Exhibit 3.3
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FORM OF AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
▇▇▇▇▇▇▇ EQUITIES OPERATING PARTNERSHIP LP
a Delaware limited partnership
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THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP AN
OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND SUBSTANCE
SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED SALE, TRANSFER
OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES
ACT AND UNDER APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
AMENDED AND RESTATED AS OF [ ], 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINED TERMS............................................................................1
ARTICLE II ORGANIZATIONAL MATTERS..................................................................17
Section 2.1. Organization.........................................................................17
Section 2.2. Name.................................................................................17
Section 2.3. Registered Office and Agent; Principal Office........................................18
Section 2.4. Power of Attorney....................................................................18
Section 2.5. Term.................................................................................19
ARTICLE III PURPOSE.................................................................................19
Section 3.1. Purpose and Business.................................................................19
Section 3.2. Powers...............................................................................19
Section 3.3. Partnership Only for Partnership Purposes Specified..................................20
Section 3.4. Representations and Warranties by the Parties........................................20
ARTICLE IV CAPITAL CONTRIBUTIONS...................................................................21
Section 4.1. Capital Contributions of the Partners................................................21
Section 4.2. Classes of Partnership Units.........................................................21
Section 4.3. Issuances of Additional Partnership Interests........................................21
Section 4.4. Additional Funds and Capital Contributions...........................................22
Section 4.5. Stock Option Plan....................................................................24
Section 4.6. PI Units.............................................................................24
Section 4.7. No Interest; No Return...............................................................27
Section 4.8. Conversion or Redemption of Earnout Units............................................27
Section 4.9. Conversion of PI Units...............................................................28
Section 4.10. Other Contribution Provisions........................................................31
Section 4.11. Not Publicly Traded..................................................................31
ARTICLE V DISTRIBUTIONS...........................................................................31
Section 5.1. Requirement and Characterization of Distributions....................................31
Section 5.2. Direct Property Interests Owned by the General Partner...............................31
Section 5.3. Distributions In-Kind................................................................31
Section 5.4. Amounts Withheld.....................................................................32
Section 5.5. Distributions Upon Liquidation.......................................................32
Section 5.6. Distributions to Reflect Issuance of Additional Partnership Units....................32
Section 5.7. Restricted Distributions.............................................................32
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TABLE OF CONTENTS
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PAGE
ARTICLE VI ALLOCATIONS.............................................................................32
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss..........................32
Section 6.2. General Allocations..................................................................32
Section 6.3. Additional Allocation Provisions.....................................................34
Section 6.4. Tax Allocations......................................................................37
ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS...................................................37
Section 7.1. Management...........................................................................37
Section 7.2. Certificate of Limited Partnership...................................................41
Section 7.3. Restrictions on General Partner's Authority..........................................41
Section 7.4. Reimbursement of the General Partner and Parent......................................42
Section 7.5. Outside Activities of the General Partner............................................43
Section 7.6. Contracts with Affiliates............................................................43
Section 7.7. Indemnification......................................................................44
Section 7.8. Liability of the General Partner.....................................................46
Section 7.9. Other Matters Concerning the General Partner and the Parent..........................47
Section 7.10. Title to Partnership Assets..........................................................47
Section 7.11. Reliance by Third Parties............................................................48
ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS..............................................48
Section 8.1. Limitation of Liability..............................................................48
Section 8.2. Management of Business...............................................................48
Section 8.3. Outside Activities of Limited Partners...............................................48
Section 8.4. Return of Capital....................................................................49
Section 8.5. Adjustment Factor....................................................................49
Section 8.6. Redemption Rights....................................................................49
ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS..................................................51
Section 9.1. Records and Accounting...............................................................51
Section 9.2. Partnership Year.....................................................................52
Section 9.3. Reports..............................................................................52
ARTICLE X TAX MATTERS.............................................................................52
Section 10.1. Preparation of Tax Returns...........................................................52
Section 10.2. Tax Elections........................................................................52
Section 10.3. Tax Matters Partner..................................................................52
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TABLE OF CONTENTS
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Section 10.4. Withholding..........................................................................54
Section 10.5. Organizational Expenses..............................................................54
ARTICLE XI TRANSFERS AND WITHDRAWALS...............................................................54
Section 11.1. Transfer.............................................................................54
Section 11.2. Transfer of General Partner's Partnership Interest...................................55
Section 11.3. Transfer of Limited Partners' Partnership Interests..................................55
Section 11.4. Substituted Limited Partners.........................................................57
Section 11.5. Assignees............................................................................57
Section 11.6. General Provisions...................................................................57
ARTICLE XII ADMISSION OF PARTNERS...................................................................59
Section 12.1. Admission of Successor General Partner...............................................59
Section 12.2. Admission of Additional Limited Partners.............................................59
Section 12.3. Amendment of Agreement and Certificate of Limited Partnership........................60
Section 12.4. Limit on Number of Partners..........................................................60
ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION................................................60
Section 13.1. Dissolution..........................................................................60
Section 13.2. Winding Up...........................................................................61
Section 13.3. Deemed Distribution and Recontribution...............................................63
Section 13.4. Rights of Limited Partners...........................................................63
Section 13.5. Notice of Dissolution................................................................63
Section 13.6. Cancellation of Certificate of Limited Partnership...................................63
Section 13.7. Reasonable Time for Winding-Up.......................................................63
ARTICLE XIV PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS...................64
Section 14.1. Procedures for Actions and Consents of Partners......................................64
Section 14.2. Amendments...........................................................................64
Section 14.3. Meetings of the Partners.............................................................65
ARTICLE XV GENERAL PROVISIONS......................................................................66
Section 15.1. Addresses and Notice.................................................................66
Section 15.2. Titles and Captions..................................................................66
Section 15.3. Pronouns and Plurals.................................................................66
Section 15.4. Further Action.......................................................................66
Section 15.5. Binding Effect.......................................................................66
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TABLE OF CONTENTS
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Section 15.6. Waiver...............................................................................66
Section 15.7. Counterparts.........................................................................66
Section 15.8. Applicable Law.......................................................................66
Section 15.9. Entire Agreement.....................................................................67
Section 15.10. Invalidity of Provisions.............................................................67
Section 15.11. Limitation to Preserve REIT Status...................................................67
Section 15.12. No Partition.........................................................................67
Section 15.13. No Third-Party Rights Created Hereby.................................................68
Section 15.14. No Rights as Shareholders of General Partner or Stockholders of Parent...............68
Section 15.15. Creditors............................................................................68
Exhibit A PARTNERS AND PARTNERSHIPS UNITS................................................................A-1
Exhibit B NOTICE OF REDEMPTION...........................................................................B-1
Exhibit C OBLIGATED PARTNERS AND PROTECTED AMOUNTS.......................................................C-1
Exhibit D CONVERSION NOTICE..............................................................................D-1
Exhibit E FORCED CONVERSION NOTICE.......................................................................E-1
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FORM OF AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF ▇▇▇▇▇▇▇ EQUITIES OPERATING PARTNERSHIP LP
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF ▇▇▇▇▇▇▇
EQUITIES OPERATING PARTNERSHIP LP, dated as of December [ ], 2004 is entered
into by and among ▇▇▇▇▇▇▇ Holdings Business Trust I, a Massachusetts business
trust (the "Withdrawing General Partner"), ▇▇▇▇▇▇▇ Holdings Business Trust I, a
Maryland business trust (the "General Partner"), and the limited partners listed
on Exhibit A hereto (each a "Limited Partner").
WHEREAS, the Withdrawing General Partner and the limited partners named
therein (the "Original Limited Partners") entered into an Agreement of Limited
Partnership, dated as of August 13, 2004, pursuant to which the Partnership
commenced its business (the "Original Agreement");
WHEREAS, the Withdrawing General Partner wishes to withdraw as the general
partner of the Partnership and the General Partner wishes to be admitted to the
Partnership as the general partner;
WHEREAS, by their signatures below the Original Limited Partners and the
Withdrawing General Partner agrees to the Withdrawing General Partner's
withdrawal as general partner of the Partnership and the Original Limited
Partners and the General Partner agrees to the General Partner's admission as
the General Partner of the Partnership;
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in its entirety by entering into this Amended and Restated Agreement
of Limited Partnership and to hereafter continue the business of the Partnership
in accordance with its terms and to admit the person whose names are set forth
on Exhibit A hereto as additional limited partners of the Partnership and to
hereafter express the limited partnership interests of the Original Limited
Partners in accordance with such Exhibit A.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act (6 Del.
C. ss. 17-101 et seq.), as it may be amended from time to time, and any
successor to such statute.
"Actions" has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.4.A hereof.
"Additional Limited Partner" means a Person who is admitted to the
Partnership as a Limited Partner pursuant to Section 4.3 and Section 12.2 hereof
and who is shown as such on the books and records of the Partnership.
"Adjusted Capital Account" means the Capital Account maintained for each
Partner as of the end of each Fiscal Year (i) increased by any amounts which
such Partner is obligated to restore pursuant to any provision of this Agreement
or is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(I)(5) and (ii) decreased by the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
"Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Adjusted Capital Account as of the
end of the relevant Partnership Year.
"Adjustment Event" shall have the meaning set forth in Section 4.6.A
hereof.
"Adjustment Factor" means 1.0; provided, however, that in the event that:
(i) the Parent (a) declares or pays a dividend on its outstanding
REIT Shares in REIT Shares or makes a distribution to all holders of its
outstanding REIT Shares in REIT Shares, (b) splits or subdivides its
outstanding REIT Shares or (c) effects a reverse stock split or otherwise
combines its outstanding REIT Shares into a smaller number of REIT Shares,
the Adjustment Factor shall be adjusted by multiplying the Adjustment
Factor previously in effect by a fraction, (i) the numerator of which
shall be the number of REIT Shares issued and outstanding on the record
date for such dividend, distribution, split, subdivision, reverse split or
combination (assuming for such purposes that such dividend, distribution,
split, subdivision, reverse split or combination has occurred as of such
time) and (ii) the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on
the record date for such dividend, distribution, split, subdivision,
reverse split or combination;
(ii) the Parent distributes any rights, options or warrants to all
holders of its REIT Shares to subscribe for or to purchase or to otherwise
acquire REIT Shares (or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares) at a price per share less
than the Value of a REIT Share on the record date for such distribution
(each a "Distributed Right"), then the Adjustment Factor shall be adjusted
by multiplying the Adjustment Factor previously in effect by a fraction
(a) the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date plus the maximum number of REIT Shares
purchasable under such Distributed Rights and (b) the denominator of which
shall be the number of REIT Shares issued and outstanding on the record
date plus a fraction (1) the numerator of which is the maximum number of
REIT Shares purchasable under such Distributed Rights times the minimum
purchase price per REIT Share under such Distributed Rights and (2) the
denominator of which is the Value of a REIT Share as of the record date;
provided, however, that, if any such Distributed Rights expire or become
no longer exercisable, then the Adjustment Factor shall be adjusted,
effective retroactive to the date of distribution of the Distributed
Rights, to reflect a reduced maximum number of REIT Shares or any change
in the minimum purchase price for the purposes of the above fraction; and
(iii) the Parent shall, by dividend or otherwise, distribute to all
holders of its REIT Shares evidences of its indebtedness or assets
(including securities, but excluding any dividend or distribution referred
to in subsection (i) above), which evidences of indebtedness or assets
relate to assets not received by the Parent or its Subsidiaries pursuant
to a pro rata distribution by the Partnership, then the Adjustment Factor
shall be adjusted to equal the amount determined by multiplying the
Adjustment Factor in effect immediately prior to the close of business on
the date fixed for determination of stockholders entitled to receive such
distribution by a fraction (i) the numerator of which shall be such Value
of a REIT Share on the date fixed for such determination and (ii) the
denominator of which shall be the Value of a REIT Share on the dates fixed
for such determination less the then fair market value (as determined by
the REIT, whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one REIT
Share.
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Any adjustments to the Adjustment Factor shall become effective
immediately after the effective date of such event, retroactive to the record
date, if any, for such event; provided, however, that any Limited Partner may
waive, by written notice to the General Partner, the effect of any adjustment to
the Adjustment Factor applicable to the OP Units held by such Limited Partner,
and, thereafter, such adjustment will not be effective as to such OP Units.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling or controlled by or under common control with such
Person. For the purposes of this definition, "control" when used with respect to
any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agreement" means this First Amendment and Restated Agreement of Limited
Partnership of ▇▇▇▇▇▇▇ Equities Operating Partnership LP, as it may be amended,
supplemented or restated from time to time.
"Appraised Value" means the appraised value of the Harrisburg Property
immediately prior to a Merger Event as determined by an appraiser selected by
the Board (including a majority of the Independent Directors).
"Assignee" means a Person to whom one or more Partnership Units have been
Transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.5
hereof.
"Available Cash" means, with respect to any period for which such
calculation is being made, the amount of cash available for distribution by the
Partnership as determined by the General Partner.
"Average Market Price" means, on any day as to one OP Unit, the closing
sales price of one REIT Share (provided that one REIT Share would be received in
exchange for one OP Unit under this Agreement, otherwise the number of REIT
Shares (or fraction thereof) that would be received in exchange for one OP Unit)
as listed on the New York Stock Exchange averaged over a period of 21 Business
Days consisting of the day as of which "Average Market Price" is being
determined and the 20 consecutive business days prior to such day. If the day of
determination of Average Market Price is other than Business Day, Average Market
Price shall be determined as of the business day immediately preceding such day
as if it were the day of determination of Average Market Price. If at any time
such security is not listed on the New York Stock Exchange then, if there has
been a sale of REIT Shares for an aggregate amount exceeding $1 million to
persons or entities that are not affiliates of Parent within 90 days prior to
such time, the price per REIT Share (subject to proviso in the first sentence of
this definition) in the most recent such sale shall be deemed to be the Average
Market Price hereunder.
"Board" means the board of directors of the Parent.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
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"Bylaws" means the Bylaws of the Parent, as amended, supplemented or
restated from time to time.
"Capital Account" means, with respect to any Partner, the Capital Account
maintained by the General Partner for such Partner on the Partnership's books
and records in accordance with the following provisions:
A. To each Partner's Capital Account, there shall be added such
Partner's Capital Contributions, such Partner's distributive share of Net
Income and any items in the nature of income or gain that are specially
allocated pursuant to Section 6.3 hereof, and the principal amount of any
Partnership liabilities assumed by such Partner or that are secured by any
property distributed to such Partner.
B. From each Partner's Capital Account, there shall be subtracted
the amount of cash and the Gross Asset Value of any property distributed
to such Partner pursuant to any provision of this Agreement, such
Partner's distributive share of Net Losses and any items in the nature of
expenses or losses that are specially allocated pursuant to Section 6.3
hereof, and the principal amount of any liabilities of such Partner
assumed by the Partnership or that are secured by any property contributed
by such Partner to the Partnership.
C. In the event any interest in the Partnership is Transferred in
accordance with the terms of this Agreement, the transferee shall succeed
to the Capital Account of the transferor to the extent that it relates to
the Transferred interest.
D. In determining the principal amount of any liability for purposes
of subsections (a) and (b) hereof, there shall be taken into account Code
Section 752(c) and any other applicable provisions of the Code and
Regulations.
E. The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Regulations Sections
1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner
consistent with such Regulations. If the General Partner shall determine
that it is prudent to modify the manner in which the Capital Accounts are
maintained in order to comply with such Regulations, the General Partner
may make such modification provided that such modification will not have a
material effect on the amounts distributable to any Partner without such
Partner's Consent. The General Partner also shall (i) make any adjustments
that are necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital reflected
on the Partnership's balance sheet, as computed for book purposes, in
accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (ii) make any
appropriate modifications in the event that unanticipated events might
otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b) or Section 1.704-2.
"Capital Account Deficit" has the meaning set forth in Section 13.2.C
hereof.
"Capital Contribution" means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of any Contributed Property that such
Partner contributes to the Partnership or is deemed to contribute pursuant to
Section 4.4 hereof.
"Capitalized Base Rent" means the quotient obtained by dividing (x) the
average annual net base rental payable under the applicable lease for the entire
non-cancelable portion of the term thereof (excluding any initial "free rent"
period of 120 days or less) divided by (y) 8%.
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"Cash Amount" means, with respect to a Tendering Party, an amount of cash
equal to the product of (A) the Value of a REIT Share and (B) such Tendering
Party's REIT Shares Amount determined as of the date of receipt by the General
Partner of such Tendering Party's Notice of Redemption or, if such date is not a
Business Day, the immediately preceding Business Day.
"Certificate" means the Certificate of Limited Partnership of the
Partnership filed in the office of the Secretary of State of the State of
Delaware on August 6, 2004, as amended from time to time in accordance with the
terms hereof and the Act.
"Charter" means the Articles of Incorporation of the Parent as filed with
the State Department of Assessments and Taxation of Maryland, as amended,
supplemented or restated from time to time.
"Closing Price" has the meaning set forth in the definition of "Value."
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time or any successor statute thereto, as interpreted by the
applicable Regulations thereunder. Any reference herein to a specific section or
sections of the Code shall be deemed to include a reference to any corresponding
provision of future law.
"Company Employees" means the employees of the Partnership, the Parent and
any of their subsidiaries.
"Consent" means the consent to, approval of, or vote in favor of a
proposed action by a Partner given in accordance with Article XIV hereof.
"Constituent Person" shall have the meaning set forth in Section 4.9.F.
"Conversion Date" shall have the meaning set forth in Section 4.9.B.
"Conversion Notice" shall have the meaning set forth in Section 4.9.B.
"Conversion Right" shall have the meaning set forth in Section 4.9.A.
"Contributed Property" means each item of Property or other asset, in such
form as may be permitted by the Act, but excluding cash, contributed or deemed
contributed to the Partnership (or deemed contributed by the Partnership to a
"new" partnership pursuant to Code Section 708) net of any liabilities assumed
by the Partnership relating to such Contributed Property and any liability to
which such Contributed Property is subject.
"Debt" means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person's interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.
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"Depreciation" means, for each Partnership Year or other applicable
period, an amount equal to the federal income tax depreciation, amortization or
other cost recovery deduction allowable with respect to an asset for such year
or other period, except that if the Gross Asset Value of an asset differs from
its adjusted basis for federal income tax purposes at the beginning of such year
or period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Distributed Right" has the meaning set forth in the definition of
"Adjustment Factor."
"Earnout Participant" means each of ▇▇▇▇▇▇▇ Partners, LLC, an Arizona
limited liability company, ▇▇▇▇▇ ▇▇▇▇▇, an individual, and ▇▇▇▇▇ ▇▇▇▇▇▇, an
individual.
"Earnout Term" means the period commencing on the date of the closing of
the IPO and ending on the earliest of (A) December 31, 2009; (B) the date of the
closing of a Property Sale; and (C) the date of the closing of the Interest
Sale; and (D) a Merger Event.
"Earnout Unit" means a Partnership Unit which is designated as an Earnout
Unit and which has the rights, preferences and other privileges designated in
Section 4.8 hereof and elsewhere in this Agreement in respect of Holders of
Earnout Units. The allocation of Earnout Units among the Partners shall be set
forth on Exhibit A, as may be amended from time to time.
"Economic Capital Account Balances" has the meaning set forth in Section
6.3.E hereof.
"Effective Date" means the date of closing of the initial public offering
of REIT Shares.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.
"Forced Conversion" shall have the meaning set forth in Section 4.9.C.
"Forced Conversion Notice" shall have the meaning set forth in Section
4.9.C.
"Funding Debt" means the incurrence of any Debt for the purpose of
providing funds to the Partnership by or on behalf of the Parent or any wholly
owned subsidiary of the Parent.
"General Partner" means ▇▇▇▇▇▇▇ Holdings Business Trust I, a Maryland
business trust, and its successors and assigns, as the general partner of the
Partnership.
"General Partner Interest" means the Partnership Interest held by the
General Partner, which Partnership Interest is an interest as a general partner
under the Act. A General Partner Interest may be expressed as a number of OP
Units, Earnout Units, Preferred Units, Junior Units or any other Partnership
Units.
"General Partner Loan" has the meaning set forth in Section 4.4.D hereof.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
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(a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such
asset as determined by the General Partner.
(b) The Gross Asset Values of all Partnership assets immediately
prior to the occurrence of any event described in clause (i), clause (ii),
clause (iii), clause (iv) or clause (v) hereof shall be adjusted to equal
their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt, as of
the following times:
(i) the acquisition of an additional interest in the
Partnership (other than in connection with the execution of this
Agreement but including, without limitation, acquisitions pursuant
to Section 4.2 hereof or contributions or deemed contributions by
the General Partner pursuant to Section 4.2 hereof) by a new or
existing Partner in exchange for more than a de minimis Capital
Contribution, if the General Partner reasonably determines that such
adjustment is necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Property as consideration for an
interest in the Partnership, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership;
(iii) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);
(v) the conversion of any Earnout Units pursuant to Section
4.8.A hereof; and
(vi) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply with
Regulations Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed to a
Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the distributee and the General Partner
provided that, if the distributee is the General Partner or if the
distributee and the General Partner cannot agree on such a determination,
such gross fair market value shall be determined by an independent third
party experienced in the valuation of similar assets, selected by the
General Partner or the Parent in good faith.
(d) The Gross Asset Values of Partnership assets shall be increased
(or decreased) to reflect any adjustments to the adjusted basis of such
assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining
Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant
to this subsection (d) to the extent that the General Partner reasonably
determines that an adjustment pursuant to subsection (b) above is
necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this subsection (d).
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(e) If the Gross Asset Value of a Partnership asset has been
determined or adjusted pursuant to subsection (a), subsection (b) or
subsection (d) above, such Gross Asset Value shall thereafter be adjusted
by the Depreciation taken into account with respect to such asset for
purposes of computing Net Income and Net Losses.
"Hard Costs" means the aggregate costs of all construction materials,
direct labor charges, general contractor fees (without overhead and profit)
relating to all site work, grading and utility connections.
"Harrisburg IRR" means the IRR achieved by Parent or any of its
subsidiaries (without duplication) from all funds received from the Harrisburg
Partnership based on an assumed investment of $8,486,000 from the date of the
closing of the IPO through the end of the Earnout Term, provided, however, that,
(x) if any Management Fees are received by Parent or any of its subsidiaries
related to the Harrisburg Property; and (y) if Parent or any of its subsidiaries
makes additional capital contributions to or receives cash flow and/or capital
distributions from the Harrisburg Partnership, in each case, the foregoing IRR
calculation shall take into account the positive amounts and date of Management
Fees earned, the negative amounts of additional capital contributions and the
dates of such contributions, if any, the negative amounts required if Parent or
any of its subsidiaries elects to acquire the interests of some or all of the
other partners in the Harrisburg Partnership and the positive amounts of cash
flow and/or capital distributions paid to Parent or any of its subsidiaries in
determining the Harrisburg IRR. In addition:
(i) if no Property Sale or Interest Sale has occurred prior to
December 31, 2009, there shall also be included in the calculation of the
Harrisburg IRR the amount that Parent or any of its subsidiaries would
have received under the terms of the Harrisburg Partnership Agreement then
in effect (unless Parent or any of its subsidiaries then owns all of the
partnership interests in the Harrisburg Partnership, in which case the
terms of the Harrisburg Partnership Agreement shall not apply) if the
Harrisburg Property were sold (without any sale expenses such as brokerage
commissions, loan prepayment fees, transfer taxes or closing costs) on
December 31, 2009 for an amount equal to the Harrisburg NOI divided by
8.5% and the Harrisburg Partnership had then dissolved and distributed all
of its assets to its respective partners concurrently with such date
(unless Parent or any of its subsidiaries then owns all of the partnership
interests in the Harrisburg Partnership, in which case the terms of the
Harrisburg Partnership Agreement shall not apply);
(ii) if a Property Sale has occurred prior to December 31, 2009,
there shall also be included in the calculation of the Harrisburg IRR the
amount of proceeds received by Parent or any of its subsidiaries under the
Harrisburg Partnership Agreement then in effect in connection with such
sale based on the assumption that the Harrisburg Partnership is dissolved
and all of its assets are distributed to its respective partners
concurrently with the closing of the Property Sale;
(iii) if an Interest Sale has occurred prior to December 31, 2009,
there shall also be included in the calculation of the Harrisburg IRR the
amount of proceeds received by Parent or any of its subsidiaries in
connection with such sale;
(iv) if a Merger Event has occurred prior to December 31, 2009,
Parent shall promptly obtain the Appraised Value and there shall also be
included in the calculation of the Harrisburg IRR the amount of proceeds
that Parent or any of its subsidiaries would have received had the
Harrisburg Property been sold for the Appraised Value; and
(v) if some or all of a Merger Event, an Interest Sale and a
Property Sale occur concurrently, the foregoing calculation shall be based
on the Interest Sale or, if not applicable, a Property Sale.
