Exhibit 10.21
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (THIS
"AGREEMENT") OF ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., A DELAWARE
LIMITED PARTNERSHIP (THE "PARTNERSHIP"), IS MADE AND ENTERED INTO AS OF THE
SIXTH DAY OF JANUARY, 1998, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INDUSTRIAL TRUST, a
Maryland real estate investment trust, as general partner, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
INDUSTRIAL INTERIM GP LLC, a Delaware limited liability company, as interim
managing general partner, and those parties who are designated as limited
partners upon the Exhibit A attached hereto and made a part hereof by this
reference, as limited partners.
R E C I T A L S:
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WHEREAS, the parties hereto have determined that it is in the best
interests of the parties' long term strategic growth to combine their
respective properties and related assets pursuant to that certain
Contribution and Exchange Agreement, dated October 7, 1997 (the "CONTRIBUTION
AND EXCHANGE AGREEMENT"), among the Partnership, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industrial
Trust, Reckson Operating Partnership, L.P. (sometimes referred to as "Reckson
O.P."), ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, whereby the partners are
contributing to the Partnership, directly or indirectly, all of the partners'
right, title and interest in and to their respective properties, on the terms
and conditions set forth therein;
WHEREAS, the Partnership was previously formed pursuant to that certain
Agreement of Limited Partnership, dated as of December 10, 1997 (the
"Original Agreement"), and that certain Certificate of Limited Partnership,
dated as of December 1, 1997, which was filed with the Secretary of State of
Delaware on December 2, 1997 as amended by a First Amendment to Certificate
of Limited Partnership dated as of December 9, 1997 and filed December 10
with the Secretary of the State of Delaware.
WHEREAS, the parties hereto desire to continue the Partnership and amend
and restate the terms and provisions of the Original Agreement in its
entirety, all upon the terms and provisions, and subject to the conditions,
set forth herein;
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto,
intending to be legally bound, hereby agree as follows:
ARTICLE 1
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DEFINITIONS
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As used in this Agreement, unless otherwise clearly indicated to the
contrary, the following terms have the meanings set forth below.
"ACCOUNTANTS" shall mean the firm or firms of independent certified
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public accountants selected from time to time by the General Partner on
behalf of the Partnership to audit the books and records of the Partnership
and to prepare statements and reports in connection therewith.
"ACT" shall mean the Delaware Revised Uniform Limited Partnership Act,
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as amended from time to time subsequent to the date hereof.
"ADDITIONAL PARTNERSHIP UNITS" shall have the definition assigned to
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such term in Section 6.3 hereof.
"ADDITIONAL LIMITED PARTNER" shall have the definition assigned to such
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term in Section 6.4 hereof.
"AFFILIATE" shall mean, with respect to any Partner (or as to any other
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Person the affiliates of whom are relevant for purposes of any of the
provisions of this Agreement), (i) any member of the Immediate Family of such
Partner; (ii) any trustee or beneficiary of a Partner; (iii) any legal
representative, successor or assignee of such Partner or any Person referred
to in the preceding clauses (i) and (ii); (iv) any trustee for the benefit of
such Partner or any Person referred to in the preceding clauses (i) through
(iii); or (v) any Person which directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with
such Partner or any Person referred to in the preceding clauses (i) through
(iv).
"AGREED VALUE" shall mean, with respect to any property contributed by
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a Partner to the Partnership hereunder, an amount equal to (i) the Gross
Asset Value of the Capital Contribution determined as of the date of such
contribution, less (ii) the amount of any and all liabilities securing such
contributed property that the Partnership is considered to assume or take
subject to with respect to such property under Code Section 752 or the
Regulations promulgated thereunder.
"BOARD OF DIRECTORS" shall mean the Board of Directors of the General
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Partner.
"CAPITAL ACCOUNT" shall have the definition assigned to such term in
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Section 6.5 hereof.
"CAPITAL CONTRIBUTION" shall mean, with respect to any Partner, the
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amount of money and the Agreed Value of any property (other than money)
contributed to the Partnership with respect to the Partnership Interest held
by such Partner.
"CERTIFICATE" shall mean the Partnership's Certificate of Limited
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Partnership, as amended from time to time in accordance with the terms hereof
and the Act.
"CLOSING PRICE" shall mean, on any date, with respect to a share of
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Common Stock, the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, for one share of Common Stock in either case as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or,
if the Common Stock is not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading, or if the Common Stock is not listed or admitted to trading on any
national securities exchange, the last quoted price, or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotations System or, if such system is no longer in use, the principal other
automated quotations system that may then be in use or, if the Common Stock
is not quoted by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker making a market in
the Common Stock as such person is selected from time to time by the Board of
Directors.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
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time to time, or any successor statute thereto.
"COMMON STOCK" shall mean the shares of beneficial interest, having a
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par value of $.01 per share, of the General Partner.
"COMPLETION OF THE OFFERING" shall mean the closing of the first sale
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of Common Stock in the Offering and the contribution by the General Partner
of the net proceeds thereof to the Partnership.
"CONTRIBUTION AND EXCHANGE AGREEMENT" shall have the meaning assigned
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to such term in the Recitals set forth above.
"CONTROL" shall mean the ability, whether by the direct or indirect
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ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or otherwise to select, or have the power to remove
and then select, a majority of those persons exercising governing authority
over any particular entity. In the case of a limited partnership, the sole
general partner, all of the general partners to the extent each has equal
management control and authority, or the managing general partner or managing
general partners thereof shall be deemed to have control of such partnership
and, in the case of a trust, any trustee thereof or any Person having the
right to select any such trustee shall be deemed to have control of such
trust.
"CURRENT PER SHARE MARKET PRICE", on any date, shall mean the average
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of the Closing Price for the five (5) consecutive Trading Days ending on such
date.
"DEPRECIATION" shall mean, with respect to any asset of the Partnership
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for any fiscal year or other period, the depreciation, depletion,
amortization or other cost recovery deduction, as the case may be, allowed or
allowable for Federal income tax purposes in respect of such asset for such
fiscal year or other period; provided, however, that if there is a
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difference between the Gross Asset Value and the adjusted tax basis of such
asset, Depreciation shall mean "book depreciation, depletion or amortization"
as determined under Section 1.704-l(b)(2)(iv)(g)(3) of the Regulations.
"EXCESS DEFICIT CAPITAL ACCOUNT BALANCE" of any Partner shall be the
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Capital Account balance of such Partner, adjusted as provided in the
immediately following sentence, to the extent, if any, that such balance is a
deficit (after adjustment). For purposes of determining the existence and
amount of an Excess Deficit Capital Account Balance, the Capital Account
balance of a Partner shall be adjusted by: (i) crediting thereto (A) that
portion of any deficit Capital Account balance that such Partner is required
to restore under the terms of this Agreement or any other document, and (B)
the amount of such Partner's share of Minimum Gain, including any Partner
Nonrecourse Debt Minimum Gain; and (ii) charging thereto the items described
in Regulation Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6) that apply to
such Partner. The existence and amount of Excess Deficit Capital Account
Balance at the end of any year shall be determined before any other
allocations provided for in Article 7 for such year have been made.
"EXERCISE NOTICE" shall mean the written notice as described in Section
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10.3(b) hereof to be given by an Exercising Partner to the General Partner to
exercise Redemption Rights, the form of which Exercise Notice is attached
hereto as Exhibit B.
"EXERCISING PARTNERS" shall have the meaning set forth in Section
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10.3(b) hereof.
"GENERAL PARTNER" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industrial Trust, a Maryland
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real estate investment trust, and any substitute or additional General
Partner(s) duly admitted pursuant to the terms of this Agreement, or, where
the context so requires, any successor General Partner(s) acting pursuant to
the provisions of this Agreement, or, where the context so requires, the
Interim Managing General Partner.
"GROSS ASSET VALUE" shall mean, with respect to any asset of the
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Partnership, such asset's adjusted basis for Federal income tax purposes,
except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner shall be equal to the gross fair market value of such asset as
determined by the General Partner, in its reasonable discretion.
(b) If the General Partner reasonably determines that an adjustment
is necessary or appropriate to reflect the relative economic interests of the
Partners, the Gross Asset Values of all Partnership assets shall be adjusted
to equal their respective gross fair market values, as reasonably determined
by the General Partner, as of the following times:
(i) a Capital Contribution (other than a de minimis Capital
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Contribution) to the Partnership by a new or existing Limited Partner as
consideration for a Partnership Interest;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership money or property as
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consideration for the redemption of a Partnership Interest;
(iii) the liquidation of the Partnership within the meaning of
Section 1.704-l(b)(2)(ii)(g) of the Regulations (except for a
liquidation resulting from a termination of the Partnership under
Section 708(b)(1)(B) of the Code); and
(iv) any other time that such adjustment may be made under
the Code, the Regulations or any administrative pronouncement or ruling
by the IRS.
(c) The Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross fair market values of such assets as reasonably
determined by the General Partner as of the date of distribution; and
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Sections 734(b) or 743(b) of the Code, but only to the
extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Section 1.704-l(b)(2)(iv)(m) of the Regulations;
provided, however, that Gross Asset Values shall not be adjusted pursuant to
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this paragraph to the extent that the General Partner reasonably determines
that an adjustment pursuant to paragraph (b) above is necessary or
appropriate in connection with a transaction that would otherwise result in
an adjustment pursuant to this paragraph (d).
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of
computing Profits and Losses. Any adjustment to the Gross Asset Values of
Partnership property shall require an adjustment to the Partners' Capital
Accounts; as for the manner in which such adjustments are allocated to the
Capital Accounts, see clause (iii) of the definition of Profits and Losses in
the case of adjustment by Depreciation, and clause (iv) of said definition in
all other cases.
"IMMEDIATE FAMILY" shall mean, with respect to any individual Person,
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such individual Person's spouse, parents, parents-in-law, descendants,
nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and
children-in-law.
"INTERIM MANAGING GENERAL PARTNER" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industrial
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Interim GP LLC, a Delaware limited liability company, and any substitute or
additional Interim Managing General Partner(s) duly admitted pursuant to the
terms of this Agreement and acting pursuant to Section 9.1(b) of this
Agreement, or, where the context so requires, any successor Interim Managing
General Partner(s) acting pursuant to the provisions of this Agreement.
"IPO" shall mean a transaction in which shares of the General Partner
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are first sold to the public in an Offering.
"IPO DATE" shall mean the date on which the IPO closed.
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"IRS" means the Internal Revenue Service, which administers the federal
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tax laws of the United States.
"LIMITED PARTNERS" shall mean any Person named as a Limited Partner on
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the Exhibit A attached hereto as such Exhibit may be amended from time to
time, or any substituted Limited Partner or additional Limited Partner duly
admitted to the Partnership pursuant to the terms of this Agreement.
"LIQUIDATION" shall mean the disposition of all or substantially all of
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the assets of the Partnership pursuant to a complete liquidation of the
Partnership.
"MINIMUM GAIN" shall have the meaning given such term in Treasury
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Regulation Section 1.704-2(d), and shall generally mean the amount by which
the nonrecourse liabilities secured by any assets of the Partnership exceed
the adjusted tax basis of such assets as of the date of determination. A
Partner's share of Minimum Gain (and any net decrease thereof) at any time
shall be determined in accordance with Treasury Regulation Section 1.7042(g).
"▇▇▇▇▇▇ GROUP" shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and any
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transferee of either of them.
"NET CASH FLOW" shall mean, with respect to any fiscal period of the
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Partnership, the excess, if any, of "Receipts" over "Expenditures." For
purposes hereof, the term "Receipts" means the sum of (i) all cash receipts
of the Partnership from all sources for such period, including Net Sale
Proceeds and Net Financing Proceeds but excluding Capital Contributions, and
(ii) any amounts held as reserves as of the last day of the period
immediately prior to such fiscal period that the General Partner deemed
necessary for any capital or operating expenditure permitted hereunder. The
term "Expenditures" means the sum of (i) all cash expenses of the Partnership
for such period regardless of whether they are capitalized for book purposes
(net of any funds borrowed by the Partnership expressly for the purpose of
funding any such capital expenditures) or were expended from reserves for the
immediately prior fiscal period, (ii) the amount of all payments of principal
and interest on account of any indebtedness of the Partnership owed to any
Person, (iii) administrative expenses incurred by the General Partner to
maintain its REIT status, and (iv) any amounts held as reserves as of the
last day of such fiscal period as the General Partner in its sole discretion
deems necessary for any capital or operating expenditures permitted hereunder
or for any other proper Partnership purpose.
"NET FINANCING PROCEEDS" shall mean the cash proceeds received by the
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Partnership in connection with any borrowing or refinancing of borrowing by
or on behalf of the Partnership (whether or not secured), after deduction of
all costs and expenses incurred by the Partnership in connection with such
borrowing, and after deduction of that portion of such proceeds used to repay
any other indebtedness of the Partnership, or any interest or premium
thereon.
"NET SALE PROCEEDS" means the cash proceeds received by the Partnership
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in connection with a sale of any asset by or on behalf of the Partnership
after deduction of any costs or expenses incurred by the Partnership, or
payable specifically out of the proceeds of such sale (including, without
limitation, any repayment of any indebtedness required to be repaid as a
result of such sale or which the General Partner elects to repay out of the
proceeds of such sale, together with accrued interest and premium, if any,
thereon and any sales commissions or other costs and expenses due and payable
to any Person in connection with a sale, including to a Partner or its
Affiliates).
"OFFERED UNITS" shall mean the Partnership Units of the Exercising
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Partners identified in an Exercise Notice which, pursuant to the exercise of
a Redemption Right, can be acquired by the General Partner under the terms
hereof.
"OFFERING" shall mean the initial public offering of the General
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Partner's Common Stock under the Securities Act.
"OP UNITS" shall mean those Partnership Units issued pursuant to the
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terms of the Contribution and Exchange Agreement and any additional OP Units
issued by the Partnership pursuant to Article 6 hereof.
"OPERATING AGREEMENT" shall mean the Operating Agreement of Reckson
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▇▇▇▇▇▇ Industrial Interim GP LLC dated as of January 6, 1998, between Reckson
Operating Partnership, L.P. and the ▇▇▇▇▇▇ Contributors (as defined therein).
"ORGANIZATIONAL LIMITED PARTNER" shall mean the initial limited partner
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of the Partnership.
"ORIGINAL AGREEMENT" shall have the meaning assigned to such term in the
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Recitals set forth above.
"PARTNER OR PARTNERS" shall mean, unless the context in which the term
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is used requires otherwise, the General Partner, the Interim Managing General
Partner and the Limited Partners.
