Exhibit 3
▇▇▇▇▇ CASH PLUS LIMITED PARTNERSHIP
AMENDED AGREEMENT OF LIMITED PARTNERSHIP
AGREEMENT dated as of the 12th day of July, 1985, by and among The ▇▇▇▇▇
Corporation, a Massachusetts corporation, and The ▇▇▇▇▇ Company Limited
Partnership IV, a Massachusetts limited partnership, each as a General Partner;
▇▇▇▇▇ Depositary Corporation, as the Corporate Limited Partner; and those
Persons who may hereafter be admitted to the Partnership as Investor Limited
Partners. The Corporate Limited Partner and the Investor Limited Partners are
collectively referred to herein as the "Limited Partners" and, together with the
General Partners, as the "Partners." Certain other terms used throughout this
Agreement are defined in Section 17 hereof.
WHEREAS, the General Partners and the Corporate Limited Partner formed a
limited partnership (the "Partnership") by filing a Certificate of Limited
Partnership with the Secretary of State of The Commonwealth of Massachusetts on
April 30, 1985, and a First Amendment thereto on July 3, 1985 and entered into
an Amended Agreement of Limited Partnership dated as of July 3, 1985, and wish
to continue the Partnership under this Amended Agreement of Limited Partnership
(the "Agreement") and the provisions of the Massachusetts Uniform Limited
Partnership Act; and
WHEREAS, the General Partners and the Corporate Limited Partner wish to
provide, among other matters, for (i) economic and other rights of investors
(the "Unitholders") in the Partnership who will hold Units of Depositary
Receipts evidencing such rights and who may, under certain circumstances, be
admitted to the Partnership as Investor Limited Partners; (ii) the assignment to
the extent permitted by Massachusetts law by the Corporate Limited Partner to
the Unitholders of all of its interest in distributions, including liquidating
distributions, and profits and losses of the Partnership and all of its other
rights, duties and obligations in connection with the Limited Partner Interests
which correspond to the Units; (iii) the obligation of the Corporate Limited
Partner to exercise any and all rights, duties and obligations with respect to
such Limited Partner Interests solely in favor of, in the interest of, and at
the direction of the Unitholders; (iv) the continued status of the Corporate
Limited Partner as a Limited Partner of the Partnership; and (v) the possible
admission of Investor Limited Partners subject to the terms and conditions
herein specified;
NOW THEREFORE, the parties hereto agree as follows:
Section 1. CONTINUATION. The parties agree to continue the Partnership
pursuant to this Agreement and the provisions of the Uniform Limited Partnership
Act of The Commonwealth of Massachusetts.
Section 2. NAME AND OFFICE. The Partnership shall be conducted under the
name and style of "▇▇▇▇▇ Cash Plus Limited Partnership." The principal office
and place of business of the Partnership shall be located at ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other place as the General
Partners may from time to time determine and specify by written notice to all of
the Partners. The Partnership shall at all times maintain in Massachusetts (i)
an office at which shall be kept the basic Partnership documents described in
Section 12.2 hereof, and (ii) an agent for service of process selected by the
General Partners in accordance with any relevant provisions of the Massachusetts
Uniform Limited Partnership Act as then in effect.
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Section 3. PURPOSES AND POWERS.
3.1 PURPOSES. The purposes of the Partnership are to acquire, invest in,
maintain, operate, lease, improve, hold, encumber, sell, manage and otherwise
deal with the Assets of the Partnership.
3.2 POWERS. In furtherance of the above purposes, the Partnership shall
have the powers:
(a) to acquire, improve, hold, sell, exchange and otherwise deal in
Properties situated in any location in the United States and in any real
property appurtenant thereto and in interests therein as may be necessary or
desirable to carry out the operation, leasing and maintenance of such
Properties;
(b) to acquire, hold, sell, exchange and otherwise deal in mortgage-backed
securities ("MBS") issued or originated under or in connection with federal
housing programs of the Government National Mortgage Association ("GNMA"), the
Federal National Mortgage Association ("FNMA") or the Federal Home Loan Mortgage
Corporation ("FHLMC");
(c) subject to any applicable statutes and regulations, to borrow money to
further the purposes of the Partnership, to issue evidences of indebtedness in
respect thereof and to secure the same by mortgage or pledge or grant of lien on
or other security interest in a Property or any other assets of the Partnership;
and
(d) to do all things, carry on any activities and enter into, perform,
modify, supplement or terminate any contracts necessary to, in connection with
or incidental to the furtherance of the purposes of the Partnership, all so long
as such things, activities and contracts may be lawfully done, carried on or
entered into by the Partnership under the laws of The Commonwealth of
Massachusetts and the United States of America and under the terms of this
Agreement.
The Partnership shall not engage in any business not provided for in this
Section 3.2 without the Consent of the holders of a majority of the Limited
Partner Interests.
Section 4. TERM. The term of the Partnership shall end at midnight on
December 31, 2025, unless the Partnership is sooner dissolved or terminated as
provided in Section 11 hereof.
Section 5. CAPITAL CONTRIBUTIONS.
5.1 CONTRIBUTIONS OF GENERAL PARTNERS. The General Partners have
contributed in cash in respect of their Interests an aggregate of $3,000, in the
respective amounts set forth opposite their names in Schedule A hereto. Upon the
dissolution and termination of the Partnership, the General Partners will
contribute to the Partnership an amount equal to the lesser of (i) the deficit
balances in their Capital Accounts or (ii) the excess of one and one-hundredths
percent (1.01%) of the total Capital Contributions of the Limited Partners over
the amount of capital previously contributed by the General Partners.
5.2 CONTRIBUTIONS OF LIMITED PARTNERS. The Corporate Limited Partner has
contributed $2,000 in cash in respect of 100 Limited Partner Interests. Upon the
purchase of Units by Unitholders, the Corporate Limited Partner shall contribute
in cash to the Partnership the Subscription Prices paid by the Unitholders,
shall receive Limited Partner Interests in return therefor, shall assign all its
rights with respect to such Interests to the Unitholders to the extent permitted
by Massachusetts law, shall agree to exercise any and all rights with respect to
such Interests as directed by the Unitholders, shall remain a
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Limited Partner with respect to such Interests as permitted by the Massachusetts
Uniform Limited Partnership Act, and shall within 45 days after the initial
purchase of Interests by Unitholders deliver Depositary Receipts to the
Unitholders evidencing their rights with respect to such Interests. Not less
than 125,000 Units (not including Units purchased by the General Partners and
their Affiliates) and not more than 4,000,000 Units evidenced by Depositary
Receipts will be sold.
5.3 SALE OF ADDITIONAL LIMITED PARTNER INTERESTS OR UNITS. Subsequent to
the final closing of the sale of not less than 125,000 Units (not including
Units purchased by the General Partners and their Affiliates) and not more than
4,000,000 Units, the Partnership may not sell additional Limited Partner
Interests or Units; provided, however, that this Section shall not prevent a
Unitholder from exchanging Units for Limited Partner Interests pursuant to
Section 7.6(i) hereof.
5.4 CAPITAL ACCOUNTS. A Capital Account shall be established and
maintained for each General Partner, Limited Partner, and Unitholder. The
Capital Account of each Partner shall be (a) credited with all payments made to
the Partnership by such Partner on account of Capital Contributions and with
allocations to such Partner of Partnership Profits for Tax Purposes and
tax-exempt income, and (b) charged with allocations to such Partner of
Partnership Losses for Tax Purposes, with other Partnership expenditures which
are not deductible for federal income tax purposes (not including payments of
indebtedness or expenditures included in the basis of any Partnership asset),
and with cash distributions made to such Partner as distributions of Cash Flow
or of Net Cash Proceeds of Capital Transactions and the Terminating Capital
Transaction, and shall otherwise appropriately reflect transactions of the
Partnership and the Partners. The Capital Account of each Unitholder shall be
kept in the same manner as the Capital Account of a Partner. A Substitute
General or Limited Partner shall be deemed to have made the Capital Contribution
to the Partnership which was made with respect to the Interest transferred or
exchanged and to have received from the Partnership the credits, allocations and
charges with respect to such Interest and shall otherwise succeed to the Capital
Account kept with respect to such Interest.
5.5 ADDITIONAL CAPITAL CONTRIBUTIONS; INTERPRETATION. No Partner or
Unitholder shall be required to make any Capital Contribution, or be entitled to
bring an action for partition against the Partnership, or to demand or receive
any distribution of or with respect to his Capital Contribution except as is
specifically provided under this Agreement. No loan made by a General Partner,
Limited Partner or Unitholder to the Partnership shall constitute a Capital
Contribution for any purpose.
Section 6. GENERAL PARTNERS.
6.1 EXTENT OF POWERS AND DUTIES.
(a) GENERAL. Except as expressly limited by the provisions of this
Agreement, the General Partners shall have complete and exclusive discretion in
the management and control of the affairs and business of the Partnership and
all powers necessary, convenient or appropriate to carry out the purposes,
conduct the business and exercise the powers of the Partnership. Except as so
expressly limited, the General Partners shall possess and enjoy with respect to
the Partnership all of the rights and powers of partners of a partnership
without limited partners to the extent permitted by Massachusetts law.
(b) POWERS AND DUTIES. The General Partners shall diligently and
faithfully exercise their discretion to the best of their ability and use their
best efforts during so much of their time as may be necessary to carry out the
purposes and conduct the business of the Partnership in accordance with this
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Agreement and in the best interests of the Partnership and so as, consistent
therewith, to protect the interests of the Investor Limited Partners and
Unitholders as a group. The General Partners shall have fiduciary responsibility
for the safekeeping and use of all funds and assets of the Partnership, whether
or not in their immediate possession or control, and they shall not employ or
permit another Person to employ such funds or assets in any manner except for
the exclusive benefit of the Partnership. In particular, the General Partners,
solely, shall be responsible for and shall use their best efforts and exercise
discretion to the best of their ability: (i) to cause Assets to be acquired,
held, and sold, exchanged or otherwise disposed of; (ii) to rent, maintain and
operate the Properties; (iii) to select and supervise the activities of the real
estate management agent(s) for the Partnership including, without limitation,
the periodic inspection of the Properties in order to assure their proper
maintenance and repair; (iv) to assure the proper application of revenues of the
Partnership; (v) to maintain proper books of account for the Partnership and to
prepare all reports of operations and tax returns which are to be furnished to
the Partners and Unitholders pursuant to this Agreement or which are required by
taxing bodies or other governmental agencies; (vi) to maintain adequate
insurance with respect to the Properties and any other insurable property of the
Partnership pursuant to policies of insurance in form and coverage customary for
property similar to the Properties and such other insurable property; and (vii)
to assure the doing of all other things which may be necessary or advisable in
connection with the supervision of the affairs, business and property of the
Partnership.
(c) AMPLIFICATION OF POWERS AND DUTIES. As amplification, and not by way
of limitation on the powers expressed herein, the General Partners shall have,
subject to the provisions of this Agreement, full power and authority on behalf
of the Partnership, in order to carry out and accomplish its purposes and
functions: (i) to expend Partnership capital and income; (ii) to purchase,
lease, sell, convey, exchange, improve, divide, combine and otherwise transact
business with respect to interests in real estate and personal property, and in
that connection to employ engineers, contractors, attorneys, accountants,
brokers, appraisers, and such other consultants, advisors, artisans, and workmen
as may be necessary or advisable for the purpose; (iii) to designate
depositories of the Partnership's funds, and the terms and conditions of such
deposits and drawings thereon; (iv) to borrow money or otherwise to procure
extensions of credit for the Partnership, as security therefor to pledge,
hypothecate, mortgage, assign, transfer, and grant security interests in the
Assets, and in connection therewith to execute, seal, acknowledge and deliver
promissory notes, guarantees, mortgages, security and other agreements,
assignments and any other written documents; (v) to execute and deliver
documents and instruments relating to real and personal property of whatever
kind and description, including, but not limited to, deeds, mortgages, leases
and other documents of title or conveyance, regulatory agreements with
governmental bodies and agencies, powers of attorney, and other contracts,
instruments and agreements of all kinds; (vi) to hold all or any portion of the
Assets in the name of one or more trustees, nominees or other agents of or for
the Partnership for the purpose of facilitating transactions involving said
Assets; (vii) to establish reserves for normal repairs, replacements and
contingencies and, in their discretion, for any other proper Partnership
purpose; (viii) to invest the proceeds of the offering of Units on an interim
basis as provided in Section 6.2(a) hereof for a period of up to 24 months after
the date on which the offering of Units commences; (ix) to reinvest the proceeds
of the sale of an MBS if such MBS is sold by the Partnership within five years
after the final closing of the sale of Units; (x) to reinvest the proceeds of
the sale of a Property if such Property is sold by the Partnership within two
years after the final closing of the sale of Units; (xi) to offer and sell the
Units to the public directly or through any licensed Affiliate of the General
Partners and to employ personnel, agents and dealers for such purposes; (xii) to
appoint a transfer agent with respect to the Units; (xiii) to list the Units on
NASDAQ or another securities exchange or to withdraw the Units from such listing
and take such actions as they deem appropriate therefor; (xiv) to take such
steps as the General Partners determine are advisable or necessary and will
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not result in any material adverse effect on the economic position of a majority
in interest of the Investor Limited Partners and the Unitholders with respect to
the Partnership in order to preserve the tax status of the Partnership as a
pass-through entity for federal income tax purposes, including, without
limitation, removing the Depositary Receipts from public trading markets,
causing the Corporate Limited Partner to cancel all Depositary Receipts and
imposing restrictions on transfers of Units or Limited Partner Interests
(provided such restrictions on transfers do not cause the Partnership's Assets
to be deemed to be "plan assets" with respect to investors which are Qualified
Plans); (xv) to take such steps as the General Partners determine are advisable
or necessary and will not result in any material adverse effect on the economic
position of a majority in interest of the Investor Limited Partners and the
Unitholders with respect to the Partnership to restructure the Partnership and
its activities to obtain a prohibited transaction exemption from the Department
of Labor or to comply with any exemption in final plan asset regulations adopted
by the Department of Labor, including, but not limited to, establishing a fixed
percentage of Units permitted to be held by Qualified Plans or other tax-exempt
investors or discontinuing sales to such entities after a given date, in the
event that either the assets of the Partnership constitute "plan assets" for
purposes of ERISA or the transactions contemplated hereunder constitute
prohibited transactions under ERISA or the Code and an exemption for such
transactions is not obtainable from the Department of Labor; (xvi) to take such
steps as the General Partners determine are advisable or necessary, with the
Consent of the holders of a majority of the Limited Partner Interests, to
restructure the Partnership and its activities in order to enable the
Partnership to qualify as a real estate investment trust for federal income tax
purposes; and (xvii) in general to do all things and execute all documents the
General Partners shall deem necessary or convenient to accomplish the purposes
of the Partnership, or to protect and preserve the Assets, to the same extent as
if they owned such Assets individually. The powers of the General Partners
enumerated in subsections (xiv) and (xv) above may be carried out by them and
the Corporate Limited Partner acting on behalf of the Unitholders without any
canvassing of or voting by the Unitholders.
(d) ACCEPTANCE OF UNITHOLDERS. The General Partners' right to accept as
Unitholders prospective transferees of Depositary Receipts is more fully set
forth in Section 7.2 hereof. The General Partners shall have the right to accept
as initial Unitholders such Persons (including the General Partners and their
Affiliates) as may acquire at least 250 Units or, in the case of tax-exempt
entities 100 Units, up to an aggregate of not less than 125,000 Units (not
including Units purchased by the General Partners and their Affiliates) and not
more than 4,000,000 Units. Each person desiring to become an initial Unitholder
shall execute and deliver to the General Partners a subscription agreement and
such other documents as shall be deemed appropriate by the General Partners.
Each such subscription shall be subject to acceptance by the General Partners.
If subscriptions are received and accepted respecting not less than 400,000
Units (excluding Units subscribed for by residents of Texas), a closing of the
sale of Units shall occur. If subscriptions are received and accepted respecting
not less than 125,000 Units (excluding Units subscribed for by the General
Partners and their Affiliates and by residents of Texas), a closing of the sale
of Units may occur In the sole discretion of the General Partners if they commit
to purchase or cause to be purchased at the termination of the offering any then
unsold units necessary to reach a minimum of 400,000 Units. Any such purchases
of Units by the General Partners or their Affiliates shall be net of sales
commissions to selected dealers. The General Partners will accept or reject each
subscription for Units within 30 days after they receive it; if rejected, all
subscription payments which accompanied such rejected subscription shall be
returned forthwith to the subscriber. No General Partner or Affiliate of a
General Partner or any underwriter, dealer or salesman of Units shall directly
or indirectly pay or award any finder's fee, commission or other compensation to
any Person engaged by a potential Unitholder for investment advice as an
inducement to such advisor to advise the purchase of Units; provided, however,
that this provision shall not prohibit the normal sales commission payable to a
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registered broker-dealer or other properly licensed Person for selling Units.
