Exhibit 10(e)
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
MACKLOWE PROPERTIES, L.P.
Dated as of ____________, 1998
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINED TERMS...............................2
ARTICLE 2
ORGANIZATIONAL MATTERS..........................14
Section 2.1 Formation............................................14
Section 2.2 Name.................................................14
Section 2.3 Registered Office and Agent; Principal Office........15
Section 2.4 Power of Attorney....................................15
Section 2.5 Term.................................................16
ARTICLE 3
PURPOSE.................................16
Section 3.1 Purpose and Business.................................16
Section 3.2 Powers...............................................17
Section 3.3 Partnership Only for Purposes Specified..............17
ARTICLE 4
CAPITAL CONTRIBUTIONS..........................18
Section 4.1 Capital Contributions of the Partners................18
Section 4.2 Issuances of Additional Partnership Interests........19
Section 4.3 Contribution of Proceeds of Issuance of REIT Shares..20
Section 4.4 No Interest on Capital...............................20
Section 4.5 No Other Contribution Provisions.....................20
Section 4.6 No Preemptive Rights.................................21
ARTICLE 5
DISTRIBUTIONS...............................21
Section 5.1 Requirement and Characterization of Distributions....21
Section 5.2 Amounts Withheld.....................................21
Section 5.3 Distributions upon Liquidation.......................22
Section 5.4 Revisions to Reflect Issuance of Additional
Partnership Interests ...............................22
Section 5.5 Minimum Distributions If REIT Shares Not Publicly
Traded ..............................................22
ARTICLE 6
ALLOCATIONS OF PROFITS AND LOSSES....................22
Section 6.1 Profits and Losses...................................22
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Section 6.2 Mandatory Allocations................................22
Section 6.3 Other Allocation Rules...............................24
Section 6.4 Tax Allocations......................................24
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS..................25
Section 7.1 Management...........................................25
Section 7.2 Certificate of Limited Partnership...................29
Section 7.3 Restrictions on General Partner Authority............30
Section 7.4 Reimbursement of the General Partner and the
General Partner; DRIP's and Repurchase Programs......30
Section 7.5 Outside Activities of the General Partner............32
Section 7.6 Contracts with Affiliates............................32
Section 7.7 Indemnification......................................33
Section 7.8 Liability of the General Partner.....................35
Section 7.9 Other Matters Concerning the General Partner.........36
Section 7.10 Title to Partnership Assets..........................37
Section 7.11 Reliance by Third Parties............................37
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................38
Section 8.1 Limitation of Liability..............................38
Section 8.2 Management of Business...............................38
Section 8.3 Outside Activities of Limited Partners...............38
Section 8.4 Return of Capital....................................39
Section 8.5 Rights of Limited Partners Relating to the
Partnership .........................................39
Section 8.6 Redemption Rights....................................40
Section 8.7 Intentionally Omitted................................43
Section 8.8 Class B Exchange Right...............................43
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS..................43
Section 9.1 Records and Accounting...............................43
Section 9.2 Fiscal Year..........................................43
Section 9.3 Reports..............................................43
ARTICLE 10
TAX MATTERS...............................44
Section 10.1 Preparation of Tax Returns...........................44
Section 10.2 Tax Elections........................................44
Section 10.3 Tax Matters Partner..................................45
Section 10.4 Organizational Expenses..............................46
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Page
Section 10.5 Withholding..........................................46
ARTICLE 11
TRANSFERS AND WITHDRAWALS........................47
Section 11.1 Transfer.............................................47
Section 11.2 Transfer of the General Partner Interest and
General Partner's Limited Partner Interest;
Extraordinary Transactions...........................48
Section 11.3 Limited Partners' Rights to Transfer.................49
Section 11.4 Substituted Limited Partners.........................50
Section 11.5 Assignees............................................51
Section 11.6 General Provisions...................................51
ARTICLE 12
ADMISSION OF PARTNERS..........................54
Section 12.1 Admission of Successor General Partner...............54
Section 12.2 Admission of Additional Limited Partners.............54
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership .........................................55
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION.................55
Section 13.1 Dissolution..........................................55
Section 13.2 Winding-Up...........................................56
Section 13.3 Deemed Distribution and Recontribution...............58
Section 13.4 Rights of Limited Partners...........................58
Section 13.5 Notice of Dissolution................................58
Section 13.6 Termination of Partnership and Cancellation of
Certificate of Limited Partnership...................58
Section 13.7 Reasonable Time for Winding-Up.......................59
Section 13.8 Waiver of Partition..................................59
Section 13.9 Liability of Liquidator..............................59
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS...............59
Section 14.1 Amendments...........................................59
Section 14.2 Meetings of the Partners.............................61
ARTICLE 15
GENERAL PROVISIONS............................62
Section 15.1 Addresses and Notice.................................62
Section 15.2 Titles and Captions..................................62
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Page
Section 15.3 Pronouns and Plurals.................................62
Section 15.4 Further Action.......................................62
Section 15.5 Binding Effect.......................................62
Section 15.6 Creditors............................................63
Section 15.7 Waiver...............................................63
Section 15.8 Counterparts.........................................63
Section 15.9 Applicable Law.......................................63
Section 15.10 Invalidity of Provisions.............................63
Section 15.11 Entire Agreement.....................................64
Section 15.12 No Rights as Stockholders............................64
EXHIBITS
Exhibit A - Partner's Contributions and Partnership Interests
Exhibit B - Notice of Redemption
iv
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MACKLOWE PROPERTIES, L.P.
Dated as of ___________, 1998
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (this
"Agreement") of MACKLOWE PROPERTIES, L.P., a Delaware limited partnership (the
"Partnership") , dated as of _____________, 1998, is entered into by and among
MACKLOWE PROPERTIES, INC., a Maryland corporation (the "General Partner"), and
the Persons (as defined below) whose names are set forth on Exhibit A attached
hereto under the heading "Limited Partners" (as it may be amended from time to
time).
WHEREAS, this Partnership was originally formed on March 25, 1998;
WHEREAS, immediately prior to or contemporaneously with the execution
hereof, the persons named on Exhibit A hereto conveyed to the Partnership all of
their right, title and interest to certain real properties, direct and indirect
interests in such properties and other assets owned by them and received in
exchange therefor Partnership Interests (as defined below) and, accordingly, the
parties would like to amend and restate the original partnership agreement of
this Partnership;
WHEREAS, the General Partner proposes (i) to effect a public offering of
its common stock, (ii) to acquire and cause the Partnership to acquire direct
and indirect interests in certain properties and other assets, (iii) to cause
the Partnership to enter into certain financing arrangements and (iv) to
contribute the remaining net proceeds from the public offering and the other
assets of the General Partner to the Partnership;
WHEREAS, the Partnership will issue Partnership Interests to the General
Partner in accordance with the foregoing transactions;
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
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ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the Partnership as
a Limited Partner pursuant to Sections 4.2 and 12.2 hereof and who is shown as
such on the books and records of the Partnership.