"PARTNER NONRECOURSE DEBT" shall have the meaning assigned to such term
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in Regulation Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" shall have the meaning assigned
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to such term in Regulation Section 1.704-2(i).
"PARTNERSHIP" shall mean ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Partnership, L.P., a
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Delaware limited partnership.
"PARTNERSHIP AGREEMENT" shall mean this Agreement of Limited Partnership
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and the Exhibits and Schedules hereto, and any amendments hereto from time to
time.
"PARTNERSHIP INTEREST" shall mean the ownership interest of a Partner
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in the Partnership from time to time, including such Partner's Percentage
Interest and Capital Account and any and all other benefits to which the
holder of such a Partnership Interest may be entitled as provided in this
Agreement and under applicable laws, together with all obligations of such
Person to comply with the terms and provisions of this Agreement.
"PARTNERSHIP UNIT" shall mean a fractional, undivided share of the
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Partnership Interests of all Partners issued pursuant to Article 6 hereof;
provided, however, that in the event the General Partner issues classes of
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Partnership Units to Limited Partners other than the OP Units pursuant to
Section 6.4 hereof, the term Partnership Unit shall mean with respect to each
class of Partnership Units, a fractional, undivided share of the Partnership
Interests of all Partners in such class.
"PARTNERSHIP PERCENTAGES" shall mean, in the case of any Partner, a
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fraction, expressed as a percentage, the numerator of which is equal to the
number of OP Units owned by such Partner and the denominator of which is
equal to the aggregate number of OP Units owned by all Partners; provided,
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however, that in the event the General Partner issues classes of Partnership
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Units to Limited Partners other than OP Units pursuant to Section 6.4 hereof,
the term Partnership Percentages shall mean with respect to each class of
Partnership Units, a fractional, undivided share of the Partnership Interests
of all Partners in such class.
"PARTNERSHIP RECORD DATE" shall mean the record date established by the
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General Partner for any particular distribution of Net Cash Flow pursuant to
Article 8 hereof, which record date shall be the same as the record date
established by the General Partner for distribution to its stockholders of
some or all of its portion of such distribution.
"PERCENTAGE INTEREST" shall mean, with respect to any Partner, its
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interest in the Partnership as determined by dividing the number of OP Units
owned by such Partner by the total number of OP Units then issued and
outstanding; provided, however, that in the event the General Partner issues
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classes of Partnership Units other than OP Units, the term Percentage
Interest shall mean with respect to each class of Partnership Units the
number of such class of Partnership Units owned by such Partner divided by
the total number of Partnership Units of such class then issued and
outstanding.
"PERCENTAGE INTEREST" shall mean with respect to any Partner, its
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interest in the Partnership as determined by dividing the Partnership Units
of each class owned by such Partner by the total number of Partnership Units
in such class then issued and outstanding.
"PERSON" shall mean a natural person, corporation, trust, partnership,
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estate, unincorporated association or other entity.
"PRE-OFFERING UNIT VALUE" shall mean ($__________) .
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"PROFITS OR LOSSES" shall mean, for each fiscal year or other applicable
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period, an amount equal to the Partnership's net income or loss for such year
or period as determined for Federal income tax purposes by the Accountants,
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) of the Code shall be included in taxable income or
loss), with the following adjustments: (i) by including as an item of gross
income any tax-exempt income received by the Partnership; (ii) by treating as
a deductible expense any expenditure of the Partnership described in Section
705(a)(2)(B) of the Code (including amounts paid or incurred to organize the
Partnership (unless an election is made pursuant to Code Section 709(b)) or
to promote the sale of interests in the Partnership and by treating
deductions for any losses incurred in connection with the sale or exchange of
Partnership property disallowed pursuant to Section 267(a)(1) or Section
707(b) of the Code as expenditures described in Section 705(a)(2) (B) of the
Code); (iii) in lieu of depreciation, depletion, amortization and other cost
recovery deductions taken into account in computing total income or loss,
there shall be taken into account Depreciation; (iv) gain or loss resulting
from any disposition of Partnership property with respect to which gain or
loss is recognized for Federal income tax purposes shall be computed by
reference to the Gross Asset Value of such property rather than its adjusted
tax basis; and (v) in the event of an adjustment of the Gross Asset Value of
any Partnership asset which requires that the Capital Accounts of the
Partnership be adjusted pursuant to Regulation Section 1.704-l(b)(2)(iv)(e),
(f) and (m), the amount of such adjustment is to be taken into account as
additional Profits or Losses.
"PROPERTIES" shall mean those partnerships or properties, as the case
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may be, listed on Exhibit C attached hereto in which, pursuant to the
Contribution and Exchange Agreement, the Partners are contributing to the
Partnership, directly or indirectly, all of their right, title and interest
as partners in such partnerships or owners of such properties, as the case
may be.
"RECKSON GROUP" shall mean the General Partner and any Affiliate of the
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General Partner.
"REDEMPTION RIGHTS" shall have the meaning set forth in Section 10.3(a)
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hereof.
"REGULATIONS" shall mean the Income Tax Regulations promulgated under
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the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"REGULATORY ALLOCATIONS" has the meaning set forth in Section 7.3(g) of
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this Agreement.
"REIT" shall mean a real estate investment trust under Section 856 of
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the Code.
"REIT REQUIREMENTS" shall mean any and all requirements that must be met
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to qualify or continue to qualify as a REIT under the Code and the
Regulations.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended.
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"TRADING DAY" shall mean a day on which the principal national
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securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, any
day other than a Saturday, a Sunday or a day on which banking institutions in
the State of New York are authorized or obligated by law or executive order
to close.
ARTICLE 2
CONTINUATION OF THE PARTNERSHIP
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2.1 Continuation. The Partners hereby continue the Partnership as a
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limited partnership formed under and pursuant to the terms and provisions of
the Act, and the rights and obligations of the Partners shall be as provided
therein except as otherwise expressly provided in this Agreement. The
Partners agree to execute such certificates or documents and do such filings
and recordings and all other acts, including the filing or recording of an
amendment to the Certificate and any assumed name certificates in the
appropriate offices in the State of Delaware and any other applicable
jurisdictions as may be required to comply with applicable law. The Partners
agree that immediately after the admission of one Limited Partner, the
Organizational Limited Partner shall be deemed to have withdrawn from the
Partnership.
2.2 Entire Agreement. Each and every other agreement or understanding,
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oral or written, relating in any way to the formation or operation of the
Partnership including, but not limited to, the Original Agreement, is hereby
superseded in its entirety. From and after the execution of this Agreement,
the same shall constitute the only Agreement of Limited Partnership of the
Partnership except as the same may hereafter be amended pursuant to the
provisions hereof. This Agreement represents the entire agreement and
understanding of the parties hereto concerning the Partnership and their
relationship as Partners, and all prior or concurrent agreements,
understandings, representations and warranties in regard to the subject
matter hereof including, but not limited to, the Original Agreement, are and
have been merged herein.
ARTICLE 3
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NAME AND OFFICES
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3.1 Name. The business of the Partnership shall be conducted under the
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name of "▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Partnership, L.P.", or such other name as
the General Partner may from time to time designate upon notice to the
Limited Partners.
3.2 Principal and Registered Offices. The principal place of business
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of the Partnership shall be located at c/o the General Partner at ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, or such other place as the General Partner
may designate. The registered agent of the Partnership shall be The
Corporation Trust Company. The registered office of the Partnership shall be
Corporate Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. The
General Partner may from time to time designate another registered agent or
another location for the registered office or principal place of business of
the Partnership upon notice to the other 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.
ARTICLE 4
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PURPOSE
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4.1 Purpose. The purpose and nature of the business to be conducted
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by the Partnership is (i) to conduct any business that may be lawfully
conducted by a limited partnership organized pursuant to the Act; provided,
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however, that such business shall be limited to and conducted in such a
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manner as to permit the General Partner at all times to be classified as a
REIT for federal income tax purposes, unless the General Partner has
determined to cease to qualify as a REIT, subject to Section 9.3 hereof, (ii)
to enter into any partnership, joint venture or other similar arrangements to
engage in any of the foregoing or the ownership of interests in any entity
engaged in any of the foregoing and (iii) to do anything necessary or
incidental to the foregoing. In connection with the foregoing, and without
limiting the General Partner's right to cease qualifying as a REIT pursuant
to Section 9.3 hereof, the Partners acknowledge that the General Partner's
status as a REIT inures to the benefit of all of the Partners and not solely
the General Partner.
4.2 Powers. The Partnership is empowered to do any and all acts and
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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, that
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the Partnership shall not take, or shall refrain from taking, any action
which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT, (ii) could subject the General Partner to any
additional taxes under Section 857 or Section 4981 of the Code or any
successor or newly enacted provisions of the Code imposing other additional
taxes or penalties on the General Partner, or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner or its securities, unless any such action (or inaction) under
(i), (ii) or (iii) shall have been specifically consented to by the General
Partner in writing.
4.3 Pre-Offering. Prior to the IPO Date, in addition to the purposes
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set forth in Section 4.1 a purpose of the Partnership shall be to acquire
industrial properties or interests in entities that own industrial
properties. Such acquisitions shall be made from additional capital
contributed by the General Partner as the Interim Managing General Partner
may direct.
ARTICLE 5
---------
TERM AND FISCAL YEAR
--------------------
5.1 Term. The term of the Partnership commenced on January 6, 1998,
----
the date the Certificate was filed in the appropriate offices in the State of
Delaware, and shall continue until terminated pursuant to the provisions of
Article 14 of this Agreement.
5.2 Fiscal Year. The first fiscal year of the Partnership shall
-----------
terminate on December 31, 1998, and succeeding fiscal years shall terminate
on December 31 of each year thereafter, or such other date as the Partnership
shall terminate as herein provided.
ARTICLE 6
---------
CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND CAPITAL ACCOUNTS
--------------------------------------------------------------
6.1 Capital Contributions of the General Partner and the Interim
------------------------------------------------------------
Managing General Partner.
------------------------
(a) Initial Capital Contribution of the General Partner.
---------------------------------------------------
Concurrent with the execution of this Agreement, the General Partner,
pursuant to the Contribution and Exchange Agreement, shall contribute to the
Partnership, directly or indirectly, as its initial Capital Contribution, not
less than $50,000,000 (the "INITIAL CAPITAL CONTRIBUTION"). The General
Partner shall initially be issued OP Units based upon the Pre-Offering Unit
Value and thereafter shall own Partnership Units in the amount set forth
opposite its name on Exhibit A, which number of Partnership Units shall be
adjusted on such Exhibit A from time to time by the General Partner to the
extent necessary to reflect accurately issuances, exchanges, redemptions,
Capital Contributions, or similar events having an effect on a Partner's
Partnership Units. The General Partner shall have the right, before the
Offering, to receive a refund of its Initial Capital Contribution in an
amount (the "REFUND AMOUNT") not to exceed the difference between the amount
of the Initial Capital Contribution and $50,000,000 upon the following terms
and conditions: (i) the Partnership shall have received proceeds from a loan
with a third-party lender or Reckson Operating Partnership, L.P. in an amount
not more than the Refund Amount on terms approved by the Partnership and (ii)
the number of Partnership Units of the General Partner shall be reduced pro
rata based on the amount of the Refund Amount.
(b) Additional Capital Contribution Commitment Of The General
---------------------------------------------------------
Partner Pursuant to the Contribution and Exchange Agreement. Prior to the
-----------------------------------------------------------
IPO Date, the General Partner intends to contribute to the Partnership such
amounts as are determined by Interim Managing General Partner, up to an
aggregate amount of $150,000,000 less the General Partner's Initial Capital
Contribution reduced by any refund thereof, within thirty (30) days after
receiving notice from Interim Managing General Partner that such amounts are
due. On the date on which any such funds are contributed to the Partnership,
the Partnership shall issue to the General Partner additional Partnership
Units. The number of additional Partnerships Units issued to the General
Partner on each such date (if any) shall be equal to the dollar amount of
funds contributed on that date divided by the Pre-Offering Unit Value.
(c) Capital Contribution of the General Partner Upon Completion
-----------------------------------------------------------
of the Offering. Upon Completion of the Offering, the General Partner shall
---------------
contribute the proceeds of the Offering to the Partnership, which proceeds
will be net of the underwriter's discount and other expenses.
Notwithstanding the exact amount of such net proceeds which are contributed
to the Partnership, the General Partner shall be deemed to have made a
Capital Contribution to the Partnership in the amount of the gross proceeds
of the Offering and the Partnership shall be deemed simultaneously to have
reimbursed the General Partner pursuant to Section 9.8(c) hereof for the
amount of any such underwriter's discount or other expenses paid out of the
gross proceeds of the Offering. The General Partner shall have the right, in
its sole and absolute discretion, to treat the contribution to the
Partnership by the General Partner of any proceeds from the Offering in a
manner other than that described in the immediately preceding sentence if,
upon the advice of counsel to the General Partner and/or the Partnership,
such alternative treatment will provide a more favorable federal or state tax
consequence to the General Partner and/or the Partnership without causing any
material adverse federal or state tax consequences to the Limited Partners.
Immediately prior to the Completion of the Offering, the number of OP Units
owned by each Partner shall be adjusted, upward or downward, by multiplying
the number of OP Units that such Partner owns by a fraction the numerator of
which is the aggregate value of all the OP Units owned by the Partners in
accordance with the valuation ascribed to such interest in the Offering and
the denominator of which is the initial offering price of the shares of
Common Stock sold in the IPO. The Partners hereby acknowledge and agree that
upon the Completion of the Offering the aggregate number of additional
Partnership Units to be issued to the General Partner upon Completion of the
Offering shall be exactly equal to the number of shares of Common Stock
issued in the Offering. Upon any subsequent sales of shares of Common Stock
pursuant to the exercise of an over-allotment option in connection with the
Offering, the General Partner shall, subject to and in accordance with the
terms and conditions of this Section 6.1, contribute the proceeds of such
subsequent sale to the Partnership, and shall be issued additional
Partnership Units in an amount exactly equal to the number of shares of
Common Stock subsequently sold in connection with the Offering.
(d) Capital Contribution of the Interim Managing General Partner.
------------------------------------------------------------
Concurrent with the execution of this Agreement, and subject to Section
9.1(b) hereof, the Interim Managing General Partner shall contribute to the
Partnership one dollar ($1.00) as its initial Capital Contribution. The
Interim Managing General Partner shall initially be issued and thereafter
shall own one Partnership Unit. Upon the Completion of the Offering, the
Interim Managing General Partner shall automatically be entitled to a return
of its Capital Contribution, and shall automatically be deemed to have
withdrawn from the Partnership and to have surrendered its Partnership Unit.