Within 15 days after a successful completion of the minimum offering, the
Subscription Prices for such Units shall be contributed in cash to the
Partnership, the Corporate Limited Partner shall receive the Limited Partner
Interests corresponding to such Units, the assignment to the Unitholders and
their contractual rights under Section 7.6(b) hereof with respect to such Units
shall commence, the General Partners shall prepare and file an amendment to the
Certificate of Limited Partnership which shall reflect the contribution to the
Partnership of the Subscription Price of such Units, and the Depositary Receipts
with respect to such Units shall be delivered to the Unitholders within 45 days
after such closing. Thereafter, Subscription Prices will be contributed to the
Partnership and Depositary Receipts will be delivered to Unitholders as
described above either once or twice a month until the termination of the
offering of the Units. The General Partners shall prepare and file from time to
time during the offering of Units, further amendments to the Certificate of
Limited Partnership to reflect the increase of the Capital Contribution of the
Corporate Limited Partner on behalf of the Unitholders. Until their Subscription
Prices are delivered to the Partnership at a closing, subscribers will not be
Unitholders, but instead will be creditors of the Partnership entitled to a
return of their respective subscription payments in the event they are not
accepted as Unitholders.
(e) MAINTENANCE OF NET WORTH. The General Partners shall at all times use
their best efforts to maintain their combined net worth (including the net worth
of the general partners of any partnership which serves as a General Partner
including, without limitation, The ▇▇▇▇▇ Company Limited Partner ship-IV) at a
sufficient level to meet all requirements of the Code under currently applicable
rulings, regulations and policies of the Internal Revenue Service and as
hereafter interpreted by the Internal Revenue Service, any agency of the federal
government or the courts, to permit the Partnership to be classified for federal
income tax purposes as a partnership and not as an association taxable as a
corporation, and shall, irrespective of such requirements, maintain such
combined net worth on a fair market basis at an amount at least equal to
$1,000,000.
(f) DELEGATION OF POWERS. Each General Partner, while there are more than
one, may act on behalf of the Partnership in connection with any particular
matter affecting the Partnership, including the authority to execute notes,
deeds, mortgages and other instruments. Except as otherwise provided under this
Agreement or by law, the General Partners may delegate all or any of their
duties under this Agreement to any of their own respective partners, officers or
employees, and in furtherance of such delegation may elect, employ, contract or
deal with any Person (including any General Partner or any Affiliate of a
General Partner).
(g) RELIANCE BY THIRD PARTIES. No Person dealing with the Partnership, or
its Assets, whether as mortgagee, assignee, purchaser, lessee, grantee or
otherwise, shall be required to investigate the authority of the General
Partners, or any General Partner purporting to act on behalf of the other
General Partners, in selling, assigning, leasing, mortgaging, conveying or
otherwise dealing with any Partnership Assets or any part thereof, nor shall any
such assignee, lessee, purchaser, mortgagee, grantee or other Person entering
into a contract with the Partnership be required to inquire as to whether the
approval of the Partners or Unitholders for any such sale, assignment, lease,
mortgage, transfer or other transaction has been first obtained. Any such Person
shall be conclusively protected in relying upon a certificate of authority or
any other material fact signed by any General Partner, or in accepting any
instrument signed by any General Partner in the name and behalf of the
Partnership or the General Partners.
6.2 LIMITATIONS ON THE EXERCISE OF POWERS OF GENERAL PARTNERS. The
General Partners shall have no power to take any action prohibited by this
Agreement or by the Massachusetts Uniform Limited
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Partnership Act. Furthermore, in their administration of the Partnership's
affairs, the General Partners shall be subject to the following specific
limitations:
(a) INVESTMENT OBJECTIVES AND POLICIES. The Partnership's Investment in
Assets shall not be less than eighty-two percent (82%) of the gross proceeds of
the Partnership's offering of Units, and Front-End Fees and Expenses shall not
exceed eighteen percent (18%) of such gross proceeds. The Partnership expects to
invest approximately 70% of the net proceeds of the offering of Units in
unleveraged Properties. The Properties to be acquired by the Partnership shall
consist primarily of apartment complexes, office and light industrial buildings,
and/or shopping centers. All of the Properties shall be located in the United
States. The Partnership shall invest in developed Properties and may expand,
rehabilitate or otherwise improve existing Properties. The Partnership shall not
invest in resort or recreational properties, hotels, nursing homes, gaming
facilities, or mobile home parks. No unimproved or non-income producing property
shall be acquired. The General Partners shall attempt to structure any
borrowings to avoid producing unrelated business taxable income at a level which
would obligate a tax exempt entity holding 100 Units, which does not otherwise
have unrelated business taxable income, to file a federal income tax return or
to pay federal income tax as a result. The Partnership expects to invest
approximately 30% of the net proceeds of the offering of Units in MBS issued by
GNMA, FNMA or FHLMC. On an interim basis, the Partnership may invest its funds
either in (i) United States Government securities, other United States
Government guaranteed money instruments, certificates of deposit of banks
located in the United States having total assets in excess of $100 million, bank
repurchase agreements collateralized by securities of the United States
Government or governmental agencies, bankers' acceptances, and similar money
market investments, or (ii) shares of public investment companies registered
with the Securities and Exchange Commission whose assets exceed $50,000,000 and
are invested in the foregoing types of investments and held by an independent
custodian. The General Partners shall attempt to manage the Partnership's
investments in MBS and its interim investments to assure that the Partnership
shall not be deemed an investment company as such term is defined in the
Investment Company Act of 1940. The Partnership shall not redeem or repurchase
Limited Partnership Interests or Units and shall not underwrite the securities
of other issuers.
(b) SALES AND LEASES OF PROPERTIES FROM OR TO THE GENERAL PARTNERS AND
THEIR AFFILIATES. The Partnership shall not purchase, lease or acquire any Asset
from any General Partner or any Affiliate of any General Partner or any Person
in which any General Partner or Affiliate has a material interest including,
without limitation, any partnership of which any General Partner or Affiliate of
a General Partner is a partner. Notwithstanding the foregoing, the General
Partners or their Affiliates may purchase a Property in their own name, and
assume loans in connection therewith and temporarily hold title thereto for the
purpose of facilitating the acquisition of such Property or the borrowing of
money for the Partnership, or any other purpose related to the business of the
Partnership, provided that (i) such Property is purchased by the Partnership for
a Purchase Price (and related cash investment) no greater than the Purchase
Price (and related cash investment) in such Property (including, without
limitation, equity payments, transfer taxes, financing and closing costs) made
or agreed to be made by the General Partners or their Affiliates, except for
payment of Acquisition Expenses to the extent permitted by this Agreement, (ii)
there is no difference in interest rates of the loans secured by the Property at
the time acquired by the General Partners or their Affiliates and the time
acquired by the Partnership, and (iii) no other payment directly or indirectly
issuing out of such transaction is received by, nor any other benefit conferred
upon, any General Partner or Affiliate thereof apart from compensation otherwise
permitted by this Agreement. The General Partners or their Affiliates may lease
office or other space in any Property owned by the Partnership; provided,
however, that any such lease (i) shall be on terms and conditions no less
favorable to the Partnership than those which would have been determined by
arm's-
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length negotiations with a non-affiliated person for comparable space in
the area where the Property is located, which determination may be made on the
basis of, and shall take into account, the terms, conditions and rentals agreed
to by any other tenants of the Property, (ii) shall be terminable on 60 days'
prior written notice by the Partnership without penalty, and (iii) shall provide
that any rentals from subleases relating thereto which are in excess of the
rentals from such lease shall be paid to the Partnership and, provided further,
that no more than 15% of the office space of the Partnership Properties shall be
leased to the General Partners or their Affiliates. Except as otherwise provided
herein, the Partnership shall not sell or lease any Property to any General
Partner or any Affiliate of a General Partner.
(c) LOANS TO OR FROM THE GENERAL PARTNERS AND THEIR AFFILIATES. No loans
may be made by the Partnership to any General Partner or any Affiliate of a
General Partner. A General Partner or any Affiliate of a General Partner may
loan funds to the Partnership but only with interest rates and other finance
charges and fees not in excess of the amounts that are charged by unrelated
banks on comparable loans for the same purpose in the locality of the Property
in connection with which the loan was made, and in no event shall the annual
interest rate charged on any such loan exceed by more than 2% the base rate of
Bank of New England, N.A., Boston, Massachusetts. In addition, (i) to the extent
that the General Partners or their Affiliates shall themselves borrow the funds
which they loan to the Partnership, the interest rates and other finance charges
charged to the Partnership shall not exceed the corresponding amounts paid by
the General Partners or their Affiliates, and (ii) neither any General Partner
nor any Affiliate of a General Partner shall make loans to the Partnership with
a prepayment charge or penalty which is evidenced or secured by either a first
or junior or all-inclusive note or mortgage except to the extent that such
prepayment charge or penalty is attributable to an underlying encumbrance.
Neither any General Partner or Affiliate of a General Partner shall provide
permanent financing for the Partnership, and all payments of principal and
interest on any financing provided by the General Partners or any Affiliate of a
General Partner shall be due and payable within 12 months after the date of the
loan. In the event the Partnership utilizes any all-inclusive (or "wrap-around")
note issued by the Partnership to the General Partners or an Affiliate thereof,
said note shall provide that the Partnership shall receive credit on its
obligation under said note for payments made by the Partnership directly on the
underlying encumbrance and that a bank, escrow company or other paying agent
shall collect payments (other than amounts not to be applied to the underlying
encumbrance) on the all-inclusive note and make disbursements therefrom to the
holder of the underlying encumbrance prior to making any disbursement to the
holder of the all-inclusive note or, in the alternative, all payments on the
all-inclusive note and underlying notes shall be made directly by the
Partnership. In addition, no General Partner or Affiliate of a General Partner
shall receive interest on the amount of the underlying encumbrance included in
any all-inclusive note in excess of that payable to the lender on that
underlying encumbrance.
(d) EXCHANGE OF INTERESTS FOR ASSETS. The Partnership shall not acquire
any Asset in exchange for Interests in the Partnership.
(e) JOINT VENTURE INVESTMENTS. The Partnership shall not make investments
in the general or limited partner interests of any other program, or enter into
any joint venture or partnership which owns or operates a particular Asset
except for (i) any such general partnership or venture entered into to
facilitate the holding of title to any Asset and in which the Partnership holds
all or substantially all of the beneficial interest, or (ii) a general
partnership or joint venture to acquire and hold an Asset and with respect to
which each of the following conditions is satisfied. First, the Partnership
shall acquire a controlling interest in any such general partnership or venture.
For purposes hereof, the Partnership shall be deemed to have a "controlling
interest" in such general partnership or venture if the Partnership holds
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an interest of not less than 50% in the capital and profits of the venture and
the joint venture agreement or related documents grants to the Partnership the
joint right to make basic management decisions concerning the sale, leasing,
refinancing, expansion or improvement of the Asset. Second, the General
Partners, in their capacity as managers of the Partnership, shall not do, or
cause such joint venture to do, any act which would not be permitted under this
Agreement if title to such Asset were held directly by the Partnership. Third,
no such general partnership or venture shall be entered into by the Partnership
which involves the payment of duplicate property management or other fees which
would have the effect of circumventing any of the restrictions on and
prohibition of transactions involving conflicts of interest contained in this
Agreement. Fourth, in the event of a proposed sale of the Asset initiated by
either joint venture partner, the Partnership must have a right of first refusal
to purchase the other party's interest. Fifth, the Partnership may enter into
joint ventures with a partnership subsequently sponsored by the General Partners
or their Affiliates, but only if such other partnership has substantially
identical investment objectives and management compensation provisions to those
of the Partnership. No duplicative property management or other fees shall be
permitted in any such joint ventures. In addition, each partnership must have a
right of first refusal to buy out the other partnership, and the investment by
each partnership must be on substantially the same terms and conditions.
(f) PROPERTY APPRAISALS. No Property shall be acquired at a Purchase Price
to the Partnership in excess of its value as determined by an appraisal prepared
by a competent independent appraiser, which appraisals shall be maintained in
the records of the Partnership for not less than five years after the date of
acquisition and which shall be available for inspection and duplication by any
Partner or his representative at his cost. Similar appraisals shall be made of
each Property in each year.
6.3 LIABILITY FOR ACTS OR OMISSIONS AND INDEMNIFICATION. No General
Partner or Affiliate of a General Partner shall be liable, responsible or
accountable in damages to any of the Partners, Unitholders or the Partnership
for any act or omission of any General Partner in good faith on behalf of the
Partnership and in a manner reasonably believed by such General Partner to be
within the scope of the authority granted to the General Partners by this
Agreement and in the best interests of the Partnership, except for acts or
omissions constituting negligence, misconduct or breach of fiduciary duty. The
General Partners and their respective Affiliates shall be entitled to indemnity
from the Partnership for any loss, damage, or claim by reason of any act or
omission performed or omitted by the General Partners in good faith on behalf of
the Partnership and in a manner reasonably believed by the General Partners to
be within the scope of the authority granted to the General Partners by this
Agreement and in the best interests of the Partnership, except that they shall
not be entitled to be indemnified in respect of any loss, damage or claim
incurred by reason of negligence, misconduct, or breach of fiduciary duty. Any
indemnity under this Section shall be provided out of and to the extent of
Partnership assets only, and no Partner shall have or incur any personal
liability on account thereof. In no event shall the Partnership assume the cost
of any portion of liability insurance which would insure the General Partners
for any liability as to which the General Partners are prohibited from being
indemnified by the Partnership.
Notwithstanding the foregoing, neither the General Partners nor any
officer, director, employee, agent, Affiliate or assign of the General Partners
or of the Partnership shall be indemnified for liabilities arising under federal
and state securities laws unless there has been a successful adjudication on the
merits of each count involving securities law violations, or such claims have
been dismissed with prejudice on the merits by a court of competent
jurisdiction.
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6.4 COMPENSATION OF THE GENERAL PARTNERS AND THEIR AFFILIATES. The General
Partners and their Affiliates shall be entitled to receive from the Partnership
the following amounts in addition to distribu tions made to them pursuant to
Section 8 hereof:
(a) The Partnership is authorized to enter into a Sales Agent Agreement
with ▇▇▇▇▇ Securities Corporation under which ▇▇▇▇▇ Securities Corporation shall
agree to act as managing underwriter for the offering of Units made pursuant to
Section 6.1(d) hereof. ▇▇▇▇▇ Securities Corporation will in turn enter into
Selected Dealer Agreements with participating selected dealers. Pursuant to the
Sales Agent Agreement and the Selected Dealer Agreements, ▇▇▇▇▇ Securities
Corporation or the participating selected dealers, as the case may be, shall be
entitled to receive out of the gross proceeds of such offering the following
compensation: (1) a sales commission of up to a maximum of $80 (8%) per $1,000
of Units sold and (2) an accountable reimbursement of due diligence expenses
incurred by prospective selected dealers up to a maximum of $5 (1/2%) per $1,000
of Units sold.
(b) For services rendered in connection with the acquisition of Assets by
the Partnership, the Partnership shall pay to Affiliates of the General Partners
an Acquisition Fee equal to 2.85% of the initial Invested Capital of the
Unitholders resulting from the offering of Units. In the event that any other
fee or commission is incurred in connection with the selection or purchase of
any Property by the Partnership, whether designated as a real estate commission,
acquisition fee, finder's fee, selection fee, development fee, construction fee,
non-recurring management fee, consulting fee or any fee of similar nature
however designated and however treated for tax or accounting purposes, it shall
be paid by Affiliates of the General Partners out of the Acquisition Fee. In
addition, the Partnership shall reimburse the General Partners and their
Affiliates with respect to Acquisition Expenses incurred by them. In no event
shall the aggregate of the Acquisition Expenses paid by the Partnership exceed
1% of the initial Invested Capital of the Unitholders resulting from the
offering of Units. Subject to the foregoing limitations and to the additional
limitations set forth in Section 12.4 hereof, the General Partners and their
Affiliates shall be entitled to receive reimbursement for organizational and
offering expenses, Acquisition Expenses, and other expenses incurred by them in
connection with the organization and operation of the Partnership.
(c) For services rendered in managing the affairs of the Partnership, the
Partnership shall pay to the General Partners a Basic Management Fee equal to 5%
of the Partnership's annual Cash Flow, but payment of such Fee will be
subordinated to the extent necessary for the Unitholders and Investor Limited
Partners to receive under Section 8.2 an amount for such year equal to a 7.5%
non-cumulative annual return on their Invested Capital.
(d) For services rendered in managing the affairs of the Partnership, the
Partnership shall pay to the General Partners an Incentive Fee in an amount
equal to 3% of the Partnership's annual Cash Flow, but payment of such Fee will
be subordinated to the extent necessary for the Unitholders and Investor Limited
Partners to receive under Section 8.2 an amount for such year equal to a 9%
non-cumulative annual return on their Invested Capital.
(e) Upon the sale of any Property, the General Partners shall receive for
their actual services in connection with such sale a real estate disposition fee
in an amount equal to 3% of the contract sales price of the Property, provided
that in no event shall (1) any such fee exceed 50% of the competitive real
estate commission in the area where the Property sold is located and, together
with any other brokerage fees payable to or by any other Person, exceed 6% of
the contract price for the sale of such Property, and (2) any such real estate
disposition fee be paid until after all Investor Limited Partners and
▇▇▇▇▇▇▇▇▇▇▇
▇-▇▇
shall first have received a return of their total Invested Capital and any
previously unpaid Cumulative Return as determined under Section 8.3(a) or
Section 8.3(b) hereof. If and when such a return has been achieved, any and all
real estate disposition fees previously earned by the General Partners shall be
paid by the Partnership to the General Partners prior to any other distributions
to the Partners. If the General Partners participate with an independent broker
on resale, the aforesaid subordination requirement shall apply only to the
commission earned by the General Partners.