"Adjusted Capital Account Deficit" means, with respect to any Partner, the
deficit balance, if any, in such Partner's Capital Account as of the end of the
relevant Partnership Year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such
Partner is obligated to restore to the Partnership pursuant to any
provision of this Agreement or is deemed to be obligated to restore to the
Partnership pursuant to the second to last sentences of Regulations ▇▇.▇▇.
1.704-2(g)(1) and 1.704-2(i)(5).
(ii) Debit to such Capital Account the items described in
Regulations ▇▇.▇▇. 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
Except as otherwise modified herein, the foregoing definition of Adjusted
Capital Account Deficit is intended to comply with the provisions of Regulations
ss. 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Administrative Expenses" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, and (iii) to the
extent not included in clause (ii) above, REIT Expenses.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such Person.
For purposes of this definition, "control," when used with respect to any
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise, and the terms "controlling" and "controlled" have
meanings correlative to the foregoing. No officer, director or stockholder of
the General
2
Partner shall be considered an Affiliate of the General Partner solely as a
result of serving in such capacity or being a stockholder of the General
Partner.
"Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be further amended, supplemented or restated from time to
time.
"Articles of Incorporation" means the Articles of Incorporation or other
organizational document governing the General Partner, as amended or restated
from time to time.
"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.
"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.
"Capital Account" means, with respect to each Partner, a book account
maintained in accordance with the following provisions:
(i) To each Partner's Capital Account there shall be credited such
Partner's Capital Contributions, such Partner's distributive share of Profits
and any items in the nature of income or gain which are allocated to such
Partner pursuant to Section 6.2, and the amount of any Partnership liabilities
that are assumed by such Partner or that are secured by any Partnership property
distributed to such Partner.
(ii) To each Partner's Capital Account there shall be debited the
amount of cash and the Gross Asset Value of any Partnership asset distributed to
such Partner pursuant to any provision of this Agreement, such Partner's
distributive share of Losses and any items in the nature of expenses and losses
which are allocated to such Partner pursuant to Section 6.2, and the amount of
any liabilities of such Partner that are assumed by the Partnership or which are
secured by any property contributed to the Partnership by such Partner (except
to the extent already reflected in the amount of such Partner's Capital
Contributions).
If the Gross Asset Value of Partnership assets are adjusted pursuant to
paragraph (ii), (iii) or (iv) of the definition of Gross Asset Value, the
Capital Accounts of the Partners shall be adjusted to reflect the aggregate net
adjustments as if the Partnership sold all of its assets for their fair market
values, and recognized gain or loss equal to the aggregate amount of such net
adjustment.
The foregoing definition and other provisions of this Agreement relating
to the maintenance of Capital Accounts are intended to comply with Code ss.
704(b) and the
3
Regulations thereunder, and shall be interpreted and applied in a manner
consistent with such regulations.
Any transferee of a Partnership Interest or a portion thereof shall
succeed to the Capital Account relating to the Partnership Interest transferred
or the corresponding portion thereof.
"Capital Contributions" means, with respect to any Partner, the amount of
cash and the initial Gross Asset Value of any other property contributed or
deemed contributed to the capital of the Partnership by or on behalf of such
Partner, reduced by the amount of any liability assumed by the Partnership
relating to such property and any liability to which such property is subject.
"Cash Amount" means an amount of cash per Partnership Unit equal to the
Value on the Valuation Date of the REIT Shares Amount.
"Certificate of Limited Partnership" means the Certificate of Limited
Partnership relating to the Partnership filed in the office of the Delaware
Secretary of State, as amended from time to time in accordance with the terms
hereof and the Act.
"Class B Limited Partner" means any Limited Partner named as a Class B
Limited Partner under the heading "Class B Limited Partners" on Exhibit A
attached hereto.
"Class B Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued to Class B Limited Partners
pursuant to Sections 4.1, 4.2 and 4.3. The number of Class B Partnership Units
outstanding and the Percentage Interest in the Partnership represented by such
Units are set forth in Exhibit A attached hereto, as such Exhibit may be amended
from time to time. The ownership of Class B Partnership Units shall be evidenced
by such form of certificate for units as the General Partner adopts from time to
time unless the General Partner determines that the Class B Partnership Units
shall be uncertificated securities.
"Class B Redeeming Partner" has the meaning set forth in Section 8.6.B.
"Class B Redemption Right" has the meaning set forth in Section 8.6.B.
"Code" means the Internal Revenue Code of 1986, as amended and in effect
from time to time, 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.
"Common Limited Partner" means any Limited Partner named as a Common
Limited Partner under the heading "Common Limited Partners" on Exhibit A
attached hereto.
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"Common Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued to Common Limited Partners pursuant
to Sections 4.1, 4.2 and 4.3. The number of Common Partnership Units outstanding
and the Percentage Interest in the Partnership represented by such Units are set
forth in Exhibit A attached hereto, as such Exhibit may be amended from time to
time. The ownership of Common Partnership Units shall be evidenced by such form
of certificate for units as the General Partner adopts from time to time unless
the General Partner determines that the Common Partnership Units shall be
uncertificated securities.
"Common Redeeming Partner" has the meaning set forth in Section 8.6.A.
"Common Redemption Right" has the meaning set forth in Section 8.6.A.
"Consent" means the consent or approval of a proposed action by a Partner
given in accordance with Section 14.2 hereof.
"Conversion Factor" means 1.0; provided, that if the General Partner (i)
declares or pays a dividend on its outstanding REIT Shares in REIT Shares or
makes a distribution to all holders of its outstanding REIT Shares in REIT
Shares; (ii) subdivides its outstanding REIT Shares; or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such purpose that such dividend, distribution, subdivision or
combination has occurred as of such time), and the denominator of which shall be
the actual number of REIT Shares (determined without the above assumption)
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination. Any adjustment to the Conversion Factor shall become
effective immediately after the effective date of such event retroactive to the
record date, if any, for such event (provided, however, if a Notice of
Redemption is given prior to such a record date and the Specified Redemption
Date is after such a record date, then the adjustment to the Conversion Factor
shall, with respect to such redeeming Partner, be retroactive to the date of
such Notice of Redemption). It is intended that adjustments to the Conversion
Factor are to be made in order to avoid unintended dilution or anti-dilution as
a result of transactions in which REIT Shares are issued, redeemed or exchanged
without a corresponding issuance, redemption or exchange of Partnership Units.