(e) Prior to the IPO Date, the General Partner or its affiliates
may contribute additional properties to the Partnership. Upon the completion
of each such contribution, the General Partner shall be issued OP Units equal
in amount to the agreed value of such additional properties (net of any
associated liabilities assumed or taken subject to by the Partnership)
divided by the Pre-Offering Unit Value.
6.2 Capital Contributions of the Limited Partners.
---------------------------------------------
(a) Concurrent with the execution of this Agreement, each Limited
Partner, pursuant to the Contribution and Exchange Agreement, shall
contribute to the Partnership, directly or indirectly, as its initial Capital
Contribution, all of such Limited Partner's right, title and interest in and
to the Properties. Such Properties shall have an agreed fair market value as
of the dates on which they are contributed to the Partnership as determined
in accordance with such Agreement and set forth on Exhibit A hereto. Each
Limited Partner shall initially be issued and thereafter shall own
Partnership Units based upon the Pre-Offering Unit Value in the amount set
forth opposite such Limited Partner's name on Exhibit A, which number of
Partnership Units on such Exhibit A shall be adjusted from time to time by
the General Partner to the extent necessary to reflect accurately exchanges,
redemptions, Capital Contributions, or similar events having an effect on
such Partner's Partnership Units or as required by Article 2 and Section
18.2(b) of the Contribution and Exchange Agreement.
(b) On the date of admission of one or more Limited Partners to
the Partnership, the Organizational Limited Partner shall be entitled to a
return of its Capital Contribution, and shall be deemed to have withdrawn
from the Partnership.
6.3 General Partner Option to Contribute Additional Capital. Subject
-------------------------------------------------------
to Delaware law:
(a) If the Partnership requires funds at any time or from time to
time in excess of funds available to the Partnership through borrowings or
additional Capital Contributions, the General Partner or Affiliates of the
General Partner may, but shall not be required to, borrow such funds from a
financial institution or other lender or through public debt offerings and
lend such funds to the Partnership only on such terms as may be approved by
the Board of Directors of the Interim General Partner. If, notwithstanding
the foregoing, the Partnership requires funds for any proper Partnership
purpose in excess of any other funds anticipated by the General Partner to be
available to the Partnership (including through borrowings and prior Capital
Contributions), or if the General Partner concludes that borrowings are
inappropriate, the General Partner may, but shall not be required to, raise
such additional funds pursuant to the issuance of shares of its Common Stock
(or New Securities subject to Section 6.4(b))(any such issuance which is made
for the purpose of providing additional funds to the Partnership shall be
referred to herein as an "Additional Issuance").
(b) Issuance of New Securities. Following Completion of the
--------------------------
Offering, the General Partner shall not issue any additional shares of Common
Stock (other than shares of Common Stock issued pursuant to Section 10.3
hereof), or rights, options, warrants or convertible or exchangeable
securities containing the right to subscribe for or purchase shares of Common
Stock (collectively, "New Securities"), other than to all holders of shares
of Common Stock, unless (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, all such that the economic
interests are substantially similar to those of the New Securities, and (ii)
the General Partner contributes to the Partnership the proceeds from the
issuance of such New Securities and from the exercise of rights contained in
such New Securities. Without limiting the foregoing, the General Partner is
expressly authorized to issue New Securities for less than fair market value,
and the General Partner is expressly authorized to cause the Partnership to
issue to the General Partner corresponding Partnership Interests, so long as
(x) the General Partner concludes in good faith that such issuance is in the
interest of the General Partner and the Partnership (for example, and not by
way of limitation, the issuance of shares of Common Stock and corresponding
Units pursuant to an employee stock purchase plan providing for employee
purchases of shares of Common Stock at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair
market value of the shares of Common Stock, either at the time of issuance or
at the time of exercise), and (y) the General Partner contributes all
proceeds from such issuance and exercise to the Partnership.
(c) In the event that the General Partner shall issue shares of
Common Stock (and/or pay cash out of the net proceeds of any Additional
Issuance) in connection with any subsequent merger, consolidation or other
acquisition, the General Partner may contribute the shares of stock, assets
and/or other consideration received by the General Partner in connection
therewith to the capital of the Partnership in exchange for Additional
Partnership Units and be issued additional Partnership Units in an amount
exactly equal to the number of shares of Common Stock issued by the General
Partner in connection with such acquisition. The General Partner shall have
the right, in its sole discretion, to treat a contribution to the capital of
the Partnership in a manner other than as described above if, upon the advice
of counsel, such alternative treatment will provide a more favorable federal
state tax consequence to the General Partner and/or the Partnership and will
not cause any material adverse federal or state tax consequences to the
Limited Partners.
(d) If the proceeds actually received and thereafter contributed
to the Partnership by the General Partner pursuant to any Additional Issuance
as described in this Section 6.3 are less than the gross proceeds of such
issuance as a result of any underwriter's discount or other expenses paid or
incurred in connection with such issuance, then the General Partner shall be
deemed to have made a Capital Contribution to the Partnership in the amount
of the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have reimbursed the General Partner pursuant to Section
9.8(c) hereof for the amount of such underwriter's discount or other
expenses.
6.4 General Partner Option to Issue Additional Partnership Units to
---------------------------------------------------------------
Limited Partners; Issuance of New Securities by the General Partner. Subject
-------------------------------------------------------------------
to Delaware law and Section 5.2(b) of the Operating Agreement:
(a) At any time after the date hereof without the consent of any
Partner, but subject to the provisions of Section 13.1 hereof, the General
Partner may, upon its determination, which shall be made in its sole and
absolute discretion, cause the Partnership to issue additional Partnership
Units to and admit as a limited partner in the Partnership, any Person (an
"Additional Limited Partner" herein) in exchange for the contribution by such
Person of cash and/or property desirable to further the purposes of the
Partnership under Article 4 hereof.
(b) In the event that additional Partnership Units are issued by
the Partnership pursuant to this Section 6.4, the amount of such Partnership
Units issued to each Additional Limited Partner shall, unless otherwise
determined by the General Partner in the exercise of its sole and absolute
discretion, be fixed by agreement between the General Partner and such
Additional Limited Partner.
(c) The General Partner is hereby authorized to cause the
Partnership from time to time to issue to the Partners (including the General
Partner) or other Persons additional Partnership Units or such other
Partnership Interests in one or more classes, or one or more series of such
classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties which may be senior, pari passu or junior to OP Units, all as
shall be determined by the General Partner in its sole and absolute
discretion including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests; (ii) the right of each such class or series
of Partnership Interests to share in Partnership distributions; and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; provided that no such additional
Partnership Units or other Partnership Interests shall be issued to the
General Partner unless either (A)(1) the additional Partnership Interests are
issued in connection with the issuance of shares of Common Stock or other
shares by the General Partner, which shares have designations, preferences
and other rights such that the economic interests attributed to such shares
are substantially similar to the designations, preferences and other rights
of the additional Partnership Interests issued to the General Partner in
accordance with this Section 6.4, and (2) the General Partner shall make a
Capital Contribution to the Partnership in an amount equal to the net
proceeds raised in connection with the issuance of such shares of the General
Partner, or (B) the additional Partnership Units are issued to all the
Partners in proportion to their respective Percentage Interests.
(d) The General Partner shall be authorized on behalf of each of
the Partners to amend this Agreement to reflect the issuance of Additional
Partnership Units (including, without limitation, the issuance of new classes
of Partnership Units) and/or the admission of any Additional Limited
Partner(s) in accordance with the provisions of this Section 6.4, and the
General Partner shall promptly deliver a copy of such amendment (which, in
the event that new classes of Partnership Units are issued, shall contain the
terms of such new classes of Partnership Units) to each Limited Partner.
Without limiting the foregoing, the General Partner is expressly authorized
to cause the Partnership to issue Partnership Units for less than fair market
value, so long as (x) the General Partner concludes in good faith that such
issuance is in the interest of the General Partner and the Partnership (for
example, and not by way of limitation, the issuance of Partnership Units
pursuant to an employee purchase plan providing for employee purchases of
Partnership Units at a discount from fair market value or employee options
pursuant to the General Partner's Incentive Stock Option Plan that have an
exercise price that is less than the fair market value of the Partnership
Units, either at the time of issuance or at the time of exercise) and (y) the
General Partner contributes all net proceeds from such issuance and exercise
to the Partnership.
6.5 Capital Accounts. A separate capital account (a "Capital Account")
----------------
shall be maintained for each Partner in accordance with the Code and the
Regulations promulgated thereunder including, but not limited to, the rules
regarding the maintenance of partners' Capital Accounts set forth in
Regulation Section 1.704-1. Subject to the immediately preceding sentence,
there shall be credited to each Partner's Capital Account: (i) the amount of
money contributed or deemed contributed by the Partner to the Partnership,
(ii) the Agreed Value of any property contributed by the Partner to the
Partnership, (iii) the amount of any Partnership liabilities assumed by such
Partner (other than liabilities secured by property distributed to such
Partner that such Partner is considered to have assumed or taken subject to
under Section 752 of the Code), and (iv) the Partner's share of Profits.
There shall be charged against each Partner's Capital Account: (i) the amount
of money distributed to the Partner by the Partnership, (ii) the Agreed Value
of any property distributed to the Partner by the Partnership, (iii) the
amount of any liabilities of such Partner assumed by the Partnership (other
than liabilities secured by property contributed to the Partnership by such
Partner that the Partnership is considered to have assumed or taken subject
to pursuant to Section 752 of the Code), and (iv) the Partner's share of
Losses. To the extent a Partner's Capital Account is greater than zero, such
excess is hereinafter referred to as a "positive balance". To the extent a
Partner's Capital Account is less than zero, said amount is hereinafter
referred to as a "deficit balance".
6.6 Limited Liability. Notwithstanding anything in this Agreement to
-----------------
the contrary, the personal liability of a Limited Partner arising out of or
in any manner relating to the Partnership shall be limited to and shall not
exceed such Limited Partner's Capital Contribution made or required to be
made pursuant to this Agreement. No Limited Partner shall have any personal
liability for liabilities or obligations of the Partnership, except to the
extent of its Capital Contribution, as aforesaid.
6.7 Return of Capital. Except as otherwise provided herein, (i) no
-----------------
Partner shall be required to make any further or additional contributions to
the capital of the Partnership or to lend or advance funds to the Partnership
for any purpose and (ii) no Partner shall be entitled to the return of its
capital, except to the extent, if any, that distributions are made or deemed
to be made to such Partner otherwise than out of Profits pursuant to this
Agreement.
6.8 No Interest on Capital Contributions. No interest or additional
------------------------------------
share of Profits shall be paid or credited to the Partners on their Capital
Accounts, or on any undistributed Profits or funds left on deposit with the
Partnership; provided, however, that nothing contained herein shall be
-------- -------
construed to prevent or prohibit the payment of interest on account of loans
made by the Partners to the Partnership. Any loans made to the Partnership
by a Partner shall not increase its Capital Contribution or interest in the
Profits, Losses or Net Cash Flow of the Partnership, but shall be a debt due
from the Partnership and repaid accordingly.
6.9 No Third Party Beneficiary. No creditor or other third party
--------------------------
having dealings with the Partnership shall have the right to enforce the
right or obligation of any Partner to make Capital Contributions or loans or
to pursue any other right or remedy hereunder or at law or in equity, it
being understood and agreed among the parties hereto that the provisions of
this Agreement shall be solely for the benefit of, and may be enforced solely
by, the parties hereto and their respective successors and assigns. None of
the rights or obligations of the Partners herein set forth to make Capital
Contributions or loans to the Partnership shall be deemed an asset of the
Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the
Partnership or pledged or encumbered by the Partnership to secure any debt or
other obligation of the Partnership or of any of the Partners.
6.10 Incentive Stock Option Plans. The Partners hereby acknowledge that
----------------------------
prior to the date hereof the General Partner has adopted, and the Partners
hereby acknowledge and agree that from and after the date hereof the General
Partner may adopt, without the consent of any Limited Partner, one or more
qualified or non-qualified incentive stock option plans ("Stock Plans")
pursuant to which officers, directors, trustees and/or employees of the
General Partner, the Partnership or any Affiliate of either of them may
acquire shares of Common Stock. On each date on which the General Partner
issues any shares of Common Stock to a person pursuant to a Stock Plan (i)
the consideration paid for each such share of Common Stock shall, as soon as
received by the General Partner, be contributed to the capital of the
Partnership and (ii) the General Partner shall be issued Partnership Units in
an amount equal to that number of Partnership Units which, if such
Partnership Units were redeemed as of their date of issuance by the General
Partner for shares of Common Stock pursuant to Section 10.3 hereof, would
result in the General Partner receiving that number of shares of Common Stock
which are being issued to any such person pursuant to the Stock Plan. For
purposes of this Section 6.10 only, shares of Common Stock issued subject to
forfeiture or other similar restrictions shall be deemed issued upon the
lapse of such restrictions. Notwithstanding anything herein to the contrary,
the mere grant of options to purchase shares of Common Stock pursuant to any
Stock Plan shall not constitute the grant or issuance of shares of Common
Stock for purposes of this Section 6.10.
ARTICLE 7
---------
ALLOCATION OF PROFITS AND LOSSES
--------------------------------
7.1 General Allocation of Profits and Losses. Except as otherwise
----------------------------------------
provided in this Article 7, after giving effect to any and all allocations
set forth in Section 7.3 below, all Profits and Losses of the Partnership
(including all items of income and expense entering into the determination of
such Profits and Losses), for Federal income tax purposes for each fiscal
year of the Partnership, shall be allocated to and among the Partners in such
manner as will cause the positive or negative balance in the Partners'
Capital Accounts to be in the same proportions as the Partners' Percentage
Interests.
7.2 Allocations with Respect to Transferred Interests. Unless
-------------------------------------------------
otherwise required by the Code and/or the Regulations or as agreed to by the
General Partner, in its sole and absolute discretion, any Profits or Losses
allocable to an additional Partnership Interest issued during any year or to
a Partnership Interest which has been transferred during any year shall be
allocated among the Persons who were holders of such Partnership Interest
during such year in the manner described in Section 13.3(c) below.
7.3 Regulatory Allocations.
----------------------
(a) Minimum Gain Chargeback.
-----------------------
(i) Notwithstanding any other provision of this Agreement (except
as provided in subparagraph (ii) below), if there is a net decrease in
Minimum Gain for a Partnership taxable year, each Partner shall be allocated,
before any other allocation of Partnership items for such taxable year, items
of income and gain for such year (and, if necessary, for subsequent years) in
proportion to, and to the extent of, the amount of such Partner's share of
the net decrease in Minimum Gain during such year. The income allocated
pursuant to this Section 7.3(a) in any taxable year shall be determined in
accordance with Regulation Section 1.704-2(b)(6).