(f) The Partnership is authorized to purchase title insurance and
liability insurance from Affiliates of the General Partners at rates at least
equal to the lowest rate obtainable from two unaffiliated companies
independently engaged in the business of providing such services to other than
Affiliates, provided at least 75% of their insurance brokerage service gross
revenue is derived from other than Affiliates.
(g) Commencing with the month of acquisition of any Property, the General
Partners are authorized to enter into a property management agreement with
respect to such Property. Under any such agreements with a General Partner or
any Affiliate of the General Partners, the Partnership shall pay a monthly
management fee equal to the amount customarily charged in arm's-length
transactions by other firms rendering comparable services for comparable
properties in the localities where such Properties are located, but in no event
to exceed (i) 5% of the gross receipts from residential properties under
management (including all rent-up, leasing, and re-leasing fees and bonuses, and
leasing related services, paid to any Person, except for locator services
performed by non-Affiliated Persons in certain geographic areas where such
locator services are not traditionally included in property management
services), (ii) 6% of the gross receipts from office or commercial properties
under management if such property management firm provides leasing, re-leasing
and leasing related services (including, without limitation, the negotiation and
review of leases and renewals thereof), (iii) 3% of the gross receipts from
office or commercial properties under management if such property management
firm does not provide leasing, re-leasing and leasing related services, (iv) 3%
of the gross receipts from industrial properties under management (inclusive of
leasing, re-leasing and leasing related services provided by such property
management firm), or (v) 1% of the gross receipts from industrial, office or
commercial properties which are leased on a long-term (ten or more years) net
(or similar) basis, except that a one-time initial leasing fee of 3% of the
gross receipts on each such lease shall be permitted, such fee to be payable
over the first five full years of the original term of such lease. Such fee
shall include, with respect to the Property subject to such agreement, any fees
paid to a non-related Person for bookkeeping or property management services,
but shall exclude (except in the case of residential properties) any fees paid
to real estate brokers which are not Affiliates of the General Partners in
connection with the procurement of tenants in such Property. Under any such
agreement, the management agent shall agree to perform services in connection
with day-to-day operations of the Partnership Property subject to the Agreement
including, but not limited to: (i) collection of rent payable under outstanding
leases of the Partnership Property; (ii) supervision of the maintenance, repair,
remodeling, and refurbishing of the Partnership Property; (iii) review of rental
schedules and recommendations with respect to changes thereto; (iv) employment
and supervision of on-site property managers and other property management
personnel on behalf of the Partnership, together with the establishment of
procedures regarding the management of the Partnership Property; (v) negotiation
and review of leases with respect to the Partnership Property if the managing
agent is responsible for leasing, re-leasing and leasing related services; (vi)
negotiation and review of maintenance agreements; (vii) review of replacement
and working capital reserves and recommendations with respect to changes
thereto; (viii) preparation and review of budgets and cash flow projections for
the Partnership Property; (ix) periodic physical inspections and market surveys;
and (x) determination and implementation of capital improvements. Subject to the
limitations set forth in Section 12.4 hereof,
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the General Partners are authorized to reimburse the entity or entities which
manage any Property pursuant to a management agreement for proper expenditures,
obligations and liabilities (including the salaries of on-site property managers
and personnel) incurred by such agent in connection with the operation of such
Property.
6.5 OTHER INTERESTS OF THE GENERAL PARTNERS AND THEIR AFFILIATES. Any
General Partner and any Affiliate of a General Partner may engage in or possess
an interest in other business ventures (uncon nected with the Partnership) of
every kind and description, independently or with others including, but not
limited to, serving as general partner of other partnerships and participating
in the real estate business in all of its phases, which shall include, without
limitation, ownership, operation, financing, construction, management,
syndication and development of real property and which may include properties
competitive with any Property. The General Partners will devote such time to the
affairs of the Partnership and each other such partnership as they, within their
sole discretion, deem necessary for the proper performance of their duties.
Neither the Partnership, the Limited Partners nor the Unitholders (except for
the General Partners and their Affiliates) shall have any rights in and to such
independent ventures or the income or profits therefrom by reason of the General
Partners' position with the Partnership. Neither the General Partners nor any
Affiliate of any General Partner shall be obligated to present any particular
investment opportunity to the Partnership even if such opportunity is of a
character which, if presented to the Partnership, could be taken by the
Partnership, and each of the General Partners and their Affiliates shall have
the right to take for its own account (individually or otherwise) or to
recommend to others any such particular investment opportunity. Notwithstanding
the foregoing, while the Partnership has available uncommitted funds to invest
in additional Properties (other than funds of the Partnership allocated to the
purchase of MBS or which became available because of a Capital Transaction or
because of the failure to close on a property acquisition originally allocated
to the Partnership), the General Partners shall not commit any real property for
investment to their own account or to any non-specified real estate partnership
subsequently sponsored by the General Partners or their Affiliates unless the
General Partners determine that such property would not be a suitable investment
for the Partnership or that the Partnership then has insufficient funds to make
such investment. The General Partners shall make such determination on the basis
of the investment policies and objectives set forth in Section 6.2(a) hereof.
Subject to the other provisions of this Agreement, the Partnership may employ or
transact business with any Person, notwithstanding the fact that any Partner or
Unitholder or any of his Affiliates may have (or have had) an interest in or
connection with such Person, and neither the Partnership, the other Partners nor
the Unitholders shall have any rights by virtue of this Agreement in or to any
income or profits derived therefrom. Nothing herein shall be deemed to diminish
the General Partners' overriding fiduciary obligation to the Partnership or to
act as a waiver of any right or remedy the Partnership or other Partners or
Unitholders may have in the event of a breach by a General Partner of such
obligation.
6.6 OTHER TRANSACTIONS INVOLVING THE GENERAL PARTNERS AND THEIR
AFFILIATES. Except as specifically permitted by this Agreement, the General
Partners are prohibited from entering into any agreements, contracts or
arrangements on behalf of the Partnership with any General Partner or any
Affiliate of any General Partner. Such prohibition shall include, without
limitation, the following: (a) neither a General Partner nor any such Affiliate
shall be given an exclusive right to sell or exclusive employment to sell
Property for the Partnership, provided that the General Partners shall be
entitled to perform services in connection with the sale of Partnership
Properties and to receive real estate disposition fees in connection therewith
as specified in Section 6.4(e) hereof; (b) neither any General Partner nor any
such Affiliate shall receive directly or indirectly a commission or fee (but may
receive reimbursements of expenses incurred) in connection with the reinvestment
of the proceeds of the sale, exchange or refinancing of any Property; and (c)
neither any General Partner nor any such Affiliate shall enter into an agreement
or
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contract with the Partnership for the development of any Property or the
construction of improvements on any Property. In addition, in connection with
any property management or other agreement entered into by the Partnership with
any General Partner or any Affiliate of the General Partners, no rebates or
"give-ups" may be received by a General Partner or any such Affiliate, nor may
the General Partner or any such Affiliate participate in any reciprocal business
agreements which would have the effect of circumventing any of the provisions of
this Agreement.
Section 7. LIMITED PARTNERS AND UNITHOLDERS; CORPORATE LIMITED PARTNER;
DEPOSITARY RECEIPTS.
7.1 CLASSES OF LIMITED PARTNERS AND UNITHOLDERS. There shall be one class
of Limited Partner Interests held by the Corporate Limited Partner and, under
certain circumstances, by Unitholders who become Investor Limited Partners.
Subject to the provisions of Section 9 of this Agreement, a With drawn General
Partner, or his estate or legal representatives, may also be treated as a
Limited Partner (but not as an Investor or Corporate Limited Partner) in respect
of any Interest formerly held as a General Partner in the manner specified in
Section 9.3(b) hereof.
7.2 TRANSFERABILITY OF UNITS. The General Partners' right to accept
initial subscribers as Unit holders is set forth in Section 6.1(d) hereof. Each
prospective transferee of a Depositary Receipt may be accepted by the General
Partners as a Unitholder if such transferee provides the General Partners with
(i) information, including name, address, status as a tax-exempt entity or
non-resident alien, such information as may be necessary or appropriate to
determine suitability under applicable securities laws, and such other
information as the General Partners may request, and (2) a fee of not more than
$10.00 (not including related brokerage commissions) to reimburse the
Partnership for its costs respecting the transfer. The General Partners will use
their best efforts to accept or reject a prospective transferee as a Unitholder
within the same month as they receive such information. If a prospective
transferee is not accepted by the General Partners, such prospective transferee
shall have no right to any distributions or allocations of the Partnership and
shall have no other rights, obligations or duties with respect to the
Partnership.
The General Partners shall accept a prospective transferee unless a
transfer restriction applies. The General Partners shall reject a prospective
transferee if any of the following transfer restrictions applies:
(a) The prospective transferee is not suitable under applicable federal
or state securities laws;
(b) The prospective transferee is a non-resident alien;
(c) The transfer would cause the assets of the Partnership to be "plan
assets" or the transactions contemplated hereunder to be prohibited transactions
under ERISA or the Code;
(d) The transfer is a transfer of less than 100 Units or would cause the
prospective transferor or the prospective transferee to hold less than 250 Units
(or 100 Units for Tax-Exempt Entities), except for transfer by will or intestacy
upon the death of the transferor or by operation of law; or
(e) The transfer would cause the Partnership to terminate under Section
708 of the Code.
The General Partner may impose additional transfer restrictions in
accordance with Section 6.1(c) hereof. The Depositary Receipts evidencing the
Units shall be transferable after the first distribution from
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the Partnership of Distributable Cash Flow under Section 8.2 hereof following
the termination of the offering. Transfers of Depositary Receipts shall be
effective on the first day of the month following acceptance by the General
Partners.
7.3 ABSENCE OF CONTROL OVER PARTNERSHIP BUSINESS. The Limited Partners and
Unitholders hereby consent to the exercise by the General Partners of the powers
conferred on them by this Agreement. No Limited Partner or Unitholder (except
one who may also be a General Partner, and then only in his capacity as General
Partner) shall participate in or have any control over the Partnership business
or have any right or authority to act for or to bind the Partnership. No Limited
Partner or Unitholder shall have the right to have the Partnership dissolved and
liquidated or to have his Capital Contribution, returned except as provided in
this Agreement.
7.4 LIMITED LIABILITY. The liability of each Limited Partner in his
capacity as a Limited Partner shall be limited to the amount of his Capital
Contribution, and the liability of each Unitholder in his capacity as a
Unitholder shall be limited to the amount of his Subscription Price described in
Section 5.2 hereof. No Limited Partner, in his capacity as Limited Partner, and
no Unitholder, in his capacity as Unitholder, shall have any further obligations
to the Partnership or be required to contribute any capital or loan any funds to
the Partnership; provided, however, that nothing herein shall relieve the
Limited Partners or Unitholders of any liability imposed under law, including
but not limited to their liability under the Massachusetts Uniform Limited
Partnership Act for the amount of returned Capital Contributions to the extent
necessary to discharge the Partnership's liabilities to creditors who extend
credit to the Partnership during the period the Capital Contribution was held by
the Partnership. Each Unitholder assumes and agrees to pay or to reimburse the
Corporate Limited Partner with respect to any such liability of the Corporate
Limited Partner with respect to the Limited Partner Interests corresponding to
his or its Units.
7.5 ADMISSION OF INVESTOR AND SUBSTITUTE LIMITED PARTNERS. The General
Partners shall prepare and file from time to time after the initial offering of
Units, and in any event not less frequently than quarterly, amendments to the
Certificate of Limited Partnership to admit Investor Limited Partners and
Substitute Limited Partners pursuant to Sections 7.6(h) and 10 hereof.
7.6 RELATIONSHIP BETWEEN CORPORATE LIMITED PARTNER AND UNITHOLDERS;
DEPOSITARY RECEIPTS.
(a) ISSUANCE OF DEPOSITARY RECEIPTS. Upon the contribution of the
Subscription Price for a Unit to the capital of the Partnership under Sections
5.2 and 6.1(d) hereof, the Corporate Limited Partner shall receive the Limited
Partner Interest corresponding to such Unit, the assignment to the Unitholder
and his contractual rights under Section 7.6(b) hereof shall commence, the Units
will be deemed deposited by the Unitholders with the Depositary, the Depositary
Receipts will be issued by the Depositary, and a Depositary Receipt registered
in the name of the Unitholder will be delivered to him. Except in the case of
the Reinvestment Plan where Depositary Receipts may be issued in the name of a
nominee for the Reinvestment Agent, Depositary Receipts may not be issued in the
name of a nominee or agent, but may be issued only in the name of the beneficial
owner. The Corporate Limited Partner shall act as Depositary with respect to all
Units. By subscribing for a Unit and by the General Partners' acceptance of such
subscription, a Unitholder shall be deemed to have assented to all the terms and
conditions of this Agreement.
(b) ASSIGNMENT AND COVENANT BY CORPORATE LIMITED PARTNER. The Corporate
Limited Partner, by the execution of this Agreement, irrevocably transfers and
assigns, to the extent permitted by the
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Massachusetts Uniform Limited Partnership Act, to the Unitholders all of the
Corporate Limited Partner's rights and interest in and to the Limited Partner
Interests corresponding to the Units, including the right to distributions,
including liquidating distributions of the Partnership, as of the time of
release to the Partnership of the Subscription Price for each such Unit. At the
same time, the Corporate Limited Partner, by the execution of this Agreement,
agrees and covenants that it will exercise any other rights with respect to each
Limited Partner Interest solely in favor of, in the interest of, and at the
direction of the Unitholder whose Unit corresponds to such Limited Partner
Interest. The Corporate Limited Partner shall remain a Limited Partner of the
Partnership with respect to the Limited Partner Interests corresponding to the
Units, notwithstanding the assignment of its rights and interests under this
Section 7.6(b).
(c) CONSENT TO ASSIGNMENT AND COVENANT. The General Partners, by the
execution of this Agreement, irrevocably consent to and acknowledge that (1) the
foregoing assignment and covenant by the Corporate Limited Partner to the
Unitholders with respect to the Corporate Limited Partner's rights and interest
in the Limited Partner Interests corresponding to the Units as described above
is effective and (2) the Unitholders are intended to be assignees of record and
third party beneficiaries of all rights and privileges of the Corporate Limited
Partner in respect of the Limited Partner Interests corresponding to their
Units. The General Partners covenant and agree that, in accordance with the
foregoing assignment and covenant of the Corporate Limited Partner, all the
Corporate Limited Partner's rights and privileges in respect of the underlying
Limited Partner Interests may be exercised by the Unitholders on an
Interest-by-Interest basis or, if not permitted to be exercised by the
Unitholders under Massachusetts law, then by the Corporate Limited Partner on an
Interest-by-Interest basis as provided by Section 7.6(e) hereof.
(d) NO LIABILITY OF CORPORATE LIMITED PARTNER. The Corporate Limited
Partner shall not be liable to any Unitholder for any action or nonaction by it
taken or omitted in good faith or in reliance upon advice, written notice,
request or direction from a Unitholder believed by it to be genuine and to have
been signed or presented by the proper person or persons. The Unitholders and
Investor Limited Partners and not the Corporate Limited Partner shall be liable
to the Partnership or any third party for any obligations for which limited
partners are liable under this Agreement or Massachusetts law, and each
Unitholder assumes and agrees to pay or to reimburse the Corporate Limited
Partner with respect to any such liability applicable to his Unit.
(e) VOTING. In the event that the Unitholders are not permitted to
exercise any voting or similar rights in the Partnership directly, the Corporate
Limited Partner shall canvass the preferences of all Unitholders on all matters
submitted to a vote of the Limited Partners, and the Corporate Limited Partner
shall vote each underlying Limited Partner Interest only in accordance with the
directions of the Unitholder whose Unit corresponds to such Interest, with each
Unit (and, therefore, each Limited Partner Interest) entitled to one vote. The
Corporate Limited Partner shall only vote the Limited Partner Interests held by
it in accordance with, and to the extent of, written instructions received from
the Unitholders.
All voting shall be conducted in accordance with Section 13 hereof.
(f) CALLING MEETINGS. Unitholders, individually or collectively with
Investor Limited Partners, owning directly or indirectly 10% or more of the
outstanding Limited Partner Interests, may exercise the rights of Limited
Partners to call a meeting by written notice to the Corporate Limited Partner
and the General Partners. Within ten business days after receipt of such notice,
the Corporate Limited Partner shall request a meeting in accordance with the
procedures set forth in Section 13.1 hereof.
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(g) ALLOCATIONS AND DISTRIBUTIONS. The portion of Profits or Losses for
Tax Purposes and distri butions which shall be credited to the account of the
Corporate Limited Partner for the benefit of Unitholders shall be allocated and
apportioned among the Unitholders in the same manner as Profits or Losses for
Tax Purposes and distributions are allocated and apportioned among Limited
Partners with respect to the underlying Limited Partner Interests in Section 8
of this Agreement.
(h) EXCHANGE OF UNITS FOR LIMITED PARTNER LNTERESTS. Any Unitholder who
desires to exchange all of his Units for Limited Partner Interests may do so by
delivering to the Depositary his Depositary Receipts and transfer applications
(which are available upon request from the Depositary), and the payment of a fee
of $100.00 per transaction, for legal and administrative costs and filing fees.