If, prior to a Specified Redemption Date, Rights (other than Rights issued
pursuant to an employee benefit plan or other compensation arrangement) were
issued and have expired, and such Rights were issued with an exercise price
that, together with the purchase price for such Rights, was below fair market
value in relation to the security or other property to be acquired upon the
exercise of such Rights, and such Rights were issued to all holders of
outstanding REIT Shares or the General Partner cannot in good faith represent
that the issuance of such Rights benefitted the Limited Partners, then the
Conversion Factor applicable upon a Notice of Redemption shall be
5
equitably adjusted in a manner consistent with antidilution provisions in
warrants and other instruments in the case of such a below market issuance or
exercise price. A similar equitable adjustment to protect the value of
Partnership Units shall be made in all events if any Rights issued under a
"Shareholder Rights Plan" became exercisable and expired prior to a Specified
Redemption Date.
"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) obligations of such Person
incurred in connection with entering into a lease which, in accordance with
generally accepted accounting principles, should be capitalized.
"Depreciation" means, for each Partnership Year or other period, an amount
equal to the depreciation, amortization or other cost recovery deduction
allowable for federal income tax purposes with respect to an asset for such
Partnership Year or other period; provided, however, that if the Gross Asset
Value of an asset differs from its adjusted basis for federal income tax
purposes at the beginning of such Partnership Year or other period, Depreciation
shall be an amount which bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or other cost
recovery deduction for such Partnership Year or other period bears to such
beginning adjusted tax basis; provided, further, that if the federal income tax
depreciation, amortization, or other cost recovery deduction for such
Partnership Year is zero, Depreciation shall be determined with reference to
such beginning Gross Asset Value using any reasonable method selected by the
General Partner.
"Effective Date" means the date of closing the initial public offering of
REIT Shares by the General Partner.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange Right" has the meaning set forth in Section 8.8
"Extraordinary Transaction" shall mean, with respect to the General
Partner, the occurrence of one or more of the following events: (i) a merger
(including a triangular merger), consolidation or other combination with or into
another Person; (ii) the direct or indirect sale, lease, exchange or other
transfer of all or substantially all of its assets in one transaction or a
series of transactions; (iii) any reclassification, recapitalization or change
of its
6
outstanding equity interests (other than a change in par value, or from par
value to no par value, or as a result of a split, dividend or similar
subdivision); (iv) any issuance of equity securities of the General Partner in
exchange for assets (other than an issuance of securities for cash or an
issuance of securities pursuant to an employee benefit plan); (v) any Change of
Control (as defined in the Articles of Incorporation) or (vi) the adoption of
any plan of liquidation or dissolution of the General Partner (whether or not in
compliance with the provisions of this Agreement).
"General Partner" means Macklowe Properties, Inc., a Maryland corporation,
in its capacity as the general partner of the Partnership, or its successors as
general partner of the Partnership.
"General Partner Interest" means a Partnership Interest held by the
General Partner, in its capacity as general partner. A General Partner Interest
may be expressed as a number of Partnership Units.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted
basis for federal income tax purposes, except as follows:
(i) 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 at the time
of contribution, as reasonably determined by the General Partner;
(ii) The Gross Asset Values of all Partnership Assets shall be adjusted to
equal their respective gross fair market values, as reasonably determined by the
General Partner, as of the following times: (a) the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (b) the distribution by the Partnership
to a Partner of more than a de minimis amount of property as consideration for
an interest in the Partnership; and (c) the liquidation of the Partnership
within the meaning of Regulations ss. 1.704-1(b)(2)(ii)(g); provided, however,
that adjustments pursuant to clauses (a) and (b) above shall be made only if the
General Partner reasonably determine that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership;
(iii) The Gross Asset Value of any Partnership Asset distributed to any
Partner shall be the gross fair market value of such asset on the date of
distribution; and
(iv) 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 ss. 734(b) or Code ss. 743(b), but only to the extent that such
adjustments are taken into account in determining Capital Accounts pursuant to
Regulations ss. 1.704-1(b)(2)(iv)(m).
7
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
this provision, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of
computing Profits and Losses. Any adjustment to the Gross Asset Values of
Partnership Assets shall require an adjustment to the Partner's Capital Account
as provided in the definition of Profits and Losses and in Section 6.2 hereof.
"Incapacity" or "Incapacitated" means, (i) as to any individual Partner,
death, total physical disability or entry by a court of competent jurisdiction
adjudicating him incompetent to manage his or her Person or estate; (ii) as to
any corporation which is a Partner, the filing of a certificate of dissolution,
or its equivalent, for the corporation or the revocation of its charter; (iii)
as to any partnership which is a Partner, the dissolution and commencement of
winding up of the partnership; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate's entire interest in the
Partnership; (v) as to any trustee of a trust which 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 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 of or against such Partner under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one
hundred twenty (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 one hundred twenty (120) days
of such appointment; or (h) an appointment referred to in clause (g) which has
been stayed is not vacated within one hundred twenty (120) days after the
expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by reason
of (A) his status as the General Partner, or as a stockholder or Affiliate of
the General Partner, or as a director, officer or employee of the Partnership,
the General Partner or any such stockholder or Affiliate of the General Partner,
or (B) his or its liabilities, pursuant to a loan guarantee 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 assets subject to); and (ii)
such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from
8
time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.
"Independent Directors" has the meaning given such term in the Articles of
Incorporation.
"IRS" means the Internal Revenue Service, which administers the internal
revenue laws of the United States.
"Limited Partner" means any Person (including the General Partner) named
as a Limited Partner in Exhibit A attached hereto (whether a Common Limited
Partner or a Class B Limited Partner), as such Exhibit 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 of 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 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 Partnership Units.
"Liquidating Events" has the meaning set forth in Section 13.1.
"Liquidator" has the meaning set forth in Section 13.2.
"Losses" has the meaning set forth in the definition of "Profits" and
"Losses."
"Nonrecourse Deductions" has the meaning set forth in Regulations ss.