(ii) The allocation otherwise required pursuant to Section
7.3(a) shall not apply to a Partner to the extent that: (a) such Partner's
share of the net decrease in Minimum Gain is caused by a guarantee,
refinancing or other change in the instrument evidencing a nonrecourse debt
of the Partnership which causes such debt to become a partially or wholly
recourse debt or a Partner Nonrecourse Debt, and such Partner bears the
economic risk of loss (within the meaning of Regulation Section 1.752-2) for
such changed debt; (b) such Partner's share of the net decrease in Minimum
Gain results from the repayment of a nonrecourse liability of the
Partnership, which repayment is made using funds contributed by such Partner
to the capital of the Partnership; (iii) the IRS, pursuant to Regulation
Section 1.704-2(f)(4), waives the requirement of such allocation in response
to a request for such waiver made by the General Partner on behalf of the
Partnership (which request the General Partner may or may not make, in its
sole discretion, if it determines that the Partnership would be eligible
therefor); or (iv) additional exceptions to the requirement of such
allocation are established by revenue rulings issued by the IRS pursuant to
Regulation Section 1.704-2(f)(5), which exceptions apply to such Partner, as
determined by the General Partner in its sole discretion.
(b) Partner Minimum Gain Chargeback. If there is a net decrease
-------------------------------
for a Partnership taxable year in any Partner Nonrecourse Debt Minimum Gain
of the Partnership, each Partner with a share of such Partner Nonrecourse
Debt Minimum Gain as of the beginning of such year, as determined in
accordance with Regulation Section 1.704-2(i)(5), shall be allocated items of
gross income and gain in the manner and to the extent provided in Regulation
Section 1.704-2(i)(5).
(c) Qualified Income Offset. Notwithstanding any other provision
-----------------------
of this Agreement, if a Partner unexpectedly receives an adjustment,
allocation or distribution described in Regulation Section
1.704-l(b)(2)(ii)(d)(4),(5) or (6), that after giving effect to allocations
under Sections 7.3(a) and 7.3(b), causes or increases an Excess Deficit
Capital Account Balance with respect to such Partner, items of Partnership
gross income and gain shall be specially allocated to such Partner in an
amount and manner sufficient to eliminate such Excess Deficit Capital Account
Balance as quickly as possible.
(d) Gross Income Allocation. If at the end of any Partnership
-----------------------
taxable year, a Partner has an Excess Deficit Capital Account Balance, such
Partner shall be specially allocated items of Partnership gross income or
gain in an amount and manner sufficient to eliminate such Excess Deficit
Capital Account Balance as quickly as possible.
(e) Partner Nonrecourse Debt. Notwithstanding any other provision
------------------------
of this Agreement, any item of Loss that is attributable to a Partner
Nonrecourse Debt shall be allocated to those Partners that bear the economic
risk of loss for such Partner Nonrecourse Debt, and among such Partners in
accordance with the ratios in which they share such economic risk, determined
in accordance with Regulation Section 1.704-2(i).
(f) Interpretation. The foregoing provisions of this Section 7.3
--------------
are intended to comply with Regulation Sections 1.704-1(b) and 1.704-2 and
shall be interpreted consistently with this intention. Any terms used in
such provisions that are not specifically defined in this Agreement shall
have the meaning, if any, given such terms in the Regulations cited above.
(g) Curative Allocations. The allocations set forth in Sections
--------------------
7.3(a)-(e) (the "Regulatory Allocations") are intended to comply with certain
requirements of the Regulations under Section 704(b) of the Code. The
Regulatory Allocations may not be consistent with the manner in which the
Partners intend to divide Partnership distributions. Accordingly, the
General Partner is hereby authorized to devise other allocations of income,
gain, deduction and loss among the Partners so as to prevent the Regulatory
Allocations from distorting the manner in which Partnership distributions
will be divided among the Partners. In general, the Partners anticipate
that, if necessary, this will be accomplished by specially allocating other
items of income, gain, loss and deduction among the Partners so that the net
amount of the Regulatory Allocations and such special allocations to each
Partner is zero. The General Partner will have discretion to accomplish this
result in any reasonable manner; provided, however, that no allocation
-------- -------
pursuant to this Section 7.3(g) shall cause the Partnership to fail to comply
with the requirements of Regulation Sections 1.704-1(b)(2)(ii)(d), 1.704-
1(b)2(e) or 1.704-2(i).
7.4 Tax Allocations. Except as otherwise provided in this Section 7.4,
---------------
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 Profit or Loss is allocated pursuant to Section 7.3.
Notwithstanding anything contained herein to the contrary, taxable income,
gain, loss and deduction with respect to any Partnership property that is
contributed to the Partnership by a Partner shall be shared among the
Partners for income tax purposes pursuant to Regulations promulgated under
Section 704(c) of the Code, so as to take into account the variation, if any,
between the adjusted tax basis of the property to the Partnership and its
initial Gross Asset Value. With respect to Partnership property that is
initially contributed to the Partnership upon its formation, such variation
between the adjusted tax basis and initial Gross Asset Value shall be taken
into account under the "traditional method" as described in Treasury
Regulation Section 1.704-3(b), unless otherwise determined by the General
Partner and the contributing Partner. With respect to properties subsequently
contributed to the Partnership, the Partnership shall account for such
variation under any method approved under Section 704(c) of the Code and the
applicable regulations as chosen by the General Partner. In the event the
Gross Asset Value of any Partnership asset is adjusted pursuant to
subparagraph (b) of the definition of Gross Asset Value (as provided in
Article 1 of this Agreement), subsequent allocations of tax items with
respect to such asset shall take account of the variation, if any, between
the adjusted tax basis of such asset and its Gross Asset Value in the same
manner as under Section 704(c) of the Code and the applicable Regulations.
7.5 Allocations with Respect to Partnership Units other than OP Units.
-----------------------------------------------------------------
In the event the General Partner issues additional classes of Partnership
Units other than OP Units to Limited Partners, then the General Partner shall
determine, in its sole discretion, the Profits and Losses attributable to
each class and shall allocate to Profits and Losses of each class of
Partnership Units among the Partners in such class in proportion to their
respective Percentage Interests in such class, after giving effect to any and
all special allocations set forth in Sections 7.3 and 7.4 above.
ARTICLE 8
---------
DISTRIBUTIONS
-------------
8.1 Distribution of Net Cash Flow.
-----------------------------
(a) From the date of formation until the IPO Date, quarterly
distributions of annual Net Cash Flow shall be made, to the extent available
and on a non-cumulative basis, in accordance with Article IV of the Operating
Agreement.
(b) After the admission of new partners to the Partnership and
until the IPO Date, distributions of Net Cash Flow shall be made to the
extent available and on a non-cumulative basis in accordance with the
following:
(i) The newly admitted partners shall receive their share of
Net Cash Flow in accordance with their respective Partnership
Percentages.
(ii) The remainder of Net Cash Flow shall be distributed
between Reckson and ▇▇▇▇▇▇ in accordance with Article IV of the
Operating Agreement. Nothing contained in the Operating Agreement shall
affect the Net Cash Flow distributable to any newly admitted partner.
(c) Subsequent to the IPO Date, distributions shall be made to the
Partners in proportion to their respective Partnership Percentages.
(d) Notwithstanding subparagraphs (b) and (c) of this Section 8.1,
if Net Cash Flow has arisen pursuant to a Liquidation, such Net Cash Flow
shall be distributed to and among the Partners as provided in Section 14.4.
(e) Net Cash Flow shall be distributed to the Partners in such
amounts and at such intervals as the General Partner, in its sole discretion,
may determine, but no less frequently than quarterly. With respect to each
and every distribution of Net Cash Flow to the Partners hereunder, the
General Partner shall distribute such Net Cash Flow only to those Partners
who are Units were outstanding during the period to which such distribution
relates and, with respect to those Partners who were issued additional
Partnership Units during such period, the General Partner shall distribute
Net Cash Flow (i) on a pro-rated basis based upon the number of days during
such period that such Partners held such additional Partnership Units or (ii)
on such other reasonable basis as determined by the General Partner in its
sole discretion; provided, however, in no event may a Partner receive a
-------- -------
distribution of Net Cash Flow with respect to any particular Partnership Unit
if such Partner is entitled to receive a distribution out of such Net Cash
Flow with respect to one or more shares of Common Stock for which such
Partnership Unit has been redeemed. Notwithstanding the foregoing, the
General Partner shall take such reasonable efforts, as determined by it in
its sole and absolute discretion and consistent with its qualification as a
REIT, to cause the Partnership to distribute sufficient amounts to enable the
General Partner to pay stockholder dividends that will (i) satisfy the REIT
Requirements and (ii) avoid the imposition of any federal income or excise
tax on the General Partner resulting from its failure to pay adequate
dividends to its shareholders.
8.2 Distributions in Kind. No right is given to any Partner to demand
---------------------
and receive property or cash. The General Partner may determine, in its sole
and absolute discretion, to make a distribution in kind to the Partners of
Partnership assets, and such assets shall be distributed in such a fashion as
to ensure that the fair market value of such assets is distributed and
allocated in accordance with Section 8.1 hereof.
8.3 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 or reasonably believes that the Partnership is
required to withhold or pay with respect to any amount distributable or
allocable to such Limited Partner pursuant to this Agreement, including,
without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code Sections 1441, 1442, 1445 or 1446. Any and all
amounts withheld pursuant to this Section 8.3 with respect to any allocation,
payment or distribution to any Partner hereunder shall be treated as amounts
distributed to such Partner pursuant to Section 8.1 hereof for all purposes
under this Agreement. If any amount is withheld by the Partnership pursuant
to this Section 8.3 with respect to a particular Partner and such amount
would not have been distributed to such Partner pursuant to Section 8.1
hereof at any time on or before the date it is withheld, then such Partner
shall contribute to the capital of the Partnership an amount equal to the
amount so withheld as soon as practicable after the delivery by the General
Partner to such Partner of a notice requesting such contribution to the
Partnership. The General Partner, on behalf of the Partnership, shall have
the right to offset any obligation of a Partner to contribute additional
funds to the Partnership pursuant to the immediately preceding sentence of
this Section 8.3 against any future distributions due to such Partner under
Section 8.1 hereof.
8.4 Distributions with Respect to Partnership Units other than OP
-------------------------------------------------------------
Units. Notwithstanding the foregoing provisions of this Article 8, in the
-----
event the General Partner issues additional classes of Partnership Units
other than OP Units to Limited Partners, then the General Partner shall
determine, in its sole discretion, the amount of distributions of Net Cash
Flow attributable to each class and shall distribute the Net Cash Flow
attributable to each class of Partnership Units other than OP Units among the
Partners in such class in proportion to their respective Percentage Interests
in such class or otherwise required pursuant to the terms of this Agreement.
ARTICLE 9
---------
MANAGEMENT
----------
9.1 Management of Partnership Affairs.
---------------------------------
(a) General Partner. Except as otherwise specifically provided
---------------
in this Agreement, and subject to Section 9.1(b) below, the General Partner
shall have full, exclusive and complete responsibility and discretion in the
management and control of the business and affairs of the Partnership and
shall make all decisions affecting the Partnership's business and affairs.
Subject to the foregoing, the General Partner shall have all the rights,
powers and obligations of a general partner as provided in the Act, and,
except as otherwise provided, any action taken by the General Partner (in its
capacity as such) shall constitute the act of and serve to legally bind the
Partnership. Persons dealing with the Partnership shall be entitled to rely
conclusively on the power and authority of the General Partner as set forth
in this Agreement.
(b) Interim Managing General Partner. From the date hereof until
--------------------------------
Completion of the Offering, the Interim Managing General Partner shall,
subject to the rights accorded the Limited Partners hereunder and under the
Act, have full, exclusive and complete responsibility and discretion in the
management and control of the business and affairs of the Partnership and
shall make all decisions affecting the Partnership's business and affairs to
the extent otherwise granted to the General Partner hereunder, and the
General Partner shall have no such rights. Subject to the foregoing, the
Interim Managing General Partner shall have all the rights, powers and
obligations of a general partner as provided in the Act, and, except as
otherwise provided, any action taken by the Interim Managing General Partner
(in its capacity as such) shall constitute the act of and serve to legally
bind the Partnership. Persons dealing with the Partnership shall be entitled
to rely conclusively on the power and authority of the Interim Managing
General Partner as set forth in this Agreement. The Partners agree that
immediately upon the Completion of the Offering, the Interim Managing General
Partner shall automatically be deemed to have withdrawn from the Partnership,
and the General Partner shall be entitled to exercise in full the rights and
responsibilities hereunder accorded to the General Partner that it would have
received but for the rights accorded the Interim Managing General Partner
under this Section 9.1(b). Until the Completion of the Offering, references
to the General Partner in this Agreement shall be deemed to be references to
the Interim Managing General Partner, unless otherwise required by the
context thereof; provided, however, that references to the General Partner
-------- -------
herein, including, without limitation, those set forth in Articles 6, 7 and 8
and Section 10.3 hereof, shall always refer with respect to economic issues
(as opposed to management issues) to the General Partner.