The effective date of any such exchange shall be the first day of the month
following the date as of which the General Partners file an amendment to the
Certificate of Limited Partnership listing the name of such Unitholder as an
Investor Limited Partner. Such an amendment shall be filed no later than 15 days
after the completion of any fiscal quarter of the Partnership in which a Unit is
exchanged for a Limited Partner Interest. Persons who effect such conversion
will receive one Limited Partner Interest for each Unit they exchange and will
not be able to re-exchange Limited Partner Interests for Units. In accordance
with Section 5.5 hereof, the Capital Account of the Corporate Limited Partner
shall be reduced by an amount equal to the capital account of such former
Unitholder, and such amount will be credited to the Unitholder's Capital Account
as an Investor Limited Partner. Units which have been converted into Limited
Partner Interests will be cancelled and will not be reissued. If Units shall be
exchanged for Limited Partner Interests as a result of a requirement imposed by
the General Partners under Section 6.1(c) hereof or by applicable law, there
shall be no fee charged by the Partnership with respect to the transaction.
Section 8. ALLOCATIONS AND DISTRIBUTIONS.
8.1 ALLOCATIONS OF PROFITS OR LOSSES FOR TAX PURPOSES.
(a) OPERATING PROFITS OR LOSSES. Prior to the initial closing of the sale
of Units, the Profits or Losses for Tax Purposes of the Partnership shall be
allocated to the Corporate Limited Partner and the General Partners in
proportion to their respective Capital Contributions. For purposes of this
section, if the initial closing of the sale of Units occurs (1) on any of the
first fifteen days of a month, then such closing shall be deemed to have
occurred on the first day of such month, or (2) on any other day of a month,
then such closing shall be deemed to have occurred on the first day of the
following month. Commencing with the effective date of the initial closing of
the sale of Units, the Profits or Losses for Tax Purposes of the Partnership,
other than Profits or Losses of the Partnership arising from a Capital
Transaction and the Terminating Capital Transaction, for each fiscal year (or
portion thereof) shall be determined as of the end of such fiscal year, or
portion thereof, and allocated ninety-eight percent (98%) to the class comprised
of the Limited Partners, and two percent (2%) to the class comprised of the
General Partners.
(b) PROFITS FOR TAX PURPOSES FROM A CAPITAL TRANSACTION. The Profits for
Tax Purposes of the Partnership arising from a Capital Transaction shall be
allocated as follows:
FIRST, to the class comprised of the Limited Partners to the extent of
cash distributions pur suant to Section 8.3(a) FIRST attributable to the return
of Invested Capital;
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SECOND, to the class comprised of the General Partners to the extent of
cash distributions pursuant to Section 8.3(a) SECOND attributable to the return
of Invested Capital;
THIRD, to the class comprised of the Limited Partners to the extent of
cash distributions pursuant to Section 8.3(a) THIRD;
FOURTH, to the class comprised of the General Partners to the extent of
cash distributions pursuant to Section 8.3(a) FOURTH; and
FIFTH, any remaining Profits for Tax Purposes shall be allocated
eighty-five percent (85%) to the class comprised of the Limited Partners and
fifteen percent (15%) to the class comprised of the General Partners.
(c) PROFITS FOR TAX PURPOSES FROM THE TERMINATING CAPITAL TRANSACTION. The
Profits for Tax Purposes arising from the Terminating Capital Transaction and
the winding up of the affairs of the Partnership shall be allocated among the
Partners (treating the classes comprised of the Limited Partners and the General
Partners as separate classes for such allocation) as follows:
FIRST, to each class of Partners (without preference over the other
class of Partners) in the amount as to each class equal to (or if less than, in
proportion to) the aggregate of the then negative balances (if any) in the
Capital Accounts of the Partners of such class;
SECOND, to the class comprised of the Limited Partners until the
aggregate of the positive balances in the Capital Accounts of the Partners of
such class is equal to its Invested Capital;
THIRD, to the class comprised of the General Partners until the
aggregate of the positive bal ances in the Capital Accounts of the Partners of
such class is equal to its Invested Capital;
FOURTH, to the class comprised of the Limited Partners until such class
has been allocated an amount of Profits equal to the Cumulative Return less the
sum of (i) all amounts of cash whenever distributed to such class pursuant to
Section 8.2 and (ii) all amounts of cash whenever distributed to such class
pursuant to Section 8.3(a) THIRD;
FIFTH, to the class comprised of the General Partners until such class
has been allocated the amount of Profits necessary so that the amounts whenever
allocated under Section 8.1(b) THIRD and clause FOURTH of this Section 8.1(c)
when compared to the amounts whenever allocated under Section 8.1(b) FOURTH and
this clause FIFTH are in the ratio of 85 to 15; and
SIXTH, any remaining Profits shall be allocated eighty-five percent
(85%) to the class comprised of the Limited Partners and fifteen percent (15%)
to the class comprised of the General Partners.
(d) LOSSES FOR TAX PURPOSES FROM A CAPITAL TRANSACTION. All Losses for Tax
Purposes attribut able to a Capital Transaction shall be allocated ninety-eight
percent (98%) to the class comprised of the Limited Partners and two percent
(2%) to the class comprised of the General Partners.
(e) LOSSES FOR TAX PURPOSES FROM THE TERMINATING CAPITAL TRANSACTION.
Losses for Tax Purposes attributable to the Terminating Capital Transaction and
the winding-up of the affairs of the Partnership
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shall be allocated to the Partners to the extent of, and any excess in
proportion to, the positive balances in their Capital Accounts (adjusted as
though the Partnership's fiscal year ended immediately prior to the event giving
rise to such Losses).
(f) ONE PERCENT INTEREST OF GENERAL PARTNERS. Notwithstanding anything to
the contrary that may be expressed or implied in this Agreement, the interests
of all of the General Partners, taken together, in each item of Partnership
income, gain, loss, deduction, or credit will be equal to at least one percent
(1%) of each of those items ______ times during the existence of the
Partnership. In determining the interests of the General Partners in those
items, any Limited Partner Interests owned by the General Partners shall not be
taken into account.
8.2 DISTRIBUTABLE CASH FLOW. Distributable Cash Flow of the Partnership
shall be distributed ninety-eight percent (98%) to the class comprised of the
Limited Partners and two percent (2%) to the class comprised of the General
Partners.
8.3 PROCEEDS OF CAPITAL TRANSACTIONS AND THE TERMINATING CAPITAL
TRANSACTION.
(a) CAPITAL TRANSACTION PROCEEDS. Net Cash Proceeds of a Capital
Transaction other than the Terminating Capital Transaction shall be distributed
as follows:
FIRST, to the class comprised of the Limited Partners until such class
has received a return of its total Invested Capital;
SECOND, to the class comprised of the General Partners until such class
has received a return of its total Invested Capital;
THIRD, to the class comprised of the Limited Partners until such class
has received an amount equal to the Cumulative Return less the sum of (i) all
amounts of cash whenever distributed to such class pursuant to Section 8.2, and
(ii) all amounts of cash whenever distributed to such class pursuant to this
Section 8.3(a) THIRD (which distributions were made due to a prior Capital
Transaction);
FOURTH, to the class comprised of the General Partners until such class
has received the amount necessary so that the amounts whenever allocated under
clauses THIRD and this clause FOURTH are in the ratio of 85 to 15; and
FIFTH, any remaining Net Cash Proceeds shall be distributed eighty-five
percent (85%) to the class comprised of the Limited Partners and fifteen percent
(15%) to the class comprised of the General Partners.
(b) TERMINATING CAPITAL TRANSACTION PROCEEDS. Net Cash Proceeds of the
Terminating Capital Transaction and the winding up of the affairs of the
Partnership shall be distributed as follows:
FIRST, to each class of Partners in the amount as to each class equal
to (or if less than, in proportion to) the aggregate of the then positive
balances (if any) in the Capital Accounts of the Partners of such class;
SECOND, to the class comprised of the Limited Partners until the
aggregate of the positive balances in the Capital Accounts of the Partners of
such class is equal to its Invested Capital;
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THIRD, to the class comprised of the General Partners until the
aggregate of the positive bal ances in the Capital Accounts of the Partners of
such class is equal to its Invested Capital;
FOURTH, to the class comprised of the Limited Partners until such class
has received an amount equal to the Cumulative Return less the sum of (i) all
amounts of cash whenever distributed to such class pursuant to Section 8.2, and
(ii) all amounts of cash whenever distributed to such class pursuant to Section
8.3(a) THIRD;
FIFTH, to the class comprised of the General Partners until such class
has received the amount necessary so that the amounts whenever allocated under
Section 8.3(a) THIRD and clause FOURTH of this Section 8.3(b) when compared to
the amounts whenever allocated under Section 8.3(a) FOURTH and this clause FIFTH
are in the ratio of 85 to 15; and
SIXTH, any remaining Net Cash Proceeds shall be distributed eighty-five
percent (85%) to the class comprised of the Limited Partners and fifteen percent
(15%) to the class comprised of the General Partners.
8.4 SPECIAL PROVISIONS FOR ALLOCATIONS AND DISTRIBUTIONS.
(a) Subject to the provisions of Sections 8.4(d) and 8.4(e) hereof, and to
allocation (if any) to Partners in accordance with their respective Capital
Accounts of Profits and Net Cash Proceeds from the Terminating Capital
Transaction pursuant to Sections 8.1(c) FIRST and 8.3(b) FIRST, all Profits or
Losses for Tax Purposes of the Partnership allocated to, and distributions of
cash made to, the classes of Partners consisting of the Limited Partners and the
General Partners shall be allocated among the respective members of such classes
as follows: (1) among the Limited Partners, in proportion to their respective
number of Interests, and (2) among the General Partners, in proportion to their
respective Invested Capital.
(b) All Profits or Losses for Tax Purposes allocated to, and distributions
of cash made to, the Partners shall be credited or charged, as the case may be,
to their Capital Accounts as of the date as of which such Profits or Losses for
Tax Purposes are allocated and the date as of which distributions of cash are
made. All distributions made to the Partners pursuant to the provisions of
Section 8.2 hereof shall be treated as having been made and charged to their
respective Capital Accounts prior to the allocation of Profits or Losses for Tax
Purposes pursuant to Section 8.1(a); distributions under Section 8.3(a) shall be
treated as having been made and charged to their respective Capital Accounts
prior to the allocation of Profits for Tax Purposes pursuant to Section 8.1(b);
distributions under Section 8.3(b) shall be treated as having been made and
charged to their respective Capital Accounts after the allocation of Profits for
Tax Purposes pursuant to Section 8.1(c) and after the allocation of Losses for
Tax Purposes pursuant to Section 8.1(e); and all cash distributions pursuant to
Sections 8.2(b) and 8.3(a) shall be treated as having been made and charged to
their respective Capital Accounts prior to the allocation of Losses for Tax
Purposes pursuant to Section 8.1(d) and Section 8.1(e). The Profits or Losses
for Tax Purposes of the Partnership allocated among the Partners pursuant to
Section 8.1(a) shall be credited or charged to their respective Capital Accounts
prior to the allocation of Profits or Losses for Tax Purposes of the Partnership
pursuant to Sections 8.1(b), (c), (d) and (e).
(c) The Partnership shall make distributions of Distributable Cash Flow
for each quarter commencing with the quarter in which the initial closing of the
sale of Units occurs. Within 45 days after the completion of each of the first
three quarters of each of the Partnership's fiscal years, the Partnership
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will make a distribution of Distributable Cash Flow, which distribution will be
based upon an estimate by the General Partners of the Partnership's total
Distributable Cash Flow for such year. Within 90 days after the end of each
fiscal year, the Partnership's Distributable Cash Flow for such year will be
determined and, after giving effect to the amount of Distributable Cash Flow
previously distributed, the remainder will then be distributed.
(d) All Profits or Losses for Tax Purposes and all distributions, if any,
to the class of Limited Partners based upon transactions of the Partnership
during any fiscal year in which Units are initially sold, shall be allocated
among the Limited Partners as follows: FIRST, the Partnership shall close its
books on an interim basis on the first day of each month; SECOND, each Unit sold
during such fiscal year (1) on any of the first fifteen days of a month, shall
be deemed to have been sold on the first day of such month, (2) on any other day
of a month, shall be deemed to have been sold on the first day of the following
month.
(e) In the event that a Unit or Interest is transferred, (i) Distributable
Cash Flow with respect to the fiscal quarter during which the transfer occurs
shall be distributed among the Unitholders or Investor Limited Partners
recognized as such under this Agreement for each month of such quarter; (ii) if
Distributable Cash Flow for any fiscal year with respect to a Unit or Interest
is distributed to more than one Person under this Section, then the Profit or
Loss for Tax Purposes allocated under Section 8.1(a) to such Unit or Interest
with respect to such fiscal year shall be divided into twelve equal portions and
allocated one portion to the Person who received Distributable Cash Flow for
each month without regard to whether Partnership operations during particular
monthly periods of such fiscal year produced profits or losses or cash
distributions; (iii) Net Cash Proceeds and Profit or Loss For Tax Purposes
arising from the same Capital Transaction (or the Terminating Capital
Transaction) shall be distributed and allocated, respectively, to the Unitholder
or Investor Limited Partner recognized as such under this Agreement as of the
date of such Capital Transaction (or the Terminating Capital Transaction); and
(iv) Net Cash Proceeds and Profit or Loss for Tax Purposes not received or
realized, as the case may be, upon a Capital Transaction (or the Terminating
Capital Transaction), but later received or realized, as the case may be, by the
Partnership as a result of an installment or other deferred payment sale, shall
be distributed and allocated, respectively, to the Unitholder or Investor
Limited Partner recognized as such under this Agreement as of the dates such Net
Cash Proceeds and Profit or Loss are received or realized, as the case may be,
by the Partnership.
(f) Any allocation or distribution with respect to a Limited Partner
Interest shall be made directly to the Unitholder of the Unit corresponding to
such Interest, if any.
(g) If an amount paid or deemed paid to the General Partners or their
Affiliates as a fee or payment described in Section 6.4 is a distribution to a
general partner in its capacity as a partner and not a guaranteed payment as
defined in Section 707(c) of the Code or a payment to a partner not acting in
his capacity as a partner under Section 707(a) of the Code, the General Partners
shall be allocated an amount of Partnership gross income equal to such payment
and its Capital Account shall be reduced to reflect the distribution. For
purposes of Sections 8.1, 8.2 and 8.3, Profits and Losses for Tax Purposes shall
be determined after making any allocation required by this Section 8.4(g).
(h) All amounts paid with respect to any Unit as sales commissions shall
be allocated to the particular Unit with respect to which they are paid and the
Capital Account for such Unit shall be reduced to reflect such allocation.
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8.5 RETURN OF CAPITAL CONTRIBUTIONS. All Partners and Unitholders shall
look solely to the assets of the Partnership for the return of Capital
Contributions or any other distributions with respect to their Interests. If the
assets remaining after payment or discharge, or provisions for payment or
discharge, or its debts and liabilities are insufficient to return the Capital
Contributions or to make any other distributions to the Partners and
Unitholders, no Partner or Unitholder shall have any recourse against the
personal assets of any other Partner or Unitholder for that purpose, except to
the limited extent set forth in Section 6.3 hereof.
8.6 REINVESTMENT OF NET CASH PROCEEDS. The Partnership shall not reinvest
Cash Flow in Assets. The Partnership may reinvest Net Cash Proceeds only as
provided in Section 6.1(c) hereof. In the event reinvestment is permitted under
Section 6.1(c) hereof, the General Partners may elect, in their sole discretion
based upon real estate and MBS market conditions then in effect, either to
distribute all or any portion of the cash available for such reinvestment or to
reinvest such cash in Properties or MBS. Notwithstanding the foregoing, if the
transaction giving rise to such cash shall create any federal or state income
tax liability for Investor Limited Partners or Unitholders, no such cash shall
be reinvested unless sufficient Net Cash Proceeds are distributed to enable
Investor Limited Partners and Unitholders to pay such taxes (assuming the
Investor Limited Partners and Unitholders are taxable at an overall rate of 40%
on ordinary income and 16% on long-term capital gains).
8.7 RETURN OF UNINVESTED CAPITAL CONTRIBUTIONS. In the event that any
portion of the Limited Partners' Capital Contributions is not invested or
committed for investment by the Partnership within 24 months from the date on
which the offering of Units commenced (except for any amounts utilized to pay
expenses of the Partnership and amounts set aside for working capital reserves
not in excess of 5% of such Capital Contributions), such portion of Capital
Contributions shall promptly be distributed by the Partnership as a return of
capital. For the purpose of this Agreement, funds will be deemed to have been
committed to investment and will not be returned to the extent written
agreements in principle, commitment letters, letters of intent or understanding,
option agreements or any similar contracts or understandings were at any time
executed by not terminated during the aforesaid 24-month period, regardless of
whether any such investment is or is not ultimately consummated, and to the
extent any funds have been reserved to make contingent payments in connection
with any property, regardless of whether any such payments are or are not
ultimately made. In the event that any Capital Contributions shall be returned
pursuant to this Section, the respective Capital Contributions (and Invested
Capital) of the Investor Limited Partners and Unitholders shall be reduced by
the amount of such distribution.