- 8 -
"Harrisburg NOI" means the total actual property revenues of the
Harrisburg Property for calendar year 2009 (excluding non-cash income such as
straight-line rent, but including all rent that accrues to the calendar year
2009) less the Property Related Expenses.
"Harrisburg Partnership" means ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ Harrisburg LP, a
Pennsylvania limited partnership, the owner of the Harrisburg Property.
"Harrisburg Partnership Agreement" means the agreement of limited
partnership of the Harrisburg Partnership.
"Harrisburg Property" means the land and improvements commonly known as
Harrisburg Mall, Harrisburg, Pennsylvania.
"Holder" means either (a) a Partner or (b) an Assignee, owning a
Partnership Unit, that is treated as a member of the Partnership for federal
income tax purposes.
"Incapacity" or "Incapacitated" means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, or the revocation of the corporation's charter; (iii) as to any
Partner that is a partnership, the dissolution and commencement of winding up of
the partnership; (iv) as to any Partner that is an estate, the distribution by
the fiduciary of the estate's entire interest in the Partnership; (v) as to any
trustee of a trust that is a Partner, the termination of the trust (but not the
substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of
such Partner. For purposes of this definition, bankruptcy of a Partner shall be
deemed to have occurred when (a) the Partner commences a voluntary proceeding
seeking liquidation, reorganization or other relief of or against such Partner
under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner's
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within 120 days after the
commencement thereof, (g) the appointment without the Partner's consent or
acquiescence of a trustee, receiver or liquidator has not been vacated or stayed
within 90 days of such appointment, or (h) an appointment referred to in clause
(g) above is not vacated within 90 days after the expiration of any such stay.
"Incumbent Directors" has the meaning set forth in the definition of the
term Other Change in Control.
"Indemnitee" means (i) any Person made a party to a proceeding by reason
of its status as (A) the General Partner or the Parent or any successor thereto
or (B) a trustee of the General Partner, a director of the Parent or an officer
or employee of the Partnership, the General Partner or the Parent and (ii) such
other Persons (including Affiliates of the General Partner, the Partnership or
the Parent) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and
absolute discretion.
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"Independent Directors" means the independent directors of the Board as
determined by the rules and regulations of the New York Stock Exchange then in
effect.
"Interest Sale" means a sale of the partnership interests in the
Harrisburg Property owned by Parent or any of its subsidiaries.
"IPO" means a public offering of the common stock of the Parent.
"IPO Price" means the initial public offering price as shown on the cover
page of the final prospectus used in Parent's IPO as adjusted for stock splits,
special dividends or distributions or other similar adjustments to the capital
structure of Parent.
"IRR" means an internal rate of annual return (compounded quarterly). The
calculation of IRR shall be performed by Parent's accounting staff and shall be
reviewed by Parent's independent accountants whose review shall be deemed final
and binding absent manifest error and fraud.
"IRR Excess" means 50% of the excess, if any, of (a) the amounts received
or deemed received by Parent or any of its subsidiaries (without duplication) in
calculating the Harrisburg IRR over (b) the amounts required to be received or
deemed received by Parent or any of its subsidiaries (without duplication) in
order to obtain a Harrisburg IRR of 15%, with such amount to be determined upon
the expiration of the Earnout Term.
"IRS" means the Internal Revenue Service, which administers the internal
revenue laws of the United States.
"Junior Share" means a share of capital stock of the Parent now or
hereafter authorized or reclassified that has dividend rights, or rights upon
liquidation, winding up and dissolution, that are junior in rank to the REIT
Shares.
"Junior Unit" means a fractional share of the Partnership Interests that
the General Partner has authorized pursuant to Section 4.1, 4.3 or 4.4 hereof
that has distribution rights, or rights upon liquidation, winding up and
dissolution, that are junior in rank to the OP Units.
"Lease-Up Condition" means with respect to the applicable lease, that the
tenant under such lease has taken occupancy of the space demised thereunder and
has commenced the payment of rent therefor.
"Limited Partner" means any Person named as a Limited Partner in Exhibit A
attached hereto, as such Exhibit A may be amended from time to time, or any
Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a Limited Partner in the Partnership.
"Limited Partner Interest" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Limited Partners and includes any and all benefits to which the
holder of such a Partnership Interest may be entitled as provided in this
Agreement, together with all obligations of such Person to comply with the terms
and provisions of this Agreement. A Limited Partner Interest may be expressed as
a number of OP Units, Earnout Units, PI Units, Preferred Units or other
Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1 hereof.
"Liquidating Gains" has the meaning set forth in Section 6.3.E hereof.
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"Liquidator" has the meaning set forth in Section 13.2.A hereof.
"Majority in Interest of the Outside Limited Partners" means Limited
Partners (excluding for this purpose (i) any Limited Partnership Interests held
by the Parent or its Subsidiaries, (ii) any Person of which the Parent or its
Subsidiaries directly or indirectly owns or controls more than 50% of the voting
interests and (iii) any Person directly or indirectly owning or controlling more
than 50% of the outstanding interests of the General Partner) holding more than
50% of the outstanding OP Units held by all Limited Partners who are not
excluded for the purposes hereof.
"Management Fees" means collectively, management fees, leasing commissions
and construction management fees.
"Market Price" has the meaning set forth in the definition of "Value."
"Merger Event" means a merger, consolidation, sale of all or substantially
all of the assets of the Parent or the Partnership or, at the option of Earnout
Participant given within 10 business days after notice of such transaction is
given to Earnout Participant, the occurrence of any Other Change in Control.
"Net Income" or "Net Loss" means, for each Partnership Year of the
Partnership, an amount equal to the Partnership's taxable income or loss for
such year, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Net Income (or Net
Loss) pursuant to this definition of "Net Income" or "Net Loss" shall be
added to (or subtracted from, as the case may be) such taxable income (or
loss);
(b) Any expenditure of the Partnership described in Code Section
705(a)(2)(B) or treated as a Code Section 705(a)(2)(B) expenditure
pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Net Income (or Net Loss) pursuant to this
definition of "Net Income" or "Net Loss," shall be subtracted from (or
added to, as the case may be) such taxable income (or loss);
(c) In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subsection (b) or subsection (c) of the definition of
"Gross Asset Value," the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset for purposes of
computing Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property with
respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Gross Asset Value of the
property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost
recovery deductions that would otherwise be taken into account in
computing such taxable income or loss, there shall be taken into account
Depreciation for such Partnership Year;
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(f) To the extent that an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section
743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4)
to be taken into account in determining Capital Accounts as a result of a
distribution other than in liquidation of a Partner's interest in the
Partnership, the amount of such adjustment shall be treated as an item of
gain (if the adjustment increases the basis of the asset) or loss (if the
adjustment decreases the basis of the asset) from the disposition of the
asset and shall be taken into account for purposes of computing Net Income
or Net Loss; and
(g) Notwithstanding any other provision of this definition of "Net
Income" or "Net Loss," any item that is specially allocated pursuant to
Section 6.3 hereof shall not be taken into account in computing Net Income
or Net Loss. The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to Section 6.3
hereof shall be determined by applying rules analogous to those set forth
in this definition of "Net Income" or "Net Loss."
"New Securities" means (i) any rights, options, warrants or convertible or
exchangeable securities having the right to subscribe for or purchase REIT
Shares, Preferred Shares or Junior Shares, except that "New Securities" shall
not mean any Preferred Shares, Junior Shares or grants under the Stock Option
Plans or (ii) any Debt issued by the REIT that provides any of the rights
described in clause (i).
"NOI Calculation" has the meaning set forth in Section 4.8.
"Nonrecourse Deductions" has the meaning set forth in Regulations Section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations Section
1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption substantially in the
form of Exhibit B attached to this Agreement.
"Obligated Partner" means a Partner who has agreed in writing to be an
Obligated Partner and has agreed and is obligated to make certain contributions,
not in excess of such Obligated Partner's Protected Amount, to the Partnership
with respect to such Partner's Capital Account Deficit upon the occurrence of
certain events.
"Original Agreement" means the original Agreement of Limited Partnership,
dated as of August 13, 2004.
"OP Unit" means a fractional share of the Partnership Interests of all
Partners issued pursuant to Sections 4.1 and 4.2 hereof, but does not include
any Earnout Unit, PI Unit, Preferred Unit, Junior Unit or any other Partnership
Unit specified in a Partnership Unit Designation as being other than an OP Unit;
provided, however, that the General Partner Interest and the Limited Partner
Interests shall have the differences in rights and privileges as specified in
this Agreement.
"OP Unit Economic Balance" has the meaning set forth in Section 6.3.E
hereof.
"Other Change in Control" means the occurrence of any of the following:
(1) the members of the Board at the beginning of any consecutive
24-calendar-month period (the "Incumbent Directors") cease for any reason other
than due to death to constitute at least a majority of the members of the Board;
provided that any director whose election, or nomination for election by
Parent's stockholders, was approved by a vote of at least a majority of the
members of the Board then still in office who were members of the Board at the
beginning of such 24-calendar-month period, shall be deemed to be an Incumbent
Director; or
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(2) the general partner of the Partnership ceases to be a wholly-owned
direct or indirect subsidiary of Parent.
"Outside Director" shall mean a director of the Parent who is not also an
officer or employee of the Parent.
"Ownership Limit" means the applicable restriction or restrictions on
ownership of shares of the Parent imposed under the Charter.
"Parent" means ▇▇▇▇▇▇▇ Mall Properties, Inc., a Maryland corporation.
"Parent Limited Partner" means ▇▇▇▇▇▇▇ Holdings Business Trust II, a
Maryland business trust, and its successors and assigns, as a limited partner of
the Partnership.
"Partner" means the General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined
in accordance with the rules of Regulations Section 1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership held
by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of OP Units, Earnout Units, PI Units, Preferred
Units, Junior Units or other Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(d).
"Partnership Record Date" means a record date established by the General
Partner for the distribution of Available Cash pursuant to Section 5.1 hereof,
which record date shall generally be the same as the record date established by
the General Partner for a distribution to its stockholders of some or all of its
portion of such distribution.
- 13 -
"Partnership Unit" shall mean an OP Unit, a PI Unit, an Earnout Unit, a
Preferred Unit, a Junior Unit or any other fractional share of the Partnership
Interests that the General Partner has authorized pursuant to Section 4.1, 4.2,
4.3 or 4.4 hereof.
"Partnership Unit Designation" has the meaning set forth in Section 4.3
hereof.
"Partnership Unit Distribution" shall have the meaning set forth in
Section 4.6.A hereof.
"Partnership Year" means the fiscal year of the Partnership, which shall
be the calendar year.
"Percentage Interest" means, as to a Partner holding a class or series of
Partnership Interests, its interest in such class or series as determined by
dividing the Partnership Units of such class or series owned by such Partner by
the total number of Partnership Units of such class then outstanding as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time. If the Partnership issues additional classes or series of Partnership
Interests other than as contemplated herein, the interest in the Partnership
among the classes or series of Partnership Interests shall be determined as set
forth in the amendment to this Agreement setting forth the rights and privileges
of such additional classes or series of Partnership Interest, if any, as
contemplated by Section 4.3.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.
"PI Unit" means a Partnership Unit which is designated as a PI Unit and
which has the rights, preferences and other privileges designated in Section 4.6
hereof and elsewhere in this Agreement in respect of Holders of PI Units. The
allocation of PI Units among the Partners shall be set forth on Exhibit A, as
may be amended from time to time.
"PI Unitholder" means a Partner that holds PI Units.
"Preferred Share" means a share of capital stock of the Parent now or
hereafter authorized or reclassified that has dividend rights, or rights upon
liquidation, winding up and dissolution, that are superior or prior to the REIT
Shares.
"Preferred Unit" means a fractional share of the Partnership Interests
that the General Partner has authorized pursuant to Section 4.1, 4.3 or 4.4
hereof that has distribution rights, or rights upon liquidation, winding up and
dissolution, that are superior or prior to the OP Units.
"Properties" means any assets and property of the Partnership such as, but
not limited to, interests in real property and personal property, including,
without limitation, fee interests, interests in ground leases, interests in
limited liability companies, joint ventures or partnerships, interests in
mortgages, and Debt instruments as the Partnership may hold from time to time
and "Property" shall mean any one such asset or property.
"Property Related Expenses" means all normal and customary operating
expenses of the Harrisburg Property which are expensed for GAAP accounting
purposes, but specifically excluding: (a) any non-cash items such as
depreciation and amortization; (b) any Management Fees related to the Harrisburg
Property (whether or not such fees are payable to Parent or any of its
subsidiaries); and (c) debt service payments and reserves, if any.
"Property Sale" means a sale of the Harrisburg Property.
- 14 -
"Protected Amount" means the amount specified on Exhibit C with respect to
any Obligated Partner, as such Exhibit may be amended from time to time.
"Publicly Traded" means listed or admitted to trading on the New York
Stock Exchange, the American Stock Exchange or another national securities
exchange or designated for quotation on the NASDAQ National Market, or any
successor to the foregoing.
"Qualified REIT Subsidiary" means a qualified REIT subsidiary of the
Parent within the meaning of Code Section 856(i)(2).
"Qualified Transferee" means an "Accredited Investor" as defined in Rule
501 promulgated under the Securities Act.
"Qualifying Party" means (a) a Limited Partner set forth in Schedule A
hereto, (b) an Additional Limited Partner or (c) a Substituted Limited Partner
succeeding to all or part of the Limited Partner Interest of (i) a Limited
Partner set forth in Schedule A hereto or (ii) an Additional Limited Partner.
"Redemption" has the meaning set forth in Section 8.6.A hereof.
"Regulations" means the applicable income tax regulations under the Code,
whether such regulations are in proposed, temporary or final form, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section 6.3.B(vii)
hereof.
"REIT" means a real estate investment trust qualifying under Code Section
856.
"REIT Payment" has the meaning set forth in Section 15.11 hereof.
"REIT Requirements" has the meaning set forth in Section 5.1 hereof.
"REIT Share" means a share of the Parent's common stock, par value $0.01
per share. Where relevant in this Agreement, "REIT Share" includes shares of the
Parent's common stock, par value $0.01 per share, issued upon conversion of
Preferred Shares or Junior Shares.
"REIT Shares Amount" means a number of REIT Shares equal to the product of
(a) the number of Tendered Units and (b) the Adjustment Factor in effect on the
Specified Redemption Date with respect to such Tendered Units; provided,
however, that, in the event that the Parent issues to all holders of REIT Shares
as of a certain record date rights, options, warrants or convertible or
exchangeable securities entitling the Parent's stockholders to subscribe for or
purchase REIT Shares, or any other securities or property (collectively, the
"Rights"), with the record date for such Rights issuance falling within the
period starting on the date of the Notice of Redemption and ending on the day
immediately preceding the Specified Redemption Date, which Rights will not be
distributed before the relevant Specified Redemption Date, then the REIT Shares
Amount shall also include such Rights that a holder of that number of REIT
Shares would be entitled to receive, expressed, where relevant hereunder, in a
number of REIT Shares determined by the Parent in good faith.
"Rights" has the meaning set forth in the definition of "REIT Shares
Amount."
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
- 15 -
"Services Agreement" means any management, development or advisory
agreement with a property and/or asset manager for the provision of property
management, asset management, leasing, development and/or similar services with
respect to the Properties and any agreement for the provision of services of
accountants, legal counsel, appraisers, insurers, brokers, transfer agents,
registrars, developers, financial advisors and other professional services.
"Specified Redemption Date" means the 10th Business Day following receipt
by the General Partner of a Notice of Redemption; provided that, if the REIT
Shares are not Publicly Traded, the Specified Redemption Date means the 30th
Business Day following receipt by the General Partner of a Notice of Redemption.
"Stock Option Plan" means any stock option plan hereafter adopted by the
Partnership or the Parent, including the Parent's 2004 equity incentive plan.
"Subsidiary" means, with respect to any Person, any other Person (which is
not an individual) of which a majority of (i) the voting power of the voting
equity securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.4 hereof.
"Tax Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered Units" has the meaning set forth in Section 8.6.A hereof.
"Tendering Partner" has the meaning set forth in Section 8.6.A hereof.
"Tendering Party" has the meaning set forth in Section 8.6.A hereof.
"Terminating Capital Transaction" means any sale or other disposition of
all or substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
"Transfer," when used with respect to a Partnership Unit, or all or any
portion of a Partnership Interest, means any sale, assignment, bequest,
conveyance, devise, gift (outright or in trust), pledge, encumbrance,
hypothecation, mortgage, exchange, transfer or other disposition or act of
alienation, whether voluntary or involuntary or by operation of law; provided,
however, that when the term is used in Article XI hereof, "Transfer" does not
include (a) any Redemption of Partnership Units by the Partnership or the
Parent, or acquisition of Tendered Units by the General Partner or the Parent,
pursuant to Section 8.6 hereof or (b) any redemption of Partnership Units
pursuant to any Partnership Unit Designation. The terms "Transferred" and
"Transferring" have correlative meanings.
- 16 -
"Value" means, on any date of determination with respect to a REIT Share,
the average of the daily Market Prices for ten consecutive trading days
immediately preceding the date of determination except that, as provided in
Section 4.5.B hereof, the Market Price for the trading day immediately preceding
the date of exercise of a stock option under any Stock Option Plan shall be
substituted for such average of daily market prices for purposes of Section 4.5
hereof; provided, however, that for purposes of Section 8.6, the "date of
determination" shall be the date of receipt by the Parent of a Notice of
Redemption or, if such date is not a Business Day, the immediately preceding
Business Day. The term "Market Price" on any date shall mean, with respect to
any class or series of outstanding REIT Shares, the Closing Price for such REIT
Shares on such date. The "Closing Price" on any date shall mean the last sale
price for such REIT Shares, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, for such
REIT Shares, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such REIT Shares are not listed or
admitted to trading on the New York Stock Exchange, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such REIT Shares are listed
or admitted to trading or, if such REIT Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or, if such system is no longer in use,
the principal other automated quotation system that may then be in use or, if
such REIT Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such REIT Shares selected by the Board or, in the event that no
trading price is available for such REIT Shares, the fair market value of the
REIT Shares, as determined in good faith by the Board.
In the event that the REIT Shares Amount includes Rights (as defined in
the definition of "REIT Shares Amount") that a holder of REIT Shares would be
entitled to receive, then the Value of such Rights shall be determined by the
Parent acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"Transaction" shall have the meaning set forth in Section 4.9.F.
"Vesting Agreement" means each or any, as the context implies, Profits
Interest Plan (PI Plan) Vesting Agreement entered into by a PI Unitholder upon
acceptance of an award of PI Units under the Plan (as such agreement may be
amended, modified or supplemented from time to time).
"Withdrawing General Partner" means ▇▇▇▇▇▇▇ Holdings Business Trust I, a
Massachusetts business trust, and its successors and assigns, as the general
partner of the Partnership.
ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.1. Organization. The Partnership is a limited partnership
organized pursuant to the provisions of the Act and upon the terms and subject
to the conditions set forth in this Agreement. Except as expressly provided
herein to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all
purposes.
Section 2.2. Name. The name of the Partnership is "▇▇▇▇▇▇▇ EQUITIES
OPERATING PARTNERSHIP LP" The Partnership's business may be conducted under any
other name or names deemed advisable by the General Partner, including the name
of the General Partner or any Affiliate thereof. The words "Limited
Partnership," "LP," "L.P.," "Ltd." or similar words or letters shall be included
in the Partnership's name where necessary for the purposes of complying with the
laws of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership at any time and from
time to time and shall notify the Partners of such change in the next regular
communication to the Partners.
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Section 2.3. Registered Office and Agent; Principal Office. The address of
the registered office of the Partnership in the State of Delaware is located at
Corporation Service Company, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and
the registered agent for service of process on the Partnership in the State of
Delaware at such registered office is Corporation Service Company. The principal
office of the Partnership is located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the General Partner may from time
to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the General Partner deems advisable.
Section 2.4. Power of Attorney.
A. Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and each of those acting singly, in each
case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:
(i) execute, swear to, seal, acknowledge, deliver, file and
record in the appropriate public offices (a) all certificates, documents
and other instruments (including, without limitation, this Agreement and
the Certificate and all amendments, supplements or restatements thereof)
that the General Partner or the Liquidator deems appropriate or necessary
to form, qualify or continue the existence or qualification of the
Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability to the extent provided by
applicable law) in the State of Delaware and in all other jurisdictions in
which the Partnership may conduct business or own property; (b) all
instruments that the General Partner or the Liquidator deems appropriate
or necessary to reflect any amendment, change, modification or restatement
of this Agreement in accordance with its terms; (c) all conveyances and
other instruments or documents that the General Partner or the Liquidator
deems appropriate or necessary to reflect the dissolution and liquidation
of the Partnership pursuant to the terms of this Agreement, including,
without limitation, a certificate of cancellation; (d) all conveyances and
other instruments or documents that the General Partner or the Liquidator
deems appropriate or necessary to reflect the distribution or exchange of
assets of the Partnership pursuant to the terms of this Agreement; (e) all
instruments relating to the admission, withdrawal, removal or substitution
of any Partner pursuant to, or other events described in, Article XI,
Article XII or Article XIII hereof or the Capital Contribution of any
Partner; and (f) all certificates, documents and other instruments
relating to the determination of the rights, preferences and privileges
relating to Partnership Interests; and
(ii) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of the
General Partner or the Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action that is made
or given by the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole and absolute discretion
of the General Partner or the Liquidator, to effectuate the terms or
intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or the Liquidator to amend this Agreement except in accordance with Article XIV
hereof or as may be otherwise expressly provided for in this Agreement.
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B. The foregoing power of attorney is hereby declared to be
irrevocable and a special power coupled with an interest, in recognition of the
fact that each of the Limited Partners and Assignees will be relying upon the
power of the General Partner or the Liquidator to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership, and
it shall survive and not be affected by the subsequent Incapacity of any Limited
Partner or Assignee and the Transfer of all or any portion of such Limited
Partner's or Assignee's Partnership Units or Partnership Interest and shall
extend to such Limited Partner's or Assignee's heirs, successors, assigns and
personal representatives. Each such Limited Partner or Assignee hereby agrees to
be bound by any representation made by the General Partner or the Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses that may be available to
contest, negate or disaffirm the action of the General Partner or the
Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within 15 days after receipt of the General Partner's or the
Liquidator's request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.