1.704-2(b)(1). The amount of Nonrecourse Deductions for a Partnership Year
equals the net increase, if any, in the amount of Partnership Minimum Gain
during such Partnership Year reduced by any distributions during such
Partnership Year of proceeds of a Nonrecourse Liability that are allocable to an
increase in Partnership Minimum Gain, determined according to the provisions of
Regulations ▇▇.▇▇. 1.704-2(c) and 1.704-2(h).
"Nonrecourse Liability" has the meaning set forth in Regulations ss.
1.704-2(b)(3).
"Notice of Redemption" means the Notice of Redemption substantially in the
form of Exhibit B to this Agreement.
"Partner" means the General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners collectively.
9
"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 ss. 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations ss.
1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in Regulations
ss. 1.704- 2(i)(2). The amount of Partner Nonrecourse Deductions with respect to
a Partner Nonrecourse Debt for a Partnership Year equals the net increase, if
any, in the amount of Partner Minimum Gain during such Partnership Year
attributable to such Partner Nonrecourse Debt, reduced by any distributions
during that Partnership Year to the Partner that bears the economic risk of loss
for such Partner Nonrecourse Debt to the extent that such distributions are from
the proceeds of such Partner Nonrecourse Debt and are allocable to an increase
in Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined according to the provisions of Regulations ▇▇.▇▇. 1.704-2(h) and
1.704-2(i).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, as it may be amended and/or restated, and any
successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of
Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations ss.
1.704-2(d).
"Partnership Record Date" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.1 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its stockholders of some or all of its portion of
such distribution.
"Partnership Unit" or "Unit" means a fractional, undivided share of the
Partnership Interests of all Partners (including Class B Partnership Units and
Common Partnership Units) issued pursuant to Sections 4.1, 4.2 and 4.3. The
number of Partnership Units outstanding and the Percentage Interest in the
Partnership represented by such Units are set forth in Exhibit A attached
hereto, as such Exhibit may be amended from time to time. The ownership of
Partnership Units shall be evidenced by such form of certificate for units as
the General Partner adopts from time to time unless the General Partner
determines that the Partnership Units shall be uncertificated securities.
10
"Partnership Year" means the fiscal year of the Partnership, which shall
be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time.
"Person" means an individual or a corporation, partnership, trust,
unincorporated organization, association or other entity.
"Profits" and "Losses" means, for each Partnership Year or other period,
an amount equal to the Partnership's taxable income or loss for such Partnership
Year or period, determined in accordance with Code ss. 703(a) (for this purpose,
all items of income, gain, loss, or deduction required to be stated separately
pursuant to Code ss. 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
(i) Any income of the Partnership that is exempt from federal
income tax or excluded from federal gross income and not otherwise taken
into account in computing Profits or Losses pursuant to this Section shall
be added to such taxable income or loss;
(ii) Any expenditures of the Partnership described in Code ss.
705(a)(2)(B) or treated as Code ss. 705(a)(2)(B) expenditures pursuant to
Regulations ss. 1.704-1(b)(2)(iv)(i), and not otherwise taken into account
in computing Profits or Losses pursuant to this Section, shall be
subtracted from such taxable income or loss;
(iii) If the Gross Asset Value of any Partnership Asset is
adjusted pursuant to any provision of this Agreement in accordance with
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 Profits or Losses;
(iv) Gain or loss resulting from any disposition of any
Partnership Asset 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 Asset differs from its Gross Asset Value;
(v) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Partnership
Year or other period, computed in accordance with the definition of
Depreciation; and
11
(vi) Notwithstanding any other provision of this Section, any
items which are allocated pursuant to Section 6.2 shall not be taken into
account in computing Profits or Losses.
"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 any of the foregoing.
"Redeeming Partner" means either a Common Redeeming Partner or a Class B
Redeeming Partner.
"Redemption Right" means either the Common Redemption Right or the Class B
Redemption Right.
"Regulations" means the Income Tax Regulations promulgated under the Code,
as such regulations may be amended from time to time (including corresponding
provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856 of the Code.
"REIT Expenses" means (i) costs and expenses relating to the formation and
continuity of existence and operation of the General Partner and any
Subsidiaries (which Subsidiaries shall, for purposes hereof, be included within
the definition of General Partner), including taxes, fees and assessments
associated therewith, and any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses
relating to the public offering and registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including underwriting discounts and selling commissions applicable to any such
offering of securities, (iii) costs and expenses associated with the preparation
and filing of any periodic reports by the General Partner under federal, state
or local laws or regulations, (iv) costs and expenses associated with compliance
by the General Partner with laws, rules and regulations promulgated by any
regulatory body and (v) all other operating or administrative costs of the
General Partner incurred in the ordinary course of its business on behalf of or
in connection with the Partnership.
"REIT Share" shall mean a share of common stock, par value $.001 per
share, of the General Partner.
"REIT Shares Amount" shall mean a number of REIT Shares equal to the
product of the number of Partnership Units offered for redemption by a Redeeming
Partner, multiplied by the Conversion Factor in effect on the date of receipt by
the General Partner of a Notice of Redemption; provided, that if the General
Partner issues to all holders of REIT Shares rights, options, warrants or
convertible or exchangeable securities entitling the stockholders to
12
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, "Rights"), and the Rights have not expired at the Specified
Redemption Date, then the REIT Shares Amount shall also include the Rights that
were issuable to a holder of the REIT Shares Amount of REIT Shares on the
applicable record date relating to the issuance of such Rights.
"Rights" has the meaning set forth in the definition of "REIT Shares
Amount."
"Specified Redemption Date" means the tenth (10th) Business Day after
receipt by the General Partner of a Notice of Redemption; provided, that no
Specified Redemption Date shall occur before that date that is (i) six (6)
months after the Effective Date in the case of a Class B Redemption Right, or
(ii) twelve (12) months after the Effective Date in case of a Common Redemption
Right; provided, further, that if the General Partner combines its outstanding
REIT Shares, no Specified Redemption Date shall occur after the record date of
such combination of REIT Shares and prior to the effective date of such
combination.
"Stock Option Plan" means any stock incentive plan of the General Partner,
the Partnership or any Affiliate of the Partnership or the General Partner.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which a majority of (i) the voting power of the
voting equity securities; or (ii) the outstanding equity interests, is owned,
directly or indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.4.
"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.
"Unit" has the meaning set forth in the definition of "Partnership Unit."
"Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption or, if such date is not a Business Day, the first Business
Day thereafter.