8.8 LIMITATION ON DISTRIBUTIONS TO THE GENERAL PARTNERS. Notwithstanding
anything to the contrary that may be expressed or implied in this Agreement,
distributions of Net Cash Proceeds of any Capital Transactions or the
Terminating Capital Transaction shall not be made to the General Partners
pursuant to Section 8 hereof until 100% of the Limited Partners' Invested
Capital shall have been returned and the Limited Partners shall have received an
amount equal to the sum of (i) a 6% annual cumulative return on the portion of
their Invested Capital invested in Property, and (ii) a 10% annual cumulative
return on the portion of their Invested Capital invested in MBS; such amounts to
be subject to reduction on a pro rata basis, but not below zero, by the
aggregate amount of prior distributions to the Limited Partners from cash
available for distributions.
Section 9. WITHDRAWAL OF GENERAL PARTNERS.
9.1 VOLUNTARY WITHDRAWAL. Any General Partner may Voluntarily Withdraw
as a General Partner from the Partnership at any time provided that (a) the
General Partners shall have given sixty (60) days
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prior notice thereof to the Limited Partners, (b) the Partnership shall have
received the opinion of Counsel to the Partnership to the effect that such
Withdrawal will not constitute a termination of the Partnership or otherwise
materially adversely affect the status of the Partnership for federal income tax
purposes and (c) if the General Partner proposing to Withdraw is then the sole
General Partner, or if such Voluntary Withdrawal shall require the admission of
a new General Partner in order to preserve the status of the Partnership as a
partnership for federal income tax purposes, a new General Partner shall have
been selected who, or which, (i) shall have stated willingness to be admitted,
(ii) shall satisfy the then applicable provisions of the Code and any applicable
procedures, regulations, rules and rulings (including published private rulings)
thereunder, including applicable net worth requirements so that the Partnership
shall be classified as a partnership for tax purposes, and (iii) shall have
received the specific written consent of any remaining General Partner and of
Limited Partners holding not less than a majority of the Limited Partner
Interests with respect to such admission. Notwithstanding the foregoing, in no
event shall either The ▇▇▇▇▇ Corporation or The ▇▇▇▇▇ Company Limited
Partnership-IV Voluntarily Withdraw as a General Partner from the Partnership
prior to December 31, 1989.
9.2 INVOLUNTARY WITHDRAWAL. A General Partner shall be deemed to have
Involuntarily Withdrawn as a General Partner from the Partnership upon the
occurrence of any of the following events: (a) in the case of The ▇▇▇▇▇ Company
Limited Partnership-IV or an additional or Substitute General Partner which is a
partnership, upon the death, physical or mental incapacity (as determined by
certificate of a licensed physician), dissolution or bankruptcy of all general
partners of such partnership, (b) in the case of The ▇▇▇▇▇ Corporation or an
additional or Substitute General Partner which is a corporation, the filing of a
certificate of dissolution, or its equivalent, for such General Partner or the
revocation of its charter, (c) the removal of the General Partner pursuant to a
vote of the Limited Partners made in accordance with Section 13 of this
Agreement, (d) the making of an assignment for the benefit of creditors, the
filing of a voluntary petition in bankruptcy, or an adjudication of bankruptcy,
or (e) any other event which constitutes an event of withdrawal under the
Massachusetts Uniform Limited Partnership Act as then in effect.
9.3 CONSEQUENCES OF WITHDRAWAL.
(a) Upon the Withdrawal of any General Partner, the Withdrawn General
Partner or his estate or legal representatives shall be entitled to receive from
the Partnership (i) any positive balance in his or its Capital Account (as
adjusted to the date of such Withdrawal), (ii) any amounts due and owing to it
or him by the Partnership less any amounts due and owing by it or him to the
Partnership, and (iii) the remaining balance, if any, of fees payable as and
when due pursuant to this Agreement or any other written agreements between the
Partnership and such General Partner in his capacity as General Partner;
however, the Withdrawn General Partner shall not be entitled to any such fees
which had not yet been earned by him prior to his Withdrawal. The right of a
General Partner, his estate or legal representatives to payment of said amounts
and fees shall be subject to any claim for damages which the Partnership or any
Partner may have against such General Partner, his estate or legal
representative if such Withdrawal is in contravention of this Agreement.
Valuation of a Withdrawn General Partner's Interest shall be in accordance with
the provisions of Section 13.4 hereof.
(b) Each General Partner hereby covenants and agrees, in the event of his
Withdrawal, to transfer to a Substitute General Partner selected as provided in
Section 9.5 hereof or to the remaining General Partner or General Partners, such
portion, if any, of his General Partner Interest as may be required to assure
that the Partnership will meet the minimum general partnership interest
requirement for the continued treatment of the Partnership as a partnership
under the then applicable provisions of the
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Code and any applicable procedures, regulations, rules and rulings (including
published private rulings) thereunder. Any such transfer will be made in
consideration of the payment by the Substitute General Partner or the remaining
General Partner or Partners to the Withdrawn General Partner, his estate or
legal representatives, of the fair market value of such interest. Such payments
shall be in addition to any amounts payable pursuant to Section 9.3(a) hereof by
the Partnership. Any portion of such Withdrawn General Partner's Interest which
is not required to be transferred as aforesaid may be retained by such Withdrawn
General Partner, or his estate or legal representatives as appropriate. Such
Withdrawn General Partner, or his estate or legal representatives, shall be
treated as a Limited Partner in the Partnership in respect to any such retained
Interest.
(c) If the Withdrawal of a General Partner shall occur as part of a
removal and replacement of such General Partner effected in accordance with
Section 13 hereof, the provisions of said Section 13 shall govern to the extent
(if any) that the provisions of said Section 13 are inconsistent with the
provisions of this Section 9.3.
9.4 LIABILITY OF WITHDRAWN GENERAL PARTNER. If the business of the
Partnership is continued after Withdrawal of a General Partner, the Withdrawn
General Partner, his estate and legal representatives shall remain liable for
all obligations and liabilities incurred by him while a General Partner and for
which he was liable as a General Partner, but shall be free of any obligation or
liability incurred on account of or arising from the activities of the
Partnership from and after the time such Withdrawal shall have become effective.
9.5 CONTINUATION OF PARTNERSHIP BUSINESS.
(a) PROCEDURE IF THERE IS A REMAINING GENERAL PARTNER. Upon the Withdrawal
of a General Partner, the remaining General Partner or Partners, if any, shall
promptly notify the Limited Partners and Unitholders of such Withdrawal. The
remaining General Partner or Partners may elect to continue the Partnership
business. If at any time The ▇▇▇▇▇ Company Limited Partnership-IV or a successor
General Partner with substantial net worth shall Withdraw as a General Partner,
the remaining General Partners or Partner may (but shall not be obligated to)
propose for admission a Substitute General Partner or General Partners, unless a
Substitute General Partner shall have already been proposed by the Limited
Partners pursuant to Section 13 hereof. Any such proposed Substitute General
Partner shall, with the specific written consent of the other General Partners
and of the Limited Partners with respect to not less than a majority of the
Limited Partner Interests, become a Substitute General Partner upon his or its
execution of this Agreement.
(b) PROCEDURE IF THERE IS NO REMAINING GENERAL PARTNER. If, following the
Withdrawal of a General Partner, there is no remaining General Partner or
Substitute General Partner, any Limited Partner may notify the other Limited
Partners and Unitholders of such circumstances and may propose for admission a
Substitute General Partner, unless a Substitute General Partner shall have
already been proposed by the Limited Partners pursuant to Section 13 hereof. Any
Substitute General Partner proposed by such Limited Partner pursuant to this
Section 9.5(b) or Section 13.2 hereof, shall, with the specific written consent
of the Limited Partners with respect to not less than a majority of the Limited
Partner Interests, become a Substitute General Partner upon his or its execution
of this Agreement and may thereupon elect to continue the Partnership business.
If no Substitute General Partner has received the consent of the Limited
Partners with respect to not less than a majority of the Limited Partner
Interests, executed this Agreement, and elected to continue the Partnership
business within one hundred
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eighty (180) days from the date of the last remaining General Partner's
Withdrawal, then the Partnership shall thereupon terminate.
Section 10. ASSIGNMENT OF LIMITED PARTNER INTERESTS.
10.1 WITHDRAWAL OF A LIMITED PARTNER. Subject to compliance with this
Agreement, a Limited Partner may withdraw from the Partnership only by assigning
or otherwise transferring his or its Interest as specified in this Section 10.
Such withdrawal of a Limited Partner shall not dissolve or terminate the
Partnership. In the event of a Limited Partner's withdrawal because of death,
legal incompetence, dissolution or other termination, the estate, legal
representative or successor of such withdrawn Limited Partner shall be deemed to
be the assignee of such withdrawn Limited Partner's Interest and may become a
Substitute Limited Partner upon compliance with the provisions of Section 10.3
hereof.
10.2 ASSIGNMENT. Units of Depositary Receipts may be Assigned in
accordance with Section 7.2 hereof. Limited Partner Interests of the Corporate
Limited Partner which correspond to Units may be Assigned in accordance with
Section 7.6(b) hereof. Other Limited Partner Interests may be Assigned only in
accordance with this Section 10.2 and Section 10.4. Such Limited Partner
Interests may be Assigned provided there shall be filed with the Partnership, in
form satisfactory to the General Partners, a duly executed counterpart of the
instrument making such Assignment and such instrument (a) evidences the written
acceptance by the assignee of all of the terms and provisions of this Agreement,
(b) represents that such Assignment was made in accordance with all applicable
laws and regulations (including, without limitation, such minimum investment and
investor suitability requirements as may then be applicable under state
securities law), and (c) is accompanied by a fee of $50.00 to reimburse the
Partnership for its costs respecting the Assignment.
10.3 SUBSTITUTION. An assignee of a Limited Partner Interest assigned in
accordance with the provisions of Section 10.1 or 10.2 hereof shall become a
Substitute Limited Partners if:
(a) such assignee executes an instrument reasonably satisfactory to the
General Partners accepting and adopting the terms and provisions of this
Agreement;
(b) in the case of Assignments other than by operation of law, the
assignor states his intention in writing to have his assignee become a
Substitute Limited Partner; and
(c) the General Partners, in their sole discretion, consent in writing to
such substitution (which consent may be withheld).
If all of the conditions of Section 10.1 or 10.2 and this Section 10.3
shall have been met, the assignee of a Limited Partner Interest shall become a
Substitute Limited Partner as of the first day of the month following the date
as of which the General Partners consent in writing to his admission to the
Partnership as a Substitute Limited Partner, which consent may be evidenced by
the filing of an amendment to the Certificate of Limited Partnership listing the
name of such Substitute Limited Partner. Such an amendment shall be filed no
later than 15 days after the completion of any fiscal quarter of the Partnership
in which a Substitute Limited Partner is admitted to the Partnership.
An assignee of a Limited Partner Interest who does not become a Substitute
Limited Partner in accordance with this Section 10.3 and who desires to make a
further Assignment of his Interest shall be subject to all the provisions of
Sections 10.2, 10.3 and 10.4 hereof, to the same extent and in the same
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manner as any Limited Partner desiring to make an Assignment of his Interest.
Failure or refusal of the General Partners to admit an assignee of a Limited
Partner Interest as a Substitute Limited Partner shall in no way affect the
right of such assignee to receive the share of the Profits or Losses for Tax
Purposes and distributions of Cash Flow and Net Cash Proceeds to which his
predecessor in interest would have been entitled in accordance with Section 8
hereof.
10.4 PROHIBITED ASSIGNMENT. No Limited Partner Interests may be Assigned
or otherwise transferred:
(a) to a non-resident alien;
(b) to a minor or incompetent (unless a guardian, custodian or
conservator has been appointed to handle the affairs of such Person);
(c) to any Person not permitted to be a transferee under law including, in
particular but without limitation, applicable state securities laws which
generally provide that, except in the case of a transfer by gift, inheritance,
intra-family transfer, or family dissolution, each transferee of Limited Partner
Interests must acquire not less than 100 Limited Partner Interests, and that
following a transfer of less than all his Limited Partner Interests, each
transferor must retain a sufficient number of Limited Partner Interests to
satisfy the minimum investment standards applicable to his initial purchase of
Limited Partner Interests;
(d) to any Person if such Person would hold after such Assignment less
than 100 Limited Partner Interests unless the General Partners shall give
specific written consent to such Assignment;
(e) to any Person if, in the opinion of Counsel to the Partnership, such
transfer would result in the assets of the Partnership being "plan assets" or
the transactions hereunder being prohibited transactions under ERISA or the
Code; or
(f) to any Person if, in the opinion of Counsel to the Partnership, such
transfer would result in the termination under the Code of the Partnership's
taxable year or of its status as a partnership.
Any such attempted Assignment without the express written consent of the
General Partners shall be void and ineffectual and shall not bind the
Partnership. In the case of a proposed Assignment which is prohibited solely
under clause (d) above, however, the Partnership shall be obligated to permit
such Assignment to become effective if and when, in the opinion of Counsel to
the Partnership, such Assignment would no longer have either of the adverse
consequences under the Code which are specified in that clause.
10.5 STATUS OF AN ASSIGNING LIMITED PARTNER. Any Limited Partner (other
than the Corporate Limited Partner) who shall Assign all of his Interest shall
cease to be a Limited Partner of the Partnership and shall no longer have any of
the rights or privileges of a Limited Partner, except that unless and until a
Substitute Limited Partner is admitted in his stead, such assigning Limited
Partner shall retain the statutory rights of an assignor of a limited partner
interest under the Massachusetts Uniform Limited Partnership Act.
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Section 11. DISSOLUTION AND WINDING-UP.
11.1 EVENTS CAUSING DISSOLUTION. The Partnership shall be dissolved and
its affairs wound up on the first to occur of the following:
(a) the Withdrawal of any General Partner, unless the remaining General
Partner or General Partners, if any, or a Substitute General Partner admitted in
accordance with Section 9.5 or Section 13 hereof, agree to continue the
Partnership business pursuant to Section 9.5; or
(b) an election to dissolve the Partnership made in writing by the General
Partners with the Consent of a majority in interest of the Limited Partner
Interests, or, subject to compliance with Section 13 hereof, made by a majority
in interest of the Limited Partner Interests, without action by the General
Partners; or
(c) the sale or other disposition of all or substantially all of the
Assets unless the General Partners elect to continue the Partnership business
for the purpose of the receipt and collection of a note and payments thereon or
the collection of any other consideration to be received in exchange for the
Assets (which activities shall be deemed to be a part of the Terminating Capital
Transaction and the winding-up of the affairs of the Partnership); or
(d) the expiration of the Partnership term; or
(e) any other event which causes the dissolution and/or winding up of the
Partnership under the Massachusetts Uniform Limited Partnership Act to the
extent not otherwise provided herein.
11.2 DISTRIBUTIONS UPON DISSOLUTION. Upon the dissolution of the
Partnership, the General Partners, or if there is none, such other Person
required by law to wind up the Partnership's affairs, shall proceed with the
liquidation of the Partnership (including, without limitation, the sale or other
disposition of any remaining Assets and cancellation of the Certificate of
Limited Partnership), and the net proceeds of such liquidation shall be applied
and distributed in accordance with the provisions of Section 8.3(b) hereof.
During the period of dissolution and winding-up of the Partnership, the General
Partners or any Person performing such actions may exercise all of the powers
granted to the General Partners herein, and they may adopt such plan, method or
procedures as they may deem reasonable in order to effectuate an orderly
winding-up. If the General Partners shall perform the foregoing functions, they
shall be compensated therefore as provided in Sections 6.4 and 8 hereof, and if
such functions shall be performed by Persons other than the General Partners,
such Persons shall be entitled to reasonable compensation from the Partnership
for their services.
Section 12. FISCAL MATTERS.
12.1 TITLE TO ASSETS AND BANK ACCOUNTS. Except to the extent that
trustees, nominees or others agents are utilized as specified in Section
6.1(b)(2) hereof, the Properties and other Assets of the Partnership are held in
the name of the Partnership. The funds of the Partnership shall be deposited in
the name of the Partnership in such bank account or accounts as shall be
designated by the General Partner, and withdrawals therefrom shall be made upon
the signature of any General Partner or such Person or Persons as shall be
designated in writing by any General Partner. The funds of the Partnership shall
not be commingled with the funds of any other Person.
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12.2 MAINTENANCE OF AND ACCESS TO BASIC PARTNERSHIP DOCUMENTS. The General
Partners shall maintain at the Partnership's principal office in Massachusetts
the following documents: (a) current lists of the full name and last known
business address of each Partner and Unitholder set forth in alphabetical order,
(b) a copy of the Certificate of Limited Partnership and all amendments thereto,
together with executed copies of any powers of attorney pursuant to which the
Certificate or any such amendment has been executed, (c) copies of the
Partnership's federal, state and local income tax returns and reports, if any,
for the three most recent years, and (d) copies of this Agreement as then in
effect and of any financial statements of the Partnership for the three most
recent years. Such documents are subject to inspection and copying at the
reasonable request, and at the expense, of any Partner or Unitholder during
ordinary business hours. In addition, the Partnership will furnish a list of the
names and addresses of all Limited Partners and Unitholders, together with their
respective Capital Contributions and Subscription Prices, to any Limited Partner
or Unitholder who makes a written request therefor to the Partnership, provided
such Partner or Unitholder shall pay the cost of reproducing and delivering such
list. Except to the extent requested by any Limited Partner or Unitholder, the
General Partners shall have no obligation to deliver or mail a copy of the
Partnership's Certificate of Limited Partnership or any amendment thereto to the
Limited Partners or Unitholders. Each Limited Partner shall also have the right
to obtain from the General Partners from time to time upon reasonable demand:
(i) true and full information regarding the status of the business and financial
condition of the Partnership; (ii) promptly after becoming available, a copy of
the Partnership's federal, state and local income tax returns for each year, and
(iii) other information regarding the affairs of the Partnership as is just and
reasonable.