Section 2.5. Term. Pursuant to Section 17-217(d) of the Act, the term of
the Partnership commenced on August 6, 2004, the date that the original
Certificate was filed in the office of the Secretary of the State of Delaware,
and shall continue until December 31, 2104 unless it is dissolved sooner
pursuant to the provisions of Article XIII hereof or as otherwise provided by
law.
ARTICLE III
PURPOSE
Section 3.1. Purpose and Business. The purpose and nature of the
Partnership is to conduct any business, enterprise or activity permitted by or
under the Act; provided, however, such business and arrangements and interests
may be limited to and conducted in such a manner as to permit the Parent, in the
sole and absolute discretion of the General Partner, at all times to be
classified as a REIT unless the Parent in its sole discretion has chosen to
cease to qualify as a REIT or has chosen not to attempt to qualify as a REIT for
any reason or for reasons whether or not related to the business conducted by
the Partnership. Without limiting the General Partner's right in its sole
discretion to cease qualifying as a REIT, the Partners acknowledge that the
status of the Parent as a REIT inures to the benefit of all Partners and not
solely to the Parent, the General Partner or its Affiliates. In connection with
the foregoing, the Partnership shall have full power and authority to enter
into, perform and carry out contracts of any kind, to borrow and lend money and
to issue and guarantee evidence of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien and, directly or indirectly, to
acquire and construct additional Properties necessary, useful or desirable in
connection with its business.
Section 3.2. Powers.
A. The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described
herein and for the protection and benefit of the Partnership.
B. The Partnership may contribute from time to time Partnership
capital to one or more newly formed entities solely in exchange for equity
interests therein (or in a wholly owned subsidiary entity thereof).
C. Notwithstanding any other provision in this Agreement, the
General Partner may cause the Partnership not to take, or to refrain from
taking, any action that, in the judgment of the General Partner, in its sole and
absolute discretion, (i) could adversely affect the ability of the Parent to
continue to qualify as a REIT, (ii) could subject the Parent to any additional
taxes under Code Section 857 or Code Section 4981 or any other related or
successor provision of the Code or (iii) could violate any law or regulation of
any governmental body or agency having jurisdiction over the General Partner,
the Parent, their securities or the Partnership.
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Section 3.3. Partnership Only for Partnership Purposes Specified. This
Agreement shall not be deemed to create a company, venture or partnership
between or among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.1 hereof. Except as otherwise provided in this Agreement, no Partner
shall have any authority to act for, bind, commit or assume any obligation or
responsibility on behalf of the Partnership, its properties or any other
Partner. No Partner, in its capacity as a Partner under this Agreement, shall be
responsible or liable for any indebtedness or obligation of another Partner, and
the Partnership shall not be responsible or liable for any indebtedness or
obligation of any Partner, incurred either before or after the execution and
delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities, indebtedness or obligations incurred pursuant to and as limited by
the terms of this Agreement and the Act.
Section 3.4. Representations and Warranties by the Parties.
A. Each Partner (including, without limitation, each Additional
Limited Partner or Substituted Limited Partner as a condition to becoming an
Additional Limited Partner or a Substituted Limited Partner, respectively)
represents and warrants to each other Partner that (i) the consummation of the
transactions contemplated by this Agreement to be performed by such Partner will
not result in a breach or violation of, or a default under, any material
agreement by which such Partner or any of such Partner's property is bound, or
any statute, regulation, order or other law to which such Partner is subject,
(ii) subject to the last sentence of this Section 3.4.A, such Partner is neither
a "foreign person" within the meaning of Code Section 1445(f) nor a "foreign
partner" within the meaning of Code Section 1446(e), (iii) such Partner does not
own, directly or indirectly, (a) 9.9% or more of the total combined voting power
of all classes of stock entitled to vote, or 9.9% or more of the total number of
shares of all classes of stock, of any corporation that is a tenant of either
(I) the Parent or any Qualified REIT Subsidiary, (II) the Partnership or (III)
any partnership, venture or limited liability company of which the Parent, any
Qualified REIT Subsidiary or the Partnership is a member or (b) an interest of
9.9% or more in the assets or net profits of any tenant of either (I) the Parent
or any Qualified REIT Subsidiary, (II) the Partnership or (III) any partnership,
venture, or limited liability company of which the Parent, any Qualified REIT
Subsidiary or the Partnership is a member and (iv) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
Notwithstanding anything contained herein to the contrary, in the event that the
representation contained in the foregoing clause (ii) would be inaccurate if
given by a Partner, such Partner (w) shall not be required to make and shall not
be deemed to have made such representation, if it delivers to the General
Partner in connection with or prior to its execution of this Agreement written
notice that it may not truthfully make such representation, (x) hereby agrees
that it is subject to, and hereby authorizes the General Partner to withhold,
all withholdings to which such a "foreign person" or "foreign partner," as
applicable, is subject under the Code and (y) hereby agrees to cooperate fully
with the General Partner with respect to such withholdings, including by
effecting the timely completion and delivery to the General Partner of all
governmental forms required in connection therewith.
B. Each Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner)
represents, warrants and agrees that it has acquired and continues to hold its
interest in the Partnership for its own account for investment purposes only and
not for the purpose of, or with a view toward, the resale or distribution of all
or any part thereof, and not with a view toward selling or otherwise
distributing such interest or any part thereof at any particular time or under
any predetermined circumstances. Each Partner further represents and warrants
that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds that it has invested in the Partnership in what
it understands to be a highly speculative and illiquid investment.
- 20 -
C. The representations and warranties contained in Sections 3.4.A
and 3.4.B hereof shall survive the execution and delivery of this Agreement by
each Partner (and, in the case of an Additional Limited Partner or a Substituted
Limited Partner, the admission of such Additional Limited Partner or Substituted
Limited Partner as a Limited Partner in the Partnership) and the dissolution,
liquidation and termination of the Partnership.
D. Each Partner (including, without limitation, each Substituted
Limited Partner as a condition to becoming a Substituted Limited Partner) hereby
acknowledges that no representations as to potential profit, cash flows, funds
from operations or yield, if any, in respect of the Partnership or the General
Partner have been made by the Parent, any Partner or any employee or
representative or Affiliate of the Parent or any Partner, and that projections
and any other information, including, without limitation, financial and
descriptive information and documentation, that may have been in any manner
submitted to such Partner shall not constitute any representation or warranty of
any kind or nature, express or implied.
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners. Each Partner has made a
Capital Contribution to the Partnership and owns Partnership Units in the amount
and designation set forth for such Partner on Exhibit A, as the same may be
amended from time to time by the General Partner to the extent necessary to
reflect accurately sales, exchanges, conversions or other Transfers,
redemptions, Capital Contributions, the issuance of additional Partnership
Units, or similar events having an effect on a Partner's ownership of
Partnership Units. Except as provided by law or in Section 4.4, 10.4 or 13.2.D
hereof, the Partners shall have no obligation or right to make any additional
Capital Contributions or loans to the Partnership.
Section 4.2. Classes of Partnership Units. From and after the Effective
Date, subject to Section 4.3.A below, the Partnership shall have three classes
of Partnership Units entitled "OP Units," "Earnout Units," and " PI Units."
Subject to Section 4.10, either OP Units or PI Units, at the election of the
General Partner, in its sole and absolute discretion, may be issued to newly
admitted Partners in exchange for any Capital Contributions and/or the provision
of services by such Partners; provided that any Partnership Unit that is not
specifically designated by the General Partner as being of a particular class
shall be deemed to be an OP Unit. Each Earnout Unit shall be converted
automatically into an OP Unit as provided in Section 4.8 hereof without the
requirement for any action by either the Partnership or the Partner holding the
Earnout Units.
Section 4.3. Issuances of Additional Partnership Interests.
A. General. Notwithstanding Section 7.3.B hereof, the General
Partner is hereby authorized to cause the Partnership to issue additional
Partnership Interests, in the form of Partnership Units, for any Partnership
purpose, at any time or from time to time, to the Partners (including the
General Partner or Parent Limited Partner) or to other Persons, and to admit
such Persons as Additional Limited Partners, for such consideration and on such
terms and conditions as shall be established by the General Partner in its sole
and absolute discretion, all without the approval of any Limited Partners.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units (i) upon the conversion,
redemption or exchange of any Debt, Partnership Units or other securities issued
by the Partnership, (ii) for less than fair market value, so long as the General
Partner concludes in good faith that such issuance is in the best interests of
the Parent and the Partnership and (iii) in connection with any merger of any
other Person into the Partnership or any Subsidiary of the Partnership if the
applicable merger agreement provides that Persons are to receive Partnership
Units in exchange for their interests in the Person merging into the Partnership
or any Subsidiary of the Partnership. Subject to Delaware law, any additional
Partnership Interests may be issued in one or more classes, or one or more
series of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties as shall be
determined by the General Partner, in its sole and absolute discretion without
the approval of any Limited Partner, and set forth in a written document
thereafter attached to and made an exhibit to this Agreement (each, a
"Partnership Unit Designation"). Without limiting the generality of the
foregoing, the General Partner shall have authority to specify (a) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests; (b) the right of each such
class or series of Partnership Interests to share in Partnership distributions;
(c) the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership; (d) the voting rights, if any,
of each such class or series of Partnership Interests; and (e) the conversion,
redemption or exchange rights applicable to each such class or series of
Partnership Interests. Upon the issuance of any additional Partnership Interest,
the General Partner shall amend Exhibit A as appropriate to reflect such
issuance.
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B. Issuances to the General Partner. No additional Partnership Units
shall be issued to the General Partner or Parent Limited Partner unless (i) the
additional Partnership Units are issued to all Partners in proportion to their
respective Percentage Interests with respect to the class of Partnership Units
so issued, (ii) (a) the additional Partnership Units are (x) OP Units issued in
connection with an issuance of REIT Shares or (y) Partnership Units (other than
OP Units) issued in connection with an issuance of Preferred Shares, Junior
Shares, New Securities or other interests in the Parent (other than REIT
Shares), which Preferred Shares, Junior Shares, New Securities or other
interests have designations, preferences and other rights, terms and provisions
that are substantially the same as the designations, preferences and other
rights, terms and provisions of the additional Partnership Units issued to the
General Partner and (b) the Parent directly or indirectly contributes or
otherwise causes to be transferred to the Partnership the cash proceeds or other
consideration, if any, received in connection with the issuance of such REIT
Shares, Preferred Shares, Junior Shares, New Securities or other interests in
the Parent or (iii) the additional Partnership Units are issued upon the
conversion, redemption or exchange of Debt, Partnership Units or other
securities issued by the Partnership. In the event that the Partnership issues
additional Partnership Units pursuant to this Section 4.3.B, the General Partner
shall make such revisions to this Agreement (including but not limited to the
revisions described in Sections 6.2.B and 8.6) as it determines are necessary to
reflect the issuance of such additional Partnership Interests.
C. No Preemptive Rights. No Person, including, without limitation,
any Partner or Assignee, shall have any preemptive, preferential, participation
or similar right or rights to subscribe for or acquire any Partnership Interest.
Section 4.4. Additional Funds and Capital Contributions.
A. General. The General Partner may, at any time and from time to
time, determine that the Partnership requires additional funds ("Additional
Funds") for the acquisition or development of additional Properties, for the
redemption of Partnership Units or for such other purposes as the General
Partner may determine in its sole and absolute discretion. Additional Funds may
be obtained by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.4
without the approval of any Limited Partners.
B. Additional Capital Contributions. The General Partner, on behalf
of the Partnership, may obtain any Additional Funds by accepting Capital
Contributions from any Partners or other Persons. In connection with any such
Capital Contribution (of cash or property), the General Partner is hereby
authorized to cause the Partnership from time to time to issue additional
Partnership Units (as set forth in Section 4.3 above) in consideration therefor
and the Percentage Interests of the General Partner and the Limited Partners
shall be adjusted to reflect the issuance of such additional Partnership Units.
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C. Loans by Third Parties. The General Partner, on behalf of the
Partnership, may obtain any Additional Funds by causing the Partnership to incur
Debt to any Person upon such terms as the General Partner determines
appropriate, including making such Debt convertible, redeemable or exchangeable
for Partnership Units; provided, however, that the Partnership shall not incur
any such Debt if (i) a breach, violation or default of such Debt would be deemed
to occur by virtue of the Transfer by any Limited Partner of any Partnership
Interest or (ii) such Debt is recourse to any Partner (unless the Partner
otherwise agrees).
D. General Partner/Parent Loans. The General Partner and/or the
Parent, as the case may be, on behalf of the Partnership, may obtain any
Additional Funds by causing the Partnership to incur Debt with the General
Partner and/or the Parent, as the case may be (each, a "General Partner Loan"),
if (i) such Debt is, to the extent permitted by law, on substantially the same
terms and conditions (including interest rate, repayment schedule, and
conversion, redemption, repurchase and exchange rights) as Funding Debt incurred
by the General Partner and/or the Parent, as the case may be, the net proceeds
of which are loaned to the Partnership to provide such Additional Funds or (ii)
such Debt is on terms and conditions no less favorable to the Partnership than
would be available to the Partnership from any third party; provided, however,
that the Partnership shall not incur any such Debt if (a) a breach, violation or
default of such Debt would be deemed to occur by virtue of the Transfer by any
Limited Partner of any Partnership Interest or (b) such Debt is recourse to any
Partner and/or the Parent, as the case may be (unless the Partner and/or the
Parent, as the case may be, otherwise agrees).
E. Issuance of Securities by the Parent. The Parent shall not issue
any additional REIT Shares, Preferred Shares, Junior Shares or New Securities
unless the Parent contributes directly or indirectly the cash proceeds or other
consideration, if any, received from the issuance of such additional REIT
Shares, Preferred Shares, Junior Shares or New Securities, as the case may be,
and from the exercise of the rights contained in any such additional New
Securities, to the Partnership in exchange for (x) in the case of an issuance of
REIT Shares, Partnership Units or (y) in the case of an issuance of Preferred
Shares, Junior Shares or New Securities, Partnership Units with designations,
preferences and other rights, terms and provisions that are substantially the
same as the designations, preferences and other rights, terms and provisions of
such Preferred Shares, Junior Shares or New Securities; provided, however, that
notwithstanding the foregoing, the Parent may issue REIT Shares, Preferred
Shares, Junior Shares or New Securities (a) pursuant to Section 4.5 or 8.6.B
hereof, (b) pursuant to a dividend or distribution (including any stock split)
of REIT Shares, Preferred Shares, Junior Shares or New Securities to all of the
holders of REIT Shares, Preferred Shares, Junior Shares or New Securities, as
the case may be, (c) upon a conversion, redemption or exchange of Preferred
Shares, (d) upon a conversion of Junior Shares into REIT Shares, (e) upon a
conversion, redemption, exchange or exercise of New Securities, (f) pursuant to
share grants or awards made pursuant to any equity incentive plan of the Parent
(including the Parent's 2004 Long Term Incentive Compensation Plan) or (g) if
the Parent determines that the best interests of the Parent would be served by
contributing such cash proceeds or other consideration to another Subsidiary of
the Parent. In the event of any issuance of additional REIT Shares, Preferred
Shares, Junior Shares or New Securities by the Parent, and the direct or
indirect contribution to the Partnership, by the Parent, of the cash proceeds or
other consideration received from such issuance, the Partnership shall pay the
Parent's expenses associated with such issuance, including any underwriting
discounts or commissions (it being understood that payment of some or all of
such expenses may be made by the Parent on behalf of the Partnership out of the
gross proceeds of such issuance prior to the direct or indirect contribution of
such proceeds by the Parent to the Partnership).
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Section 4.5. Stock Option Plan.
A. Options Granted to Company Employees and Independent Directors.
If at any time or from time to time, in connection with a Stock Option Plan, a
stock option granted to a Company Employee or Outside Director is duly
exercised:
(i) the Parent shall, as soon as practicable after such exercise,
make or cause to be made directly or indirectly a Capital Contribution to
the Partnership in an amount equal to the exercise price paid to the
Parent by such exercising party in connection with the exercise of such
stock option.
(ii) Notwithstanding the amount of the Capital Contribution
actually made pursuant to Section 4.5.A(i) hereof, the Parent shall be
deemed to have contributed directly or indirectly to the Partnership, as a
Capital Contribution, in consideration of an additional Limited Partner
Interest (expressed in and as additional Partnership Units), an amount
equal to the Value of a REIT Share as of the date of exercise multiplied
by the number of REIT Shares then being issued in connection with the
exercise of such stock option.
(iii) An equitable Percentage Interest adjustment shall be made
in which the General Partner shall be treated as having made a cash
contribution equal to the amount described in Section 4.5.A(ii) hereof.
B. Special Valuation Rule. For purposes of this Section 4.5, in
determining the Value of a REIT Share, only the trading date immediately
preceding the exercise of the relevant stock option under the Stock Option Plan
shall be considered.
C. Future Stock Incentive Plans. Nothing in this Agreement shall be
construed or applied to preclude or restrain the Parent from adopting, modifying
or terminating stock incentive plans, including any Stock Option Plan, for the
benefit of employees, directors or other business associates of the Parent, the
Partnership or any of their Affiliates. The Limited Partners acknowledge and
agree that, in the event that any such plan is adopted, modified or terminated
by the Parent, amendments to this Section 4.5 may become necessary or advisable
and that any approval or consent of the Limited Partners required pursuant to
the terms of this Agreement in order to effect any such amendments requested by
the General Partner shall not be unreasonably withheld or delayed.
Section 4.6. PI Units.
A. Issuance of PI Units. The General Partner may from time to time
issue PI Units to Persons who provide services to the Partnership, for such
consideration as the General Partner may determine to be appropriate, and admit
such Persons as Limited Partners. Subject to the following provisions of this
Section 4.6 and the special provisions of Sections 6.3.E and 4.9, PI Units shall
be treated as OP Units, with all of the rights, privileges and obligations
attendant thereto. For purposes of computing the Partners' Percentage Interests,
holders of PI Units shall be treated as OP Unitholders and PI Units shall be
treated as OP Units. In particular, the Partnership shall maintain at all times
a one-to-one correspondence between PI Units and OP Units for conversion,
distribution and other purposes, including without limitation complying with the
following procedures:
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(i) If an Adjustment Event (as defined below) occurs, then the
General Partner shall make a corresponding adjustment to the PI Units to
maintain a one-for-one conversion and economic equivalence ratio between
OP Units and PI Units. The following shall be Adjustment Events: (A) the
Partnership makes a distribution on all outstanding OP Units in
Partnership Units, (B) the Partnership subdivides the outstanding OP Units
into a greater number of units or combines the outstanding OP Units into a
smaller number of units, or (C) the Partnership issues any Partnership
Units in exchange for its outstanding OP Units by way of a
reclassification or recapitalization of its OP Units. If more than one
Adjustment Event occurs, the adjustment to the PI Units need be made only
once using a single formula that takes into account each and every
Adjustment Event as if all Adjustment Events occurred simultaneously. For
the avoidance of doubt, the following shall not be Adjustment Events: (x)
the issuance of Partnership Units in a financing, reorganization,
acquisition or other similar business transaction, (y) the issuance of
Partnership Units pursuant to any employee benefit or compensation plan or
distribution reinvestment plan, or (z) the issuance of any Partnership
Units to the Company in respect of a capital contribution to the
Partnership of proceeds from the sale of securities by the Company. If the
Partnership takes an action affecting the OP Units other than actions
specifically described above as "Adjustment Events" and in the opinion of
the General Partner such action would require an adjustment to the PI
Units to maintain the one-to-one correspondence described above, the
General Partner shall have the right to make such adjustment to the PI
Units, to the extent permitted by law and by any Stock Option Plan, in
such manner and at such time as the General Partner, in its sole
discretion, may determine to be appropriate under the circumstances. If an
adjustment is made to the PI Units as herein provided the Partnership
shall promptly file in the books and records of the Partnership an
officer's certificate setting forth such adjustment and a brief statement
of the facts requiring such adjustment, which certificate shall be
conclusive evidence of the correctness of such adjustment absent manifest
error. Promptly after filing of such certificate, the Partnership shall
mail a notice to each PI Unitholder setting forth the adjustment to his or
her PI Units and the effective date of such adjustment; and
(ii) The PI Unitholders shall, when, as and if authorized and
declared by the General Partner out of assets legally available for that
purpose, be entitled to receive distributions in an amount per PI Unit
equal to the distributions per OP Unit (the "Partnership Unit
Distribution"), paid to holders of OP Units on such Partnership Record
Date established by the General Partner with respect to such distribution.
So long as any PI Units are outstanding, no distributions (whether in cash
or in kind) shall be authorized, declared or paid on OP Units, unless
equal distributions have been or contemporaneously are authorized,
declared and paid on the PI Units.
B. Priority. Subject to the provisions of this Section 4.6 and the
special provisions of Sections 6.3.E and 4.9, the PI Units shall rank pari passu
with the OP Units as to the payment of regular and special periodic or other
distributions and distribution of assets upon liquidation, dissolution or
winding up. As to the payment of distributions and as to distribution of assets
upon liquidation, dissolution or winding up, any class or series of Partnership
Units or Partnership Interests which by its terms specifies that it shall rank
junior to, on a parity with, or senior to the OP Units shall also rank junior
to, or pari passu with, or senior to, as the case may be, the PI Units. Subject
to the terms of any Vesting Agreement, a PI Unitholder shall be entitled to
transfer his or her PI Units to the same extent, and subject to the same
restrictions as holders of OP Units are entitled to transfer their OP Units
pursuant to Article XI.
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C. Special Provisions. PI Units shall be subject to the following
special provisions:
(i) Vesting Agreements. PI Units may, in the sole discretion of
the General Partner, be issued subject to vesting, forfeiture and
additional restrictions on transfer pursuant to the terms of a Vesting
Agreement. The terms of any Vesting Agreement may be modified by the
General Partner from time to time in its sole discretion, subject to any
restrictions on amendment imposed by the relevant Vesting Agreement or by
the Stock Option Plan, if applicable. PI Units that have vested under the
terms of a Vesting Agreement are referred to as "Vested PI Units"; all
other PI Units shall be treated as "Unvested Incentive Units."
(ii) Forfeiture. Unless otherwise specified in the Vesting
Agreement, upon the occurrence of any event specified in a Vesting
Agreement as resulting in either the right of the Partnership or the
General Partner to repurchase PI Units at a specified purchase price or
some other forfeiture of any PI Units, then if the Partnership or the
General Partner exercises such right to repurchase or forfeiture in
accordance with the applicable Vesting Agreement, then the relevant PI
Units shall immediately, and without any further action, be treated as
cancelled and no longer outstanding for any purpose. Unless otherwise
specified in the Vesting Agreement, no consideration or other payment
shall be due with respect to any PI Units that have been forfeited, other
than any distributions declared with respect to a Partnership Record Date
prior to the effective date of the forfeiture. In connection with any
repurchase or forfeiture of PI Units, the balance of the portion of the
Capital Account of the PI Unitholder that is attributable to all of his or
her PI Units shall be reduced by the amount, if any, by which it exceeds
the target balance contemplated by Section 6.3.E, calculated with respect
to the PI Unitholder's remaining PI Units, if any.
(iii) Allocations. PI Unitholders shall be entitled to certain
special allocations of gain under Section 6.3.E.
(iv) Redemption. The Redemption Right provided to Limited
Partners under Section 8.6 shall not apply with respect to PI Units unless
and until they are converted to OP Units as provided in clause (v) below
and Section 4.9.
(v) Conversion To OP Units. Vested PI Units are eligible to be
converted into OP Units under Section 4.9.