9.2 Powers and Authorities of the General Partner. Except as otherwise
---------------------------------------------
specifically provided in this Agreement, and subject to Sections 9.1(b) and
9.3 hereof, the General Partner is hereby granted the right, power and
authority to do on behalf of the Partnership all things which, in its best
business judgment, are necessary, proper or desirable to carry out its duties
and responsibilities, including but not limited to, the right, power and
authority:
(a) To manage, control, invest, reinvest, acquire by purchase,
lease or otherwise, develop, expand, sell, contract to purchase or sell,
grant, obtain or exercise options to purchase, options to sell or conversion
rights, assign, transfer, convey, deliver, endorse, exchange, pledge,
mortgage, abandon, improve, repair, maintain, insure, lease for any term and
otherwise deal with any and all property of whatsoever kind and nature, and
wheresoever situated, in furtherance of the purposes of the Partnership;
(b) To acquire, directly or indirectly, interests in real estate
of any kind and of any type, and any and all kinds of interests therein, and
to determine the manner in which title thereto is to be held; to manage,
insure against loss, protect and subdivide any of the real estate, interests
therein or parts thereof; to improve, develop or redevelop and expand any
such real estate; to participate in the ownership and development of any
property; to dedicate for public use, to vacate any subdivisions or parts
thereof, to resubdivide, to contract to sell, to grant options to purchase or
lease, to sell on any terms; to convey, to mortgage, pledge or otherwise
encumber said property, or any part thereof; to lease said property or any
part thereof from time to time, upon any terms and for any period of time,
and to renew or extend leases, to amend, change or modify the terms and
provisions of any leases and to grant options to lease and options to renew
leases and options to purchase; to partition or to exchange said real
property, or any part thereof, for other real or personal property; to grant
easements or charges of any kind; to release, convey or assign any right,
title or interest in or about or easement appurtenant to said property or any
part thereof; to construct and reconstruct, remodel, alter, repair, add to or
take from buildings on said premises; to insure any Person having an interest
in or responsibility for the care, management or repair of such property; to
direct the trustee of any land trust to mortgage, lease, convey or contract
to convey the real estate held in such land trust or to execute and deliver
deeds, mortgages, notes, and any and all documents pertaining to the property
subject to such land trust or in any matter regarding such trust; to execute
assignments of all or any part of the beneficial interest in such land trust;
(c) To employ, engage or contract with or dismiss from employment
or engagement Persons to the extent deemed necessary by the General Partner
for the operation and management of the Partnership business, including but
not limited to, contractors, subcontractors, engineers, architects,
surveyors, mechanics, consultants, accountants, attorneys, insurance brokers,
real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow money, procure loans and advances from any Person
for Partnership purposes, and to apply for and secure, from any Person,
credit or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to
repay, discharge, settle, adjust, compromise or liquidate any such loan,
advance, credit, obligation or liability;
(f) To pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or
as additional or substitute security, or for sale or other disposition any
and all Partnership property, tangible or intangible, including, but not
limited to, real estate and beneficial interests in land trusts, and to make
substitutions thereof, and to receive any proceeds thereof upon the release
or surrender thereof; to sign, execute and deliver any and all assignments,
deeds and other contracts and instruments in writing; to authorize, give,
make, procure, accept and receive moneys, payments, property, notices,
demands, vouchers, receipts, releases, compromises and adjustments; to waive
notices, demands, protests and authorize and execute waivers of every kind
and nature; to enter into, make, execute, deliver and receive written
agreements, undertakings and instruments of every kind and nature; to give
oral instructions and make oral agreements; and generally to do any and all
other acts and things incidental to any of the foregoing or with reference to
any dealings or transactions which any attorney may deem necessary, proper or
advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any
purpose convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts with
such institutions as the General Partner shall deem appropriate; to draw,
sign, execute, accept, endorse, guarantee, deliver, receive and pay any
checks, drafts, bills of exchange, acceptances, notes, obligations,
undertakings and other instruments for or relating to the payment of money
in, into, or from any account in the Partnership's name; to execute, procure,
consent to and authorize extensions and renewals of the same; to make
deposits and withdraw the same and to negotiate or discount commercial paper,
acceptances, negotiable instruments, bills of exchange and dollar drafts;
(i) To demand, ▇▇▇ for, receive, and otherwise take steps to
collect or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which the
Partnership may be entitled or which are or may become due to the Partnership
from any Person; to commence, prosecute or enforce, or to defend answer or
oppose, contest and abandon all legal proceedings in which the Partnership is
or may hereafter be interested; and to settle, compromise or submit to
arbitration any accounts, debts, claims, disputes and matters which may arise
between the Partnership and any other Person and to grant an extension of
time for the payment or satisfaction thereof on any terms, with or without
security;
(j) To make arrangements for financing, including the taking of
all action deemed necessary or appropriate by the General Partner to cause
any approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with applicable arrangements, and other contractual
obligations and arrangements entered into by the Partnership from time to
including periodic reports as required to lenders and using all due diligence
to insure that the Partnership is in compliance with its contractual
obligations;
(l) To maintain the Partnership's books and records; and
(m) To prepare and deliver, or cause to be prepared and delivered
by the Partnership's Accountants, all financial and other reports with
respect to the operations of the Partnership, and preparation and filing of
all Federal and state tax returns and reports.
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the
General Partner shall not have any obligations hereunder except to the extent
that Partnership funds are reasonably available to it for the performance of
such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
9.3 Major Decisions. During the three-year period following Completion
---------------
of the Offering, the General Partner shall not, without the prior written
consent of holders of at least seventy-five percent (75%) of the Partnership
Units taken as a single class, on behalf of the Partnership, undertake any of
the following actions:
(a) Cause or permit the merger of the Partnership into any Person
pursuant to a transaction in which the Partnership is not the surviving
entity, or take any other action which may have the effect of the foregoing;
(b) Dissolve, liquidate or wind-up the Partnership;
(c) Convey or otherwise transfer all or substantially all of the
Partnership's assets in one or a series of related transactions; or
(d) Cause or permit the General Partner to cease to qualify as a
REIT, or take any other action which may have the effect of the foregoing.
Upon the expiration of the three-year period referenced above, such
75% shall be reduced to 50%.
9.4 Restrictions on General Partner's Authority.
-------------------------------------------
(a) The General Partner may not take any action in contravention
of this Agreement, including, without limitation:
(i) Take any action that would make it impossible to carry
on the ordinary business of the Partnership, except as otherwise
provided in this Agreement;
(ii) Admit a Person as a Partner, except as otherwise
provided in this Agreement;
(iii) Perform any act that would subject a Limited Partner to
liability as a general partner in any jurisdiction or any other
liability except as provided herein or under the Act; or
(iv) Enter into any contract, mortgage, loan or other
agreement that prohibits or restricts, or has the effect of prohibiting
or restricting, the ability of a Limited Partner to exercise its
Redemption Rights in full, except with the written consent of such
Limited Partner.
(b) The General Partner may not, without the consent of all of the
Limited Partners, change its policy of holding its assets and conducting its
business solely through the Partnership.
9.5 Engagements by the Partnership. The General Partner may engage,
------------------------------
on behalf and at the expense of the Partnership, such professional persons,
firms or corporations as the General Partner in its reasonable judgment shall
deem advisable for the conduct and operation of the business of the
Partnership, including, without limitation, brokers, mortgage bankers,
lawyers, accountants, architects, engineers, consultants, contractors and
purveyors of other such services for the Partnership on such terms and for
such compensation or costs as the General Partner, in its reasonable
judgment, shall determine.
9.6 Engagement of Affiliates. The General Partner may, on behalf and
------------------------
at the expense of the Partnership, engage the General Partner or a firm in
which the General Partner, a Limited Partner, or a Partner, officer,
director, stockholder or Affiliate of any of them, has an interest, to render
services to the Partnership and/or the assets of the Partnership, provided
--------
that the fees or other compensation payable for such services are
specifically authorized by the terms of this Agreement or are comparable to
those prevailing in arm's-length transactions for similar services and are
approved by the Board of Directors.
9.7 Liability of the General Partner. The General Partner and its
--------------------------------
Affiliates, officers, directors, agents and employees shall not be liable,
responsible or accountable in damages or otherwise to the Partnership or any
of the Partners or their successors or assigns for any acts or omissions
performed or omitted within the scope of its authority as General Partner, or
otherwise conferred on the General Partner and such Affiliates, officers,
directors, agents and employees by this Agreement, provided that the General
--------
Partner or such Affiliates, officers, directors, agents or employees shall
not have acted in bad faith and shall not be guilty of willful misconduct or
gross negligence.
9.8 Reimbursement of Certain Expenses of the General Partner.
--------------------------------------------------------
(a) Except as provided in this Section 9.8 and elsewhere in this
Agreement (including the provisions of Articles 7 and 8 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) The General Partner shall be reimbursed on a monthly basis, or
such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses it incurs relating to the ownership
and operation of, or for the benefit of, the Partnership, including without
limitation, any expenses incurred by the General Partner in connection with
the management by the General Partner of any property owned by the
Partnership or any subsidiary of the Partnership; provided, however, that the
-------- -------
amount of any such reimbursement shall be reduced by any interest earned by
the General Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership. The Limited Partners
acknowledge that the General Partner's sole business is the ownership of
interests in and operation of the Partnership and that all of the General
Partner's expenses are incurred for the benefit of the Partnership.
(c) In accordance with the provisions of Sections 6.1, 6.3 and
6.4, the General Partner shall be deemed to be reimbursed for all expenses
it incurs relating to the Offering and any other offering and/or issuance of
Additional Partnership Units, Partnership Interests and/or Common Stock as
described therein.
9.9 Outside Activities of the General Partner. The General Partner
-----------------------------------------
shall not directly or indirectly enter into or conduct any business, other
than in connection with the ownership, acquisition and disposition of
Partnership Interests as a General Partner and the management of the business
of the Partnership, and such activities as are incidental to same. The
General Partner shall not, directly or indirectly, participate in or
otherwise acquire any interest in any real or personal property, except its
Partnership Interest as a General Partner and as otherwise provided in this
Agreement, and other than such shortterm liquid investments, bank accounts or
similar instruments as it deems necessary to carry out its responsibilities
contemplated under this Agreement.
9.10 Operation in Accordance with REIT Requirements. Subject to
----------------------------------------------
Section 9.3 hereof, the Partners acknowledge and agree that the Partnership
shall be operated in a manner that will enable the General Partner to (i)
satisfy the REIT Requirements and (ii) avoid the imposition of any federal
income or excise tax liability on the General Partner. The Partnership shall
avoid taking any action which would result in the General Partner ceasing to
satisfy the REIT Requirements or would result in the imposition of any
federal income or excise tax liability on the General Partner.
9.11 Title Holder. To the extent allowable under applicable law, title
------------
to all or any part of the properties of the Partnership may be held in the
name of the Partnership or any other individual, corporation, partnership,
trust or otherwise, 100% of the beneficial interest in which shall at all
times be vested in the Partnership. Any such title holder shall perform any
and all of its respective functions to the extent and upon such terms and
conditions as may be determined from time to time by the General Partner.
ARTICLE 10
----------
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
------------------------------------------
10.1 No Participation in Management of Partnership; Rights of Limited
----------------------------------------------------------------
Partners to Certain Documents.
-----------------------------
(a) The Limited Partners shall have such rights as are enumerated
as rights of limited partners under the Act. The Limited Partners, in such
capacity, shall not take part in, or interfere in any manner, with the
conduct or control of the Partnership's business and shall have no right or
authority to act for or bind the Partnership, said powers being vested solely
and exclusively in the General Partner. Except as specifically set forth in
Section 9.3 or otherwise in this Agreement, the Limited Partners, in their
capacities as such, shall not have any right or power whatsoever to take any
action with respect to the conduct or control of the Partnership or its
business including, but not limited to, any right to vote on, or otherwise
approve, any matters or decisions, whether material, major or otherwise, in
connection with the business of the Partnership.
(b) In addition to any other rights provided in this Agreement or
by the Act, and except as limited by Section 10.1(c) below, 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:
(i) to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by the General
Partner pursuant to the Securities Exchange Act of 1934, as amended, and
each report sent to the stockholders of the General Partner;
(ii) to obtain a copy of the Partnership's federal, state and
local income tax returns for each fiscal year of the Partnership;
(iii) to obtain a current list of the name and last known
business, residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the Certificate
and all amendments thereto, together with executed copies of all powers
of attorney pursuant to which this Agreement, the Certificate and all
amendments thereto have been executed; and
(v) to obtain true and full information regarding the amount
of cash and a description and statement of any other property or
services contributed by each Partner and which each Partner has agreed
to contribute in the future, and the date on which each became a
Partner.
(c) Notwithstanding any other provisions of Section 10.1(b)
hereof, the General Partner may keep confidential from the Limited Partners,
for such period of time as the General Partner determines in its sole and
absolute discretion to be reasonable, any information that (i) the General
Partner believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in
the best interests of the Partnership or the General Partner or (ii) the
Partnership or the General Partner is required by law or by agreements with
unaffiliated third parties to keep confidential.
10.2 Withdrawal, Retirement, Death, Incompetency, Insolvency or
----------------------------------------------------------
Dissolution of a Limited Partner. A Limited Partner shall have no right to
--------------------------------
withdraw, retire or resign from the Partnership. The death, incompetency,
insolvency or dissolution of a Limited Partner shall not terminate the
Partnership. Upon the death of a Limited Partner, his or her executor,
administrator or successor in interest shall have all of the rights and
duties of a Limited Partner for the purpose of settling his or her estate.
10.3 Redemption Rights.
-----------------
(a) Grant of Rights. The General Partner does hereby grant to the
---------------
Limited Partners and the Limited Partners do hereby accept the right, but not
the obligation (such right shall be referred to hereinafter sometimes as the
"Redemption Rights"), to require the Partnership subsequent to the Offering
to redeem all or part of their Partnership Units for cash, at any time or
from time to time after the date which is the later of one (1) year after the
-----
Offering or one (1) year after the original issuance by the Partnership to
any Limited Partner of such Partnership Units, on the terms and subject to
the conditions and restrictions contained in this Section 10.3.
(b) Delivery of Exercise Notices. Any one or more Limited
----------------------------
Partners ("Exercising Partners") may, subject to the limitations set forth in
this Section 10.3, deliver to the General Partner an Exercise Notice pursuant
to which such Exercising Partners elect to exercise their Redemption Rights
with respect to all or any portion of their Partnership Units. The Exercise
Notice shall specify the specific number of Partnership Units which the
Limited Partner intends to require the Partnership to redeem. Only whole
numbers of Partnership Units may be redeemed. Once delivered, the Exercise
Notice shall be irrevocable.
(c) Assumption by General Partner. Notwithstanding anything
-----------------------------
contained herein to the contrary, the General Partner may, in its sole and
absolute discretion, assume directly the obligation with respect to and
satisfy an Exercising Partner's exercise of a Redemption Right by paying to
the Exercising Partner, at the General Partner's election, shares of Common
Stock and/or cash, as determined in accordance with the provisions of Section
10.3(e) below, whereupon the General Partner shall acquire the Offered Units
and shall be treated for all purposes of this Agreement as the owner of such
Offered Units. In the event the General Partner shall exercise its right to
satisfy the Redemption Right in the manner described in the preceding
sentence, the Partnership shall have no obligation to pay any amount to the
Exercising Partner with respect to such Exercising Partner's exercise of the
Redemption Right, and each of the Exercising Partner, the Partnership and the
General Partner shall treat the transaction between the General Partner and
the Exercising Partner as a sale of the Offered Units to the General Partner
for federal income tax purposes.