12.3 FINANCIAL BOOKS AND ACCOUNTING. The General Partners shall keep or
cause to be kept complete and accurate financial books with request to the
Partnership's business. Such books shall be kept on an accrual basis and the
Profits and Losses for Tax Purposes of the Partnership shall be determined for
each fiscal year in accordance with accounting methods followed for federal
income tax purposes. Except as otherwise provided herein, whenever a
proportionate part of the Profits or Losses for Tax Purposes of the Partnership
is credited or charged to a Partner's Capital Account, every item of income,
gain, loss or deduction entering into the computation of such Profits or Losses
shall be considered either credited or charged, as the case may be, and every
item or credit or tax preference related to such Profits or Losses and
applicable to the period during which such Profits or Losses were realized shall
be allocated to such Capital Account in the same proportion.
12.4 PARTNERSHIP EXPENSES.
(a) The Partnership shall reimburse the General Partners and their
Affiliates for organizational and offering expenses incurred by the General
Partners and such Affiliates, provided that in no event shall the amount of
organizational and offering expenses paid directly or indirectly by the
Partnership exceed 4% of the gross proceeds of the offering of Units, and the
General Partners shall pay for any organizational and offering expenses in
excess of such 4% amount. For purposes hereof, "organizational and offering
expenses" shall mean those expenses incurred in connection with, and in
preparing the Partnership for, qualification under the federal and state
securities laws and subsequently offering and distributing the Units to the
public, including certain marketing expenses but not sales commissions or
reimbursement for due diligence expenses paid by the Partnership to ▇▇▇▇▇
Securities Corporation and selected dealers in connection with the offering of
Units. In addition, the Partnership shall pay to prospective selected dealers
through ▇▇▇▇▇ Securities Corporation an accountable expense reimbursement of up
to 0.5% of the gross proceeds of the offering of Units for due diligence
expenses of prospective selected dealers described in Section 6.4(a) hereof.
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(b) Subject to the foregoing, the Partnership shall pay all expenses
(which expenses shall be billed directly to the Partnership) of the Partnership
which may include but are not limited to: (i) all costs of personnel (excluding
rent or depreciation, utilities, capital equipment, and other administrative
items) employed full- or part-time by the Partnership and involved in the
business of the Partnership and allocated pro rata to their administrative
services performed on behalf of the Partnership, including Persons who may also
be officers or employees of the General Partners or their Affiliates (other than
Controlling Persons); (ii) all costs of borrowed money, taxes and assessments on
Partnership Properties and other taxes applicable to the Partnership; (iii)
legal, audit, accounting, brokerage and other fees; (iv) printing, engraving and
other expenses and taxes incurred in connection with the issuance, distribution,
transfer, registration and recording of documents evidencing ownership of an
Interest or Unit or in connection with the business of the Partnership; (v) fees
and expenses paid to independent contractors, mortgage bankers, brokers and
servicers, leasing agents, consultants, on-site property managers and other
property management personnel (other than Controlling Persons and other officers
of the General Partners or their Affiliates), real estate brokers, insurance
brokers and other agents; (vi) expenses in connection with the disposition,
replacement, alteration, repair, remodeling, refurbishment, leasing, refinancing
and operation of Partnership Properties (including the costs and expenses of
foreclosures, insurance premiums, real estate brokerage and leasing commissions
and of maintenance of such property); (vii) expenses of organizing, revising,
amending, converting, modifying, or terminating the Partnership; (viii) expenses
in connection with distributions made by the Partnership to, and communications
and bookkeeping and clerical work necessary in maintaining relations with
Limited Partners and Unitholders, including the costs of printing and mailing to
such Persons evidences of ownership of Limited Partner Interests or Units and
reports of meetings of the Partnership, and of preparation of proxy statements
and solicitations of proxies in connection therewith; (ix) expenses in
connection with preparing and mailing reports required to be furnished to
Limited Partners and Unitholders for investor, tax reporting or other purposes,
or which reports the General Partners deem the furnishing thereof to Limited
Partners or Unitholders to be in the best interests of the Partnership; (x)
accounting, computer, statistical or bookkeeping costs necessary for the
maintenance of the books and records of the Partnership; and (xi) the cost of
preparation and dissemination of the information material and documentation
relating to potential sale, or other disposition of Partnership Assets. Other
than as specifically described above in this Section and in Section 6.4 hereof,
the Partnership shall not pay the General Partners for any other items generally
considered to be the General Partners' overhead and expenses.
(c) Except for organizational and offering expenses, the Partnership shall
not reimburse the General Partners or their Affiliates except for reimbursement
of the actual cost to the General Partners or their Affiliates of goods,
materials and services used for or by the Partnership and obtained from Persons
unaffiliated with the General Partners and their Affiliates; provided, however,
subject to the limitations stated below, the General Partners and their
Affiliates may receive reimbursement for the administrative services necessary
to the prudent operation of the Partnership, such as legal, accounting,
computer, transfer agent and other services which could be performed directly
for the Partnership by independent parties. The amounts charged to the
Partnership for such administrative services will not exceed the lesser of (i)
the actual costs to the General Partners or their Affiliates, or (ii) 90% of
those which the Partnership would be required to pay to independent parties for
comparable services in the same or comparable geographic locations. As part of
the Partnership's annual report to the Limited Partners and Unitholders, an
itemized breakdown will be included of such reimbursements, all of which shall
be verified by the Accountants. Such verification shall at minimum provide (i) a
review of the records of individual employees, the costs of whose services were
reimbursed, and (ii) a review of the specific nature of the work performed by
each such employee. The methods of verification shall be
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performed in accordance with generally accepted auditing standards and shall
accordingly include such tests of the accounting records and such other auditing
procedure which the Accountants consider appropriate in the circumstance. The
additional costs of such verification will be itemized by the Accountants on a
partnership-by-partnership basis and may be reimbursed to the General Partners
and their Affiliates by the Partnership only to the extent that such
reimbursement, when added to the cost for administrative services rendered, does
not exceed 90% of the competitive rate for such services as determined above.
(d) Any agreements, contracts and arrangements in addition to those
authorized by Section 6.4 hereof may be entered into with a General Partner or
an Affiliate of the General Partners subject to the following additional
conditions:
(A) any such agreements contracts or arrangements shall be embodied in
a written contract which precisely describes the subject matter thereof and all
compensation to be paid therefor;
(B) neither a General Partners (in any capacity other than as General
Partner) nor any such Affiliate may act as paying or purchasing agent for the
Partnership and no funds of the Partnership may be paid to a General Partner or
any such Affiliate by way of reimbursement for Partnership expenses except as
permitted this Section 12.4;
(C) any such agreements, contracts or arrangements shall be fully and
promptly disclosed to all Partners in the reports provided for in Section
12.6(a) hereof (stating the compensation paid and to be paid by the
Partnership); and
(D) any such agreements, contracts or arrangements shall be terminable
by either party, without penalty, upon 60 days' prior written notice.
12.5 FISCAL YEAR. Except as may otherwise be determined from time to time
by the General Partners, the Partnership's fiscal year for federal income tax
and financial reporting purposes shall end on December 31 of each year.
12.6 REPORTS, ACCOUNTING DECISIONS AND FEDERAL TAX ELECTIONS.
(a) REPORTS TO LIMITED PARTNERS.
(1) QUARTERLY REPORTS. Within 45 days after the end of each of the
first three quarters of each fiscal year, the General Partners shall send to
each Person who was a Limited Partner or Unitholder at any time during the
quarter then ended (i) a balance sheet (which need not be audited), (ii) a
statement of operations (which need not be audited), (iii) a Cash Flow statement
(which need not be audited), (iv) a statement describing (A) any new agreement,
contract or arrangement required to be reported by Section 6.1(b)(4), and (B)
the amount of all fees and other compensation and distributions paid by the
Partnership for such quarter to any General Partner or any Affiliate of any
General Partner, (v) a report in narrative form summarizing the status of the
Partnership's investments, (vi) a report of the activities of the Partnership
during such fiscal quarter, (vii) a schedule of the most recent Appraised Values
of the Properties and an estimate by the General Partners of the value of the
Units, and (viii) if the Partnership is then required to file quarterly reports
on Form 10-Q with the Securities and Exchange Commission, a copy of each such
report. Until the Capital Contributions to the Partnership derived from the
offering of Units shall be fully invested, except for reserves, each quarterly
report (or a special report distributed
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prior to or concurrently with such quarterly report) will also contain a report
on real property and MBS acquisitions made by the Partnership during the period
covered by the report including (A) a description of the Properties or MBS
purchased, (B) a description of the geographic locale of any Property and of the
market upon which the success of operations is dependent, (C) the appraised
value of any Property, (D) the actual purchase price and terms, (E) the cash
expended from Capital Contributions to acquire each Asset, and (F) the amount of
Capital Contributions which then remains unexpended, stated both in items of
dollar amount and percentage of the total amount of Capital Contributions
derived from the offering of Units.
(2) ANNUAL REPORTS. Within 90 days after the end of each fiscal year,
the General Partners shall send to each Person who was a Limited Partner or
Unitholder at any time during the fiscal year then ended a report in narrative
from summarizing the status of the Partnership's investments and containing (i)
a balance sheet as of the end of such fiscal year and statements of operations,
Partners' equity and changes in financial position for such fiscal year, all of
which shall be prepared in accordance with generally accepted accounting
principles and accompanied by an auditor's report containing an opinion of the
Accountants, (ii) a cash flow statement (which need not be audited), (iii) a
report summarizing the fees and other remuneration paid by the Partnership for
such fiscal year to any General Partner or any Affiliate of any General Partner,
(iv) a schedule of the most recent Appraised Values of the Properties and an
estimate by the General Partners of the value of the Units, and (v) a statement
(which need not be audited) showing the Distributable Cash Flow and the Net Cash
Proceeds from any Capital Transaction or Terminating Capital Transaction
distributed per Interest during such fiscal year. Such report shall separately
identify (to the extent then applicable) distributions from (a) cash flow from
operations during the period, (b) cash flow from operations during a prior
period which had been held as reserves, (c) net cash proceeds arising from
disposition or refinancing of property and investments, (d) lease payments on
net leases with builders and sellers, and (e) reserves from the gross proceeds
of the offering of Units. Until the Capital Contributions of the Partnership
derived from the offering of Units shall be fully invested, the annual report
shall also contain a report on real property and MBS acquisitions providing the
information specified above for quarterly reports, unless such information shall
have previously been or shall concurrently be provided in a quarterly or special
report to the Limited Partners and Unitholders.
(b) TAX RETURNS AND TAX INFORMATION. The General Partners shall:
(i) have the Accountants prepare the tax returns (federal,
state and local, if any) of the Partnership for each fiscal year within 75 days
after the end of each calendar year in which such fiscal year was completed; and
(ii) deliver to each partner and Unitholder within 75 days
after the end of each calendar year the information necessary to prepare his
federal income tax return, and a state tax return to the extent required in each
state where the Partnership then owns a Property, for the calendar year during
which such fiscal year was completed.
(c) ACCOUNTING DECISIONS. All decisions as to accounting matters, except
as specifically provided to the contrary herein, shall be made by the General
Partners in accordance with generally accepted accounting principles and
procedures applied in a consistent manner. The General Partners may rely upon
the advice of the Accountants as to whether such decisions are in accordance
with generally accepted accounting principles.
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(d) FEDERAL TAX ELECTIONS. The Partnership, in the sole discretion of the
General Partners, may make elections for federal tax purposes as follows:
(i) In case of a transfer of all or part of the Interest of a
Partner, the Partnership, in the absolute discretion of the General Partners,
may timely elect pursuant to Section 754 of the Code (or corresponding
provisions of future law) and pursuant to similar provisions of applicable state
or local income tax laws, to adjust the basis of the assets of the Partnership.
In such event, any basis adjustment attributable to such election shall be
allocated solely to the transferee.
(ii) The General Partners may elect accelerated depreciation
methods under the Code, or may elect straight-line depreciation over a period as
long 45 years if in their judgment the determination of the percentage of
tax-exempt investors becomes too cumbersome.
(iii) All other elections required or permitted to be made by
the Partnership under the Code shall be made by the General Partners in such
manner as will, in the opinion of the Accountants, be most advantageous to a
majority of the Limited Partner Interests. The Partnership shall, to the extent
permitted by applicable law and regulations, elect to treat as an expense for
federal income tax purposes all amounts incurred by it for real estate taxes,
interest and other charges which may, in accordance with applicable law and
regulations, be considered as expenses.
(e) TAX MATTERS PARTNER. The ▇▇▇▇▇ Corporation is hereby designated as the
"Tax Matters Partner" under Section 6231(a)(7) of the Code, to manage
administrative and judicial tax proceedings conducted at the Partnership level
by the Internal Revenue Service with respect to Partnership matters. Any Partner
has the right to participate in such administrative or judicial proceedings
relating to the determination of partnership items at the Partnership level. The
▇▇▇▇▇ Corporation as Tax Matters Partner shall inform each other Partner and
each Unitholder of all administrative and judicial proceedings for an adjustment
at the Partnership level of partnership items, shall forward to each other
Partners and to each Unitholder within 30 days after receipt all notices
received from the Internal Revenue Service regarding the commencement of a
Partnership-level audit or a final Partnership administrative adjustment, and
shall perform all other duties imposed by Sections 6231 and 6232 of the Code on
The ▇▇▇▇▇ Corporation as Tax Matters Partner. Expenses of any such
administrative or judicial proceedings undertaken by the Tax Matters partner
will be paid out of Partnership assets. Each other Partner or Unitholder who
elects to participate in such proceedings will be responsible for any expenses
incurred by such Partner or Unitholder in connection with such participation.
Further, the cost of any adjustments to a Partner or Unitholder and the cost of
any resulting audits or adjustments of a Partner's or Unitholder's tax return
will be borne solely by the affected partner or Unitholder.
(f) REPORTS TO FEDERAL AND STATE AUTHORITIES. The General Partners shall
cause to be prepared and timely filed with appropriate federal and state
regulatory and administrative bodies, all reports required to be filed with such
entities under then current applicable laws, rules and regulations. Such reports
shall be prepared on the accounting or reporting basis required by such
regulatory bodies. Any Limited partner or Unitholder shall be provided with a
copy of any such report upon request without expense to him.
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Section 13. MEETINGS AND VOTING RIGHTS OF LIMITED PARTNERS AND
UNITHOLDERS.
13.1 MEETINGS.
(a) Meetings of the Limited Partners and Unitholders for any purpose may
be called by the General Partners and shall be called by the General Partners
upon receipt of a request in writing signed by the holders of 10% or more of the
Limited Partner Interests. Notice of any such meeting shall be sent within ten
days after receipt of such request. Such request shall state the purpose of the
proposed meeting and the matters proposed to be acted upon at the meeting. Such
meeting shall be held at the principal office of the Partnership, or at such
other place as may be designated by the General Partners, or, if called upon the
request of Limited Partners or Unitholders, as designated by such Limited
Partners or Unitholders. In addition, upon receipt of a request in writing
signed by the holders of 10% or more of the Limited partner Interests, the
General Partners shall submit any matter (upon which the Limited Partners and
Unitholders are entitled to act) to the Limited Partners and Unitholders for a
vote by written Consent without a meeting.
(b) A notice of any such meeting shall be given either personally or by
mail, not less than 15 days nor more than 60 days before the date of the
meeting, to each Limited Partner and Unitholder. Such notice shall state the
place, date and hour of the meeting, and shall indicate that it is being issued
at or by the direction of the partner or Partners calling the meeting. The
notice shall state the purpose or purposes of the meeting. If a meeting is
adjourned to another time or place, and if any announcement of the adjournment
of time or place is made at the meeting, it shall not be necessary to give
notice of the adjourned meeting. The presence in person or by proxy of a
majority in interest of the Limited partner Interests shall constitute a quorum
at all meetings, provided, however, that if there be no such quorum, holders of
a majority in interest of such Limited partner Interests so present or so
represented may adjourn the meeting from time to time without further notice,
until a quorum shall have been obtained. No notice of the time, place or purpose
of any meeting need be given with respect to any Limited partner Interest which
is represented by proxy or by a Limited partner or Unitholder who attends in
person (except when a Limited partner or Unitholder attends a meeting for the
express purpose of objecting at the beginning of the meeting to the transaction
of any business on the ground that the meeting is not lawfully called or
convened), or with respect to any Limited Partner Interested entitled to such
notice if a waiver of such notice, in writing, has been executed and filed with
the records of the meeting, either before or after the time thereof.