D. Voting. PI Unitholders shall (a) have the same voting rights as a
holder of OP Units, with the PI Units voting as a single class with the OP Units
and having one vote per PI Unit; and (b) have the additional voting rights that
are expressly set forth below. So long as any PI Units remain outstanding, the
Partnership shall not, without the affirmative vote of the holders of at least a
majority of the PI Units outstanding at the time, given in person or by proxy,
either in writing or at a meeting (voting separately as a class), amend, alter
or repeal, whether by merger, consolidation or otherwise, the provisions of this
Agreement applicable to PI Units so as to materially and adversely affect any
right, privilege or voting power of the PI Units or the PI Unitholders as such,
unless such amendment, alteration, or repeal affects equally, ratably and
proportionately the rights, privileges and voting powers of the holders of OP
Units; but subject, in any event, to the following provisions:
(i) With respect to any Transaction, so long as the PI Units are
treated in accordance with Section 4.9.F hereof, the consummation of such
Transaction shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers of the PI Units or the PI
Unitholders as such; and
(ii) Any creation or issuance of any Partnership Units or of any
class or series of Partnership Interest including without limitation
additional OP Units, PI Units or Preferred Units, whether ranking senior
to, junior to, or on a parity with the PI Units with respect to
distributions and the distribution of assets upon liquidation, dissolution
or winding up, shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers of the PI Units or the PI
Unitholders as such.
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The foregoing voting provisions will not apply if, at or
prior to the time when the act with respect to which such vote would otherwise
be required will be effected, all outstanding PI Units shall have been converted
into OP Units.
Section 4.7. No Interest; No Return. No Partner shall be entitled to
interest on its Capital Contribution or on such Partner's Capital Account.
Except as provided herein or by law, no Partner shall have any right to demand
or receive the return of its Capital Contribution from the Partnership.
Section 4.8. Conversion or Redemption of Earnout Units.
A. Except as provided in the next sentence, the holders of Earnout
Units shall not have any voting rights. So long as any Earnout Units are
outstanding, the Partnership shall not, without the affirmative vote of the
holders of at least two-thirds of the Earnout Units outstanding at the time,
given in person or by proxy, either in writing or at a meeting, amend, alter or
repeal the provisions of the this Agreement, so as to materially and adversely
affect any right, preference, privilege or voting power of the Earnout Units.
The holders of Earnout Units shall not be entitled to receive any distributions
in respect of their Earnout Units.
B. Conversion of Earnout Units.
(i) NOI Calculation. Unless an Interest Sale, a Property Sale or
a Merger Event has previously occurred, within thirty days after December
31, 2009, Parent shall calculate the Harrisburg NOI (the "NOI
Calculation") for the calendar year 2009.
(ii) Review and Approval of NOI Calculation. The NOI Calculation
shall be performed by Parent's accounting staff and shall be reviewed by
Parent's outside directors (in consultation with Parent's independent
accountants) whose review with such consultation shall be deemed final and
binding absent manifest error and fraud.
(iii) Conversion Events.
a. If the Earnout Term shall expire on December 31, 2009,
then within 30 days thereafter, the Partnership shall convert each Earnout
Unit for an amount of OP Units (rounded to the nearest OP Unit), if any,
equal to the quotient obtained by dividing (x) the quotient obtained by
dividing the IRR Excess by the Market Price as of December 31, 2009; by
(y) the aggregate number of Earnout Units then outstanding.
b. If the Earnout Term shall expire on account of a
Property Sale or an Interest Sale, then within 5 days thereafter, the
Partnership shall convert each Earnout Unit for an amount of OP Units
(rounded to the nearest OP Unit), if any, equal to the quotient obtained
by dividing (x) the quotient obtained by dividing the IRR Excess by the
Market Price as of the date of such Property Sale or Interest Sale; by (y)
the aggregate number of Earnout Units then outstanding.
c. If the Earnout Term shall expire on account of a Merger
Event, then concurrently with the closing of the transaction giving rise
to the Merger Event, the Partnership shall, at the Earnout Participant's
election, (1) convert each Earnout Unit held by such electing Earnout
Participant for an amount of OP Units (rounded to the nearest OP Unit), if
any, equal to the quotient obtained by dividing (x) the quotient obtained
by dividing the IRR Excess by the Market Price determined as of the date
of the closing of the transaction constituting the Merger Event; by (y)
the aggregate number of Earnout Units then outstanding. In the event that
holders of OP Units have the opportunity to elect the form or type of
consideration to be received upon consummation of the Merger Event, the
General Partner shall give prompt written notice to each holder of Earnout
Units of such election, and shall use commercially reasonable efforts to
afford such holders the right to elect, by written notice to the General
Partner, the form or type of consideration to be received upon conversion
of each Earnout Unit held by such holder into OP Units in connection with
such Merger Event. If a holder of Earnout Units fails to make such an
election, such holder (and any of its transferees) shall receive upon
conversion of each Earnout Unit held him or her (or by any of his or her
transferees) the same kind and amount of consideration that a holder of a
OP Unit would receive if such OP Unit holder failed to make such an
election.
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(iv) Property Sale and Interest Sale. Notwithstanding anything
contained herein, any decision to effect a Property Sale or Interest Sale
shall be subject to the determination by the Board (including a majority
of the Independent Directors) that the proposed transaction is on
commercially reasonable terms.
(v) Indebtedness Secured by Harrisburg Property. The review and
approval of the Board (including a majority of the Independent Directors)
shall be required prior to the consummation of any borrowing by the owner
of the Harrisburg Property or its partners where the aggregate
indebtedness secured by the Harrisburg Property or partnership interests
therein exceeds $46,900,000.
C. Conversion of Earnout Units. The General Partner shall amend
Exhibit A as appropriate to record any conversion of Earnout Units into OP
Units. All OP Units issued upon conversion of Earnout Units will upon issuance
be duly and validly issued and fully paid OP Units, not subject to any liens and
charges created by the Partnership nor subject to any preemptive rights. Upon
such conversion, the corresponding Earnout Units shall be cancelled and of no
force and effect, except with respect to the right of the holder thereof to
receive the OP Units, cash or other assets to be issued as a result of the
conversion.
D. No Additional Earnout Units. From and after the date hereof, no
additional Earnout Units shall be issued or sold by the Partnership, except on a
pro rata basis to the holders of record of the Earnout Units immediately prior
to such issuance or sale.
E. No Transfers. Other than in case of death or disability of the
Earnout Participant, Earnout Units may only be transferred by a holder of
Earnout Units in connection with a concurrent transfer of OP Units to the same
transferee.
Section 4.9. Conversion of PI Units.
A. A PI Unitholder shall have the right (the "Conversion Right"), at
his or her option, at any time to convert all or a portion of his or her Vested
PI Units into OP Units; provided, however, that a holder may not exercise the
Conversion Right for less than 300 Vested PI Units or, if such holder holds less
than one thousand Vested PI Units, all of the Vested PI Units held by such
holder. PI Unitholders shall not have the right to convert Unvested Incentive
Units into OP Units until they become Vested PI Units; provided, however, that
when a PI Unitholder is notified of the expected occurrence of an event that
will cause his or her Unvested Incentive Units to become Vested PI Units, such
PI Unitholder may give the Partnership a Conversion Notice conditioned upon and
effective as of the time of vesting and such Conversion Notice, unless
subsequently revoked by the PI Unitholder, shall be accepted by the Partnership
subject to such condition. The General Partner shall have the right at any time
to cause a conversion of Vested PI Units into OP Units. In all cases, the
conversion of any PI Units into OP Units shall be subject to the conditions and
procedures set forth in this Section 4.9.
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B. A holder of Vested PI Units may convert such Units into an equal
number of fully paid and non-assessable OP Units, giving effect to all
adjustments (if any) made pursuant to Section 4.6. Notwithstanding the
foregoing, in no event may a holder of Vested PI Units convert a number of
Vested PI Units that exceeds (x) the Economic Capital Account Balance of such
Limited Partner, to the extent attributable to its ownership of PI Units,
divided by (y) the OP Unit Economic Balance, in each case as determined as of
the effective date of conversion (the "Capital Account Limitation").
In order to exercise his or her Conversion Right, a PI Unitholder
shall deliver a notice (a "Conversion Notice") in the form attached as Exhibit D
to the Partnership (with a copy to the General Partner) not less than 10 nor
more than 60 days prior to a date (the "Conversion Date") specified in such
Conversion Notice; provided, however, that if the General Partner has not given
to the PI Unitholders notice of a proposed or upcoming Transaction (as defined
below in 4.9.F) at least 30 days prior to the effective date of such
Transaction, then PI Unitholders shall have the right to deliver a Conversion
Notice until the earlier of (x) the 10th day after such notice from the General
Partner of a Transaction or (y) the third business day immediately preceding the
effective date of such Transaction. A Conversion Notice shall be provided in the
manner provided in Section 15.1. Each PI Unitholder covenants and agrees with
the Partnership that all Vested PI Units to be converted pursuant to this
Section 4.9.B shall be free and clear of all liens. Notwithstanding anything
herein to the contrary, a holder of PI Units may deliver a Notice of Redemption
pursuant to Section 8.6A of this Agreement relating to those OP Units that will
be issued to such holder upon conversion of such PI Units into OP Units in
advance of the Conversion Date; provided, however, that the redemption of such
OP Units by the Partnership shall in no event take place until after the
Conversion Date. For clarity, it is noted that the objective of this paragraph
is to put a PI Unitholder in a position where, if he or she so wishes, the OP
Units into which his or her Vested PI Units will be converted can be redeemed by
the Partnership simultaneously with such conversion, with the further
consequence that, if the Company elects to assume the Partnership's redemption
obligation with respect to such OP Units under Section 8.6B of this Agreement by
delivering to such holder REIT Shares rather than cash, then such holder can
have such REIT Shares issued to him or her simultaneously with the conversion of
his or her Vested PI Units into OP Units. The General Partner shall reasonably
cooperate with a PI Unitholder to coordinate the timing of the different events
described in the foregoing sentence.
C. The Partnership, at any time at the election of the General
Partner, may cause any number of Vested PI Units held by a PI Unitholder to be
converted (a "Forced Conversion") into an equal number of OP Units, giving
effect to all adjustments (if any) made pursuant to Section 4.6; provided,
however, that the Partnership may not cause Forced Conversion of any PI Units
that would not at the time be eligible for conversion at the option of such PI
Unitholder pursuant to Section 4.9.B. In order to exercise its right of Forced
Conversion, the Partnership shall deliver a notice (a "Forced Conversion
Notice") in the form attached as Exhibit E to the applicable PI Unitholder not
less than 10 nor more than 60 days prior to the Conversion Date specified in
such Forced Conversion Notice. A Forced Conversion Notice shall be provided in
the manner provided in Section 15.1.
D. A conversion of Vested PI Units for which the holder thereof has
given a Conversion Notice or the Partnership has given a Forced Conversion
Notice shall occur automatically after the close of business on the applicable
Conversion Date without any action on the part of such PI Unitholder, as of
which time such PI Unitholder shall be credited on the books and records of the
Partnership with the issuance as of the opening of business on the next day of
the number of OP Units issuable upon such conversion. After the conversion of PI
Units as aforesaid, the Partnership shall deliver to such PI Unitholder, upon
his or her written request, a certificate of the General Partner certifying the
number of OP Units and remaining PI Units, if any, held by such person
immediately after such conversion. The Assignee of any Limited Partner pursuant
to Article XI hereof may exercise the rights of such Limited Partner pursuant to
this Section 4.9 and such Limited Partner shall be bound by the exercise of such
rights by the Assignee.
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E. For purposes of making future allocations under Section 6.3.E and
applying the Capital Account Limitation, the portion of the Economic Capital
Account balance of the applicable PI Unitholder that is treated as attributable
to his or her PI Units shall be reduced, as of the date of conversion, by the
product of the number of PI Units converted and the OP Unit Economic Balance.
F. If the Partnership or the General Partner shall be a party to any
transaction (including without limitation a merger, consolidation, unit
exchange, self tender offer for all or substantially all OP Units or other
business combination or reorganization, or sale of all or substantially all of
the Partnership's assets, but excluding any transaction which constitutes an
Adjustment Event) in each case as a result of which OP Units shall be exchanged
for or converted into the right, or the holders of such Units shall otherwise be
entitled, to receive cash, securities or other property or any combination
thereof (each of the foregoing being referred to herein as a "Transaction"),
then the General Partner shall, immediately prior to the Transaction, exercise
its right to cause a Forced Conversion with respect to the maximum number of PI
Units then eligible for conversion, taking into account any allocations that
occur in connection with the Transaction or that would occur in connection with
the Transaction if the assets of the Partnership were sold at the Transaction
price or, if applicable, at a value determined by the General Partner in good
faith using the value attributed to the Partnership Units in the context of the
Transaction (in which case the Conversion Date shall be the effective date of
the Transaction).
In anticipation of such Forced Conversion and the consummation of
the Transaction, the Partnership shall use commercially reasonable efforts to
cause each PI Unitholder to be afforded the right to receive in connection with
such Transaction in consideration for the OP Units into which his or her PI
Units will be converted the same kind and amount of cash, securities and other
property (or any combination thereof) receivable upon the consummation of such
Transaction by a holder of the same number of OP Units, assuming such holder of
OP Units is not a Person with which the Partnership consolidated or into which
the Partnership merged or which merged into the Partnership or to which such
sale or transfer was made, as the case may be (a "Constituent Person"), or an
affiliate of a Constituent Person. In the event that holders of OP Units have
the opportunity to elect the form or type of consideration to be received upon
consummation of the Transaction, prior to such Transaction the General Partner
shall give prompt written notice to each PI Unitholder of such election, and
shall use commercially reasonable efforts to afford the PI Unitholders the right
to elect, by written notice to the General Partner, the form or type of
consideration to be received upon conversion of each PI Unit held by such holder
into OP Units in connection with such Transaction. If a PI Unitholder fails to
make such an election, such holder (and any of its transferees) shall receive
upon conversion of each PI Unit held him or her (or by any of his or her
transferees) the same kind and amount of consideration that a holder of a OP
Unit would receive if such OP Unit holder failed to make such an election.
Subject to the rights of the Partnership and the Company under any
Vesting Agreement and any Stock Option Plan, the Partnership shall use
commercially reasonable effort to cause the terms of any Transaction to be
consistent with the provisions of this Section 4.9.F and to enter into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of any PI Unitholders whose PI Units will not be converted into OP Units
in connection with the Transaction that will (i) contain provisions enabling the
holders of PI Units that remain outstanding after such Transaction to convert
their PI Units into securities as comparable as reasonably possible under the
circumstances to the OP Units and (ii) preserve as far as reasonably possible
under the circumstances the distribution, special allocation, conversion, and
other rights set forth in this Agreement for the benefit of the PI Unitholders.
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Section 4.10. Other Contribution Provisions. In the event that any Partner
is admitted to the Partnership and is given a Capital Account in exchange for
services rendered to the Partnership, unless otherwise determined by the General
Partner in its sole and absolute discretion, such transaction shall be treated
by the Partnership and the affected Partner as if the Partnership had
compensated such partner in cash and such Partner had contributed the cash to
the capital of the Partnership. In addition, with the consent of the General
Partner, one or more Limited Partners may enter into contribution agreements
with the Partnership which have the effect of providing a guarantee of certain
obligations of the Partnership.
Section 4.11. Not Publicly Traded. The General Partner, on behalf of the
Partnership, shall use its best efforts not to take any action which would
result in the Partnership being a "publicly traded partnership" under and as
such term is defined in Code Section 7704(b).
ARTICLE V
DISTRIBUTIONS
Section 5.1. Requirement and Characterization of Distributions. Subject to
the terms of any Partnership Unit Designation, the General Partner shall cause
the Partnership to distribute at least quarterly all Available Cash generated by
the Partnership during such quarter to the Holders of Partnership Units on such
Partnership Record Date with respect to such quarter: (1) first, with respect to
any Partnership Interests that are entitled to any preference in distribution,
in accordance with the rights of such class(es) of Partnership Interests (and,
within such class(es), pro rata in proportion to the respective Percentage
Interests on such Partnership Record Date) and (2) second, with respect to any
Partnership Interests that are not entitled to any preference in distribution,
in accordance with the rights of such class of Partnership Interests (and,
within such class, pro rata in proportion to the respective Percentage Interests
on such Partnership Record Date). Distributions payable with respect to any
Partnership Units that were not outstanding during the entire quarterly period
in respect of which any distribution is made shall be prorated based on the
portion of the period that such units were outstanding. The General Partner in
its sole and absolute discretion may distribute to the Holders Available Cash on
a more frequent basis and provide for an appropriate Partnership Record Date.
Notwithstanding anything herein to the contrary, the General Partner shall make
such reasonable efforts, as determined by it in its sole and absolute discretion
and consistent with the Parent's qualification as a REIT, to cause the
Partnership to distribute sufficient amounts to enable the Parent to pay
stockholder dividends that will (a) satisfy the requirements for its
qualification as a REIT under the Code and Regulations (the "REIT Requirements")
and (b) except to the extent otherwise determined by the Parent, in its sole and
absolute discretion, avoid any federal income or excise tax liability of the
Parent. Earnout Units shall not be entitled to distributions.
Section 5.2. Direct Property Interests Owned by the General Partner. To
the extent amounts distributed by the Partnership are attributable to amounts
received from a property interest in which the General Partner owns a direct
interest, (i) such amounts distributed to the General Partner will be reduced so
as to take into account amounts received pursuant to the General Partner's
direct property interest and (ii) the amounts distributed to the Limited
Partners will be increased to the extent necessary so that the overall effect of
the distribution is to distribute what would have been distributed had such
property been wholly-owned by the Partnership.
Section 5.3. Distributions In-Kind. No right is given to any Partner to
demand and receive property other than cash as provided in this Agreement. The
General Partner may determine, in its sole and absolute discretion, to make a
distribution in-kind of Partnership assets to the Holders, and such assets shall
be distributed in such a fashion as to ensure that the fair market value is
distributed and allocated in accordance with Articles V, VI and X hereof.
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Section 5.4. Amounts Withheld. All amounts withheld pursuant to the Code
or any provisions of any state or local tax law and Section 10.4 hereof with
respect to any allocation, payment or distribution to any Holder shall be
treated as amounts paid or distributed to such Holder pursuant to Section 5.1
hereof for all purposes under this Agreement.
Section 5.5. Distributions Upon Liquidation. Notwithstanding the other
provisions of this Article V, net proceeds from a Terminating Capital
Transaction, and any other cash received or reductions in reserves made after
commencement of the liquidation of the Partnership, shall be distributed to the
Holders in accordance with Section 13.2 hereof.
Section 5.6. Distributions to Reflect Issuance of Additional Partnership
Units. Notwithstanding Section 7.3.B hereof, in the event that the Partnership
issues additional Partnership Units pursuant to the provisions of Article IV
hereof, subject to Section 7.3.D, the General Partner is hereby authorized to
make such revisions to this Article V as it determines are necessary or
desirable to reflect the issuance of such additional Partnership Units,
including, without limitation, making preferential distributions to certain
classes of Partnership Units.
Section 5.7. Restricted Distributions. Notwithstanding any provision to
the contrary contained in this Agreement, neither the Partnership nor the
General Partner, on behalf of the Partnership, shall make a distribution to any
Holder on account of its Partnership Interest or interest in Partnership Units
if such distribution would violate Section 17-607 of the Act or other applicable
law.
ARTICLE VI
ALLOCATIONS
Section 6.1. Timing and Amount of Allocations of Net Income and Net Loss.
Net Income and Net Loss of the Partnership shall be determined and allocated
with respect to each Partnership Year of the Partnership as of the end of each
such year. Except as otherwise provided in this Article VI, and subject to
Section 11.6.C hereof, an allocation to a Holder of a share of Net Income or Net
Loss shall be treated as an allocation of the same share of each item of income,
gain, loss or deduction that is taken into account in computing Net Income or
Net Loss.
Section 6.2. General Allocations.
A. Allocations of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided herein, Net Income
for any Partnership Year or other applicable period shall be allocated in the
following order and priority:
(i) First, to the General Partner to the extent the cumulative
Net Loss allocated to the General Partner pursuant to subparagraph (b)(vi)
below exceeds the cumulative Net Income allocated to the General Partner
pursuant to this subparagraph (a)(i);
(ii) Second, to each Obligated Partner until the cumulative Net
Income allocated to such Obligated Partner pursuant to this subparagraph
(a)(ii) equals the cumulative Net Loss allocated to such Obligated Partner
under subparagraph (b)(v) below (and, among the Obligated Partners, pro
rata in proportion to their respective percentages of the cumulative Net
Loss allocated to all Obligated Partners pursuant to subparagraph (b)(v)
below);
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(iii) Third, to the General Partner until the cumulative Net
Income allocated to the General Partner pursuant to this subparagraph
(a)(iii) equals the cumulative Net Loss allocated to the General Partner
pursuant to subparagraph (b)(iv) below;
(iv) Fourth, to the holders of any Partnership Interests that are
entitled to any preference upon liquidation until the cumulative Net
Income allocated under this subparagraph (iv) equals the cumulative Net
Loss allocated to such Partners under subparagraph (b)(iii);
(v) Fifth, to the holders of any Partnership Units that are
entitled to any preference in distribution in accordance with the rights
of any other class of Partnership Units until each such Partnership Unit
has been allocated, on a cumulative basis pursuant to this subparagraph
(a)(v), Net Income equal to the amount of distributions received which are
attributable to the preference of such class of Partnership Unit (and,
within such class, pro rata in proportion to the respective Percentage
Interests as of the last day of the period for which such allocation is
made); and
(vi) Thereafter, with respect to Partnership Units that are not
entitled to any preference in distribution or with respect to which
distributions are not limited to any preference in distribution, pro rata
to each such class in accordance with the terms of such class (and, within
such class, pro rata in proportion to the respective Percentage Interests
as of the last day of the period for which such allocation is being made).
(b) Net Loss. Except as otherwise provided herein, Net Loss for
any Partnership Year or other applicable period shall be allocated in the
following order and priority:
(i) First, to each holder of Partnership Units in proportion to
and to the extent of the amount by which the cumulative Net Income
allocated to such Partner pursuant to subparagraph (a)(vi) above exceeds,
on a cumulative basis, the sum of (a) distributions with respect to such
Partnership Units pursuant to clause (1) of Section 5.1 and (b) Net Loss
allocated to such Partner pursuant to this subparagraph (b)(i);
(ii) Second, with respect to classes of Partnership Units that
are not entitled to any preference in distribution or with respect to
which distributions are not limited to any preference in distribution, pro
rata to each such class in accordance with the terms of such class (and
within such class, pro rata in proportion to the respective Percentage
Interests as of the last day of the period for which such allocation is
being made); provided that Net Loss shall not be allocated to any Partner
pursuant to this subparagraph (b)(ii) to the extent that such allocation
would cause such Partner to have an Adjusted Capital Account Deficit (or
increase any existing Adjusted Capital Account Deficit (determined in each
case (1) by not including in the Partners' Adjusted Capital Accounts any
amount that a Partner who also holds classes of Partnership Units that are
entitled to any preferences in distribution upon liquidation, by
subtracting from such Partners' Adjusted Capital Account the amount of
such preferred distribution to be made upon liquidation and (2) by not
including in the Partners' Adjusted Capital Accounts any amount that a
Partner is obligated to contribute to the Partnership with respect to any
deficit in its Capital Account pursuant to Section 13.2.C) at the end of
such Partnership Year or other applicable period;
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(iii) Third, with respect to classes of Partnership Units that
are entitled to any preference in distribution upon liquidation, in
reverse order of the priorities of each such class (and within each such
class, pro rata in proportion to their respective Percentage Interests as
of the last day of the period for which such allocation is being made;
provided that Net Loss shall not be allocated to any Partner pursuant to
this subparagraph (b)(iii) to the extent that such allocation would cause
such Partner to have an Adjusted Capital Account Deficit (or increase any
existing Adjusted Capital Account Deficit) (determined in each case by not
including in the Partners' Adjusted Capital Accounts any amount that a
Partner is obligated to contribute to the Partnership with respect to any
deficit in its Capital Account pursuant to Section 13.2.C) at the end of
such Partnership Year or other applicable period;
(iv) Fourth, to the General Partner in an amount equal to the
excess of (a) the amount of the Partnership Recourse Liabilities over (b)
the aggregate Protected Amounts of all Obligated Partners;
(v) Fifth, to and among the Obligated Partners, in proportion to
their respective Protected Amounts, until such time as the Obligated
Partners as a group have been allocated cumulative Net Loss pursuant to
this subparagraph (b)(v) equal to the aggregate Protected Amounts of all
Obligated Partners; and
(vi) Thereafter, to the General Partner.