(d) Limitation on Exercise of Redemption Rights. Redemption Rights
-------------------------------------------
may be exercised at any time and from time to time after the date which is
the later of one (1) year after the Offering or one (1) year after the
-----
original issuance by the Partnership to any Limited Partner of such
Partnership Units, subject to the following limitations:
(i) A Limited Partner may not exercise its Redemption Rights
pursuant to any one particular Exercise Notice for less than One
Thousand (1,000) Partnership Units or, if such Limited Partner holds
less than One Thousand (1,000) Partnership Units, all of the Partnership
Units held by such Limited Partner;
(ii) A Limited Partner shall not have the right to exercise
its Redemption Rights hereunder if, in the opinion of counsel selected
by the General Partner, in its sole and absolute discretion, were the
General Partner to exercise its right to acquire the Offered Units for
shares of its Common Stock pursuant to Section 10.3(e), the issuance of
such shares of Common Stock may or would (A) violate the General
Partner's Articles of Incorporation, as amended from time to time, or
cause some of the shares of Common Stock to be "Excess Stock" as defined
in such Articles of Incorporation, (B) cause the General Partner to fail
any one or more of the REIT Requirements or (C) constitute a violation
of applicable securities laws; and
(iii) Each Limited Partner acknowledges and agrees that the
issuance of shares of Common Stock in connection with the exercise of
the Redemption Rights will not be registered under the Securities Act or
any state securities laws. Accordingly, shares of Common Stock issued
to such Limited Partner may be required to be held indefinitely and the
General Partner shall have no obligation to register such shares under
the Securities Act or any state securities laws unless required to do so
pursuant to a separate written agreement entered into by the General
Partner at the time of the issuance. In addition, such Limited Partner
will be required to meet such other requirements and to provide such
other information and representations as the General Partner may
require, which are required in the opinion of its counsel to lawfully
allow it to issue such shares without registration under the Securities
Act and any applicable state securities laws. Each Limited Partner
acknowledges that the certificates representing shares of Common Stock
issued will also bear a legend with respect to any restrictions on
transfer required in the opinion of counsel for the General Partner.
(e) Computation of Number of Exchange Shares and/or Cash To Be
----------------------------------------------------------
Paid. Each Partnership Unit which is to be redeemed for cash shall be
----
redeemed for an amount of cash equal to the Current Per Share Market Price
(determined as of the Trading Day immediately preceding the date upon which
the closing of the redemption of Offered Units is to occur). Notwithstanding
anything contained herein to the contrary, the General Partner, in its sole
and absolute discretion, shall have the right either (i) to deliver shares of
Common Stock to each Exercising Partner in lieu of all or any portion of the
cash requested by such Exercising Partner, the number of which shares of
Common Stock shall be equal to one per Partnership Unit or (ii) to cause the
Partnership to pay cash to each Exercising Partner in lieu of all or any
portion of the number of shares of Common Stock requested by such Exercising
Partner.
(f) Closing; Delivery of Election Notice. The closing of the
------------------------------------
redemption of Offered Units shall, unless otherwise mutually agreed, be held
at the principal offices of the General Partner, on the date agreed to by the
General Partner and the Exercising Partners, which date shall in no event be
later than: (i) ten (10) business days after the date of delivery of the
Exercise Notice to the General Partner or (ii) the first date upon which all
legal and other conditions with respect to such redemption have been
satisfied (which shall include the expiration or termination of any
applicable waiting periods).
(g) Closing Deliveries. At the closing of the redemption of
------------------
Offered Units, (i) the Exercising Partners shall execute and deliver (A)
proper instruments of transfer and assignment of the Offered Units and (B)
representations and warranties with respect to their due authority to sell
all of the right, title and interest in and to such Offered Units to the
General Partner and, with respect to the status of the Offered Units, that
such Offered Units are free and clear of all liens, claims and encumbrances
whatsoever, and (ii) the General Partner shall (A) if shares of Common Stock
are to be issued and the shares of Common Stock have an aggregate value
(based upon the Current Per Share Market Price) of in excess of $1,000,000,
execute and deliver representations and warranties with respect to its due
authority to issue the shares of Common Stock to be received in the exchange,
and deliver an opinion of counsel for the General Partner, reasonably
satisfactory to the Exercising Partners, to the effect that such shares of
Common Stock have been duly authorized, are validly issued, fully-paid and
nonassessable; and/or (B) if cash is to be paid for Partnership Units,
deliver a check in the amount of any cash due to the Exercising Partner(s) at
such closing. If shares of Common Stock are to be issued, the General
Partner shall deliver a stock certificate or certificates evidencing the
shares of Common Stock to be issued and registered in the names of the
Exercising Partners or their designees.
(h) Term of Rights. Unless sooner terminated, the rights of the
--------------
parties with respect to the Redemption Rights shall commence as of the later
of the Offering and the date which is one (1) year after the date of the
issuance of the Partnership Units and lapse for all purposes and in all
respects upon the termination of the Partnership; provided, however, that the
-------- -------
parties hereto shall continue to be bound by an Exercise Notice delivered to
the General Partner prior to such termination.
(i) Representations and Warranties of the General Partner. The
-----------------------------------------------------
General Partner represents and warrants, without time limit, that any Shares
of Common Stock issued in exchange for Partnership Units pursuant to this
Article X shall be duly authorized and validly issued and fully paid and non-
assessable and, in the event that the shares of Common Stock to be issued
have an aggregate value in excess of $1,000,000, shall be accompanied by an
opinion of counsel in form and substance reasonably acceptable to the
Exercising Partners.
(j) Covenants of the General Partner. To facilitate the General
--------------------------------
Partner's ability to fully perform its obligations hereunder, the General
Partner covenants and agrees as follows:
(i) At all times during the pendency of the Redemption
Rights, the General Partner shall reserve for issuance such number of
shares of Common Stock as may be necessary to enable the General Partner
to issue such shares in full exchange for all Partnership Units held by
the Limited Partners which are from time to time issued and outstanding;
(ii) During the pendency of the Redemption Rights, each
Limited Partner shall receive in a timely manner all reports and/or
other communications transmitted from time to time by the General
Partner to its stockholders generally; and
(iii) In case the General Partner shall issue rights or
warrants to all holders of shares of its Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share
less than the Current Per Share Market Price as of the date immediately
prior to the date of such issuance, the General Partner shall also issue
to each holder of a Partnership Unit such number of rights or warrants,
as the case may be, as he would have been entitled to receive had he
required the Partnership to redeem his Partnership Units immediately
prior to the record date for such issuance by the General Partner.
(iv) In case the outstanding shares of Common Stock shall be
subdivided into a greater number of shares, the number of shares of
Common Stock which the General Partner in its absolute discretion may
deliver in return for any Offered Unit as provided in Section 10.3(e)
shall be increased proportionately, and, conversely, in case outstanding
shares of Common Stock each shall be combined into a smaller number of
shares, the number of shares of Common Stock which the General Partner
in its absolute discretion may deliver in return for any Offered Unit as
provided in Section 10.3(e) shall be reduced proportionately, such
increase or reduction as the case may be, to become effective
immediately after the opening of business on the Trading Day following
the day upon which such subdivision or combination becomes effective.
(v) In case shares of Common Stock shall be changed into the
same or a different number of shares of any class or classes of shares
of beneficial interest, whether by capital reorganization,
reclassification or otherwise (other than a subdivision or combination
of shares or a stock dividend described in Section 10.3(i)(iv) above)
then and in each such event the Limited Partners shall have the right
thereafter to require the Partnership to redeem their Partnership Units
for the kind and amount of shares and other securities and property
which would have been received upon such reorganization,
reclassification or other change by holders of the number of shares of
Common Stock for which the Partnership Units might have been redeemed
immediately prior to such reorganization, reclassification or change.
(vi) The General Partner may, but shall not be required to,
make such adjustments to the number of shares of Common Stock issuable
upon redemption of a Partnership Unit, in addition to those required by
paragraphs (iii), (iv) and (v) of this Section 10.3(i), as the Board of
Directors considers to be advisable in order that any event treated for
Federal income tax purposes as a dividend of stock or stock rights shall
not be taxable to the recipients. The Board of Directors shall have the
power to resolve any ambiguity or correct any error in the adjustments
made pursuant to this Section 10.3(i) and its actions in so doing shall
be final and conclusive.
(k) Limited Partners' Covenant. Each Limited Partner covenants
--------------------------
and agrees with the General Partner that all Offered Units tendered to the
General Partner in accordance with the exercise of Redemption Rights herein
provided shall be delivered to the General Partner free and clear of all
liens, claims and encumbrances whatsoever and should any such liens, claims
and/or encumbrances exist or arise with respect to such Offered Units, the
General Partner shall be under no obligation to acquire the same. Each
Limited Partner further agrees that, in the event any state or local property
transfer tax is payable as a result of the transfer of its Offered Units to
the General Partner (or its designee), such Limited Partner shall assume and
pay such transfer tax.
ARTICLE 11
----------
BANKING, RECORDS AND TAX MATTERS
--------------------------------
11.1 Partnership Funds. All funds of the Partnership shall be
-----------------
deposited in its name in accounts (with banks, "money-market funds," or
securities of the United States government or like investment or depository
media) designated by the General Partner, and the General Partner or its
designees shall have the right to draw checks or other orders of withdrawal
thereon and make, deliver, accept and endorse negotiable instruments in
connection with the Partnership business.
11.2 Books and Records. The following books, records, and accounts
-----------------
shall be maintained by the Partnership, showing its assets, liabilities,
transactions, and financial condition: a current list of the full name and
last known address of each Partner, separately identifying the General and
Limited Partners and set forth in alphabetical order and setting forth the
amount of cash or a description and statement of the Agreed Value of other
property contributed or agreed to be contributed by each partner; the date on
which each became a Partner; a copy of the Certificate and all amendments
thereto; copies of the Partnership's federal, state and local income tax
returns and reports, if any, for the six most recent years; copies of this
Agreement and any amendments thereto; and copies of any financial statements
of the Partnership for the three most recent years. The Partnership's books
shall be maintained at the principal office of the Partnership. Each Partner
shall have the right to inspect and copy such materials at all reasonable
times and during ordinary business hours. The General Partner is not
required to deliver to any Limited Partner copies of the Certificate or any
amendments thereto, unless requested by such Limited Partner.
11.3 Financial Statements. Within ninety-five (95) days after the
--------------------
close of each fiscal year of the Partnership, the General Partner shall cause
to be prepared (at the Partnership's expense) and furnished to each Person
who was a Partner during the fiscal year then ended, a balance sheet of the
Partnership as of the close of such fiscal year and statements of income or
loss, and Net Cash Flow, if any. Such statements shall be prepared in
accordance with generally accepted accounting principles unless such
certification is waived, in writing, by all of the Partners.
11.4 Tax Returns. The General Partner shall cause to be prepared (at
-----------
the Partnership's expense) a United States Partnership Return of Income and
cause to be furnished to each Person who was a Partner during the fiscal year
a schedule (a "K-1 Schedule") of each such Partner's share of income,
credits, and deductions on the form then prescribed by the IRS. All elections
and options available to, or determinations as to items of income or expense
of, the Partnership for federal or state income tax purposes shall be taken,
rejected or made by the Partnership in the sole discretion of the General
Partner.
11.5 Section 754 Matters. If so requested by any Limited Partner or
-------------------
otherwise in its absolute discretion, the General Partner, on behalf of the
Partnership, shall file an election under Section 754 of the Code in
accordance with the procedures set forth in the applicable Regulations
promulgated thereunder, which shall be effective beginning with the first
fiscal year of the Partnership with respect to which the Partnership is
eligible to make such election, which election, for such fiscal year, may not
be revoked for any reason.
11.6 Tax Matter Partners. The General Partner is hereby appointed the
-------------------
"tax matters partner" of the Partnership for all purposes pursuant to
Sections 6221-6231 of the Code. The Partnership shall reimburse the tax
matters partner for any and all out-of-pocket costs and expenses (including
attorneys' and accountants' fees) incurred or sustained by it in its capacity
as tax matters partner. The Partnership shall indemnify, defend and hold the
tax matters partner harmless from and against any loss, liability, damage,
cost or expense (including attorneys' and accountants' fees) sustained or
incurred as a result of any act or decision concerning the Partnership tax
matters and within the scope of its responsibility as tax matters partner.
11.7 Other Reports. The General Partner shall deliver to each Limited
-------------
Partner, in a timely manner, all reports and/or other communications
transmitted from time to time by the General Partner to its shareholders.
ARTICLE 12
----------
TRANSFER OF GENERAL PARTNER INTERESTS
-------------------------------------
12.1 Transfer of Interest of the General Partner. No General Partner
-------------------------------------------
may at any time sell, assign, transfer, pledge or encumber any or all of its
Partnership Interest in the Partnership or withdraw or retire from the
Partnership except as otherwise provided herein or with the prior written
consent of Partners owning a majority of the issued and outstanding
Partnership Units (not including Partnership Units held by the General
Partner) taken as a single class. Retirement or withdrawal from the
Partnership shall not relieve the General Partner of any obligation
theretofore incurred by it hereunder. Notwithstanding anything contained
herein to the contrary, the Limited Partners shall have no right whatsoever
to remove the General Partner from the Partnership.
12.2 Retirement of the General Partner. If a General Partner other
---------------------------------
than the Interim Managing General Partner shall liquidate or dissolve, be
adjudged bankrupt, enter into an assignment for the benefit of creditors,
have a receiver appointed to administer its interest in the Partnership, be
the subject of a voluntary or involuntary petition for bankruptcy that is not
dismissed or vacated within ninety (90) days of filing, or have its interest
in the Partnership seized by a judgment creditor, or if there shall be an
individual general partner and he shall die, be adjudicated incompetent or
become permanently disabled (each of the foregoing events is referred to
hereinafter as an "Event of Retirement"), such General Partner, without
further act or notice, immediately shall be deemed to have retired as General
Partner of the Partnership. If the General Partner retires as General
Partner of the Partnership as aforesaid, (i) such General Partner (or its
administrator, executor, personal representative or successor) shall become a
Limited Partner retaining the General Partner's former interest in the
Profits, Losses, Net Cash Flow and distributions of the Partnership, pursuant
hereto, but shall have no right to participate in the management of the
affairs of the Partnership, and (ii) the surviving General Partner(s), if
any, shall remain as such and the Partners hereby agree and consent that the
Partnership shall continue in effect and shall not terminate, subject,
however, to the provisions of Section 12.5 hereof.