(c) For the purpose of determining the Limited Partner Interests entitled
to vote on, or to vote at, any meeting or any adjournment thereof, the General
Partners, Limited partners or Unitholders requesting such meeting may fix, in
advance, a date as the record date for any such determination of Interests. Such
date shall not be more than 50 days not less than ten days before any such
meeting.
(d) A Limited Partner or Unitholder shall be entitled to cast one vote of
each Limited Partner Interest or Unit which he owns: (i) at a meeting, in
person, by written proxy or by a signed writing directing the manner in which he
desires that his vote be cast, which writing must be received by the General
Partner (or the Limited Partners or Unitholders calling the meeting) prior to
such meeting, or (ii) without a meeting, by a signed writing directing the
manner in which he desires that his vote be cast, which writing must be received
by the General Partners (or the Limited Partners or Unitholders soliciting such
vote) prior to the date upon which the votes of Limited Partners and Unitholders
are to be counted. Any Limited partner or Unitholder may waiver notice of or
attendance at any meeting and may attend by telephone or any other electronic
communication device or may execute a signed written consent.
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Only the votes of Limited Partners and Unitholders of record on a record date,
if established pursuant to clause (c) above, whether at a meeting or otherwise,
shall be counted. The laws of The Commonwealth of Massachusetts pertaining to
the validity and use of corporate proxies shall govern the validity and use of
proxies given by Limited Partners and Unitholders.
(e) At each meeting, the Limited Partners and Unitholders present or
represented by proxy may adopt such rules for the conduct of such meeting as
they shall deem appropriate, provided that such rules shall not be inconsistent
with the provisions hereof.
13.2 VOTING RIGHTS OF LIMITED PARTNERS AND UNITHOLDERS. Subject to Section
13.3, a majority in interest of the Limited Partner Interests, without the
concurrence of the General Partners, may (a) amend this Agreement, subject to
the provisions of Section 14 hereof and to the conditions that such amendment
may not in an manner allow the Limited Partners and Unitholders to take part in
the control of the Partnership's business, (b) dissolve the Partnership, (c)
remove any General Partner and elect a replacement therefore, or (d) approve or
disapprove the sale of all or substantially all the assets of the Partnership.
For purposes of exercising such rights, each Limited Partner Interest shall have
one vote, provided that Limited Partner Interests held by the General Partners
or their Affiliates shall not be voted and shall be deemed not to be outstanding
for purposes of calculating applicable percentage requirements.
13.3 CONDITIONS TO ACTION BY LIMITED PARTNERS AND UNITHOLDERS. The rights
of the Limited Partners and Unitholders pursuant to Section 13.2 hereof shall
not be effective or be exercised in any manner (i) to subject the Limited
Partners or Unitholders to liability as general partners under the Massachusetts
Uniform Limited Partnership Act or under the laws of such other jurisdictions in
which the Partnership is qualified or owns a property, or (ii) to change the
Partnership's status for tax purposes. Any action taken pursuant to Section 13.2
shall be void if any partner, within 45 days after judgment from a court of
competent jurisdiction or an opinion of counsel selected by a majority in
interest of the Limited Partners and Unitholders on grounds that such action, if
given effect, would have one or more of the prohibited effects referred to in
this Section 13.3. For purposes of this Section 13.3, counsel will be deemed to
have been selected by a majority in interest of the Limited Partners and
Unitholders if such counsel is affirmatively approved in writing by a majority
in interest of the Limited Partners and Unitholders within 45 days of the date
that the holders of 10% or more of the interests of the Limited Partners and
Unitholders propose counsel for this purpose.
13.4 VALUATION OF INTEREST OF GENERAL PARTNER. In the event of removal of
any General partner pursuant to Section 13.2 hereof or the withdrawal of any
General partner pursuant to Section 9 hereof, its Interest as a General partner
in the Partnership shall be appraised by two independent appraisers, one
selected by the removed or withdrawing General partner and one by the Limited
Partners and Unitholders. In the event that such two appraisers are unable to
agree on the value of such General partner's Interest, they shall jointly
appoint a third independent appraiser whose determination shall be final and
binding. The Partnership shall pay such General Partner for the value of its
Interest as so determined by delivery of a promissory note bearing interest at
the then base rate of Bank of New England, N.A., Boston, Massachusetts, with
interest payable annually in cash and principal payable from any cash thereafter
received by the Partnership from the sale of Partnership Assets and prior to any
distribution being made to the Partners pursuant to Section 8.3 of this
Agreement. Any amounts received pursuant to this Section 13.4 shall constitute
complete and full discharge for all amounts owing to such General Partner on
account of its Interest in the Partnership. For purposes of this Section 13.4,
the independent appraiser selected by the Limited Partners and Unitholders shall
be selected in the following manner: a list of three qualified MAI (Member of
Appraisal Institute) appraisers shall be obtained (by
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a General Partner not being removed or withdrawn) from the Boston chapter of the
American Institute of Real Estate Appraisers and one of said three appraisers
shall be selected by random number and proposed by such General Partner for
selection by the Limited Partners and Unitholders. Such appraiser shall be
deemed selected by the Limited Partners and Unitholders unless objected to in
writing by a majority in interest of the Limited Partner Interests within 45
days after notification thereof is sent in writing by such General Partner.
Section 14. AMENDMENTS.
(a) In addition to the right of the Limited Partners and Unitholders to
amend this Agreement pursuant to Section 13 hereof, the General Partners may
propose an amendment to this Agreement. The General Partners shall submit to all
of the Partners in writing the text of any such proposed amendment to this
Agreement and a statement by the General Partners of the purpose of any such
amendment. The General Partners may include in any submission a statement of the
view of the General Partners as to the proposed amendment. Upon the Consent of
the General Partners and of a majority in interest of the Limited partner
Interests, such amendment shall take effect, except that no amendment adopted in
accordance with either Section 13 or 14 hereof shall increase the liability of
any Partner or Unitholder or adversely affect any Partner's or Unitholder's
share of distributions of cash or allocations of Profits or Losses for Tax
Purposes of the Partnership without in each case the approval of the partner or
Unitholder involved, and except that any amendment of this Section 14 must be
approved by a unanimous vote with respect to all Limited partner Interests. A
written approval may not be withdrawn or voided once it is filed with the
General Partners.
(b) In addition to any amendments otherwise authorized herein, this
Agreement may be amended from time to time by the General Partners without the
consent of any of the Limited Partners: (i) to add to the representations,
duties or obligations of the General Partners or surrender any right or power
granted to the General Partners herein, for the benefit of the Limited Partners;
(ii) to cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under this Agreement
which will not be inconsistent with the provisions of this Agreement; (iii) to
preserve the status of the Partnership as a "Partnership" for federal income tax
purposes; (iv) to enable the Partnership to qualify as a real estate investment
trust; (v) to delete or add any provision of this Agreement required to be so
deleted or added by the Staff of the Securities and Exchange Commission or other
federal agency or by a state "Blue Sky" commissioner or similar such official,
which addition or deletion is deemed by such Commission, agency or official to
be for the benefit or protection by the Limited Partners; or (vi) to permit the
Units to fall within any exclusion from the definition of "plan assets"
contained in Section 2550.401b-(1) of Title 29 of the Code of Federal
Regulations.
(c) In the event that the U.S. Treasury Department adopts final
Regulations under Code section 704(b), the General Partners shall, upon the
advice of counsel that the Partnership's allocations are not consistent in any
material respect with the provisions of any such adopted Regulations, submit to
the Limited Partners a proposed amendment to the Partnership Agreement that in
the sole discretion of the General Partners will make such allocations contained
in the Partnership Agreement consistent with the requirements of any such
adopted Regulations, and such an amendment shall be adopted upon the consent of
a majority in interest of the Limited partner Interests notwithstanding any
other provisions of this Section 13 of the Partnership Agreement.
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Section 15. POWER OF ATTORNEY.
(a) APPOINTMENT. Each of the Limited Partners hereby makes, constitutes
and appoints the General Partners of the Partnership and each of them, and each
person who shall hereafter become a General partner during the term of the
Partnership and any continuation of the Partnership pursuant to Section 9.5 and
Section 11, with full power of substitution, the true and lawful
attorney-in-fact of, and in the name, place and stead of, such Limited partner,
with the power from time to time to execute, acknowledge, make, swear to,
verify, deliver, record and/or publish:
(i) this Agreement of Limited Partnership and the Certificate
of Limited Partnership under the laws of The Commonwealth of Massachusetts or
any other jurisdiction, that may be required by this Agreement or by the laws of
Massachusetts or any other jurisdiction, any subsequent amendment to this
Agreement and the Certificate of Limited Partnership (including but not limited
to, amendments reflecting the addition of any signatory hereto as a Partner, or
any admission or substitution of other or any other document required from time
to time to admit a Partner, to effect the substitution of a partner, or to
effect the substitution of any Limited Partner's assignee as a Limited Partner;
(ii) any other document required to reflect any action of the
Partners duly taken in the manner provided for in this Agreement, whether or not
such Limited partner voted in favor of or otherwise Consented to such action;
(iii) any other instrument, certificate or document which may
be required by any regulatory agency, laws of the United States, any state, or
any other jurisdiction in which the Partnership is doing or intends to do
business or which the General Partners deem advisable to file or record,
provided such instrument, certificate or document is not inconsistent with the
terms of the Agreement as then in effect;
(iv) any certificate of dissolution or cancellation of the
Certificate of Limited Partnership that may be necessary upon the terminator of
the Partnership; and
(v) any instrument or papers required to continue or terminate
the business of the Partnership pursuant to Section 9.5 and 11 hereof;
provided that no General Partner shall take any action as attorney-in-fact for
any Limited partner which could in any way increase the liability of such
Limited partner beyond the liability expressly set forth in this Agreement or
alter the rights of Limited Partners under Section 8 of this Agreement, unless
(in either case) the Limited partner has given a Power of Attorney to a General
partner expressly for such purpose.
(b) AMENDMENTS TO AGREEMENT AND CERTIFICATE.
(i) Each of the Limited Partners is aware that the terms of
this Agreement permit certain amendments of this Agreement to be effected and
certain other actions to be taken or omitted by, or with respect to, the
Partnership, in each case with the approval of less than all the Limited
Partners if a specified percentage of the Partners shall have voted in favor of,
or otherwise Consented to, such action. If, as, and when:
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(A) an amendment of this Agreement is proposed or an
action is proposed to be taken or omitted by, or with respect to, the
Partnership which requires, under the terms of this Agreement, the Consent of a
specified percentage in interest (but less than all) of the Partners;
(B) Partners holding the percentage of interests
specified in this Agreement as being required for such amendment or action have
Consented to such amendment to action in the manner contemplated by this
Agreement; and
(C) a Limited Partner has failed or refused to Consent
to such amendment or action (hereinafter referred to as a "non-consenting
Limited partner"), then each non-consenting Limited Partner agrees that each
attorney-in-fact specified in Section 15(a) above, with full power of
substitution, is hereby authorized and empowered to execute, acknowledge, make,
swear to, verify, deliver, record, file and/or publish, for an in behalf of such
non-consenting Limited partner, and in his name, place and ▇▇▇▇▇, any and all
instruments and documents which may be necessary or appropriate to permit such
amendment to be lawfully made or action lawfully taken or omitted. Each
consenting and non-consenting Limited partner is fully aware that he and each
other Limited partner have executed this special power of attorney and that each
Limited partner will rely on the effectiveness of such powers with a view to the
orderly administration of the Partnership's affairs.
(ii) Any amendment to this Agreement (and to the Certificate
of Limited Partnership) substituting a Limited Partner, or adding a Limited or
General Partner, may be signed by any General Partner and by the Person to be
substituted as a Limited Partner, or added as a Limited or General Partner. Any
amendment reflecting the determination of the remaining General Partner or
Partners to continue the business of the Partnership upon the Withdrawal of a
General Partner need be signed only by one General Partner. The execution of any
such amendment on behalf of a Limited Partner or any proposed substitute or
added Limited Partner may be effected by his attorney-in-fact.
(c) POWER COUPLED WITH AN INTEREST. The foregoing grant of authority:
(i) is a special power of attorney coupled with an interest in
favor of the General Partners and as such shall be irrevocable and shall survive
the death or insanity of each Limited Partner;
(ii) may be exercised for each Limited partner by a signature
of any General Partner of the Partnership or by listing the names of all of the
Limited Partners, including such Limited partner, and executing any instrument
with a single signature of any General Partner acting as attorney-in-fact for
all of them; and
(iii) shall survive the Assignment by any Limited partner of
the whole or any portion of his Interest (including the assignment by the
Corporate Limited partner to the Unitholders under Section 7.6 hereof), except
that, where the assignee of the whole thereof has furnished a power of attorney
and has been approved by the General Partners for admission to the Partnership
as a Substitute Limited Partner, this power of attorney shall survive such
Assignment with respect to the assignor for the sole purpose of enabling a
General Partner to execute, acknowledge and file any instrument necessary to
effect such substitution and shall thereafter terminate with respect to any
partner who assigns his entire Interest.
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(d) POWER OF ATTORNEY BY SUBSTITUTE INVESTOR LIMITED PARTNERS. A similar
power of attorney shall be one of the instruments which the General Partners
shall require an assignee of a Limited Partner to execute as a condition to the
admission of such assignee as a Substitute Limited Partner.
Section 16. GENERAL PROVISIONS.
16.1 NOTICES, APPROVALS AND CONSENTS. All notices, approvals, Consents or
other communications hereunder shall be in writing and signed by the party
giving the same, and shall be deemed to have been given when the same are (a)
deposited in the United States mail and sent by first class mail, postage
prepaid, or (b) delivered. In each case, said mailing or delivering shall be
made to the parties at the addresses set forth below or at such other addresses
as such parties may designate by notice to the Partnership:
(i) If to the Partnership or any General Partner, at the
principal office of the Partnership;
(ii) If to the Corporate Limited partner, at the address set
forth in Schedule A hereto or to such other address as may be designated by
notice from such partner given in the manner hereby specified;
(iii) If to an Investor Limited partner, at the address set
forth in Schedule A hereto or to such other address as may be designated by
notice from such partner given in the manner hereby specified; and
(iv) If to a Unitholder, at such address as he has most
recently furnished in writing to the Partnership.
16.2 FURTHER ASSURANCES. The Partners will execute, acknowledge and
deliver such further instruments and do such further acts and things as may be
required to carry out the intent and purpose of this Agreement.
16.3 CAPTIONS. Captions contained in this Agreement are inserted only as a
matter of convenience and in no way define, limit, extend or describe the scope
of this Agreement or the intent of any of the provisions thereof.
16.4 BINDING EFFECT. Except to the extent required under the
Massachusetts Uniform Limited Partnership Act and for fees, rights to
reimbursement, and other compensation provided as such, none of the provisions
of this Agreement shall be for the benefit of or be enforceable by any creditor
of the Partnership;
16.5 SEPARABILITY. If one or more of the provisions of this Agreement or
any application thereof shall be invalid, illegal or unenforceable fin any
respect, the validity, legality and enforceability of the remaining provisions
contained herein and any other application thereof shall not in any away be
affected or impaired thereby, and such remaining provisions shall be interpreted
consistently with the omission of such invalid, illegal or unenforceable
provisions.
16.6 INTEGRATION. This Agreement constitutes the entire agreement among
the parties pertaining to the subject matter hereof and supersedes all prior
contemporaneous agreements and understandings of
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the parties in connection therewith which conflict with the express terms of
this Agreement. No covenant, representation or condition not expressed in this
Agreement shall affect or be effective to interpret, change or restrict the
express provisions of this Agreement.
16.7 APPLICABLE LAW. This Agreement shall be construed and enforced in
accordance with and governed by the laws of Massachusetts.
16.8 COUNTERPARTS. This Agreement may be signed by each party hereto upon
a separate copy (including in the case of the Limited Partners, a separate
subscription agreement or signature page executed by one or more such Partners),
in which event all such copies shall constitute a single counterpart of this
Agreement. However, no counterpart shall be binding unless accepted by one or
more of the General Partners, which acceptance shall be evidenced by the filing
of the Certificate of Limited Partnership or an appropriate amendment thereto.
16.9 CREDITORS. No creditor who makes a non-recourse loan to the
Partnership shall have or acquire at any time, as a result of making such loan,
any direct or indirect interest in the profits, capital or property of the
Partnership other than as a secured creditor.
16.10 INTERPRETATION. Unless the context in which words are used in this
Agreement otherwise indicates that such is the intent, words in the singular
shall include the plural and in the masculine shall include the feminine and
neuter and vice versa.
Section 17. DEFINITIONS. The defined terms used in this Agreement shall
have the meanings specified below:
"ACCOUNTANTS" means Coopers & ▇▇▇▇▇▇▇, Boston, Massachusetts, or a
successor thereto, or another firm of independent certified public accountants
selected by the General Partners.
"ACQUISITION EXPENSES" means expenses (other than the Acquisition Fee)
incurred by the Partnership relating to selection and acquisition of Properties,
whether or not acquired, including the fees and expenses of lawyers, appraisers,
engineers, architects and accountants not affiliated with a General Partner,
travel and communications expenses, costs of appraisals, non-refundable option
payments on Property not acquired, accounting fees and expenses, and title
insurance, but not fees and commissions paid by any Person to any Person in
connection with the selection or purchase of any Property by the Partnership,
whether designated as a real estate commission, acquisition fee, finder's fee,
selection fee, development fee, construction fee, non-recurring management fee,
consulting fee or any fee of similar nature however designated and however
treated for tax or accounting purposes, not any loan fees ("points"), not
development fees paid in connection with the actual development of a Property
after acquisition by the Partnership, not acquisition expenses incurred in
connection with the initial operation of any Property by the Partnership, and
not professional or contractor fees paid in connection with the expansion,
rehabilitation or other improvement of Properties following their acquisition by
the Partnership.