B. Allocations to Reflect Issuance of Additional Partnership Units.
Notwithstanding Section 7.3.B hereof, in the event that the Partnership issues
additional Partnership Units pursuant to the provisions of Article IV hereof,
the General Partner is hereby authorized to make such revisions to this Section
6.2 as it determines are necessary or desirable to reflect the terms of the
issuance of such additional Partnership Units.
Section 6.3. Additional Allocation Provisions. Notwithstanding the
foregoing provisions of this Article VI:
A. Tax Treatment of Conversion of Earnout Units. Upon conversion of
a Earnout Unit into an OP Unit, the Company will specially allocate to the
converted Partner any Net Income attributable to an adjustment of Gross Asset
Values under subparagraph (b)(v) of the definition of "Gross Asset Value" until
the portion of such Partner's Capital Account attributable to each OP Unit
received upon conversion equals the Capital Account attributable to an OP Unit
at the time of conversion. To the extent such allocation is insufficient to
bring the portion of the Capital Account attributable to each OP Unit received
upon conversion by the converting Partner up to the Capital Account attributable
to an OP Unit at the time of conversion, additional items of gross income for
the Partnership Year (and future Partnership Years, if necessary) will be
allocated to the converted Partner as quickly as possible until the portion of
such Partner's Capital Account attributable to each OP Unit received upon
conversion equals the Capital Account attributable to an OP Unit at the time of
conversion. Notwithstanding the foregoing, the General Partner is hereby
authorized to make such revisions to this Section 6.3.A as it determines are
necessary to cause the Parent to comply with the REIT Requirements and to
prevent the Parent from being subject to any additional taxes under Code Section
857 or Code Section 4981.
B. Regulatory Allocations.
(i) Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(f), notwithstanding the provisions of Section
6.2 hereof, or any other provision of this Article VI, if there is a net
decrease in Partnership Minimum Gain during any Partnership Year, each
Holder shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to
such Holder's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations pursuant to
the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Holder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(i) is
intended to qualify as a "minimum gain chargeback" within the meaning of
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.
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(ii) Partner Minimum Gain Chargeback. Except as otherwise
provided in Regulations Section 1.704-2(i)(4) or in Section 6.3.B(i)
hereof, if there is a net decrease in Partner Minimum Gain attributable to
a Partner Nonrecourse Debt during any Partnership Year, each Holder who
has a share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Holder's share of the net decrease in Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(4). Allocations pursuant to the
previous sentence shall be made in proportion to the respective amounts
required to be allocated to each General Partner, Limited Partner and
other Holder pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and
1.704-2(j)(2). This Section 6.3.B(ii) is intended to qualify as a
"chargeback of partner nonrecourse debt minimum gain" within the meaning
of Regulations Section 1.704-2(i) and shall be interpreted consistently
therewith.
(iii) Nonrecourse Deductions and Partner Nonrecourse Deductions.
Any Nonrecourse Deductions for any Partnership Year shall be specially
allocated to the Holders of Partnership Units in accordance with their
Partnership Units. Any Partner Nonrecourse Deductions for any Partnership
Year shall be specially allocated to the Holder(s) who bears the economic
risk of loss with respect to the Partner Nonrecourse Debt to which such
Partner Nonrecourse Deductions are attributable, in accordance with
Regulations Section 1.704-2(i).
(iv) Qualified Income Offset. If any Holder unexpectedly receives
an adjustment, allocation or distribution described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5), or (6), items of Partnership income and gain
shall be allocated, in accordance with Regulations Section
1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted
Capital Account Deficit of such Holder as quickly as possible. It is
intended that this Section 6.3.B(iv) qualify and be construed as a
"qualified income offset" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(v) Gross Income Allocation. In the event that any Holder has an
Adjusted Capital Account Deficit at the end of any Partnership Year, each
such Holder shall be specially allocated items of Partnership income and
gain in the amount of such excess to eliminate such deficit as quickly as
possible.
(vi) Section 754 Adjustment. To the extent that an adjustment to
the adjusted tax basis of any Partnership asset pursuant to Code Section
734(b) or Code Section 743(b) is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to
be taken into account in determining Capital Accounts as the result of a
distribution to a Holder in complete liquidation of its interest in the
Partnership, the amount of such adjustment to the Capital Accounts shall
be treated as an item of gain (if the adjustment increases the basis of
the asset) or loss (if the adjustment decreases such basis), and such gain
or loss shall be specially allocated to the Holders in accordance with
their Partnership Units in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(2) applies, or to the Holders to whom such
distribution was made in the event that Regulations Section
1.704-1(b)(2)(iv)(m)(4) applies.
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(vii) Curative Allocations. The allocations set forth in Sections
6.3.A(i), (ii), (iii), (iv), (v), and (vi) hereof (the "Regulatory
Allocations") are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 6.1 hereof, the Regulatory
Allocations shall be taken into account in allocating other items of
income, gain, loss and deduction among the Holders of Partnership Units so
that to the extent possible without violating the requirements giving rise
to the Regulatory Allocations, the net amount of such allocations of other
items and the Regulatory Allocations to each Holder of a Partnership Unit
shall be equal to the net amount that would have been allocated to each
such Holder if the Regulatory Allocations had not occurred.
C. Allocation of Excess Nonrecourse Liabilities. The Partnership
shall allocate "nonrecourse liabilities" (within the meaning of Regulations
Section 1.752-1(a)(2)) of the Partnership that are secured by multiple
Properties under any reasonable method chosen by the General Partner in
accordance with Regulations Sections 1.752-3(a)(3) and (b). The Partnership
shall allocate "excess nonrecourse liabilities" of the Partnership under any
method approved under Regulations Section 1.752-3(a)(3) as chosen by the General
Partner.
D. Allocations to Reflect Direct Property Interests Owned by the
General Partner. Any income or loss to the Partnership associated with a
property interest in which the General Partner owns a direct interest shall be
specially allocated so as to take into account amounts received by and income or
loss allocated to, the General Partner pursuant to the General Partner's direct
interest in such property so that the overall effect is to allocate all income
or loss associated with such property as if such property were wholly-owned by
the Partnership.
E. Special Allocations Regarding PI Units. Notwithstanding the
provisions of Section 6.2 above, Liquidating Gains shall first be allocated to
the Holders of PI Units until the Economic Capital Account Balances of such
Holders, to the extent attributable to their ownership of PI Units, are equal to
(i) the OP Unit Economic Balance, multiplied by (ii) the number of their PI
Units; provided that no such Liquidating Gains will be allocated with respect to
any particular PI Unit unless and to the extent that the OP Unit Economic
Balance exceeds the OP Unit Economic Balance in existence at the time such PI
Unit was issued. For this purpose, "Liquidating Gains" means net capital gains
realized in connection with the actual or hypothetical sale of all or
substantially all of the assets of the Partnership, including but not limited to
net capital gain realized in connection with an adjustment to the Gross Asset
Value of Partnership assets under Section 704(b) of the Code. The "Economic
Capital Account Balances" of the Holders of PI Units will be equal to their
Capital Account balances, plus the amount of their shares of any Partner Minimum
Gain or Partnership Minimum Gain, in either case to the extent attributable to
their ownership of PI Units. Similarly, the "OP Unit Economic Balance" shall
mean (i) the Capital Account balance of the General Partner, plus the amount of
the General Partner's share of any Partner Minimum Gain or Partnership Minimum
Gain, in either case to the extent attributable to the General Partner's
ownership of OP Units and computed on a hypothetical basis after taking into
account all allocations through the date on which any allocation is made under
this Section 6.3.E, divided by (ii) the number of the General Partner's OP
Units. Any such allocations shall be made among the PI Unitholders in proportion
to the amounts required to be allocated to each under this Section 6.3.E. The
parties agree that the intent of this Section 6.3.E is to make the Capital
Account balance associated with each PI Unit to be economically equivalent to
the Capital Account balance associated with the General Partner's OP Units (on a
per-Unit basis), but only if and to the extent that the Capital Account balance
associated with the General Partner's OP Units has increased on a per-Unit basis
since the issuance of the relevant PI Unit.
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Section 6.4. Tax Allocations.
A. In General. Except as otherwise provided in this Section 6.4, for
income tax purposes under the Code and the Regulations each Partnership item of
income, gain, loss and deduction (collectively, "Tax Items") shall be allocated
among the Holders of Partnership Units in the same manner as its correlative
item of "book" income, gain, loss or deduction is allocated pursuant to Sections
6.2 and 6.3 hereof.
B. Allocations Respecting Section 704(c) Revaluations.
Notwithstanding Section 6.4.A hereof, Tax Items with respect to Property that is
contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of
contribution shall be allocated among the Holders of Partnership Units for
income tax purposes pursuant to Regulations promulgated under Code Section
704(c) so as to take into account such variation. The Partnership shall account
for such variation under any method approved under Code Section 704(c) and the
applicable Regulations as chosen by the General Partner, including, without
limitation, the "remedial allocation method" as described in Regulations Section
1.704-3(d); provided, however, that the "traditional method" shall be used for
any properties held directly or indirectly by ▇▇▇▇▇▇▇ Equities of Arizona, LLC
and contributed to the Partnership simultaneously with the IPO. In the event
that the Gross Asset Value of any partnership asset is adjusted pursuant to
subsection (b) of the definition of "Gross Asset Value" (provided in Article I
hereof), subsequent allocations of Tax Items with respect to such asset shall
take account of the variation, if any, between the adjusted basis of such asset
and its Gross Asset Value in the same manner as under Code Section 704(c) and
the applicable Regulations.
ARTICLE VII
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1. Management.
A. Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the General Partner, and no Limited Partner shall have
any right to participate in or exercise control or management power over the
business and affairs of the Partnership. The General Partner may not be removed
by the Partners with or without cause, except with the consent of the General
Partner. In addition to the powers now or hereafter granted to a general partner
of a limited partnership under applicable law or that are granted to the General
Partner under any other provision of this Agreement, the General Partner,
subject to the other provisions hereof including Section 7.3, shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(i) the making of any expenditures, the lending or borrowing of
money (including, without limitation, making prepayments on loans and
borrowing money or selling assets to permit the Partnership to make
distributions to its Partners in such amounts as will permit the Parent
(so long as the Parent desires to maintain or restore its status as a
REIT) to avoid the payment of any federal income tax (including, for this
purpose, any excise tax pursuant to Code Section 4981) and to make
distributions to its stockholders sufficient to permit the Parent to
maintain or restore REIT status or otherwise to satisfy the REIT
Requirements), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by deed to secure debt,
mortgage, deed of trust or other lien or encumbrance on the Partnership's
assets) and the incurring of any obligations that it deems necessary for
the conduct of the activities of the Partnership;
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(ii) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other agencies
having jurisdiction over the business or assets of the Partnership, the
registration of any class of securities of the Partnership under the
Exchange Act and the listing of any debt securities of the Partnership on
any exchange;
(iii) the acquisition, sale, lease, transfer, exchange or other
disposition of any, all or substantially all of the assets of the
Partnership (including, but not limited to, the exercise or grant of any
conversion, option, privilege or subscription right or any other right
available in connection with any assets at any time held by the
Partnership) or the merger, consolidation, reorganization or other
combination of the Partnership with or into another entity;
(iv) the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership, the use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose consistent
with the terms of this Agreement and on any terms that it sees fit,
including, without limitation, the financing of the operations and
activities of the General Partner, the Partnership or any of the
Partnership's Subsidiaries, the lending of funds to other Persons
(including, without limitation, the Partnership's Subsidiaries) and the
repayment of obligations of the Partnership, its Subsidiaries and any
other Person in which the Partnership has an equity investment, and the
making of capital contributions to and equity investments in the
Partnership's Subsidiaries;
(v) the management, operation, leasing, landscaping, repair,
alteration, demolition, replacement or improvement of any Property,
including, without limitation, any Contributed Property, or other asset of
the Partnership or any Subsidiary, whether pursuant to a Services
Agreement or otherwise;
(vi) the negotiation, execution and performance of any contracts,
leases, conveyances or other instruments that the General Partner
considers useful or necessary to the conduct of the Partnership's
operations or the implementation of the General Partner's powers under
this Agreement, including contracting with contractors, developers,
consultants, accountants, legal counsel, other professional advisors and
other agents and the payment of their expenses and compensation out of the
Partnership's assets;
(vii) the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement, the holding, management,
investment and reinvestment of cash and other assets of the Partnership
and the collection and receipt of revenues, rents and income of the
Partnership;
(viii) the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate,
including, without limitation, (i) casualty, liability and other insurance
on the Properties and (ii) liability insurance for the Indemnitees
hereunder;
(ix) the formation of, or acquisition of an interest in, and the
contribution of property to, any further limited or general partnerships,
limited liability companies, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of property to, any Subsidiary and any
other Person in which it has an equity investment from time to time);
provided, however, that, as long as the Parent has determined to continue
to qualify as a REIT, the General Partner may not engage in any such
formation, acquisition or contribution that would cause the Parent to fail
to qualify as a REIT within the meaning of Code Section 856(a);
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(x) the control of any matters affecting the rights and
obligations of the Partnership, including the settlement, compromise,
submission to arbitration or any other form of dispute resolution, or
abandonment, of any claim, cause of action, liability, debt or damages,
due or owing to or from the Partnership, the commencement or defense of
suits, legal proceedings, administrative proceedings, arbitrations or
other forms of dispute resolution, and the representation of the
Partnership in all suits or legal proceedings, administrative proceedings,
arbitrations or other forms of dispute resolution, the incurring of legal
expense, and the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;
(xi) the undertaking of any action in connection with the
Partnership's direct or indirect investment in any Subsidiary or any other
Person (including, without limitation, the contribution or loan of funds
by the Partnership to such Persons);
(xii) except as otherwise specifically set forth in this
Agreement, the determination of the fair market value of any Partnership
property distributed in-kind using such reasonable method of valuation as
it may adopt; provided that such methods are otherwise consistent with the
requirements of this Agreement;
(xiii) the enforcement of any rights against any Partner pursuant
to representations, warranties, covenants and indemnities relating to such
Partner's contribution of property or assets to the Partnership;
(xiv) the exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited power-of-attorney, of
any right, including the right to vote, appurtenant to any asset or
investment held by the Partnership;
(xv) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any
Subsidiary of the Partnership or any other Person in which the Partnership
has a direct or indirect interest, or jointly with any such Subsidiary or
other Person;
(xvi) the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the
Partnership does not have an interest, pursuant to contractual or other
arrangements with such Person;
(xvii) the making, execution and delivery of any and all deeds,
leases, notes, deeds to secure debt, mortgages, deeds of trust, security
agreements, conveyances, contracts, guarantees, warranties, indemnities,
waivers, releases or legal instruments or agreements in writing necessary
or appropriate in the judgment of the General Partner for the
accomplishment of any of the powers of the General Partner enumerated in
this Agreement;
(xviii) the issuance of additional Partnership Units, as
appropriate and in the General Partner's sole and absolute discretion, in
connection with Capital Contributions by Additional Limited Partners and
additional Capital Contributions by Partners pursuant to Article IV
hereof;
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(xix) the selection and dismissal of Company Employees
(including, without limitation, employees having titles or offices such as
president, vice president, secretary and treasurer), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership or
the General Partner, the determination of their compensation and other
terms of employment or hiring and the delegation to any such Company
Employee the authority to conduct the business of the Partnership in
accordance with the terms of this Agreement;
(xx) the distribution of cash to acquire Partnership Units held
by a Limited Partner in connection with a Limited Partner's exercise of
its Redemption Right under Section 8.6 hereof;
(xxi) the amendment and restatement of Exhibit A hereto to
reflect accurately at all times the Capital Contributions and Percentage
Interests of the Partners as the same are adjusted from time to time to
the extent necessary to reflect redemptions, conversion of Earnout Units,
Capital Contributions, the issuance of Partnership Units, the admission of
any Additional Limited Partner or any Substituted Limited Partner or
otherwise, which amendment and restatement, notwithstanding anything in
this Agreement to the contrary, shall not be deemed an amendment to this
Agreement, as long as the matter or event being reflected in Exhibit A
hereto otherwise is authorized by this Agreement;
(xxii) the collection and receipt of revenues and income of the
Partnership; and
(xxiii) an election to dissolve the Partnership pursuant to
Section 13.1.D hereof.
B. Each of the Limited Partners agrees that, except as provided in
Section 7.3 hereof, the General Partner is authorized to execute, deliver and
perform the above-mentioned agreements and transactions on behalf of the
Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement, the Act or any applicable
law, rule or regulation.
C. At all times from and after the date hereof, the General Partner
may cause the Partnership to establish and maintain working capital and other
reserves in such amounts as the General Partner, in its sole and absolute
discretion, deems appropriate and reasonable from time to time.
D. In exercising its authority under this Agreement, the General
Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action taken
(or not taken) by it. Except as may be provided in a separate written agreement
between the Partnership and the Limited Partners, the General Partner and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement; provided that the General Partner has
acted in good faith and pursuant to its authority under this Agreement.
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Section 7.2. Certificate of Limited Partnership. To the extent that such
action is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other state, the
District of Columbia or any other jurisdiction, in which the Partnership may
elect to do business or own property. Except as otherwise required under the
Act, the General Partner shall not be required, before or after filing, to
deliver or mail a copy of the Certificate or any amendment thereto to any
Limited Partner. The General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation, continuation, qualification and
operation of a limited partnership (or a partnership in which the limited
partners have limited liability to the extent provided by applicable law) in the
State of Delaware and any other state, or the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.
Section 7.3. Restrictions on General Partner's Authority.
A. The General Partner may not take any action in contravention of
an express prohibition or limitation of this Agreement without the written
consent of a Majority in Interest of the Outside Limited Partners and may not
(1) perform any act that would subject a Limited Partner to liability as a
general partner in any jurisdiction or any other liability except as provided
herein or under the Act; or (2) enter into any contract, mortgage, loan or other
agreement that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a Limited Partner to exercise its rights to a
Redemption in full, except in each case with the written consent of such Limited
Partner. The General Partner may not take any action in contravention of this
Agreement, including, without limitation:
B. The General Partner shall not, without the written consent of a
Majority in Interest of the Outside Limited Partners, except as provided in
Sections 4.3.A, 5.5, 6.2.B and 7.3.C hereof, amend, modify or terminate this
Agreement.
C. Notwithstanding Sections 7.3.B and 14.2, the General Partner
shall have the exclusive power, without the prior consent of the Limited
Partners, to amend this Agreement as may be required to facilitate or implement
any of the following purposes:
(i) to add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(ii) to reflect the admission, substitution or withdrawal of
Partners or the termination of the Partnership in accordance with this
Agreement, and to amend Exhibit A in connection with such admission,
substitution or withdrawal;
(iii) to reflect a change that is of an inconsequential nature
and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision in
this Agreement not inconsistent with law or with other provisions, or make
other changes with respect to matters arising under this Agreement that
will not be inconsistent with law or with the provisions of this
Agreement;
(iv) to satisfy any requirements, conditions or guidelines
contained in any order, directive, opinion, ruling or regulation of a
federal or state agency or contained in federal or state law;
(v) (a) to reflect such changes as are reasonably necessary for
the Parent to maintain or restore its status as a REIT or to satisfy the
REIT Requirements; or (b) to reflect the Transfer of all or any part of a
Partnership Interest among the General Partner, the Parent Limited
Partner, the Parent and any Qualified REIT Subsidiary;
- 41 -
(vi) to modify the manner in which Capital Accounts are computed
(but only to the extent set forth in the definition of "Capital Account"
or contemplated by the Code or the Regulations); and
(vii) to issue additional Partnership Interests in accordance
with Section 4.3.
The General Partner will provide notice to the Limited Partners whenever
any action under this Section 7.3.C is taken.
D. Notwithstanding Sections 7.3.B and 7.3.C hereof, this Agreement
shall not be amended, and no action may be taken by the General Partner, without
the consent of each Partner adversely affected thereby, if such amendment or
action would (i) convert a Limited Partner Interest in the Partnership into a
General Partner Interest (except as a result of the General Partner acquiring
such Partnership Interest), (ii) modify the limited liability of a Limited
Partner or (iii) amend this Section 7.3.D. Further, no amendment may alter the
restrictions on the General Partner's authority set forth elsewhere in this
Section 7.3 or in Section 11.2.B without the consent specified therein. Any such
amendment or action consented to by any Partner shall be effective as to that
Partner, notwithstanding the absence of such consent by any other Partner.
Section 7.4. Reimbursement of the General Partner and Parent.
A. Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles 5 and 6 regarding distributions,
payments and allocations to which it may be entitled), the General Partner shall
not be compensated for its services as general partner of the Partnership.
B. The Partnership shall be responsible for and shall pay all
expenses relating to the Partnership's, the General Partner's and the Parent's
organization, the ownership of their assets and their operations. The General
Partner and/or the Parent are hereby authorized to pay compensation for
accounting, administrative, legal, technical, management and other services
rendered to the Partnership. Except to the extent provided in this Agreement,
the General Partner, the Parent and their Affiliates shall be reimbursed on a
monthly basis, or such other basis as the General Partner may determine in its
sole and absolute discretion, for all expenses that the General Partner, the
Parent and their Affiliates incur relating to the ownership and operation of, or
for the benefit of, the Partnership (including, without limitation,
administrative expenses); provided, that the amount of any such reimbursement
shall be reduced by any interest earned by the General Partner with respect to
bank accounts or other instruments or accounts held by it on behalf of the
Partnership. The Partners acknowledge that all such expenses of the General
Partner and/or the Parent are deemed to be for the benefit of the Partnership.
Such reimbursement shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section 7.7 hereof. In the event that certain
expenses are incurred for the benefit of the Partnership and other entities
(including the General Partner and/or the Parent), such expenses will be
allocated to the Partnership and such other entities in such a manner as the
General Partner in its sole and absolute discretion deems fair and reasonable.
All payments and reimbursements hereunder shall be characterized for federal
income tax purposes as expenses of the Partnership incurred on its behalf, and
not as expenses of the General Partner and/or the Parent.