12.3 Retirement of Last Remaining General Partner. If the last
--------------------------------------------
remaining General Partner shall at any time withdraw or suffer an Event of
Retirement, the Limited Partners shall have the right, within ninety (90)
days thereafter, by a written consent executed and delivered by Limited
Partners owning a majority of the issued and outstanding Partnership
Interests taken as a single class, to appoint one or more new General
Partners as replacement General Partners, unless the Act requires a greater
percentage of the Limited Partners to consent to the continuation of the
Partnership, in which case such higher percentage shall be required for the
continuation of the Partnership. In such event, the Limited Partners shall
create for such replacement General Partners such interest in the Partnership
Profits, Losses and Net Cash Flow as the Limited Partners may agree upon from
among their collective interests in the Partnership.
12.4 Continuation of Partnership. In the event of the timely
---------------------------
appointment of a replacement or new General Partner(s) pursuant to this
Article 12, the relationship of the Partners shall be governed by the
provisions of this Agreement, the Partnership shall be continued, and the
replacement or new General Partner(s) shall have all of the management
rights, duties, responsibilities, authority and powers provided the General
Partner in this Agreement. If the Limited Partners fail to select a
replacement or new General Partner(s), whichever the case may be, within
ninety (90) days following retirement of the Last remaining General Partner,
the Partnership shall dissolve and terminate.
ARTICLE 13
----------
TRANSFER OF LIMITED PARTNER INTERESTS
-------------------------------------
13.1 Transfer of Interest of a Limited Partner. Except as otherwise
-----------------------------------------
specifically provided in this Agreement, no Limited Partner may sell, assign,
transfer, pledge, encumber or in any manner dispose of all or any part of its
Partnership Interest without the prior written consent of the General
Partner, which consent may be withheld by the General Partner in its sole
discretion. Notwithstanding the foregoing, each Limited Partner shall have
the right to (i) pledge or otherwise encumber all or any portion of its
Partnership Interest (subject, however, to applicable securities laws) and/or
(ii) transfer all or any portion of its Partnership Interest to members of
the Immediate Family of such Limited Partner and to one or more trusts or
other entities controlled by the Partner and/or members of its Immediate
Family for the benefit of one or more members of the Immediate Family of such
Limited Partner for family planning purposes, upon prior written notice to
the General Partner. Without limiting the generality of the foregoing, in no
event shall the General Partner consent to an assignment of all or any
portion of the Partnership Interest of a Limited Partner in the Partnership
if, in the opinion of the General Partner (or of counsel satisfactory to the
General Partner), such assignment (i) will result in a termination of the
Partnership for federal income tax purposes or otherwise result in adverse
tax consequences to the Partnership or any Partner, (ii) will result in the
Partnership failing to qualify for an exemption from the registration
requirements of the federal or any applicable state securities laws, (iii)
will result in the imposition of fiduciary responsibility on the Partnership
or any Partner under the Employee Retirement Income Security Act of 1974, as
amended from time to time, (iv) will result in a violation of any provision
of any mortgage or trust deed (or the note or bond secured thereby)
constituting a lien against any assets of the Partnership, or other
instrument, document or agreement to which the Partnership is a party or
otherwise bound, (v) represents a transfer of any component portion of a
Partnership Interest, such as the Capital Account, or rights to Net Cash
Flow, separate and apart from all other components of a Partnership Interest,
or (vi) may cause the General Partner to cease to comply with any and all
REIT Requirements. Subject to satisfaction of the conditions therefor set
forth or referred to herein, each Limited Partner hereby consents to the
substitution or admission of any assignee of a Limited Partner. Any sale,
assignment, transfer, pledge, encumbrance, hypothecation or other disposition
by a Limited Partner of all or any part of its Partnership Interest in
violation of the provisions hereof shall be void ab initio and of no force
---- -- ------
or effect whatsoever.
13.2 Assignee and Substitute Limited Partners. No Person shall be
----------------------------------------
admitted as an assignee or substituted Limited Partner under this Agreement
unless and until:
(a) An assignment is made in writing, signed by the assigning
Partner and accepted in writing by the assignee, and a duplicate original of
such assignment has been delivered to and approved by the General Partner;
(b) The General Partner has received an opinion of counsel
favorably covering the matters described in clauses (i) through (vi) of
Section 13.1 above, or waived all or any portion of this requirement;
(c) The prospective admittee executes and delivers to the General
Partner a written agreement in form reasonably satisfactory to the General
Partner pursuant to which said Person agrees to be bound by and confirms the
obligations, representations, warranties and power of attorney containedi n
this Agreement; and
(d) An appropriate amendment to this Agreement is executed.
13.3 Assignment. In the event an assignment is made in accordance with
----------
the terms hereof, unless otherwise required by the Code:
(a) The effective date of such assignment shall be the date the
written instrument of assignment is delivered to the Partnership and approved
by the General Partner;
(b) The Partnership and the General Partner shall be entitled to
treat the assignor of the assigned interest as the absolute owner thereof in
all respects and shall incur no liability for allocations of Profits or
Losses and distributions of Net Cash Flow made in good faith to such assignor
until such time as the written instrument of assignment has been actually
received and approved by the General Partner, and recorded in the books of
the Partnership; and
(c) The division and allocation of Profits or Losses, other than
Profits or Losses arising from a Liquidation of the Partnership, attributable
to the applicable Partnership Interests between the assignor and assignee
during any fiscal year of the Partnership shall be based upon the length of
time during such fiscal year, as measured by the effective date of such
assignment, that the assigned Partnership Interest was owned by each of them
and shall not be based upon the date or dates during such fiscal year in
which income was earned or losses were sustained by the Partnership;
provided, however, that the division and allocation of Profits or Losses
-------- -------
resulting from a Liquidation of the Partnership shall be based upon the date
or dates such income was earned or losses were sustained.
13.4 Cost of Admission. The cost of processing and perfecting an
-----------------
admission contemplated by this Article 13 (including reasonable attorney's
fees incurred by the Partnership) shall be borne by the party seeking
admission as a Partner to the Partnership.
ARTICLE 14
----------
DISSOLUTION AND LIQUIDATION OF PARTNERSHIP
------------------------------------------
14.1 Dissolution of the Partnership. The Partnership shall be
------------------------------
dissolved upon the happening of any of the following:
(a) An election to dissolve and wind up the affairs of the
Partnership by the General Partner (subject to Section 9.3 hereof);
(b) The occurrence of an Event of Retirement to the last remaining
General Partner, unless the Limited Partners elect to continue the business
of the Partnership pursuant to the provisions of Sections 12.4 and 12.5
hereof;
(c) Any event that makes it unlawful for the Partnership business
to be continued;
(d) The sale, disposition, or abandonment of all or substantially
all of the assets of the Partnership unless the General Partner, with the
written consent of Partners owning, during the period up to three years after
the Offering, seventy-five percent (75%) and subsequent thereto, fifty
percent (50%) of the Partnership Interests taken as a single class (which
consent may not be unreasonably withheld), elects to continue the Partnership
business for the purpose of the receipt and the collection of indebtedness or
the collection of any other consideration to be received in exchange for the
assets of the Partnership (which activities shall be deemed to be part of the
winding up of the affairs of the Partnership);
(e) Dissolution required by operation of law; or
(f) December 31, 2097, unless a majority in interest of the
Partnership elects to continue the Partnership.
14.2 Winding Up of Affairs. In the event of the dissolution and
---------------------
liquidation of the Partnership for any reason, the General Partner shall
commence to wind up the affairs of the Partnership and shall convert all of
the Partnership's assets to cash or cash equivalents within such reasonable
period of time as may be required to receive fair value therefor. All Profit
or Loss realized pursuant to the sale and/or other liquidation of Partnership
property shall be allocated among the Partners in such manner as would cause
their respective Capital Accounts to be reduced to zero if (i) all of the
Partnership's assets remaining after all Partnership debts and liabilities
have been paid or discharged, including debts owed to Partners and Affiliates
of Partners, were then distributed in accordance with Sections 8.1(a), 8.1(c)
and 8.1(e) and (ii) any assets used by the General Partner to establish
reserves as provided in Section 14.4(b) were instead distributed to the
Partners. If there is no General Partner to effect such Liquidation, then
the Limited Partners, pursuant to a vote of Limited Partners owning a
majority of the issued and outstanding Partnership Units owned by all Limited
Partners, may designate any person, firm or corporation, as a Liquidating
Trustee, for that purpose who shall have all of the rights, powers and
authority of a General Partner stated herein in connection therewith.
14.3 Accounting. In the case of the dissolution and termination of the
----------
Partnership, prior to any distributions to Partners pursuant to Section
14.4(c) below, a proper accounting shall be made of the Capital Accounts of
the Partners and of each item of income, gain, loss, deduction and credit of
the Partnership from the date of the last previous accounting to the date of
dissolution. The General Partner shall provide a copy of such accounting to
all Partners.
14.4 Final Distribution of Partnership Property. Subject to Article
------------------------------------------
24 of the Contribution and Exchange Agreement, upon termination of the
Partnership, the General Partner shall apply and distribute the remaining
property of the Partnership, together with the proceeds of any sales of same,
as follows:
(a) first, all Partnership debts and liabilities shall be paid and
discharged, including debts owed to Partners and any Affiliates of Partners;
(b) second, to establish any reserve for any contingent or
unforeseen liabilities or obligations of the Partnership. Such funds shall
be placed in escrow by the General Partner for the purposes of disbursing
such funds in payment of any of the contingencies, liabilities or
obligations, and, at the expiration of such period as the General Partner
shall deem advisable, the balance then remaining shall be distributed
pursuant to subsection (c) of this Section 14.4; and
(c) third, to distribute the balance to the Partners as follows:
(i) any and all Net Cash Flow arising from the ordinary course of the
Partnership's business during the period of liquidation shall be distributed
pursuant to Sections 8.1(a), (b) or (c) and (ii) any and all Net Cash Flow
arising pursuant to the sale and/or other liquidation of Partnership property
shall be distributed to the Partners in proportion to, and to the extent of,
the positive balances in their respective Capital Accounts.
Distributions upon liquidation of the Partnership (or any Partner's
interest in the Partnership) and related adjustments shall be made by the end
of the taxable year of the liquidation (or, if later, within 90 days after
the date of such liquidation) or as otherwise permitted by the Regulations.
14.5 Certificate of Cancellation. Upon completion of the liquidation
---------------------------
of the Partnership and the distribution of all Partnership property, the
Partnership shall terminate and the General Partner shall have the authority
to execute and record one or more Certificates of Cancellation of the
Partnership as well as any and all other documents required or considered
advisable by the General Partner to effectuate the dissolution and
termination of the Partnership.
ARTICLE 15
----------
POWER OF ATTORNEY
-----------------
15.1 Power of Attorney. Each Partner, by its execution hereof,
-----------------
irrevocably constitutes and appoints the General Partner, or any substitute
or replacement General Partner, with full power of substitution, as such
Partner's true and lawful attorney-infact, in its name, place and stead to
make, execute, sign, acknowledge, certify, deliver, file and record on its
behalf and on behalf of the Partnership, the following:
(a) This Agreement, all Certificates of Limited Partnership,
Certificates of Doing Business under an Assumed Name, amendments to any or
all of the foregoing, and any other certificates or instruments which may be
required to be filed by the Partnership or the Partners under the laws of the
State of Delaware or any other jurisdiction;
(b) One or more Certificates of Cancellation of the Partnership
and such other instruments or documents as may be deemed necessary or
desirable by the General Partner upon termination of the Partnership
business;
(c) Any and all amendments to this Agreement and to the
instruments described in subsections (a) and (b) above, provided such
amendments are either required by law or have been authorized by the
Partner(s) in accordance with Article 16 and/or any other provision of this
Agreement (including, without limitation, any amendment to this Agreement and
to the Certificate to reflect the substitution or admission of a Limited
Partner pursuant to this Agreement); and
(d) Any and all such other documents and instruments as may be
deemed necessary or desirable by said attorney to carry out fully the
provisions of this Agreement in accordance with its terms.
15.2 Grant of Authority Irrevocable. The foregoing grant of authority
------------------------------
(a) is a special power of attorney coupled with an interest, is irrevocable
and shall survive the death or incapacity of a Partner who is a natural
person or, in the case of a Partner that is not a natural person, the merger,
dissolution or other termination of its existence of the Partner, (b) may be
exercised by the General Partner on behalf of each Partner, by a facsimile
signature or by listing all of the Partners executing any instrument with a
single signature as attorney-in-fact for all of them, and (c) shall survive
the assignment by a Partner of the whole or any portion of his or its
interest in the Partnership.
ARTICLE 16
----------
AMENDMENT OF PARTNERSHIP AGREEMENT
----------------------------------
16.1 Amendments by Partners. Except as may be specifically provided
----------------------
below in this Section 16.1 and in Section 16.2 hereof, this Agreement may
only be amended with the written concurrence of the General Partner and the
written consent of Partners owning a majority of the Partnership Units taken
as a single class (not including the General Partner); provided, however,
-------- -------
that absent the concurrence of the General Partner and the approval of all of
the Limited Partners no amendment shall:
(a) increase the obligation of any Limited Partner to make
contributions to the capital of the Partnership;
(b) modify the order of allocation of distributions of the Net
Cash Flow or liquidating distributions, or the allocation of Profits and
Losses among the Partners (other than as specifically provided for herein,
including without limitation, modifications pursuant to Section 6.4 hereof);
(c) change the Partnership to a general partnership;
(d) reduce the percentage of Limited Partners required to consent
to any matter in this Agreement;
(e) amend Section 9.4(a)(iv) hereof or amend Section 10.3 hereof
in any manner that prohibits or restricts, or has the effect of prohibiting
or restricting, the ability of a Limited Partner to exercise its Redemption
Rights in full; or
(f) amend this Article 16.
16.2 Amendment by the General Partner Alone. Notwithstanding anything
--------------------------------------
contained in this Agreement to the contrary, 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:
(a) To add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(b) To reflect the admission, substitution, termination or
withdrawal of Partners in accordance with this Agreement, including without
limitation, the issuance of additional classes of Partnership Units to
Limited Partners pursuant to Section 6.4 hereof;
(c) 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;
(d) 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; and
(e) To amend the provisions of this Agreement that protect the
qualification of the General Partner as a REIT if such provisions are no
longer necessary because of a change in applicable law (or an authoritative
interpretation thereof), a ruling of the IRS, or if, subject to Section 9.3
hereof, the General Partner has determined to cease qualifying as a REIT.
The General Partner will provide notice to the Limited Partners when any
action under this Section 16.2 is taken.