"ACQUISITION FEE" means the fee described in Section 6.4(b) hereof.
"ADJUSTED NET ASSET VALUE" means the book value of all assets, including
unpaid deferred interest but excluding any additional simple interest and
participations payable under the terms of the MBS, minus all liabilities of the
Partnership.
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"AFFILIATE" means, when used with reference to a specified Person, (i) any
Person that directly or indirectly through one or more intermediaries controls
or is controlled by or is under common control with the specified Person, (ii)
any Person that is an officer of, partner in or trustee of, or serves in a
similar capacity with respect to, the specified Person or of which the specified
Person is an officer, partner or trustee, or with respect to which the specified
Person serves in a similar capacity, (iii) any Person that, directly or
indirectly, is the beneficial owner of 10% or more of any class of equity
securities of, or otherwise has a substantial beneficial interest in, the
specified Person or of which the specified Person is directly or indirectly the
owner of 10% or more of any class of equity securities or in which the specified
Person has a substantial beneficial interest, and (iv) any Immediate Family
Member of the specified Person. A Person who is a partner in a partnership or
joint venture with the Partnership shall not be deemed an Affiliate of the
Partnership or a General Partner if such Person is not otherwise an Affiliate of
the Partnership or such General Partner as defined in the preceding sentence.
"AGREEMENT" means this Amended Agreement of Limited Partnership, as the
same may hereafter be amended from time to time.
"APPRAISED VALUE" shall mean, as to any Property, market value thereof
based upon the expected use according to an appraisal made by an independent
qualified appraiser who is a member in good standing of the American Institute
of Real Estate Appraisers.
"ASSETS" shall mean the Properties, MBS, or other assets acquired by the
Partnership.
"ASSIGN" means, with respect to an Interest or part thereof, to offer,
sell, assign, transfer, give, or otherwise dispose of, whether voluntarily or
involuntarily or by operation of law, except that in the case of a bona fide
pledge or other hypothecation, no Assignment shall be deemed to have occurred
unless and until the secured party has exercised any of his rights of
foreclosure with respect thereto.
"ASSIGNMENT" means any of the aforesaid transactions involving an Interest
or any part thereof.
"BASIC MANAGEMENT FEE" means the fee described in Section 6.4(c) hereof.
"CAPITAL ACCOUNT" means the capital accounts established and maintained in
accordance with Section 5.4 hereof.
"CAPITAL CONTRIBUTION" means the amount of cash contributed to the
Partnership by a Partner, prior to the deduction of any offering expenses or
selling commissions.
"CAPITAL TRANSACTION" means the repayment of principal and prepayment of
MBS to the extent classified as return of capital for federal income tax
purposes and the sale, exchange, condemnation, eminent domain taking, casualty
or other disposition of a Property or MBS, but not including the Terminating
Capital Transaction.
"CASH FLOW" means, for a particular fiscal year, all Profits or Losses for
Tax Purposes from the operation of the Partnership for such fiscal year,
including repayment of principal and prepayment of MBS to the extent classified
as income or gain for federal income tax purposes but excluding Profits or
Losses for Tax Purposes of such fiscal year arising from a Capital Transaction
or the Terminating Capital Transaction, and shall be determined by adjusting
such Profits or Losses (to the extent not otherwise adjusted) as follows:
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(1) Depreciation of buildings, improvements and personal property
shall not be considered a deduction;
(2) Amortization of any item for which there is not an associated cash
payment shall not be considered a deduction;
(3) Principal and interest payments on a mortgage or other loan
payable by the Partnership shall be considered deductions;
(4) Principal payments on all conditional sales contracts and other
secured obligations shall be considered a deduction;
(5) If the General Partners shall so determine, reasonable reserves
shall be deducted to provide for replacements, improvements, capital
improvements or any other contingency of the Partnership;
(6) Any amounts paid by the Partnership for capital expenditures or
replacements (and not withdrawn from a reserve fund established for such
purpose) shall be considered a deduction;
(7) Amounts equal to accounts payable and accrued items payable at the
close of the Partnership fiscal year, to the extent not already deducted in
calculating Profits or Losses for Tax Purposes, shall be considered a deduction;
(8) Amounts required to maintain reasonable working capital reserves
shall be considered a deduction;
(9) The reimbursements and fees incurred and payable to the General
Partners hereunder (other than the Basic Management Fee and the Incentive Fee)
shall be considered a deduction, whether or not currently paid to the General
Partners;
(10) Property management fees and reimbursements paid to property
managers shall be considered a deduction;
(11) Capital Contributions to the Partnership and the Net Cash Proceeds
of any Capital Transaction or the Terminating Capital Transaction shall not be
included in Cash Flow of the Partnership and payments made from such sources of
funds shall be excluded in determining Cash Flow of the Partnership; and
(12) Any other cash receipts from the operation of the Partnership not
properly includable in Profits or Losses for Tax Purposes, any amounts released
from operating reserve accounts described in this Section 8.2(a) and available
for distribution, and the amount of the Basic Management Fee and the Incentive
Fee payable with respect to such fiscal year, shall be included in Cash Flow of
the Partnership.
"CERTIFICATE OF LIMITED PARTNERSHIP" means the certificate of limited
partnership filed with the Secretary of State of The Commonwealth of
Massachusetts with respect to the Partnership, as the same may be amended from
time to time.
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"CODE" means the Internal Revenue Code of 1954, as amended, or
corresponding provisions of subsequent laws.
"CONSENT" means either the consent given by vote at a meeting called and
held in accordance with the provisions of Section 13.1 hereof or the written
consent, as the case may be, of a Person to do the act or thing for which the
consent is solicited or the act of granting such consent, as the context may
require.
"CONTROLLING PERSON" means, with respect to any General Partner or its
Affiliates, any of its general partners, chairman, directors, president,
secretary, treasurer, or vice presidents, or any Person holding a 5% or mor
equity interest in the General Partner or such Affiliate or having the power to
direct or cause the direction of the General Partner or such Affiliate, whether
through the ownership of voting securities, by contract, or otherwise.
"CORPORATE LIMITED PARTNER" means ▇▇▇▇▇ Depositary Corporation, or its
successor, which has acquired and will hold for its own account 100 Limited
Partner Interests and will acquire and hold up to 4,000,000 Limited Partner
Interests on behalf of those Persons who purchase Units, on the basis of one
Limited Partner Interest for each Unit, and will assign to those Persons its
rights, obligations, and interests with respect to such Limited Partner
Interests under Section 7.6 hereof.
"COUNSEL TO THE PARTNERSHIP" means ▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇ ▇▇▇▇▇▇▇▇, Boston,
Massachusetts, or another law firm selected by the General Partners.
"CUMULATIVE RETURN" means a return equal to twelve percent (12%) per annum
of the Invested Capital of the class comprised of the Limited Partners
calculated from the initial closing of the sale of Units through the most recent
fiscal year completed prior to the transaction giving rise to the computation.
In calculating whether the Cumulative Return has been satisfied, only
distributions by the Partnership of cash will be considered and no credit will
be given for tax benefits allocated to the Limited Partners.
"DEPOSITARY" means the Corporate Limited Partner or another Person
selected by the General Partners.
"DEPOSITARY RECEIPT" means a depositary receipt evidencing one or more
Units.
"DISTRIBUTABLE CASH FLOW" means Cash Flow less any Basic Management Fee
and Incentive Fee payable for such year.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"FRONT END FEES AND EXPENSES" means fees and expenses paid by any Person
for any services rendered during the Partnership's organizational or acquisition
phase including, without limitation, organizational and operating expenses,
Acquisition Fees and Acquisition Expenses.
"GENERAL PARTNER" means any Person designated as a General Partner in
Schedule A of this Agreement or who becomes an additional or Substitute General
Partner as provided in this Agreement, in such Person's capacity as a General
Partner of the Partnership.
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"GENERAL PARTNERS" means every Person or Persons who serve(s) as a General
Partner, whether there be one or several.
"IMMEDIATE FAMILY MEMBER" means with respect to any person, his spouse,
parent, parent-in-law, issue, brother, sister, brother-in-law, sister-in-law, or
child-in-law.
"INCENTIVE FEE" means the fee described in Section 6.4(d) hereof.
"INTEREST" means, with respect to a General Partner, the entire ownership
interest and, with respect to a Limited Partner, the ownership interest
representing an initial Capital Contribution of Twenty Dollars ($20.00) (or a
lesser amount in the event of a reduction in sales commissions with respect to a
single purchaser subscribing for more than $250,000 in Units or in the event of
the purchase by the General Partners or Affiliates of up to 275,000 Units net of
selling commissions as described in Section 6.1(d) hereof), including the right
of such Partner to any and all benefits to which a Partner may be entitled as
provided in this Agreement, together with the obligations of such Partner to
comply with all the terms and provisions of this Agreement, but excluding any
claims which such Partner may have against the Partnership as a creditor.
"INVESTED CAPITAL" means, with respect to the General Partners, their
Capital Contributions and, with respect to the Limited Partners and Unitholders
$20.00 for each Limited Partner Interest or Unit, in either case reduced by any
amounts of cash distributed to such Partner or Unitholder pursuant to Clauses
FIRST and SECOND of Section 8.3(a) hereof.
"INVESTMENT IN ASSETS" means the amount of Capital Contributions actually
paid for or allocated to the purchase, development, construction, or improvement
of Assets acquired by the Partnership, including amounts paid for or allocated
to the purchase of Assets, working capital reserves allocable thereto (except
that working capital reserves in excess of 5% of the total Capital Contributions
shall not be included), and other cash payments such as interest and taxes, but
excluding Front-End Fees and Expenses.
"INVESTOR LIMITED PARTNER" means any Unitholder who shall be admitted to
the Partnership as a Limited Partner, in the capacity of such Person as a
Limited Partner.
"INVOLUNTARY WITHDRAWAL" means, with respect to any General Partner, the
Withdrawal of such General Partner from the Partnership pursuant to Section 9.2
hereof.
"LIMITED PARTNER" means any Corporate Limited Partner, Investor Limited
Partner or Substitute Limited Partner in the capacity of such Person as a
Limited Partner.
"MBS" has the meaning given in Section 3.2(b) hereof.
"NASDAQ" means the National Association of Securities Dealers Automated
Quotation system.
"NET CASH PROCEEDS" of a Capital Transaction or the Terminating Capital
Transaction means the cash received by the Partnership as a result of such
Transaction, less (i) any amounts which are reinvested in accordance with
Section 6.(c), (ii) all debts and liabilities of the Partnership required to be
paid as a result of the Transaction (including, among other liabilities, any
fees and expenses payable pursuant to Section 6.4 hereof, and (iii) any reserves
for contingent liabilities (including fees then earned but not yet
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payable pursuant to Section 6.4 hereof), to the extent deemed reasonable by the
General Partners provided that, at the expiration of such period as the General
Partners shall deem advisable, the balance of such reserves remaining after
payment of such contingencies shall be distributed in the manner provided in
this Agreement for Net Cash Proceeds. In the event the Partnership takes back a
mortgage note in connection with any Capital Transaction or the Terminating
Capital Transaction, all payments subsequently received in cash by the
Partnership with respect to such note shall be included in the Net Cash Proceeds
of that Transaction, irrespective of the extent to which any portion of such
payments shall be treated by the Partnership as principal or interest for tax or
accounting purposes.
"PARTNER" means any General Partner or Limited Partner.
"PARTNERSHIP" means the limited partnership as formed in accordance with
this Agreement, as said limited partnership may from time to time be
constituted.
"PERSON" means any individual, Partnership, corporation, trust,
governmental official, body or agency, or other entity of any type.
"PROFITS OR LOSSES FOR TAX PURPOSES" means profits or losses as determined
by the Partnership for federal income tax purposes, and items of income, gain,
loss deduction, or credit entering into the computation thereof.
"PROPERTY" means any real estate, buildings, improvements, fixtures and
related personal property acquired by the Partnership, and any equity interest
of the Partnership therein, whether direct or indirect, through a nominee, joint
venture or otherwise.
"PROSPECTUS" means the Prospectus of the Partnership used in connection
with its public offering of Units, as supplemented or amended.
"PURCHASE PRICE OF A PROPERTY" means the price paid upon or in connection
with the purchase of a particular Property, including the amount of Acquisition
Fees and Acquisition Expenses and any liens and mortgages on the Property, but
excluding points and prepaid interest.
"QUALIFIED PLANS" means qualified pension, profit-sharing and other
employee retirement benefit plans (including ▇▇▇▇▇ Plans) and trusts, and bank
commingled trust funds for such plans.
"REINVESTMENT AGENT" means LCS, Inc., and its successors or assigns, or
any other reinvestment agent selected in accordance with the terms of the
Reinvestment Plan.
"REINVESTMENT PLAN" means the plan pursuant to which a Unitholder could
automatically reinvest its distributions in the Units available for sale, as
more fully described in the Reinvestment Plan which is Exhibit C to the
Prospectus.
"SALES AGENT AGREEMENT" means the Sales Agent Agreement between the
Partnership and ▇▇▇▇▇ Securities Corporation entered into pursuant to Section
6.4(a) hereof.
"SCHEDULE A" means Schedule A to this Agreement as amended from time to
time.
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"SUBSCRIPTION PRICE" means the amount of cash contributed to the
Partnership on behalf of a Unitholder, prior to the deduction of any offering
expenses or selling commissions.
"SUBSTITUTE GENERAL PARTNER" means the assignee of a General Partner
Interest who is admitted to the Partnership as a General Partner pursuant to
Section 9.5 or Section 13.2 of this Agreement.
"SUBSTITUTE LIMITED PARTNER" means the assignee of a Limited Partner
Interest who is admitted to the Partnership as a Limited Partner pursuant to
Section 10.3 hereof.
"TERMINATING CAPITAL TRANSACTION" means the sale, exchange, condemnation,
eminent domain taking, casualty or other disposition of all or substantially all
of the assets of the Partnership which results in the dissolution of the
Partnership pursuant to Section 11 of this Agreement. The Terminating Capital
Transaction shall also include the receipt and collection of notes, if any, and
payments thereon or any other consideration received or to be received by the
Partnership upon a sale or other disposition of all or substantially all of the
assets of the Partnership and all activities reasonably related thereto. Such
activities are deemed to be included in the winding up of Partnership affairs,
and all allocations and distributions therefrom shall be governed by Sections
8.1(c) and (e) and 8.3(b) hereof.
"UNIT" means the interest of a Unitholder in a Limited Partner Interest of
the Partnership. Each Unit will be evidenced by a Depositary Receipt and
represents (i) the assignment by the Corporate Limited Partner of its interest
in the corresponding Limited Partner Interest to the extent permitted by
Massachusetts law and (ii) the right to require the Corporate Limited Partner to
exercise any other rights with respect to such Limited Partner Interest at the
direction of the Unitholder.
"UNITHOLDER" means any Person who holds Units in accordance with Section
6.1(d) or Section 7.2 hereof as reflected in the records of the Partnership and
the Depositary.
"VOLUNTARY WITHDRAWAL" means, with respect to a General Partner, the
voluntary retirement or withdrawal of a General Partner from the Partnership, or
the voluntary sale, assignment, encumbrance or other disposition of all of his
General Partner Interest pursuant to Section 9.1 hereof. In the case of a
General Partner which is a partnership, a Voluntary Withdrawal shall be deemed
to have occurred when all general Partners of such partnership shall have
voluntarily withdrawn therefrom as general partners or voluntarily sold or
otherwise disposed of all of their general partner interests therein.
"WITHDRAWAL" means, with respect to a General Partner, the Voluntary or
Involuntary Withdrawal of such General Partner. "WITHDRAW" means to effect any
such Withdrawal.
"WITHDRAWN GENERAL PARTNER" means a General Partner whose Withdrawal in
accordance with the provisions of this Agreement is effective.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Amended Agreement of Limited Partnership as of the date first specified above.
GENERAL PARTNERS CORPORATE LIMITED PARTNER
THE ▇▇▇▇▇ CORPORATION ▇▇▇▇▇ DEPOSITARY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, Co-Chairman of the ▇▇▇▇▇▇▇ ▇▇▇▇▇, President
Board of Directors
THE ▇▇▇▇▇ COMPANY LIMITED
PARTNERSHIP-IV
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇, a General Partner
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SCHEDULE A
NAMES, BUSINESS ADDRESSES AND
CAPITAL CONTRIBUTIONS OF PARTNERS
CAPITAL
CONTRIBUTION
NAME AND BUSINESS ADDRESS MADE
------------------------- ----
I. GENERAL PARTNERS
----------------
The ▇▇▇▇▇ Corporation $ 75
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
The ▇▇▇▇▇ Company Limited Partnership-IV 2,925
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ______
Total $3,000
II. CORPORATE LIMITED PARTNER
-------------------------
▇▇▇▇▇ Depositary Corporation $2,000
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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