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C. If the Parent shall elect to purchase from its stockholders REIT
Shares for the purpose of delivering such REIT Shares to satisfy an obligation
under any dividend reinvestment program adopted by the Parent, any employee
stock purchase plan adopted by the Parent or any similar obligation or
arrangement undertaken by the Parent in the future or for the purpose of
retiring such REIT Shares, the purchase price paid by the Parent for such REIT
Shares and any other expenses incurred by the Parent in connection with such
purchase shall be considered expenses of the Partnership and shall be advanced
to the Parent or reimbursed to the Parent, subject to the condition that: (1) if
such REIT Shares subsequently are sold by the Parent, the Parent shall pay or
cause to be paid to the Partnership any proceeds received by the Parent for such
REIT Shares (which sales proceeds shall include the amount of dividends
reinvested under any dividend reinvestment or similar program; provided that a
transfer of REIT Shares for Partnership Units pursuant to Section 8.6 would not
be considered a sale for such purposes); and (2) if such REIT Shares are not
retransferred by the Parent within 30 days after the purchase thereof, or the
Parent otherwise determines not to retransfer such REIT Shares, the Parent shall
cause the Partnership to redeem a number of Partnership Units held by the Parent
equal to the number of such REIT Shares, as adjusted (x) pursuant to Section 7.7
(in the event the General Partner acquires material assets, other than on behalf
of the Partnership) and (y) for stock dividends and distributions, stock splits
and subdivisions, reverse stock splits and combinations, distributions of
rights, warrants or options, and distributions of evidences of indebtedness or
assets relating to assets not received by the General Partner pursuant to a pro
rata distribution by the Partnership (in which case such advancement or
reimbursement of expenses shall be treated as having been made as a distribution
in redemption of such number of Partnership Units held by the General Partner).
D. As set forth in Section 4.3, the General Partner shall be treated
as having made a Capital Contribution in the amount of all expenses that the
Parent incurs relating to the Parent's offering of REIT Shares, Preferred
Shares, Junior Shares or New Securities.
E. If and to the extent any reimbursements to the General Partner
pursuant to this Section 7.4 constitute gross income of the General Partner (as
opposed to the repayment of advances made by the General Partner on behalf of
the Partnership), such amounts shall constitute guaranteed payments with respect
to capital within the meaning of Code Section 707(c), shall be treated
consistently therewith by the Partnership and all Partners, and shall not be
treated as distributions for purposes of computing the Partners' Capital
Accounts.
Section 7.5. Outside Activities of the General Partner. The General
Partner shall not directly or indirectly enter into or conduct any business,
other than in connection with (a) the ownership, acquisition and disposition of
Partnership Interests as General Partner, (b) the management of the business of
the Partnership, (c) if the General Partner becomes a reporting company with a
class (or classes) of securities registered under the Exchange Act, the
operation of the General Partner as such, (d) financing or refinancing of any
type related to the Partnership or its assets or activities, (e) any of the
foregoing activities as they relate to a Subsidiary of the Partnership, and (f)
such activities as are incidental thereto. Nothing contained herein shall be
deemed to prohibit the General Partner from executing guarantees of Partnership
debt for which it would otherwise be liable in its capacity as General Partner.
Section 7.6. Contracts with Affiliates.
A. The Partnership may lend or contribute funds or other assets to
its Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
B. The Partnership may transfer assets to joint ventures, limited
liability companies, partnerships, corporations, business trusts or other
business entities in which it is or thereby becomes a participant upon such
terms and subject to such conditions consistent with this Agreement and
applicable law as the General Partner, in its sole and absolute discretion,
believes to be advisable.
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C. Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to the Partnership, directly or indirectly, except pursuant to
transactions that are determined by the General Partner in good faith to be fair
and reasonable.
D. The General Partner and/or the Parent, in its sole and absolute
discretion and without the approval of the Limited Partners, may propose and
adopt on behalf of the Partnership employee benefit plans funded by the
Partnership for the benefit of employees of the General Partner, the
Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in
respect of services performed, directly or indirectly, for the benefit of the
Partnership or any of the Partnership's Subsidiaries.
E. The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, any Services Agreement with Affiliates of
any of the Partnership or the General Partner, on such terms as the General
Partner, in its sole and absolute discretion, believes are advisable.
Section 7.7. Indemnification.
A. To the fullest extent permitted by applicable law, the
Partnership shall indemnify each Indemnitee from and against any and all losses,
claims, damages, liabilities (whether joint or several), expenses (including,
without limitation, attorney's fees and other legal fees and expenses),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership ("Actions") as
set forth in this Agreement in which such Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise; provided, however, that the
Partnership shall not indemnify an Indemnitee (1) for willful misconduct or a
knowing violation of the law, (2) for any transaction for which such Indemnitee
received an improper personal benefit in violation or breach of any provision of
this Agreement, or (3) in the case of any criminal proceeding, the Indemnitee
had reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of
the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.7 in
favor of any Indemnitee having or potentially having liability for any such
indebtedness. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 7.7.A. The termination of any
proceeding by conviction of an Indemnitee or upon a plea of nolo contendere or
its equivalent by an Indemnitee, or an entry of an order of probation against an
Indemnitee prior to judgment, does not create a presumption that such Indemnitee
acted in a manner contrary to that specified in this Section 7.7.A with respect
to the subject matter of such proceeding. Any indemnification pursuant to this
Section 7.7 shall be made only out of the assets of the Partnership and any
insurance proceeds from the liability policy covering the General Partner and
any Indemnitees, and neither the General Partner nor any Limited Partner shall
have any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.7.
B. To the fullest extent permitted by law, expenses incurred by an
Indemnitee who is a party to a proceeding or otherwise subject to or the focus
of or is involved in any Action shall be paid or reimbursed by the Partnership
as incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (1) a written affirmation by the Indemnitee
of the Indemnitee's good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.7.B has been
met and (2) a written undertaking by or on behalf of the Indemnitee to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met.
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C. The indemnification provided by this Section 7.7 shall be in
addition to any other rights to which an Indemnitee or any other Person may be
entitled under any agreement, pursuant to any vote of the Partners, as a matter
of law or otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee unless otherwise provided in a
written agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of any of the Indemnitees and such other Persons
as the General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement.
E. Any liabilities which an Indemnitee incurs as a result of acting
on behalf of the Partnership, the General Partner or the Parent (whether as a
fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes assessed by
the IRS, penalties assessed by the Department of Labor, restitutions to such a
plan or trust or other funding mechanism or to a participant or beneficiary of
such plan, trust or other funding mechanism, or otherwise) shall be treated as
liabilities or judgments or fines under this Section 7.7, unless such
liabilities arise as a result of (1) such Indemnitee's intentional misconduct or
knowing violation of the law, (2) any transaction in which such Indemnitee
received a personal benefit in violation or breach of any provision of this
Agreement or applicable law, or (3) in the case of any criminal proceeding, the
Indemnitee had reasonable cause to believe that the act or omission was
unlawful.
F. In no event may an Indemnitee subject any of the Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
G. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.7 because the Indemnitee had an interest in the
transaction with respect to which the indemnification applies if the transaction
was otherwise permitted by the terms of this Agreement.
H. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.7 or any provision hereof
shall be prospective only and shall not in any way affect the obligations of the
Partnership or the limitations on the Partnership's liability to any Indemnitee
under this Section 7.7 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification or
repeal, regardless of when such claims may arise or be asserted.
I. If and to the extent any payments to the General Partner pursuant
to this Section 7.7 constitute gross income to the General Partner (as opposed
to the repayment of advances made on behalf of the Partnership) such amounts
shall be treated as "guaranteed payments" within the meaning of Code Section
707(c), shall be treated consistently therewith by the Partnership and all
Partners, and shall not be treated by distribution for purposes of computing the
Partners' Capital Accounts.
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Section 7.8. Liability of the General Partner.
A. Notwithstanding anything to the contrary set forth in this
Agreement, neither the General Partner nor any of its trustees or officers shall
be liable or accountable in damages or otherwise to the Partnership, any
Partners or any Assignees for losses sustained, liabilities incurred or benefits
not derived as a result of errors in judgment or mistakes of fact or law or of
any act or omission if the General Partner or such trustee or officer acted in
good faith.
B. The Limited Partners expressly acknowledge that the General
Partner is acting for the benefit of the Partnership, the Limited Partners and
the Parent's stockholders collectively and that the General Partner is under no
obligation to give priority to the separate interests of the Limited Partners or
the Parent's stockholders (including, without limitation, the tax consequences
to Limited Partners, Assignees or the Parent's stockholders) in deciding whether
to cause the Partnership to take (or decline to take) any actions. If there is a
conflict between the interests of the stockholders of the Parent on one hand and
the Limited Partners on the other, the General Partner shall endeavor in good
faith to resolve the conflict in a manner not adverse to either the stockholders
of the Parent or the Limited Partners. The General Partner shall not be liable
under this Agreement to the Partnership or to any Partner for monetary damages
for losses sustained, liabilities incurred, or benefits not derived by Limited
Partners in connection with such decisions; provided, that the General Partner
has acted in good faith.
C. Subject to its obligations and duties as General Partner set
forth in Section 7.1.A hereof, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its employees or agents
(subject to the supervision and control of the General Partner). The General
Partner shall not be responsible for any misconduct or negligence on the part of
any such agent appointed by it in good faith.
D. To the extent that, at law or in equity, the General Partner has
duties (including fiduciary duties) and liabilities relating thereto to the
Partnership or the Limited Partners, the General Partner shall not be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement.
E. Notwithstanding anything herein to the contrary, except for
fraud, willful misconduct or gross negligence, or pursuant to any express
indemnities given to the Partnership by any Partner pursuant to any other
written instrument, no Partner shall have any personal liability whatsoever, to
the Partnership or to the other Partner(s), for the debts or liabilities of the
Partnership or the Partnership's obligations hereunder, and the full recourse of
the other Partner(s) shall be limited to the interest of that Partner in the
Partnership. To the fullest extent permitted by law, no officer, trustee or
shareholder of the General Partner shall be liable to the Partnership for money
damages except for (1) active and deliberate dishonesty established by a
non-appealable final judgment or (2) actual receipt of an improper benefit or
profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any
such express indemnity, no property or assets of any Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the trustees of the General
Partner solely as trustees of the same and not in their own individual
capacities.
F. Any amendment, modification or repeal of this Section 7.8 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's, and its officers' and trustees', liability
to the Partnership and the Limited Partners under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
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Section 7.9. Other Matters Concerning the General Partner and the Parent.
A. The General Partner and the Parent may rely and shall be
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture or other paper or document believed by it in good faith to be genuine
and to have been signed or presented by the proper party or parties.
B. The General Partner and the Parent may consult with legal
counsel, accountants, appraisers, management consultants, investment bankers,
architects, engineers, environmental consultants and other consultants and
advisers selected by it, and any act taken or omitted to be taken in reliance
upon the opinion of such Persons as to matters that the General Partner and the
Parent reasonably believe to be within such Person's professional or expert
competence shall be conclusively presumed to have been done or omitted in good
faith and in accordance with such opinion.
C. The General Partner shall have the right, in respect of any of
its powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty that
is permitted or required to be done by the General Partner hereunder.
D. Notwithstanding any other provision of this Agreement or the Act,
any action of the General Partner or the Parent on behalf of the Partnership or
any decision of the General Partner or the Parent to refrain from acting on
behalf of the Partnership, undertaken in the good faith belief that such action
or omission is necessary or advisable in order (1) to protect the ability of the
Parent to continue to qualify as a REIT, (2) for the Parent otherwise to satisfy
the REIT Requirements, or (3) to avoid the Parent incurring any taxes under Code
Section 857 or Code Section 4981, is expressly authorized under this Agreement
and is deemed approved by all of the Limited Partners.
Section 7.10. Title to Partnership Assets. Title to Partnership
assets, whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively with other Partners or Persons, shall have any
ownership interest in such Partnership assets or any portion thereof. Title to
any or all of the Partnership assets may be held in the name of the Partnership,
the General Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
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Section 7.11. Reliance by Third Parties. Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority,
without the consent or approval of any other Partner or Person, to encumber,
sell or otherwise use in any manner any and all assets of the Partnership and to
enter into any contracts on behalf of the Partnership, and take any and all
actions on behalf of the Partnership, and such Person shall be entitled to deal
with the General Partner as if it were the Partnership's sole party in interest,
both legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner in connection with any
such dealing. In no event shall any Person dealing with the General Partner or
its representatives be obligated to ascertain that the terms of this Agreement
have been complied with or to inquire into the necessity or expediency of any
act or action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying in good faith thereon or claiming
thereunder that (1) at the time of the execution and delivery of such
certificate, document or instrument, this Agreement was in full force and
effect, (2) the Person executing and delivering such certificate, document or
instrument was duly authorized and empowered to do so for and on behalf of the
Partnership, and (3) such certificate, document or instrument was duly executed
and delivered in accordance with the terms and provisions of this Agreement and
is binding upon the Partnership.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1. Limitation of Liability. The Limited Partners shall have no
liability under this Agreement (other than for breach thereof) except as
expressly provided in Section 10.4 or under the Act.
Section 8.2. Management of Business. No Limited Partner or Assignee (other
than the General Partner, any of its Affiliates or any officer, director,
member, employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such) shall take
part in the operations, management or control (within the meaning of the Act) of
the Partnership's business, transact any business in the Partnership's name or
have the power to sign documents for or otherwise bind the Partnership. The
transaction of any such business by the General Partner, any of its Affiliates
or any officer, director, member, employee, partner, agent, representative,
shareholder or trustee of the General Partner, the Partnership or any of their
Affiliates, in their capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees under this
Agreement.
Section 8.3. Outside Activities of Limited Partners. Subject to any
agreements entered into pursuant to Section 7.6.E hereof and any other
agreements entered into by a Limited Partner or its Affiliates with the General
Partner, the Partnership, the Parent or any Affiliate thereof (including,
without limitation, any employment agreement), any Limited Partner (other than
the Parent Limited Partner) and any Assignee, officer, director, employee,
agent, trustee, Affiliate, member or shareholder of any Limited Partner shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities that are in direct or indirect competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner, to the extent expressly provided herein), and such Person shall have no
obligation pursuant to this Agreement, subject to Section 7.6.E hereof and any
other agreements entered into by a Limited Partner or its Affiliates with the
General Partner, the Partnership, the Parent or any Affiliate thereof, to offer
any interest in any such business ventures to the Partnership, any Limited
Partner, the Parent or any such other Person, even if such opportunity is of a
character that, if presented to the Partnership, any Limited Partner, the Parent
or such other Person, could be taken by such Person.
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Section 8.4. Return of Capital. Except pursuant to the rights of
Redemption set forth in Section 8.6 hereof, no Limited Partner shall be entitled
to the withdrawal or return of its Capital Contribution, except to the extent of
distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. Except to the extent provided in Article VI
hereof or otherwise expressly provided in this Agreement, no Limited Partner or
Assignee shall have priority over any other Limited Partner or Assignee either
as to the return of Capital Contributions or as to profits, losses or
distributions.
Section 8.5. Adjustment Factor. The Partnership shall notify any Limited
Partner that is a Qualifying Party, on request, of the then current Adjustment
Factor or any change made to the Adjustment Factor.
Section 8.6. Redemption Rights.
A. On or after the date 12 months after the Effective Date, with
respect to the OP Units (including any Earnout Units and PI Units that are
converted into OP Units) acquired on or contemporaneously with the Effective
Date or on any other date specified in the agreement relating to the issuance of
any other OP Units, each Limited Partner (other than the Parent Limited Partner)
shall have the right (subject to the terms and conditions set forth herein and
in any other such agreement, as applicable) to require the Partnership to redeem
all or a portion of the OP Units held by such Limited Partner (such OP Units
being hereafter referred to as "Tendered Units") in exchange for the Cash Amount
(a "Redemption") unless the terms of such OP Units or a separate agreement
entered into between the Partnership and the holder of such OP Units provide
that such OP Units are not entitled to a right of Redemption. The Tendering
Partner shall have no right, with respect to any OP Units so redeemed, to
receive any distributions paid on or after the Specified Redemption Date. Any
Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the General Partner by the Limited Partner who is exercising the right (the
"Tendering Partner"). The Cash Amount shall be payable to the Tendering Partner
on the Specified Redemption Date.
B. Notwithstanding Section 8.6.A above, if a Limited Partner has
delivered to the General Partner a Notice of Redemption then the Parent may, in
its sole and absolute discretion, (subject to the limitations on ownership and
transfer of REIT Shares set forth in the Charter) elect to assume and satisfy
the General Partner's Redemption obligation and acquire some or all of the
Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount
(as of the Specified Redemption Date) and, if the Parent so elects, the
Tendering Partner shall sell the Tendered Units to the Parent in exchange for
the REIT Shares Amount. In such event, the Tendering Partner shall have no right
to cause the Partnership to redeem such Tendered Units. The Parent shall
promptly give such Tendering Partner written notice of its election, and the
Tendering Partner may elect to withdraw its redemption request at any time prior
to the acceptance of the cash or REIT Shares Amount by such Tendering Partner.
Assuming the Parent exercises its option to deliver REIT Shares, the Parent
shall contribute the Tendered Units to the General Partner and/or the Parent
Limited Partner, as the case may be.
C. The REIT Shares Amount, if applicable, shall be delivered as duly
authorized, validly issued, fully paid and nonassessable REIT Shares and, if
applicable, free of any pledge, lien, encumbrance or restriction, other than
those provided in the Charter or the Bylaws of the Parent, the Securities Act,
relevant state securities or blue sky laws and any applicable registration
rights agreement with respect to such REIT Shares entered into by the Tendering
Partner. Notwithstanding any delay in such delivery (but subject to Section
8.6.E), the Tendering Partner shall be deemed the owner of such REIT Shares for
all purposes, including without limitation, rights to vote or consent, and
receive dividends, as of the Specified Redemption Date. In addition, the REIT
Shares for which the Partnership Units might be exchanged shall also bear a
legend which generally provides the following:
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Restriction on Ownership and Transfer
THE SHARES OF CAPITAL STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON BENEFICIAL AND CONSTRUCTIVE OWNERSHIP AND TRANSFER FOR THE
PURPOSE OF THE COMPANY'S MAINTENANCE OF ITS STATUS AS A REAL ESTATE INVESTMENT
TRUST UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"). SUBJECT
TO CERTAIN FURTHER RESTRICTIONS AND EXCEPT AS EXPRESSLY PROVIDED IN THE
COMPANY'S ARTICLES OF AMENDMENT AND RESTATEMENT, (i) NO PERSON MAY BENEFICIALLY
OR CONSTRUCTIVELY OWN SHARES OF THE COMPANY'S COMMON STOCK IN EXCESS OF 9.0 %,
UNLESS SUCH PERSON IS AN INVESTMENT ENTITY, IN WHICH CASE, IT IS 9.8% (BY VALUE
OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING COMMON
STOCK OF THE COMPANY OR SHARES OF THE COMPANY'S CAPITAL STOCK IN EXCESS OF 9.0%,
UNLESS SUCH PERSON IS AN INVESTMENT ENTITY, IN WHICH CASE, IT IS 9.8% (BY VALUE
OR BY NUMBER OF SHARES, WHICHEVER IS MORE RESTRICTIVE) OF THE OUTSTANDING
CAPITAL STOCK OF THE COMPANY; (ii) NO PERSON MAY BENEFICIALLY OR CONSTRUCTIVELY
OWN SHARES OF CAPITAL STOCK THAT WOULD RESULT IN THE COMPANY BEING "CLOSELY
HELD" UNDER SECTION 856(h) OF THE CODE OR OTHERWISE CAUSE THE COMPANY TO FAIL TO
QUALIFY AS A REIT; AND (iii) NO PERSON MAY TRANSFER SHARES OF COMMON STOCK IF
SUCH TRANSFER WOULD RESULT IN THE COMMON STOCK OF THE COMPANY BEING OWNED BY
FEWER THAN 100 PERSONS. ANY PERSON WHO BENEFICIALLY OR CONSTRUCTIVELY OWNS OR
ATTEMPTS TO BENEFICIALLY OR CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK IN
VIOLATION OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE COMPANY. IF ANY
OF THE RESTRICTIONS ON TRANSFER OR OWNERSHIP IS VIOLATED, THE SHARES OF CAPITAL
STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY TRANSFERRED TO THE TRUSTEE OF A
TRUST FOR THE BENEFIT OF ONE OR MORE CHARITABLE BENEFICIARIES. IN ADDITION, THE
COMPANY MAY REDEEM SHARES UPON THE TERMS AND CONDITIONS SPECIFIED BY THE BOARD
OF DIRECTORS IN ITS SOLE DISCRETION IF THE BOARD OF DIRECTORS DETERMINES THAT
OWNERSHIP OR A TRANSFER OR OTHER EVENT MAY VIOLATE THE RESTRICTIONS DESCRIBED
ABOVE. FURTHERMORE, UPON THE OCCURRENCE OF CERTAIN EVENTS, ATTEMPTED TRANSFERS
IN VIOLATION OF THE RESTRICTIONS DESCRIBED ABOVE MAY BE VOID AB INITIO. ALL
TERMS IN THIS LEGEND THAT ARE DEFINED IN THE ARTICLES OF AMENDMENT AND
RESTATEMENT OF THE COMPANY SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN THE
ARTICLES OF AMENDMENT AND RESTATEMENT OF THE COMPANY, AS THE SAME MAY BE AMENDED
FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE RESTRICTIONS ON TRANSFER AND
OWNERSHIP, WILL BE FURNISHED TO EACH HOLDER OF SHARES OF CAPITAL STOCK ON
REQUEST AND WITHOUT CHARGE. REQUESTS FOR SUCH A COPY MAY BE DIRECTED TO THE
SECRETARY OF THE COMPANY AT ITS PRINCIPAL OFFICE.
D. Each Limited Partner covenants and agrees with the General
Partner that all Tendered Units shall be delivered to the General Partner free
and clear of all liens, claims and encumbrances whatsoever and should any such
liens, claims and/or encumbrances exist or arise with respect to such Tendered
Units, the General Partner shall be under no obligation to acquire the same.
Each Limited Partner further agrees that, in the event any state or local
property transfer tax is payable as a result of the transfer of its Tendered
Units to the General Partner (or its designee), such Limited Partner shall
assume and pay such transfer tax.
E. Notwithstanding the provisions of Section 8.6.A, 8.6.B, 8.6.C or
any other provision of this Agreement, a Limited Partner (i) shall not be
entitled to effect a Redemption for cash or an exchange for REIT Shares to the
extent the ownership or right to acquire REIT Shares pursuant to such exchange
by such Partner on the Specified Redemption Date could cause such Partner or any
other Person to violate the restrictions on ownership and transfer of REIT
Shares set forth in the Charter of the Parent and (ii) shall have no rights
under this Agreement to acquire REIT Shares which would otherwise be prohibited
under the Charter. To the extent any attempted Redemption or exchange for REIT
Shares would be in violation of this Section 8.6.E, it shall be null and void ab
initio and such Limited Partner shall not acquire any rights or economic
interest in the cash otherwise payable upon such Redemption or the REIT Shares
otherwise issuable upon such exchange.
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F. Notwithstanding anything herein to the contrary (but subject to
Section 8.6.E), with respect to any Redemption or exchange for REIT Shares
pursuant to this Section 8.6: (i) all OP Units acquired by the General Partner
pursuant thereto shall automatically, and without further action required, be
converted into and deemed to be General Partner Interests comprised of the same
number and class of OP Units; (ii) without the consent of the General Partner,
each Limited Partner may not effect a Redemption for less than 1,000 OP Units
or, if the Limited Partner holds less than 1,000 OP Units, all of the OP Units
held by such Limited Partner; (iii) without the consent of the General Partner,
each Limited Partner may not effect a Redemption during the period after the
Partnership Record Date with respect to a distribution and before the record
date established by the General Partner for a distribution to its shareholders
of some or all of its portion of such distribution; (iv) the consummation of any
Redemption or exchange for REIT Shares shall be subject to the expiration or
termination of the applicable waiting period, if any, under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, as amended; and (v) each
Tendering Partner shall continue to own all OP Units subject to any Redemption
or exchange for REIT Shares, and be treated as a Limited Partner with respect to
such OP Units for all purposes of this Agreement, until such OP Units are
transferred to the General Partner and paid for or exchanged on the Specified
Redemption Date. Until a Specified Redemption Date, the Tendering Partner shall
have no rights as a shareholder of the General Partner with respect to such
Tendering Partner's OP Units.