16.3 Amendment by the General Partner and Certain Limited Partners.
-------------------------------------------------------------
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may be amended by the General Partner to provide that certain
Limited Partners have the obligation, upon liquidation of their interests in
the Partnership (within the meaning of Regulations Section 1.704-
1(b)(2)(ii)(g)), to restore to the Partnership the amounts of their negative
Capital Account balances, if any, for the benefit of creditors of the
Partnership or Partners with positive Capital Account balances or both,
together with any necessary corresponding amendments (including corresponding
amendments to Sections 6.6 and 6.9 and Article 7) with the consent of only
such Limited Partners and of any other Limited Partners already subject to
such a restoration obligation whose restoration obligation may be affected by
such amendment.
16.4 Amendment of Certificate. If this Agreement shall be amended
------------------------
pursuant to this Article 16, the General Partner shall cause the Certificate
to be amended, to the extent required by applicable law, to reflect such
change. The Partners shall be promptly notified of any amendments made under
this Article 16.
ARTICLE 17
----------
INDEMNIFICATION
---------------
17.1 Partnership Indemnification of Partner.
--------------------------------------
(a) To the fullest extent permitted by Delaware law, the
Partnership shall indemnify each Indemnitee from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including,
without limitation, reasonable attorneys' fees and other legal 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 such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, except to
the extent such Indemnitee acted in bad faith, or with gross negligence or
willful misconduct. Without limitation, the foregoing indemnity shall extend
to any liability of any Indemnitee, pursuant to a loan guaranty (except as
may be otherwise agreed in writing) or otherwise for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including without
limitation, any Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 17.1 in favor any Indemnitee having or potentially having
liability for any such indebtedness. Any indemnification pursuant to this
Section 17.1 shall be made only out of the assets of the Partnership, and
neither the General Partner nor any Limited Partner shall have any obligation
to contribute to the capital of the Partnership, or otherwise provide funds,
to enable the Partnership to fund its obligations under this Section 17.1.
(b) Reasonable expenses incurred by an Indemnitee who is a party
to a proceeding shall be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding, upon receipt by the Partnership of
an undertaking by or on behalf of the Indemnitee to repay such amount if it
shall be determined that the Indemnitee is not entitled to be indemnified as
authorized in Section 17.1(a).
(c) The indemnification provided by this Section 17.1 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 unless otherwise provided in a written
agreement pursuant to which such Indemnities are indemnified.
(d) The Partnership may, but shall not be obligated to, purchase
and maintain insurance, on behalf of the Indemnities and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such
liability under the provisions of this Agreement.
(e) For purposes of this Section 17.1, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it or 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 17.1; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan
in the performance of its duties for a purpose reasonably believed by it to
be in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject any of the Partners to
personal liability by reason of the indemnification provisions set forth in
this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or
in part under this Section 17.1 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 17.1 are for the benefit of the
Indemnities, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 17.1 or any provision
hereof shall be prospective only and shall not in any way affect the
Partnership's liability to any Indemnitee under this Section 171., as in
effect immediately prior to such amendment, modification, or repeal with
respect to claims arising from or relating to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.
17.2 Partner Indemnification of Partnership and Other Partners. In the
---------------------------------------------------------
event the Partnership or any Partner is made a party to any litigation or
otherwise incurs any loss or expense as a result of or in connection with any
other Partner's personal obligations or liabilities unrelated to Partnership
business, such other Partner shall indemnify and reimburse the Partnership or
Partner for all such loss and expense incurred, including reasonable
attorneys' fees, and the interest of such other Partner in the Partnership
may be charged therefor. The liability of a Partner under this Section 17.2
shall not be limited to such Partner's interest in the Partnership, but shall
be enforceable against such Partner personally. This indemnity shall be in
addition to and shall have no affect upon, any indemnity or similar
arrangement entered into separately by any Partner or Affiliate thereof.
ARTICLE 18
----------
MISCELLANEOUS PROVISIONS
------------------------
18.1 Notices. All notices and demands required or permitted under this
-------
Agreement shall be in writing and may be delivered personally to the Person
to whom it is authorized to be given, or sent by registered, certified or
first class mail, or by overnight delivery, postage prepaid, and if intended
for the Partnership, addressed to the Partnership at the principal office of
the Partnership, and if intended for a Partner, addressed to the Partner at
its address on the signature pages hereof, or to such other person or at such
other address designated by written notice given to the Partnership. Any
notice or demand mailed as aforesaid shall be deemed to have been delivered
two (2) days after the date that such notice or demand is deposited in the
mails. Any notices to the General Partner shall also be sent to c/o ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇, Esq., Reckson Associates Realty Corp., ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇.
18.2 Severability. If any provision of this Agreement or the
------------
application of such provision to any Person or circumstance shall be held
invalid, the remainder of this Agreement, or the application of such
provision to Persons or circumstances other than those as to which it is held
invalid shall not be affected.
18.3 Parties Bound. Any Person acquiring or claiming an interest in
-------------
the Partnership, in any manner whatsoever, shall be subject to and bound by
all terms, conditions and obligations of this Agreement to which his or its
predecessor in interest was subject or bound, without regard to whether such
Person has executed a counterpart hereof or any other document contemplated
hereby. No Person, including the legal representative, heir or legatee of a
deceased Partner, shall have any rights or obligations greater than those set
forth in this Agreement and no Person shall acquire an interest in the
Partnership or become a Partner thereof except as permitted by the terms of
this Agreement. This Agreement shall be binding upon the parties hereto,
their successors, heirs, devisees, assigns, legal representatives, executors
and administrators.
18.4 Applicable Law. The Partnership and this Agreement shall be
--------------
governed by the laws of the State of Delaware.
18.5 Partition. Each Partner hereby irrevocably waives during the term
---------
of the Partnership any right that he or it may have to maintain any action
for partition with respect to any property of the Partnership.
18.6 Headings. The headings in this Agreement are inserted for
--------
convenience and identification only and are in no way intended to describe,
interpret, define or limit the scope, extent or intent of this Agreement or
any provision.
18.7 Counterparts. This Agreement may be executed in multiple
------------
counterparts with separate signature pages, each such counterpart shall be
considered an original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the date first set forth above, confirms his or its agreement to become a
General Partner, Interim Managing General Partner or Limited Partner, as the
case may be, of the Partnership, agrees to be bound by this Agreement and
acknowledges the appointment of attorneys-in-fact as set forth herein, and
swears that the statements set forth herein are true and correct.
GENERAL PARTNER:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INDUSTRIAL TRUST, a
Maryland real estate investment trust
By:____________________________________
Its:
INTERIM MANAGING GENERAL
PARTNER:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ INDUSTRIAL INTERIM GP LLC,
a Delaware limited liability company
By: _____________________________________
Its:
LIMITED PARTNERS:
__________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
(Signature page to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Partnership, L.P.)
_________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇
_________________________________________
▇▇▇▇ ▇. ▇▇▇▇
__________________________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee
ESTATE OF ▇▇▇ ▇▇▇▇▇▇
By:_____________________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as Executrix
(Signature page to ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Operating Partnership, L.P.)
EXHIBIT A
---------
Partners and Partnership Units
------------------------------
Name and Address of Partner Partnership Units
--------------------------- -----------------
General Partner:
---------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industrial Trust
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
INTERIM MANAGING GENERAL PARTNER:
--------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industrial Interim GP LLC
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
LIMITED PARTNERS:
-----------------
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, as Trustee
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
The Estate of ▇▇▇ ▇▇▇▇▇▇
c/o ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇-▇▇ ▇.▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
EXHIBIT B
Exercise Notice
---------------
The undersigned Limited Partner hereby irrevocably requests Reckson
Operating Partnership, L.P., a Delaware limited partnership (the
"Partnership") to redeem ____________________ Partnership Units in the
Partnership in accordance with the terms of the Amended and Restated
Agreement of Limited Partnership of the Partnership and the Redemption Right
referred to therein; and the undersigned Limited Partnership irrevocably (i)
surrenders such Partnership Units and all right, title and interest therein;
and (ii) directs that the cash and/or shares of Common Stock (if the General
Partner determines to satisfy this exercise of the Redemption Right by paying
in whole or in part with shares of Common Stock) deliverable upon exercise of
the Redemption Right be delivered to the address specified below, and if
Shares of Common Stock are to be delivered, such shares of Common Stock be
registered or placed in the name(s) and at the address(es) specified below.
The undersigned hereby, represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such Limited
Partnership Units, free and clear of the rights or interests of any other
person or entity; (b) has the full right, power, and authority to request
such redemption and surrender such Partnership Units as provided herein; and
(c) has obtained the consent or approval of all persons or entities, if any,
having the right to consent or approve such redemption and surrender of
units. The undersigned Limited Partner further agrees that, in the event
that any state or local property tax is payable as a result of the transfer
of its Partnership Units to the Partnership or the General Partner, the
undersigned Limited Partner shall assume and pay such transfer tax.
Dated:
--------------------------
Name of Limited Partner:
----------------------------------------
Please Print
----------------------------------------
(Signature of Limited Partner)
-----------------------------------------
(Street Address)
-----------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------------------
If Shares of Common Stock are to be issued, issue to:
Name:
---------------------------------------------
Please insert social security number:
---------------------------
EXHIBIT C
List of Contributed Entity Interests and Properties
---------------------------------------------------
AMENDED & RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
DATED AS OF JANUARY 6, 1998
TABLE OF CONTENTS
Page
----
ARTICLE 1
DEFINITIONS
ARTICLE 2
CONTINUATION OF THE PARTNERSHIP
2.1 Continuation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.2 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3
NAME AND OFFICES
3.1 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.2 Principal and Registered Offices . . . . . . . . . . . . . . . . . . 12
ARTICLE 4
PURPOSE
4.1 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 5
TERM AND FISCAL YEAR
5.1 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.2 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE 6
CAPITAL CONTRIBUTIONS, ADDITIONAL FUNDING AND CAPITAL ACCOUNTS
6.1 Capital Contributions of the General Partner and
the Interim Managing General Partner . . . . . . . . . . . . . . . 14
6.2 Capital Contributions of the Limited Partners . . . . . . . . . . . 16
6.3 General Partner Option to Contribute Additional Capital . . . . . . 16
6.4 General Partner Option to Issue Additional Partnership
Units to Limited Partners . . . . . . . . . . . . . . . . . . . . 18
6.5 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . 19
6.6 Limited Liability . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.7 Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.8 No Interest on Capital Contributions . . . . . . . . . . . . . . . . 20
6.9 No Third Party Beneficiary . . . . . . . . . . . . . . . . . . . . . 21
6.10 Incentive Stock Option Plans . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 7
ALLOCATION OF PROFITS AND LOSSES
7.1 General Allocation of Profits and Losses . . . . . . . . . . . . . . 22
7.2 Allocations with Respect to Transferred Interests . . . . . . . . . 22
7.3 Regulatory Allocations . . . . . . . . . . . . . . . . . . . . . . . 22
7.4 Tax Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.5 Allocations with Respect to Partnership Units other
than OP Units . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ARTICLE 8
DISTRIBUTIONS
8.1 Distribution of Net Cash Flow . . . . . . . . . . . . . . . . . . . 25
8.2 Distributions in Kind . . . . . . . . . . . . . . . . . . . . . . . 26
8.3 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.4 Distributions with Respect to Partnership Units other
than OP Units . . . . . . . . . . . . . . . . . . . . . . . . . . 27
ARTICLE 9
MANAGEMENT
9.1 Management of Partnership Affairs . . . . . . . . . . . . . . . . . 27
9.2 Powers and Authorities of the General Partner . . . . . . . . . . . 28
9.3 Major Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4 Restrictions on General Partner's Authority . . . . . . . . . . . . 32
9.5 Engagements by the Partnership . . . . . . . . . . . . . . . . . . . 32
9.6 Engagement of Affiliates . . . . . . . . . . . . . . . . . . . . . . 32
9.7 Liability of the General Partner . . . . . . . . . . . . . . . . . . 33
9.8 Reimbursement of Certain Expenses of the General Partner . . . . . . 33
9.9 Outside Activities of the General Partner . . . . . . . . . . . . . 34
9.10 Operation in Accordance with REIT Requirements . . . . . . . . . . 34
9.11 Title Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
ARTICLE 10
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
10.1 No Participation in Management of Partnership;
Rights of Limited Partners to Certain Documents . . . . . . . . . 34
10.2 Withdrawal, Retirement, Death, Incompetency,
Insolvency or Dissolution of a Limited Partner . . . . . . . . . . 36
ARTICLE 11
BANKING, RECORDS AND TAX MATTERS
11.1 Partnership Funds . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.2 Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . 41
11.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 41
11.4 Tax Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.5 Section 754 Matters . . . . . . . . . . . . . . . . . . . . . . . . 42
11.6 Tax Matter Partners . . . . . . . . . . . . . . . . . . . . . . . . 42
11.7 Other Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 12
TRANSFER OF GENERAL PARTNER INTERESTS
12.1 Transfer of Interest of the General Partner . . . . . . . . . . . . 43
12.2 Retirement of the General Partner . . . . . . . . . . . . . . . . . 43
12.3 Retirement of Last Remaining General Partner . . . . . . . . . . . 43
12.4 Continuation of Partnership . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 13
TRANSFER OF LIMITED PARTNER INTERESTS
13.1 Transfer of Interest of a Limited Partner . . . . . . . . . . . . . 44
13.2 Assignee and Substitute Limited Partners . . . . . . . . . . . . . 45
13.3 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
13.4 Cost of Admission . . . . . . . . . . . . . . . . . . . . . . . . . 46
ARTICLE 14
DISSOLUTION AND LIQUIDATION OF PARTNERSHIP
14.1 Dissolution of the Partnership . . . . . . . . . . . . . . . . . . 46
14.2 Winding Up of Affairs . . . . . . . . . . . . . . . . . . . . . . . 47
14.3 Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
14.4 Final Distribution of Partnership Property . . . . . . . . . . . . 48
14.5 Certificate of Cancellation . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 15
POWER OF ATTORNEY
15.1 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . 48
15.2 Grant of Authority Irrevocable . . . . . . . . . . . . . . . . . . 49
ARTICLE 16
AMENDMENT OF PARTNERSHIP AGREEMENT
16.1 Amendments by Partners . . . . . . . . . . . . . . . . . . . . . . 49
16.2 Amendment by the General Partner Alone . . . . . . . . . . . . . . 50
16.3 Amendment by the General Partner and Certain Limited Partners . . . 51
16.4 Amendment of Certificate . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 17
INDEMNIFICATION
17.1 Partnership Indemnification of Partner . . . . . . . . . . . . . . 51
17.2 Partner Indemnification of Partnership and Other Partners . . . . . 53
ARTICLE 18
MISCELLANEOUS PROVISIONS
18.1 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.2 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.3 Parties Bound . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.4 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.5 Partition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.6 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
18.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 55