"Value" means, with respect to a REIT Share, the average of the daily
market price for the ten (10) consecutive trading days immediately preceding the
Valuation Date. The market price for each such trading day shall be: (i) if the
REIT Shares are listed or admitted to trading on any securities exchange or the
Nasdaq National Market System, the closing price on such day, or if no such sale
takes place on such day, the average of the closing bid and asked prices on such
day; (ii) if the REIT Shares are not listed or admitted to trading on any
securities exchange or the Nasdaq National Market System, the last reported sale
price on such day or, if
13
no sale takes place on such day, the average of the closing bid and asked prices
on such day, as reported by a reliable quotation source designated by the
General Partner; or (iii) if the REIT Shares are not listed or admitted to
trading on any securities exchange or the Nasdaq National Market System and no
such last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a reliable quotation source designated by the General Partner, or if there
shall be no bid and asked prices on such day, the average of the high bid and
low asked prices, as so reported, on the most recent day (not more than ten (10)
days prior to the date in question) for which prices have been so reported;
provided, that if there are no bid and asked prices reported during the ten (10)
days prior to the date in question, the Value of the REIT Shares shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. If the REIT Shares Amount includes Rights, then the Value of such
Rights shall be determined by the General Partner acting in good faith on the
basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate; provided, that the Value of any Rights issued
pursuant to a "Shareholder Rights Plan" shall be deemed to have no value unless
a "triggering event" shall have occurred (i.e., if the Rights issued pursuant
thereto are no longer "attached" to the REIT Shares and are able to trade
independently).
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Formation
The Partnership is a limited partnership organized pursuant to the
provisions of the Act. The Partners hereby agree to continue the Partnership
upon the terms and conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration and termination of the Partnership shall be governed by the
Act. The Partnership Interest of each Partner shall be personal property for all
purposes.
Section 2.2 Name
The name of the Partnership is "Macklowe Properties, L.P." The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the Partnership at any time and from time to time and shall notify
the Limited Partners of such change in the next regular communication to the
Limited Partners.
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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 and the name and address of the registered agent for service of process
on the Partnership in the State of Delaware is Corporation Service Company, ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. The principal office of the
Partnership shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇, 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 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:
(a) execute, swear to, 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 of Limited Partnership and all amendments or restatements
thereof) that the General Partner or the Liquidator deems appropriate or
necessary to form, qualify or continue the existence or qualification of
the Partnership as a limited partnership (or a partnership in which the
Limited Partners have limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may or plans to conduct
business or own property; (b) all instruments that the General Partner
deems appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with its
terms; (c) all conveyances and other instruments or documents that the
General Partner 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 instruments relating to the admission, withdrawal,
removal or substitution of any Partner pursuant to, or other events
described in, Article 11, 12 or 13 hereof or the Capital Contribution of
any Partner; and (e) all certificates, documents and other instruments
relating to the determination of the rights, preferences and privileges of
Partnership Interests; and
(b) execute, swear to, seal, 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 any Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action which is
made or given by the Partners hereunder or is consistent with the terms of
this
15
Agreement or appropriate or necessary, in the sole discretion of the
General Partner or any Liquidator, to effectuate the terms or intent of
this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be irrevocable
and a power coupled with an interest, in recognition of the fact that each of
the Partners will be relying upon the power of the General Partner and any
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 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 any Liquidator, acting in good faith pursuant to such power
of attorney, and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any 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 fifteen (15) days after receipt of the
General Partner's or 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
The term of the Partnership commenced on March 25, 1998, the date on which
the Certificate of Limited Partnership was filed in the office of the Secretary
of State of the State of Delaware, and shall continue until December 31, 2048,
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act; (ii) to enter into any partnership,
joint venture, limited liability company or other similar arrangement to engage
in any of the foregoing or to own interests in any entity
16
engaged, directly or indirectly, in any of the foregoing; and (iii) to do
anything necessary or incidental to the foregoing; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to be classified as a REIT, unless the General
Partner ceases to qualify as a REIT for reasons other than the conduct of the
business of the Partnership. In connection with the foregoing, and without
limiting the General Partner's right, in its sole discretion, to cease
qualifying as a REIT, the Partners acknowledge the General Partner's current
status as a REIT inures to the benefit of all of the Partners and not solely the
General Partner.
Section 3.2 Powers
The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property; provided,
however, that the Partnership shall not take, or refrain from taking, any action
which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT; (ii) could subject the General Partner to any
additional taxes under Section 857 or Section 4981 of the Code; or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.
Section 3.3 Partnership Only for Purposes Specified
The Partnership shall be a partnership only for the purposes specified in
Section 3.1 above, and this Agreement shall not be deemed to create a
partnership 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 above.
17
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners
A. Initial Capital Contributions and Recapitalization of the Partnership
on the Effective Date. The General Partner and certain Limited Partners have
previously made Capital Contributions to the Partnership upon its formation. On
the Effective Date, the General Partner, as general partner, shall contribute
additional cash or other assets to the Partnership so that its total
contribution, as general partner, shall be the amount set forth on Exhibit A
under the heading "General Partner." On the Effective Date the General Partner,
as a limited partner, and the other Persons listed on Exhibit A will make
Capital Contributions to the Partnership so that their total contributions as
Limited Partners shall be the amount set forth opposite their names on Exhibit A
under the heading "Limited Partners." The General Partner will complete Exhibit
A to reflect the Capital Contributions made by each Partner, the Partnership
Units assigned to each Partner and the Percentage Interest in the Partnership
represented by such Partnership Units. The Capital Accounts of the Partners and
the Gross Asset Values of the Partnership's Assets shall be determined as of the
Effective Date to reflect the Capital Contributions made prior to and on the
Effective Date.
B. General Partnership Interest. A number of Partnership Units held by the
General Partner equal to one percent (1%) of all outstanding Partnership Units
shall be deemed to be the General Partner Partnership Units and shall be the
General Partnership Interest. All other Partnership Units held by the General
Partner shall be deemed to be Limited Partnership Interests and shall be held by
the General Partner in its capacity as a Limited Partner in the Partnership.
C. Capital Contributions by Merger. To the extent the Partnership acquires
any property by the merger of any other Person into the Partnership, Persons who
receive Partnership Interests in exchange for their interests in the Person
merging into the Partnership shall become Partners and shall be deemed to have
made Capital Contributions as provided in the applicable merger agreement and as
set forth in Exhibit A, as amended to reflect such deemed Capital Contributions.