G. In the event that the Partnership issues additional Partnership
Interests to any Additional Limited Partner pursuant to Section 4.4, the General
Partner shall make such revisions to this Section 8.6 as it determines are
necessary to reflect the issuance of such additional Partnership Interests.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1. Records and Accounting.
A. The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership's business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5 or 9.3 hereof. Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on, or be in the
form for, magnetic tape, photographs, micrographics or any other information
storage device, provided that the records so maintained are convertible into
clearly legible written form within a reasonable period of time. The books of
the Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles.
B. The books of the Partnership shall be maintained, for financial
and tax reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles, or on such other basis as the General Partner
determines to be necessary or appropriate. To the extent permitted by sound
accounting practices and principles, the Partnership and the General Partner may
operate with integrated or consolidated accounting records, operations and
principles.
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Section 9.2. Partnership Year. The Partnership Year of the Partnership
shall be the calendar year.
Section 9.3. Reports.
A. As soon as practicable, but in no event later than the date on
which the Parent mails its annual report to its stockholders, the General
Partner shall cause to be mailed to the Limited Partner an annual report, as of
the close of the most recently ended Fiscal Year, containing financial
statements of the Partnership, or of the Parent if such statements are prepared
solely on a consolidated basis with the Partnership, for such Partnership Year,
presented in accordance with generally accepted accounting principles, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the Parent.
B. If and to the extent that the Parent mails quarterly reports to
its stockholders, as soon as practicable, but in no event later than the date on
such reports are mailed, the General Partner shall cause to be mailed to each
Limited Partner a report containing unaudited financial statements, as of the
last day of such fiscal quarter, of the Partnership, or of the Parent if such
statements are prepared solely on a consolidated basis with the Partnership, and
such other information as may be required by applicable law or regulations, or
as the Parent determines to be appropriate.
ARTICLE X
TAX MATTERS
Section 10.1. Preparation of Tax Returns. The General Partner shall
arrange for the preparation and timely filing of all returns with respect to
Partnership income, gains, deductions, losses and other items required of the
Partnership for federal and state income tax purposes and shall use all
reasonable effort to furnish, within 90 days of the close of each taxable year,
the tax information reasonably required by Limited Partners for federal and
state income tax reporting purposes. The Limited Partners shall promptly provide
the General Partner with such information relating to the Contributed
Properties, including tax basis and other relevant information, as may be
reasonably requested by the General Partner from time to time.
Section 10.2. Tax Elections. Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine whether to
make any available election pursuant to the Code, including, but not limited to,
the election under Code Section 754 and the election to use the "recurring item"
method of accounting provided under Code Section 461(h) with respect to property
taxes imposed on the Partnership's Properties; provided, however, that, if the
"recurring item" method of accounting is elected with respect to such property
taxes, the Partnership shall pay the applicable property taxes prior to the date
provided in Code Section 461(h) for purposes of determining economic
performance. The General Partner shall have the right to seek to revoke any such
election (including, without limitation, any election under Code Sections 461(h)
and 754) upon the General Partner's determination in its sole and absolute
discretion that such revocation is in the best interests of the Partners.
Section 10.3. Tax Matters Partner.
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes. The tax matters partner shall
receive no compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such (including
legal and accounting fees and expenses) shall be borne by the Partnership in
addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
to assist the tax matters partner in discharging its duties hereunder, so long
as the compensation paid by the Partnership for such services is reasonable.
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B. The tax matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of Partnership
items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a "tax
audit" and such judicial proceedings being referred to as "judicial
review"), and in the settlement agreement the tax matters partner may
expressly state that such agreement shall bind all Partners, except that
such settlement agreement shall not bind any Partner (i) who (within the
time prescribed pursuant to the Code and Regulations) files a statement
with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such Partner
or (ii) who is a "notice partner" (as defined in Code Section 6231) or a
member of a "notice group" (as defined in Code Section 6223(b)(2));
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken into
account by a Partner for tax purposes (a "final adjustment") is mailed to
the tax matters partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the United States
Tax Court or the United States Claims Court, or the filing of a complaint
for refund with the District Court of the United States for the district
in which the Partnership's principal place of business is located;
(iii) to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment with the
IRS at any time and, if any part of such request is not allowed by the
IRS, to file an appropriate pleading (petition or complaint) for judicial
review with respect to such request;
(v) to enter into an agreement with the IRS to extend the period
for assessing any tax that is attributable to any item required to be
taken into account by a Partner for tax purposes, or an item affected by
such item; and
(vi) to take any other action on behalf of the Partners in
connection with any tax audit or judicial review proceeding to the extent
permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General Partner set forth
in Section 7.7 hereof shall be fully applicable to the tax matters partner in
its capacity as such.
C. The tax matters partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax matters partner
in performing its duties as such (including legal and accounting fees) shall be
borne by the Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm to assist the tax matters partner
in discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.
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Section 10.4. Withholding. Each Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such Limited
Partner any amount of federal, state, local or foreign taxes that the General
Partner determines that the Partnership is required to withhold or pay with
respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Code Sections 1441, 1442,
1445 or 1446. Any amount paid on behalf of or with respect to a Limited Partner
shall constitute a loan by the Partnership to such Limited Partner, which loan
shall be repaid by such Limited Partner within 15 days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution that would otherwise be made to the
Limited Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the Available Funds of the
Partnership that would, but for such payment, be distributed to the Limited
Partner. Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner's Partnership
Interest to secure such Limited Partner's obligation to pay to the Partnership
any amounts required to be paid pursuant to this Section 10.4. In the event that
a Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 10.4 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Limited Partner and shall succeed to all rights
and remedies of the Partnership as against such defaulting Limited Partner
(including, without limitation, the right to receive distributions). Any amounts
payable by a Limited Partner hereunder shall bear interest at the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, plus four percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., 15 days after demand) until such amount is paid in full. Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.
Section 10.5. Organizational Expenses. The Partnership shall elect to
amortize expenses, if any, incurred by it in organizing the Partnership ratably
over a 60-month period as provided in Code Section 709.
ARTICLE XI
TRANSFERS AND WITHDRAWALS
Section 11.1. Transfer.
A. No part of the interest of a Partner shall be subject to the
claims of any creditor, to any spouse for alimony or support, or to legal
process, and may not be voluntarily or involuntarily alienated or encumbered
except as may be specifically provided for in this Agreement.
B. No Partnership Interest shall be Transferred, in whole or in
part, except in accordance with the terms and conditions set forth in this
Article XI. Any Transfer or purported Transfer of a Partnership Interest not
made in accordance with this Article XI shall be null and void ab initio unless
consented to by the General Partner in its sole and absolute discretion.
C. Notwithstanding the other provisions of this Article XI (other
than Section 11.6.D hereof), the Partnership Interests of the General Partner
may be Transferred, at any time or from time to time, to any Person that is, at
the time of such Transfer, the Parent or any successor thereto or a Qualified
REIT Subsidiary. Any transferee of the entire General Partner Interest pursuant
to this Section 11.1.C shall automatically become, without further action or
Consent of any Limited Partners, the sole general partner of the Partnership,
subject to all the rights, privileges, duties and obligations under this
Agreement and the Act relating to a general partner. Upon any Transfer permitted
by this Section 11.1.C, the transferor Partner shall be relieved of all its
obligations under this Agreement. The provisions of Section 11.2.B (other than
the last sentence thereof), 11.3 and 11.4 hereof shall not apply to any Transfer
permitted by this Section 11.1.C.
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D. No Transfer of any Partnership Interest may be made to a lender
to the Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability, without the consent of the General Partner
in its sole and absolute discretion; provided that as a condition to such
consent, the lender will be required to enter into an arrangement with the
Partnership and the General Partner to redeem or exchange for REIT Shares any
Partnership Units in which a security interest is held by such lender
concurrently with such time as such lender would be deemed to be a partner in
the Partnership for purposes of allocating liabilities to such lender under Code
Section 752.
Section 11.2. Transfer of General Partner's Partnership Interest.
A. The General Partner may not Transfer any of its General Partner
Interest or withdraw from the Partnership except as provided in Sections 11.1.C,
11.2.B and 11.2.C hereof.
B. Except as set forth in Section 11.1.C above and Section 11.2.C
below, the General Partner shall not withdraw from the Partnership and shall not
Transfer all or any portion of its interest in the Partnership (whether by sale,
disposition, statutory merger or consolidation, liquidation or otherwise)
without the Consent of a Majority in Interest of the Outside Limited Partners,
which Consent may be given or withheld in the sole and absolute discretion of
such Limited Partners. Upon any Transfer of such a Partnership Interest pursuant
to the Consent of a Majority in Interest of the Outside Limited Partners and
otherwise in accordance with the provisions of this Section 11.2.B, the
transferee shall become a successor General Partner for all purposes herein, and
shall be vested with the powers and rights of the transferor General Partner,
and shall be liable for all obligations and responsible for all duties of the
General Partner, once such transferee has executed such instruments as may be
necessary to effectuate such admission and to confirm the agreement of such
transferee to be bound by all the terms and provisions of this Agreement with
respect to the Partnership Interest so acquired. It is a condition to any
Transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General
Partner under this Agreement with respect to such Transferred Partnership
Interest, and such Transfer shall relieve the transferor General Partner of its
obligations under this Agreement without the Consent of a Majority in Interest
of the Outside Limited Partners. In the event that the General Partner withdraws
from the Partnership, in violation of this Agreement or otherwise, or otherwise
dissolves or terminates, or upon the Incapacity of the General Partner, all of
the remaining Partners may elect to continue the Partnership business by
selecting a successor General Partner in accordance with the Act.
C. Notwithstanding Section 11.2.B, the General Partner may Transfer
its Interest in connection with any merger or sale of all or substantially all
of the assets of the Parent.
Section 11.3. Transfer of Limited Partners' Partnership Interests.
A. No Limited Partner shall Transfer all or any portion of its
Partnership Interest to any transferee without the consent of the General
Partner, which consent may be withheld in its sole and absolute discretion.
B. Notwithstanding any other provision of this Article XI (other
than Section 11.6.D hereof), the Partnership Interests of the Parent Limited
Partner may be Transferred in whole or in part, at any time and from time to
time to any Person that is, at the time of such Transfer, the Parent or any
successor thereto or any Qualified REIT Subsidiary.
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C. Without limiting the generality of Section 11.3.A hereof, it is
expressly understood and agreed that the General Partner will not consent to any
Transfer of all or any portion of any Partnership Interest pursuant to Section
11.3.A above unless such Transfer meets each of the following conditions:
(i) Such Transfer is made only to a single Qualified Transferee;
provided, however, that, for such purposes, all Qualified Transferees that
are Affiliates, or that comprise investment accounts or funds managed by a
single Qualified Transferee and its Affiliates, shall be considered
together to be a single Qualified Transferee.
(ii) The transferee in such Transfer assumes by operation of law
or express agreement all of the obligations of the transferor Limited
Partner under this Agreement with respect to such Transferred Partnership
Interest; provided, that no such Transfer (unless made pursuant to a
statutory merger or consolidation wherein all obligations and liabilities
of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations
under this Agreement without the approval of the General Partner, in its
sole and absolute discretion. Notwithstanding the foregoing, any
transferee of any Transferred Partnership Interest shall be subject to any
and all ownership limitations contained in the Charter that may limit or
restrict such transferee's ability to exercise its Redemption rights,
including, without limitation, the Ownership Limit. Any transferee,
whether or not admitted as a Substituted Limited Partner, shall take
subject to the obligations of the transferor hereunder. Unless admitted as
a Substituted Limited Partner, no transferee, whether by a voluntary
Transfer, by operation of law or otherwise, shall have any rights
hereunder, other than the rights of an Assignee as provided in Section
11.5 hereof.
(iii) Such Transfer is effective as of the first day of a fiscal
quarter of the Partnership.
D. If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner's estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited Partners, for the purpose of
settling or managing the estate, and such power as the Incapacitated Limited
Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
E. In connection with any proposed Transfer of a Limited Partner
Interest, the General Partner shall have the right to receive an opinion of
counsel reasonably satisfactory to it to the effect that the proposed Transfer
may be effected without registration under the Securities Act and will not
otherwise violate any federal or state securities laws or regulations applicable
to the Partnership or the Partnership Interests Transferred.
F. No Transfer by a Limited Partner of its Partnership Interests
(including any Redemption, any other acquisition of Partnership Units by the
Partnership or the General Partner) may be made to or by any person if (i) in
the opinion of legal counsel for the Partnership, it would result in the
Partnership being treated as an association taxable as a corporation or would
result in a termination of the Partnership under Code Section 708, (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the Parent to continue to qualify as a REIT or would subject the
Parent to any additional taxes under Code Section 857 or Code Section 4981, or
(iii) such Transfer would be effectuated through an "established securities
market" or a "secondary market (or the substantial equivalent thereof)" within
the meaning of Code Section 7704 (provided that this clause (iii) shall not be
the basis for limiting or restricting in any manner the exercise of a Redemption
Right unless, and only to the extent that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a "publicly traded partnership" and, by reason thereof, taxable as a
corporation).
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Section 11.4. Substituted Limited Partners.
A. A transferee of the interest of a Limited Partner pursuant to a
Transfer consented to by the General Partner pursuant to Section 11.3.A may be
admitted as a Substituted Limited Partner only with the consent of the General
Partner, which consent may be given or withheld by the General Partner in its
sole and absolute discretion. The failure or refusal by the General Partner to
permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
the General Partner. Subject to the foregoing, an Assignee shall not be admitted
as a Substituted Limited Partner until and unless it furnishes to the General
Partner (i) evidence of acceptance, in form and substance satisfactory to the
General Partner, of all the terms, conditions and applicable obligations of this
Agreement, (ii) a counterpart signature page to this Agreement executed by such
Assignee, and (iii) such other documents and instruments as may be required or
advisable, in the sole and absolute discretion of the General Partner, to effect
such Assignee's admission as a Substituted Limited Partner.
B. A transferee who has been admitted as a Substituted Limited
Partner in accordance with this Article XI shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner
under this Agreement.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address and number of
Partnership Units of such Substituted Limited Partner and to eliminate or
adjust, if necessary, the name, address and number of Partnership Units of the
predecessor of such Substituted Limited Partner.
Section 11.5. Assignees. If the General Partner, in its sole and absolute
discretion, does not consent to the admission of any transferee of any
Partnership Interest as a Substituted Limited Partner in connection with a
transfer permitted by the General Partner pursuant to Section 11.3.A, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions
from the Partnership and the share of Net Income, Net Losses and other items of
income, gain, loss, deduction and credit of the Partnership attributable to the
Partnership Units assigned to such transferee and the rights to Transfer the
Partnership Units only in accordance with the provisions of this Article XI, but
shall not be deemed to be a holder of Partnership Units for any other purpose
under this Agreement, and shall not be entitled to effect a Consent or vote or
effect a Redemption with respect to such Partnership Units on any matter
presented to the Limited Partners for approval (such right to Consent or vote or
effect a Redemption, to the extent provided in this Agreement or under the Act,
fully remaining with the transferor Limited Partner). In the event that any such
transferee desires to make a further assignment of any such Partnership Units,
such transferee shall be subject to all the provisions of this Article XI to the
same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.
Section 11.6. General Provisions.
A. No Limited Partner may withdraw from the Partnership other than
as a result of a permitted Transfer of all of such Limited Partner's Partnership
Units in accordance with this Article XI, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a redemption (or
acquisition by the General Partner) of all of its Partnership Units pursuant to
a Redemption under Section 8.6 hereof and/or pursuant to any Partnership Unit
Designation.
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B. Any Limited Partner who shall Transfer all of its Partnership
Units in a Transfer (i) consented to by the General Partner pursuant to this
Article XI where such transferee was admitted as a Substituted Limited Partner,
(ii) pursuant to the exercise of its rights to effect a redemption of all of its
Partnership Units pursuant to a Redemption under Section 8.6 hereof and/or
pursuant to any Partnership Unit Designation, or (iii) to the General Partner,
whether or not pursuant to Section 8.6.B hereof, shall cease to be a Limited
Partner.
C. If any Partnership Unit is Transferred in compliance with the
provisions of this Article XI, or is redeemed by the Partnership, or acquired by
the General Partner pursuant to Section 8.6 hereof, on any day other than the
first day of a Partnership Year, then Net Income, Net Losses, each item thereof
and all other items of income, gain, loss, deduction and credit attributable to
such Partnership Unit for such Partnership Year shall be allocated to the
transferor Partner or the Tendering Party, as the case may be, and, in the case
of a Transfer or assignment other than a Redemption, to the transferee Partner,
by taking into account their varying interests during the Partnership Year in
accordance with Code Section 706(d), using the "interim closing of the books"
method or another permissible method selected by the General Partner. Solely for
purposes of making such allocations, each of such items for the calendar month
in which a Transfer occurs shall be allocated to the transferee Partner and none
of such items for the calendar month in which a Transfer or a Redemption occurs
shall be allocated to the transferor Partner or the Tendering Party, as the case
may be, if such Transfer occurs on or before the 15th day of the month,
otherwise such items shall be allocated to the transferor. All distributions of
Available Cash attributable to such Partnership Unit with respect to which the
Partnership Record Date is before the date of such Transfer, assignment or
Redemption shall be made to the transferor Partner or the Tendering Party, as
the case may be, and, in the case of a Transfer other than a Redemption, all
distributions of Available Cash thereafter attributable to such Partnership Unit
shall be made to the transferee Partner.
D. In no event may any Transfer or assignment of a Partnership
Interest by any Partner (including any Redemption, any acquisition of
Partnership Units by the General Partner or any other acquisition of Partnership
Units by the Partnership) be made (i) to any person or entity who lacks the
legal right, power or capacity to own a Partnership Interest; (ii) in violation
of applicable law; (iii) of any component portion of a Partnership Interest,
such as the Capital Account, or rights to distributions, separate and apart from
all other components of a Partnership Interest; (iv) in the event that such
Transfer would cause the Parent to cease to comply with the REIT Requirements;
(v) if such Transfer would, in the opinion of counsel to the Partnership or the
General Partner, cause a termination of the Partnership for federal or state
income tax purposes; (vi) if such Transfer would, in the opinion of legal
counsel to the Partnership, cause the Partnership to cease to be classified as a
partnership for federal income tax purposes; (vii) if such Transfer would cause
the Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in ERISA Section 3(14)) or a
"disqualified person" (as defined in Code Section 4975(c)); (viii) without the
consent of the General Partner, to any benefit plan investor within the meaning
of Department of Labor Regulations Section 2510.3-101(f); (ix) if such Transfer
would, in the opinion of legal counsel to the Partnership or the General
Partner, cause any portion of the assets of the Partnership to constitute assets
of any employee benefit plan pursuant to Department of Labor Regulations Section
2510.3-101; (x) if such Transfer requires the registration of such Partnership
Interest pursuant to any applicable federal or state securities laws; (xi) if
such Transfer would, in the opinion of legal counsel to the Partnership or the
General Partner, adversely affect the ability of the Parent to continue to
qualify as a REIT or would subject the Parent to any additional taxes under Code
Section 857 or Code Section 4981; (xi) if such transfer would be effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Code Section 7704
(provided that this clause (xii) shall not be the basis for limiting or
restricting in any manner the exercise of a Redemption Right unless, and only to
the extent that, in the absence of such limitation or restriction there is a
significant risk that the Partnership will be treated as a "publicly traded
partnership" and, by reason thereof, taxable as a corporation); (xiii) if such
Transfer would cause the Partnership to have more than 100 partners (including
as partners those persons indirectly owning an interest in the Partnership
through a partnership, limited liability company, subchapter S corporation or
grantor trust); (xiv) if such Transfer causes the Partnership (as opposed to the
Parent) to become a reporting company under the Exchange Act; or (xv) if such
Transfer subjects the Partnership to regulation under the Investment Company Act
of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended.
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ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1. Admission of Successor General Partner. A successor to all
of the General Partner's General Partner Interest pursuant to Section 11.2
hereof who is proposed to be admitted as a successor General Partner shall be
admitted to the Partnership as the General Partner, effective immediately prior
to such Transfer. Any such successor shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to
the successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.
Section 12.2. Admission of Additional Limited Partners.
A. After the date hereof, a Person (other than an existing Partner)
who makes a Capital Contribution to the Partnership in accordance with this
Agreement shall be admitted to the Partnership as an Additional Limited Partner
only upon furnishing to the General Partner (i) evidence of acceptance, in form
and substance satisfactory to the General Partner, of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to
this Agreement executed by such Person, and (iii) such other documents or
instruments as may be required in the sole and absolute discretion of the
General Partner in order to effect such Person's admission as an Additional
Limited Partner.
B. Notwithstanding anything to the contrary in this Section 12.2, no
Person shall be admitted as an Additional Limited Partner without the consent of
the General Partner, which consent may be given or withheld in the General
Partner's sole and absolute discretion. The admission of any Person as an
Additional Limited Partner shall become effective on the date upon which the
name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.
C. If any Additional Limited Partner is admitted to the Partnership
on any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items of income, gain, loss, deduction
and credit allocable among Partners and Assignees for such Partnership Year
shall be allocated pro rata among such Additional Limited Partner and all other
Partners and Assignees by taking into account their varying interests during the
Partnership Year in accordance with Code Section 706(d), using the "interim
closing of the books" method or another permissible method selected by the
General Partner. Solely for purposes of making such allocations, each of such
items for the calendar month in which an admission of any Additional Limited
Partner occurs shall be allocated among all the Partners and Assignees including
such Additional Limited Partner, in accordance with the principles described in
Section 11.6.C hereof. All distributions of Available Cash with respect to which
the Partnership Record Date is before the date of such admission shall be made
solely to Partners and Assignees other than the Additional Limited Partner, and
all distributions of Available Cash thereafter shall be made to all the Partners
and Assignees including such Additional Limited Partner.
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Section 12.3. Amendment of Agreement and Certificate of Limited
Partnership. For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
Section 12.4. Limit on Number of Partners. Unless otherwise permitted by
the General Partner, no Person shall be admitted to the Partnership as an
Additional Limited Partner if the effect of such admission would be to cause the
Partnership to have a number of Partners (including as Partners for this purpose
those Persons indirectly owning an interest in the Partnership through another
partnership, a limited liability company, a subchapter S corporation or a
grantor trust) that would cause the Partnership to become a reporting company
under the Exchange Act.
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1. Dissolution. The Partnership shall not be dissolved by the
admission of Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement. Upon the
withdrawal of the General Partner, any successor General Partner shall continue
the business of the Partnership without dissolution. However, the Partnership
shall dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following (each a "Liquidating Event"):
A. the expiration of its term as provided in Section 2.5;
B. a final and non-appealable judgement is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt or insolvent,
or a final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each case under any
federal or state bankruptcy or insolvency laws as now or hereafter in effect,
unless, prior to the entry of such order or judgement, a Majority in Interest of
the remaining Outside Limited Partners agree in writing, in their sole and
absolute discretion, to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such order or
judgement, of a successor General Partner;
C. an election to dissolve the Partnership made by the General
Partner in its sole and absolute discretion, with or without the Consent of a
Majority in Interest of the Outside Limited Partners;
D. entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
E. the occurrence of a Terminating Capital Transaction; or
F. the Redemption (or acquisition by the General Partner) of all
Partnership Units other than Partnership Units held by the General Partner and
the Parent Limited Partner; or
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G. the Incapacity of the General Partner, unless all of the
remaining Partners in their sole and absolute discretion agree in writing to
continue the business of the Partnership and to the appointment, effective as of
a date prior to the date of such Incapacity, of a substitute General Partner.
Section 13.2. Winding Up.
A. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and Partners.
After the occurrence of a Liquidating Event, no Partner shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding
up of the Partnership's business and affairs. The General Partner or, in the
event that there is no remaining General Partner or the General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate,
any Person elected by a Majority in Interest of the Outside Limited Partners
(the General Partner or such other Person being referred to herein as the
"Liquidator") shall be responsible for overseeing the winding up and dissolution
of the Partnership and shall take full account of the Partnership's liabilities
and property, and the Partnership property shall be liquidated as promptly as is
consistent with obtaining the fair value thereof, and the proceeds therefrom
(which may, to the extent determined by the General Partner, include shares of
stock in the General Partner) shall be applied and distributed in the following
order:
(i) First, to the satisfaction of all of the Partnership's debts
and liabilities to creditors other than the Partners and their Assignees
(whether by payment or the making of reasonable provision for payment
thereof);
(ii) Second, to the satisfaction of all of the Partnership's
debts and liabilities to the General Partner (whether by payment or the
making of reasonable provision for payment thereof), including, but not
limited to, amounts due as reimbursements under Section 7.4 hereof;
(iii) Third, to the satisfaction of all of the Partnership's
debts and liabilities to the other Partners and any Assignees (whether by
payment or the making of reasonable provision for payment thereof); and
(iv) The balance, if any, to the General Partner, the Limited
Partners and any Assignees in accordance with their Capital Account
balances, after giving effect to all contributions, distributions and
allocations for all periods.
The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article XIII.
B. Notwithstanding the provisions of Section 13.2.A hereof that
require liquidation of the assets of the Partnership, but subject to the order
of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.
- 61 -
C. In the event that the Partnership is "liquidated" within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
pursuant to this Article XIII to the Partners and Assignees that have positive
Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2)
to the extent of, and in proportion to, positive Capital Account balances. If
any Partner has a deficit balance in its Capital Account (after giving effect to
all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs) (a "Capital Account
Deficit"), such Partner shall not be required to make any contribution to the
capital of the Partnership with respect to a Capital Account Deficit, if any, of
such Partner, and such Capital Account Deficit shall not be considered a debt
owed to the Partnership or any other person for any purpose whatsoever.
D. Notwithstanding the foregoing, (i) if the General Partner has a
Capital Account Deficit, the General Partner shall contribute to the capital of
the Partnership the amount necessary to restore such Capital Account Deficit
balance to zero; (ii) if an Obligated Partner has a Capital Account Deficit,
such Obligated Partner shall be obligated to make a contribution to the
Partnership with respect to any such Capital Account Deficit balance upon a
liquidation of the Partnership or a "liquidation" of such Partner's Partnership
Interest within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (which
term shall include a redemption by the Partnership of such Obligated Partner's
Partnership Interest upon exercise of the Redemption Right) in an amount equal
to the lesser of such Capital Account Deficit balance or such Obligated
Partner's Protected Amount; and (iii) the second sentence of Section 13.2.C
shall not apply with respect to any other Partner to the extent, but only to the
extent, that such Partner previously has agreed in writing, with the consent of
the General Partner, to undertake an express obligation to restore all or any
portion of a deficit that may exist in its Capital Account upon a liquidation of
the Partnership. Solely for purposes of determining an Obligated Partner's
Capital Account balance upon a liquidation of such Partner's Partnership
Interest, the General Partner shall redetermine the Gross Asset Value of the
Partnership's assets on such date based upon the principles set forth in the
definition of "Gross Asset Value," and shall take into account the Obligated
Partner's allocable share of any unrealized gain or unrealized loss resulting
from such adjustment in determining the Obligated Partner's Capital Account
balance. No Partner shall have any right to become an Obligated Partner, to
increase its Protected Amount, or otherwise agree to restore any portion of any
Capital Account Deficit without the express written consent of the General
Partner, in its sole and absolute discretion. The General Partner shall not have
the right to eliminate or decrease any Partner's Protected Amount without the
written consent of such Partner unless otherwise agreed to by the parties. Any
contribution required of a Partner under this Section 13.2.D shall be made on or
before the later of (i) the end of the Partnership Year in which the interest is
liquidated or (ii) the 90th day following the date of such liquidation. The
proceeds of any contribution to the Partnership made by an Obligated Partner
with respect to such Obligated Partner's Capital Account Deficit balance shall
be treated as a Capital Contribution by such Obligated Partner and the proceeds
thereof shall be treated as assets of the Partnership to be applied as set forth
in Section 13.2.A.
E. In the sole and absolute discretion of the General Partner or the
Liquidator, a pro rata portion of the distributions that would otherwise be made
to the Partners pursuant to this Article XIII may be:
(i) distributed to a trust established for the benefit of the
General Partner and the Limited Partners for the purpose of liquidating
Partnership assets, collecting amounts owed to the Partnership, and paying any
contingent or unforeseen liabilities or obligations of the Partnership or of the
General Partner arising out of or in connection with the Partnership and/or
Partnership activities. The assets of any such trust shall be distributed to the
General Partner and the Limited Partners, from time to time, in the reasonable
discretion of the General Partner or the Liquidator, in the same proportions and
amounts as would otherwise have been distributed to the General Partner and the
Limited Partners pursuant to this Agreement; or
- 62 -
(ii) withheld or escrowed to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership, provided that
such withheld or escrowed amounts shall be distributed to the General Partner
and Limited Partners in the manner and order of priority set forth in Section
13.2.A hereof as soon as practicable.
Section 13.3. Deemed Distribution and Recontribution. Notwithstanding any
other provision of this Article XIII, in the event that the Partnership is
liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but
no Liquidating Event has occurred, the Partnership's Property shall not be
liquidated, the Partnership's liabilities shall not be paid or discharged and
the Partnership's affairs shall not be wound up. Instead, for federal income tax
purposes the Partnership shall be deemed to have contributed all of its assets
and liabilities to a new partnership in exchange for an interest in the new
partnership; and, immediately thereafter, distributed interests in the new
partnership to the Partners in accordance with their respective Capital Accounts
in liquidation of the Partnership, and the new partnership is deemed to continue
the business of the Partnership. Nothing in this Section 13.3 shall be deemed to
have constituted any Assignee as a Substituted Limited Partner without
compliance with the provisions of Section 11.4 hereof.
Section 13.4. Rights of Limited Partners. Except as otherwise provided in
this Agreement, (a) each Limited Partner shall look solely to the assets of the
Partnership for the return of its Capital Contribution, (b) no Limited Partner
shall have the right or power to demand or receive property other than cash from
the Partnership, and (c) no Limited Partner (other than any Limited Partner who
holds Preferred Units, to the extent specifically set forth herein and in the
applicable Partnership Unit Designation) shall have priority over any other
Limited Partner as to the return of its Capital Contributions, distributions or
allocations.
Section 13.5. Notice of Dissolution. In the event that a Liquidating Event
occurs or an event occurs that would, but for an election or objection by one or
more Partners pursuant to Section 13.1 hereof, result in a dissolution of the
Partnership, the General Partner shall, within 30 days thereafter, provide
written notice thereof to each of the Partners and, in the General Partner's
sole and absolute discretion or as required by the Act, to all other parties
with whom the Partnership regularly conducts business (as determined in the sole
and absolute discretion of the General Partner), and the General Partner may,
or, if required by the Act, shall, publish notice thereof in a newspaper of
general circulation in each place in which the Partnership regularly conducts
business (as determined in the sole and absolute discretion of the General
Partner).
Section 13.6. Cancellation of Certificate of Limited Partnership. Upon the
completion of the liquidation of the Partnership cash and property as provided
in Section 13.2 hereof, the Partnership shall be terminated, a certificate of
cancellation shall be filed with the State of Delaware, all qualifications of
the Partnership as a foreign limited partnership or association in jurisdictions
other than the State of Delaware shall be cancelled, and such other actions as
may be necessary to terminate the Partnership shall be taken.
Section 13.7. Reasonable Time for Winding-Up. A reasonable time shall be
allowed for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of its assets pursuant to Section 13.2 hereof,
in order to minimize any losses otherwise attendant upon such winding-up, and
the provisions of this Agreement shall remain in effect between the Partners
during the period of liquidation.
- 63 -
ARTICLE XIV
PROCEDURES FOR ACTIONS AND CONSENTS
OF PARTNERS; AMENDMENTS; MEETINGS
Section 14.1. Procedures for Actions and Consents of Partners. The actions
requiring consent or approval of Limited Partners pursuant to this Agreement,
including Section 7.3 hereof, or otherwise pursuant to applicable law, are
subject to the procedures set forth in this Article XIV.
Section 14.2. Amendments.
A. Amendments to this Agreement requiring Consent of the Limited
Partners may be proposed by the General Partner. Following such proposal, the
General Partner shall submit any proposed amendment to the Limited Partners. The
General Partner shall seek the written consent of the Limited Partners on the
proposed amendment or shall call a meeting to vote thereon and to transact any
other business that the General Partner may deem appropriate. For purposes of
obtaining a written consent, the General Partner may require a response within a
reasonable specified time, but not less than 10 days, and failure to respond in
such time period shall constitute a consent that is consistent with the General
Partner's recommendation with respect to the proposal; provided, however, that
an action shall become effective at such time as requisite consents are received
even if prior to such specified time.
B. Notwithstanding anything to the contrary in 14.2.A., the General
Partner shall have the power, without the consent of the Limited Partners, to
amend this Agreement as may be required to facilitate or implement any of the
following purposes:
(1) to add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any Affiliate of the
General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution, termination or
withdrawal of any Partner in accordance with this Agreement;
(3) to increase or decrease a Partner's Protected Amount in
accordance with this Agreement (which may be affected through the
replacement of Exhibit C with an amended Exhibit C);
(4) to reflect a change that does not adversely affect any of the
Limited Partners in any material respect, or to cure any ambiguity,
correct or supplement any provision in this Agreement not inconsistent
with law or with other provisions, or make other changes with respect to
matters arising under this Agreement that will not be inconsistent with
law or with the provisions of this Agreement or as may be expressly
provided by any other provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation of a
federal, state or local agency or contained in federal, state or local
law.
- 64 -
The General Partner shall notify the Limited Partners when any action under this
Section 14.2.B is taken in the next regular communication to the Limited
Partners.
Section 14.3. Meetings of the Partners.
A. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
a Majority in Interest of the Outside Limited Partners. The call shall state the
nature of the business to be transacted. Notice of any such meeting shall be
given to all Partners not less than seven days nor more than 30 days prior to
the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required under
this Agreement, such vote or Consent may be given at a meeting of Partners or
may be given in accordance with the procedure prescribed in Section 14.3.B
hereof.
B. Any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by a majority of the Percentage Interests of the
Partners (or such other percentage as is expressly required by this Agreement
for the action in question). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of
the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Each Limited Partner may authorize any Person or Persons to act
for it by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of 11 months from
the date thereof unless otherwise provided in the proxy (or there is receipt of
a proxy authorizing a later date). Every proxy shall be revocable at the
pleasure of the Limited Partner executing it, such revocation to be effective
upon the Partnership's receipt of written notice of such revocation from the
Limited Partner executing such proxy. The use of proxies will be governed in the
same manner as in the case of corporations organized under the General
Corporation Law of Delaware (including Section 212 thereof).
D. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such
rules for the conduct of the meeting as the General Partner or such other Person
deems appropriate in its sole and absolute discretion. Without limitation,
meetings of Partners may be conducted in the same manner as meetings of the
General Partner's stockholders and may be held at the same time as, and as part
of, the meetings of the General Partner's stockholders.
E. On matters on which Limited Partners are entitled to vote, each
Limited Partner holding OP Units shall have a vote equal to the number of OP
Units held.
F. Except as otherwise expressly provided in this Agreement, the
Consent of Holders of Partnership Interests representing a majority of the
Partnership Interests of the Limited Partners shall control.
- 65 -
ARTICLE XV
GENERAL PROVISIONS
Section 15.1. Addresses and Notice. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written communication (including by telecopy, facsimile, or commercial courier
service) to the Partner or Assignee at the address set forth in Exhibit A or
such other address of which the Partner shall notify the General Partner in
writing.
Section 15.2. Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the scope
or intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" or "Sections" are to Articles and Sections of this
Agreement.
Section 15.3. Pronouns and Plurals. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
Section 15.4. Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Section 15.6. Waiver.
A. No failure by any party to insist upon the strict performance of
any covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
B. The restrictions, conditions and other limitations on the rights
and benefits of the Limited Partners contained in this Agreement, and the
duties, covenants and other requirements of performance or notice by the Limited
Partners, are for the benefit of the Partnership and, except for an obligation
to pay money to the Partnership, may be waived or relinquished by the General
Partner, in its sole and absolute discretion, on behalf of the Partnership in
one or more instances from time to time and at any time.
Section 15.7. Counterparts. This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.
Section 15.8. Applicable Law. This Agreement shall be construed and
enforced in accordance with and governed by the laws of the State of Delaware,
without regard to the principles of conflicts of law. In the event of a conflict
between any provision of this Agreement and any non-mandatory provision of the
Act, the provisions of this Agreement shall control and take precedence.
- 66 -
Section 15.9. Entire Agreement. This Agreement contains all of the
understandings and agreements between and among the Partners with respect to the
subject matter of this Agreement and the rights, interests and obligations of
the Partners with respect to the Partnership.
Section 15.10. Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
Section 15.11. Limitation to Preserve REIT Status. Notwithstanding
anything else in this Agreement, to the extent that the amount paid, credited,
distributed or reimbursed by the Partnership to the Parent, the General Partner
or the Parent Limited Partner or their trustees, officers, directors, employees
or agents, whether as a reimbursement, fee, expense or indemnity (a "REIT
Payment"), would constitute gross income to the Parent for purposes of Code
Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any other
provision of this Agreement, the amount of such REIT Payments, as selected by
the General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced
for any Partnership Year so that the REIT Payments, as so reduced, for or with
respect to the Parent, the General Partner or the Parent Limited Partner, shall
not exceed the lesser of:
(i) an amount equal to the excess, if any, of (a) 4.9% of the
Parent's total gross income (but excluding the amount of any REIT
Payments) for the Partnership Year that is described in subsections (A)
through (H) of Code Section 856(c)(2) over (b) the amount of gross income
(within the meaning of Code Section 856(c)(2)) derived by the Parent from
sources other than those described in subsections (A) through (H) of Code
Section 856(c)(2) (but not including the amount of any REIT Payments); or
(ii) an amount equal to the excess, if any, of (a) 24% of the
Parent's total gross income (but excluding the amount of any REIT
Payments) for the Partnership Year that is described in subsections (A)
through (I) of Code Section 856(c)(3) over (b) the amount of gross income
(within the meaning of Code Section 856(c)(3)) derived by the Parent from
sources other than those described in subsections (A) through (I) of Code
Section 856(c)(3) (but not including the amount of any REIT Payments);
provided, however, that REIT Payments in excess of the amounts set forth
in clauses (i) and (ii) above may be made if the General Partner, as a
condition precedent, obtains an opinion of tax counsel that the receipt of
such excess amounts shall not adversely affect the Parent's ability to
qualify as a REIT. To the extent that REIT Payments may not be made in a
Partnership Year as a consequence of the limitations set forth in this
Section 15.11, such REIT Payments shall carry over and shall be treated as
arising in the following Partnership Year. The purpose of the limitations
contained in this Section 15.11 is to prevent the Parent from failing to
qualify as a REIT under the Code by reason of the Parent's share of items,
including distributions, reimbursements, fees, expenses or indemnities,
receivable directly or indirectly from the Partnership, and this Section
15.11 shall be interpreted and applied to effectuate such purpose.
Section 15.12. No Partition. No Partner nor any successor-in-interest to a
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership
partitioned, and each Partner, on behalf of itself and its successors and
assigns hereby waives any such right. It is the intention of the Partners that
the rights of the parties hereto and their successors-in-interest to Partnership
property, as among themselves, shall be governed by the terms of this Agreement,
and that the rights of the Partners and their successors-in-interest shall be
subject to the limitations and restrictions as set forth in this Agreement.
- 67 -
Section 15.13. No Third-Party Rights Created Hereby. The provisions of
this Agreement are solely for the purpose of defining the interests of the
Partners, inter se; and no other person, firm or entity (i.e., a party who is
not a signatory hereto or a permitted successor to such signatory hereto) shall
have any right, power, title or interest by way of subrogation or otherwise, in
and to the rights, powers, title and provisions of this Agreement. No creditor
or other third party having dealings with the Partnership (other than as
expressly set forth herein with respect to Indemnitees) shall have the right to
enforce the right or obligation of any Partner to make Capital Contributions or
loans to the Partnership or to pursue any other right or remedy hereunder or at
law or in equity. None of the rights or obligations of the Partners herein set
forth to make Capital Contributions or loans to the Partnership shall be deemed
an asset of the Partnership for any purpose by any creditor or other third
party, nor may any such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or any of the Partners.
Section 15.14. No Rights as Shareholders of General Partner or
Stockholders of Parent. Nothing contained in this Agreement shall be construed
as conferring upon the Holders of Partnership Units any rights whatsoever as
shareholders of the General Partner or stockholders of the Parent, including
without limitation any right to receive dividends or other distributions made to
shareholders of the General Partner or stockholders of the Parent or to vote or
to consent or receive notice as shareholders in respect of any meeting of
shareholders for the election of trustees of the General Partner or of any
meeting of the stockholders of the Parent for the election of directors or any
other matter.
Section 15.15. Creditors. Other than as expressly set forth herein with
respect to Indemnitees, none of the provisions of this Agreement shall be for
the benefit of, or shall be enforceable by, any creditor of the Partnership.
[the next page is the signature page]
- 68 -
IN WITNESS WHEREOF, this Amended and Restated Agreement of Limited
Partnership has been executed as of the date first written above.
GENERAL PARTNER:
▇▇▇▇▇▇▇ HOLDINGS BUSINESS TRUST I, a
Maryland business trust
By:
-------------------------------------
Name:
Title:
LIMITED PARTNERS:
▇▇▇▇▇▇▇ HOLDINGS BUSINESS TRUST II, a
Maryland business trust
By:
-------------------------------------
Name:
Title:
▇▇▇▇▇ ▇▇▇▇▇, an individual
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, an individual
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, an individual
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ PARTNERS LLC, an Arizona limited
liability company
By:
-------------------------------------
Name:
Title:
WITHDRAWING GENERAL PARTNER:
▇▇▇▇▇▇▇ HOLDINGS BUSINESS TRUST I, a
Massachusetts business trust
By:
-------------------------------------
Name:
Title:
AS OF [ ], 2004
EXHIBIT A
PARTNERS AND PARTNERSHIP UNITS
----------------------------------------------------------- --------------------------------------------------------
NAME AND ADDRESS OF PARTNERS PARTNERSHIP UNITS (TYPE AND AMOUNT)
----------------------------------------------------------- --------------------------------------------------------
GENERAL PARTNER:
----------------------------------------------------------- --------------------------------------------------------
LIMITED PARTNERS:
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
----------------------------------------------------------- --------------------------------------------------------
TOTALS
----------------------------------------------------------- --------------------------------------------------------
A-1
EXHIBIT B
NOTICE OF REDEMPTION
To: ▇▇▇▇▇▇▇ Mall Properties, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The undersigned Limited Partner or Assignee hereby irrevocably tenders for
Redemption _______ OP Units in ▇▇▇▇▇▇▇ Equities Operating Partnership LP in
accordance with the terms of the Amended and Restated Agreement of Limited
Partnership of ▇▇▇▇▇▇▇ Equities Operating Partnership LP, dated as of [ ]
(the "Agreement"), and the Redemption rights referred to therein. The
undersigned Limited Partner or Assignee:
(a) undertakes (i) to surrender such OP Units and any certificate therefor
at the closing of the Redemption and (ii) to furnish to the General Partner,
prior to the Specified Redemption Date, the documentation, instruments and
information required under Section 8.6.G of the Agreement;
(b) directs that the certified check representing the Cash Amount, or the
REIT Shares Amount, as applicable, deliverable upon the closing of such
Redemption be delivered to the address specified below;
(c) represents, warrants, certifies and agrees that:
(i) the undersigned Limited Partner or Assignee is a Qualifying Party,
(ii) the undersigned Limited Partner or Assignee has, and at the
closing of the Redemption will have, good, marketable and unencumbered
title to such OP Units, free and clear of the rights or interests of any
other person or entity,
(iii) the undersigned Limited Partner or Assignee has, and at the
closing of the Redemption will have, the full right, power and authority
to tender and surrender such Partnership Units as provided herein, and
(iv) the undersigned Limited Partner or Assignee has obtained the
consent or approval of all persons and entities, if any, having the right
to consent to or approve such tender and surrender; and
(d) acknowledges that he will continue to own such OP Units until and
unless either (1) such OP Units are acquired by the General Partner pursuant to
Section 8.6.B of the Agreement or (2) such redemption transaction closes.
B-1
All capitalized terms used herein and not otherwise defined shall have the
same meaning ascribed to them respectively in the Agreement.
Dated:
---------------------------
Name of Limited Partner or Assignee:
-----------------------------------------
-----------------------------------------
(Signature of Limited Partner or Assignee)
-----------------------------------------
(Street Address)
-----------------------------------------
-----------------------------------------
-----------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------------------
Issue Check Payable/REIT Shares to:
-----------------------------------------
Name:
-----------------------------------------
Please insert social security or
identifying number:
-----------------------------------------
B-2
EXHIBIT C
OBLIGATED PARTNERS AND PROTECTED AMOUNTS
OBLIGATED PARTNER PROTECTED AMOUNT
----------------- ----------------
C-1
EXHIBIT D
NOTICE OF ELECTION BY PARTNER TO CONVERT PI UNITS INTO OP UNITS
The undersigned Holder of PI Units hereby irrevocably (i) elects to
convert the number of PI Units in ▇▇▇▇▇▇▇ Equities Operating Partnership LP (the
"Partnership") set forth below into OP Units in accordance with the terms of the
Amended and Restated Agreement of Limited Partnership of the Partnership, as
amended; and (ii) directs that any cash in lieu of OP Units that may be
deliverable upon such conversion be delivered to the address specified below.
The undersigned hereby represents, warrants, and certifies that the undersigned
(a) has title to such PI Units, free and clear of the rights of interests of any
other person or entity other than the Partnership; (b) has the full right,
power, and authority to cause the conversion of such PI Units as provided
herein; and (c) has obtained the consent or approval of all persons or entitles,
if any, having the right to consent or approve such conversion.
Name of Holder:
-----------------------------------------------------------------
(Please Print: Exact Name as Registered with Partnership)
Number of PI Units to be Converted:
---------------------------------------------
Date of this Notice:
------------------------------------------------------------
-----------------------------------------------------------------------
(Signature of Holder: Sign Exact Name as Registered with Partnership)
-----------------------------------------------------------------------
(Street Address)
-----------------------------------------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
-----------------------------------------------
D-1
EXHIBIT E
NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF PI UNITS INTO OP UNITS
▇▇▇▇▇▇▇ Equities Operation Partnership LP (the "Partnership") hereby
irrevocably elects to cause the number of PI Units held by the Holder of PI
Units set forth below to be converted into OP Units in accordance with the terms
of the Amended and Restated Agreement of Limited Partnership of the Partnership
as amended.
Name of Holder:
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(Please Print: Exact Name as Registered with Partnership)
Number of PI Units to be Converted:
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Date of this Notice:
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