D. No Obligation to Make Additional Capital Contributions. Each Partner
shall own the number of Partnership Units set forth for such Partner in Exhibit
A and shall have a Percentage Interest in the Partnership as set forth in
Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to
time by the General Partner to the extent necessary to reflect accurately
redemptions, additional Capital Contributions, the issuance of additional
Partnership Units (pursuant to any merger or otherwise), or similar events
having an effect on any Partner's Percentage Interest. Except as provided in
Sections 4.2, 10.5 or elsewhere in
18
this Agreement, the Partners shall have no obligation to make any additional
Capital Contributions or loans to the Partnership.
Section 4.2 Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized to cause the Partnership from
time to time to issue to the Partners (including the General Partner and its
Affiliates) or other Persons (including, without limitation, in connection with
the contribution of property to the Partnership) additional Partnership Units or
other Partnership Interests in one or more classes, or one or more series of any
of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to the Limited Partner Interests issued on the
Effective Date, all as shall be determined by the General Partner in its sole
and absolute discretion subject to Delaware law, including, without limitation,
(i) the allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Interests; (ii) the right of
each such class or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership; provided, that no
such additional Partnership Units or other Partnership Interests shall be issued
to the General Partner, unless either (a)(1) the additional Partnership
Interests are issued in connection with the grant, award or issuance of REIT
Shares or other equity interests by the General Partner, which REIT Shares or
other equity interests have designations, preferences and other rights such that
the economic interests attributable to such REIT Shares or other equity
interests are substantially similar to the designations, preferences and other
rights of the additional Partnership Interests issued to the General Partner in
accordance with this Section 4.2.A, and (2) the General Partner shall make a
Capital Contribution to the Partnership in an amount equal to the proceeds
raised in connection with such issuance, or (b) the additional Partnership
Interests are issued to all Partners in proportion to their respective
Percentage Interests. In addition, the General Partner may acquire Units from
other Partners pursuant to this Agreement. If the Partnership issues Partnership
Interests pursuant to this Section 4.2.A, the General Partner shall make such
revisions to this Agreement including but not limited to the revisions described
in Section 5.4 and Section 8.6 hereof, as it deems necessary to reflect the
issuance of such additional Partnership Interests and the special rights, powers
and duties associated therewith. Unless specifically set forth otherwise by the
General Partner, any Partnership Interest issued after the Effective Date shall
have the same rights, powers and duties as the Partnership Interests issued on
the Effective Date.
B. From and after the date hereof, the General Partner shall not issue any
additional REIT Shares (other than REIT Shares issued pursuant to Section 8.6),
or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares (collectively,
"New Securities"), other than the issuance of New Securities to all holders of
REIT Shares (other than, in the case of New Securities issued
19
pursuant to a shareholder rights plan, any holder who would constitute an
"acquiring person" as defined therein), unless (i) the General Partner shall
cause the Partnership to issue to the General Partner, Partnership Interests or
rights, options, warrants or convertible or exchangeable securities of the
Partnership having designations, preferences and other rights, all such that the
economic interests are substantially similar to those of the New Securities; and
(ii) the General Partner contributes to the Partnership the proceeds from the
issuance of such New Securities and from the exercise of rights contained in
such New Securities. Without limiting the foregoing, the General Partner is
expressly authorized to issue New Securities for no tangible value or for less
than fair market value, and the General Partner is expressly authorized to cause
the Partnership to issue to the General Partner corresponding Partnership
Interests, so long as (x) the General Partner concludes in good faith that such
issuance of Partnership Interests is in the interests of the Partnership; and
(y) the General Partner contributes all proceeds, if any, from such issuance and
exercise to the Partnership.
Section 4.3 Contribution of Proceeds of Issuance of REIT Shares
In connection with the initial public offering of REIT Shares by the
General Partner and any other issuance of New Securities pursuant to Section
4.2, the General Partner shall contribute to the Partnership, any proceeds (or a
portion thereof) raised in connection with such issuance; provided, that if the
proceeds actually received by the General Partner are less than the gross
proceeds of such issuance as a result of any underwriter's discount or other
expenses paid or incurred in connection with such issuance, then the General
Partner shall be deemed to have made a Capital Contribution to the Partnership
in the amount equal to the sum of the net proceeds of such issuance plus the
amount of such underwriter's discount and other expenses paid by the General
Partner (which discount and expense shall be treated as an expense for the
benefit of the Partnership for purposes of Section 7.4). In the case of employee
acquisitions of New Securities at a discount from fair market value or for no
value in connection with a grant of New Securities, the amount of such discount
representing compensation to the employee, as determined by the General Partner,
shall be treated as an expense of the issuance of such New Securities.
Section 4.4 No Interest on Capital
No Partner shall be entitled to interest on its Capital Contributions or
its Capital Account.
Section 4.5 No 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, such
transaction shall be treated by the Partnership and the affected Partner as if
the Partnership had compensated such Partner in cash, and the Partner had
contributed such cash to the capital of the Partnership.
20
Section 4.6 No Preemptive Rights
Except to the extent expressly granted by the Partnership pursuant to
another agreement, no Person shall have any preemptive, preferential or other
similar right with respect to (i) additional Capital Contributions or loans to
the Partnership or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
The General Partner shall distribute cash at least quarterly in an amount
determined by the General Partner in its sole discretion to the Partners who are
Partners on the Partnership Record Date with respect to such quarter or shorter
period in accordance with their respective Percentage Interests on such
Partnership Record Date; provided, that in no event may a Partner receive a
distribution of cash with respect to a Partnership Unit if such Partner is
entitled to receive a distribution with respect to a REIT Share for which such
Partnership Unit has been exchanged and such distribution shall be made to the
General Partner; provided, further, that if a new or existing Partner acquires
additional Units on any date other than the day following a Partnership Record
Date, the cash distribution attributable to such additional Units relating to
the Partnership Record Date next following the issuance of such additional Units
shall be reduced in the proportion to (i) the number of days that such
additional Units are held by such Partner bears to (ii) the number of days
between such Partnership Record Date and the immediately preceding Partnership
Record Date. The General Partner shall take such reasonable efforts, as
determined by it in its sole and absolute discretion and consistent with the
General Partner's qualification as a REIT, to distribute cash (a) to the Limited
Partners so as to preclude any such distribution or portion thereof from being
treated as part of a sale of property to the Partnership by a Limited Partner
under Section 707 of the Code or the Regulations thereunder; provided, that the
General Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances as a result of any distribution to a Limited
Partner being so treated and (b) to satisfy the requirements for qualifying as a
REIT under the Code.
Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any state
or local tax law and Section 10.5 hereof with respect to any allocation, payment
or distribution to the Partners or Assignees shall be treated as amounts
distributed to the Partners or Assignees pursuant to Section 5.1 for all
purposes under this Agreement.
21
Section 5.3 Distributions upon Liquidation
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 Partners in accordance with Section
13.2.
Section 5.4 Revisions to Reflect Issuance of Additional Partnership
Interests
If the Partnership issues additional Partnership Interests to the General
Partner or any Additional Limited Partner pursuant to Article 4 hereof, the
General Partner shall make such revisions to this Article 5 as it deems
necessary to reflect the issuance of such additional Partnership Interests and
any special rights, duties or powers with respect thereto.
Section 5.5 Minimum Distributions If REIT Shares Not Publicly Traded
If the REIT Shares are not Publicly Traded, the General Partner shall make
cash distributions with respect to the Partnership Units at least annually for
each taxable year of the Partnership beginning prior to the 15th anniversary of
the date of the closing of the General Partner's initial public offering, in an
aggregate amount with respect to each such taxable year at least equal to 95% of
the Partnership's taxable income for such year allocable to the Partnership
Units, with such distributions to be made not later than 60 days after the end
of such year.
ARTICLE 6
ALLOCATIONS OF PROFITS AND LOSSES
Section 6.1 Profits and Losses
After giving effect to the mandatory allocations set forth in Section 6.2,
Profits and Losses for any Partnership Year or other applicable period shall be
allocated to the Partners in accordance with their Percentage Interests.
Section 6.2 Mandatory Allocations
(a) (i) Minimum Gain Chargeback. Notwithstanding any other
provision of this Article 6, if there is a net decrease in Partnership Minimum
Gain during any Partnership Year or other applicable period, then, subject to
the exceptions set forth in Regulations ▇▇.▇▇. 1.704-2(f)(2), (3), (4) and (5),
each Partner shall be specially allocated items of Partnership income and gain
for such Partnership Year (and, if necessary, subsequent Partnership Years) in
an amount equal to such Partner's share of the net decrease in Partnership
Minimum Gain, as determined in accordance with Regulations ss. 1.704-2(g).
Allocations
22
pursuant to the previous sentence shall be determined in accordance with
Regulations ss. 1.704- 2(f). This Section 6.2(a)(i) is intended to comply with
the minimum gain chargeback requirement in Regulations ss. 1.704-2(f) and shall
be interpreted consistently therewith.
(ii) Partner Minimum Gain Chargeback. Notwithstanding
any other provision of this Article 6, except Section 6.2(a)(i), if there is a
net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any Partnership Year or other applicable period, then, subject to the
exceptions set forth in Regulations ss. 1.704-2(i)(4), each Partner who has a
share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations ss. 1.704-2(i)(5) shall be specially
allocated items of Partnership income and gain for such Partnership Year (and,
if necessary, subsequent Partnership Years) in an amount equal to such Partner's
share of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations ss. 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 Partner pursuant thereto.
The items to be so allocated shall be determined in accordance with Regulations
ss. 1.704-2(i)(4). This Section 6.2(a)(ii) is intended to comply with the
minimum gain chargeback requirement in Regulations ss. 1.704-2(i)(4) and shall
be interpreted consistently therewith.
(b) Qualified Income Offset. Notwithstanding any provision of
this Article 6, except Section 6.2(a), if any Partner receives any adjustments,
allocations, or distributions described in Regulations ss.
1.704-1(b)(2)(ii)(d)(4), (5) or (6), that cause or increase an Adjusted Capital
Account Deficit of such Partner, items of Partnership income and gain shall be
specially allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, the Adjusted Capital
Account Deficit of such Partner as quickly as possible. This Section 6.2(b) is
intended to comply with the qualified income offset provision of Regulations ss.
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
(c) No Excess Deficit. To the extent that any Partner has or
would have, as a result of an allocation of Loss (or item thereof), an Adjusted
Capital Account Deficit, such amount of Loss (or item thereof) shall be
allocated to the other Partners in accordance with Section 6.1, but in a manner
which will not produce an Adjusted Capital Account Deficit as to such Partner.
To the extent such allocation would result in all Partners having Adjusted
Capital Account Deficits, such Loss shall be allocated to the General Partner.
Any allocations of Loss pursuant to this Section 6.2(c) shall be reversed with a
corresponding amount of Profits in subsequent years.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year or other applicable period shall be allocated to the Partners
pro rata in accordance with their Percentage Interests.
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(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year or other applicable period shall be
specially allocated to the Partner who bears the economic risk of loss with
respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse
Deductions are attributable in accordance with Regulations ss. 1.704- 2(i)(1).
(f) Code ss. 754 Adjustments. To the extent an adjustment to
the adjusted tax basis of any Partnership Asset pursuant to Code ss. 734(b) or
Code ss. 743(b) is required, pursuant to Regulations ss. 1.704-1(b)(2)(iv)(m),
to be taken into account in determining Capital Accounts, the amount of such
adjustment to the Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases such basis) and such gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.
(g) Curative Allocations. Any mandatory allocations of items
of income, gain, loss or deduction pursuant to Sections 6.2(a), (b), (c) and (f)
above shall be taken into account for the purpose of equitably adjusting
subsequent allocations of income, gain, loss or deduction so that the net
allocations, in the aggregate, allocated to each Partner pursuant to this
Article 6, and the Capital Accounts of each Partner, shall as quickly as
possible and to the extent possible, be the same as if no mandatory allocations
had been made.
Section 6.3 Other Allocation Rules
(a) For purposes of determining the Profits, Losses, or any
other items allocable to any period, Profits, Losses, and any such other items
shall be determined on a daily, monthly, or other basis, as determined by the
General Partner using any permissible method under Code ss. 706 and the
Regulations thereunder.
(b) The Partners are aware of the income tax consequences of
the allocations made by this Article 6 and hereby agree to be bound by the
provisions thereof in reporting their shares of Partnership income and loss for
income tax purposes.
Section 6.4 Tax Allocations
(a) Except as otherwise provided for in this Section 6.4, for
federal income tax purposes, each item of income, gain, loss and deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Sections 6.1,
6.2 and 6.3 above.
(b) In accordance with Code Sections 704(b) and 704(c) and the
Regulations thereunder, income, gain, loss and deduction with respect to any
property contributed to the
24
Partnership shall solely for federal income tax purposes, be allocated among the
Partners so as to take into account any variation between the adjusted basis of
such property to the Partnership for federal income tax purposes and the initial
Gross Asset Value. If the Gross Asset Value of any Partnership Asset is adjusted
as described in the definition of Gross Asset Value, subsequent allocations of
income, gain, loss and deduction with respect to such Partnership Asset shall
take into account any variation between the adjusted basis of such Partnership
Asset for federal income tax purposes and its Gross Asset Value in the same
manner as under Code ss. 704(c) and the Regulations thereunder. In furtherance
of the foregoing, the Partnership shall employ the method described in
Regulations ss. 1.704-3(b) (the "traditional method") with respect to the assets
contributed to the Partnership on the Effective Date. With respect to assets
which are contributed to the Partnership subsequent to the Effective Date, the
Partnership shall employ such method as the General Partner chooses. Allocations
pursuant to this Section 6.4 are solely for purposes of federal, state, and
local taxes and shall not affect, or in any way be taken into account in
computing, any Partner's Capital Account or share of Profits, Losses, other
items, or distributions pursuant to any provision of this Agreement.
ARTICLE 7
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 Limited Partners with or without cause. In addition to the powers now or
hereafter granted a general partner of a limited partnership under applicable
law or which are granted to the General Partner under any other provision of
this Agreement, the General Partner, subject to Section 7.3 hereof, shall have
full power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(a) the making of any expenditures, the lending or borrowing
of money (including, without limitation, making prepayments on loans and
borrowing money to permit the Partnership to make distributions to its
Partners in such amounts as will permit the General Partner (so long as
the General Partner qualifies as a REIT) to avoid the payment of any
federal income tax (including, for this purpose, any excise tax pursuant
to Section 4981 of the Code) and to make distributions to its stockholders
in amounts sufficient to permit the General Partner to maintain REIT
status), the
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assumption or guarantee of, or other contracting for, indebtedness and
other liabilities, the issuance of evidence of indebtedness (including the
securing of the same by deed, mortgage, deed of trust or other lien or
encumbrance on the Partnership's assets) and the incurring of any
obligations it deems necessary for the conduct of the activities of the
Partnership;
(b) 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
Securities Exchange Act of 1934, as amended, and the listing of any debt
securities of the Partnership on any exchange;
(c) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any assets of the Partnership
(including the exercise or grant of any conversion, option, privilege, or
subscription right or other right available in connection with any assets
at any time held by the Partnership) or the merger or other combination of
the Partnership with or into another entity (all of the foregoing subject
to any prior approval only to the extent required by Section 7.3 hereof);
(d) the use of the assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent with the
terms of this Agreement and on any terms it sees fit, including, without
limitation, the financing of the conduct of the operations of the General
Partner, the Partnership or any of the Partnership's Subsidiaries, the
lending of funds to other Persons (including, without limitation, the
Subsidiaries of the Partnership and/or the General Partner) and the
repayment of obligations of the Partnership and its Subsidiaries and any
other Person in which it has an equity investment, and the making of
capital contributions to its Subsidiaries;
(e) the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or improvements
owned by the Partnership or any Subsidiary of the Partnership;
(f) the negotiation, execution, and performance of any
contracts, 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;
(g) the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership, and the use of the assets of the Partnership
(including, without limitation,
26
cash on hand) for any purpose consistent with the terms of this Agreement
and on any terms it sees fit, including, without limitation, the financing
of the conduct or the operations of the General Partner or the
Partnership, the lending of funds to other Persons (including, without
limitation, any Subsidiaries of the Partnership) and the repayment of
obligations of the Partnership, any of its Subsidiaries and any other
Person in which it has an equity investment;
(h) the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement;
(i) holding, managing, investing and reinvesting cash and
other assets of the Partnership;
(j) the collection and receipt of revenues and income of the
Partnership;
(k) the establishment of one or more divisions of the
Partnership, the selection, designation of powers, authority and duties
and dismissal of employees of the Partnership (including, without
limitation, employees having titles such as "president," "vice president,"
"secretary" and "treasurer" of the Partnership), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership,
and the determination of their compensation and other terms of employment
or hiring;
(l) the maintenance of such insurance for the benefit of the
Partnership, the Partners and directors and officers thereof as it deems
necessary or appropriate;
(m) the formation of, or acquisition of an interest (including
non-voting interests in entities controlled by Affiliates of the
Partnership or third parties) in, and the contribution of property to, any
further limited or general partnerships, joint ventures limited liability
companies, or other relationships that it deems desirable (including,
without limitation, the acquisition of interests in, and the contributions
of funds or property or the making of loans to, its Subsidiaries and any
other Person in which it has an equity investment from time to time or the
incurrence of indebtedness on behalf of such Persons or guarantee of
obligations of such Persons); provided, that as long as the General
Partner has determined to qualify as a REIT, the Partnership may not
engage in any such formation, acquisition or contribution that would cause
the General Partner to fail to qualify as a REIT);
(n) 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, arbitration or other
27
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;
(o) the undertaking of any action in connection with the
Partnership's direct or indirect investment in its Subsidiaries or any
other Person (including, without limitation, the contribution or loan of
funds by the Partnership to such Persons);
(p) the determination of the fair market value of any
Partnership property distributed in kind using such reasonable method of
valuation as the General Partner may adopt;
(q) 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;
(r) 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;
(s) 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;
(t) the making, execution and delivery of any and all deeds,
leases, notes, 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;
(u) the issuance of additional Partnership Units, as
appropriate, in connection with Capital Contributions by Additional
Limited Partners and additional Capital Contributions by Partners pursuant
to Article 4 hereof;
(v) 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; and
28
(w) 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, 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.
B. Each of the Limited Partners agrees that the General Partner is
authorized to execute, deliver and perform the above-mentioned agreements and
transactions on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this Agreement
(except as provided in Section 7.3), the Act or any applicable law, rule or
regulation, to the fullest extent permitted under the Act or other applicable
law, rule or regulation. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall not constitute a breach by the General Partner of any duty that
the General Partner may owe the Partnership or the Limited Partners or any other
Persons under this Agreement or of any duty stated or implied by law or equity.
C. At all times from and after the date hereof, the General Partner may
cause the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the properties of the Partnership, (ii) liability insurance for the
Indemnitees hereunder and (iii) such other insurance as the General Partner, in
its sole and absolute discretion, determines to be necessary.
D. At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain at any and all times working
capital accounts and other cash or similar balances in such amounts as the
General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.
E. In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner of any action taken (or not taken) by it. The General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances, as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner taken
pursuant to its authority under this Agreement and in accordance with the terms
of Section 7.3.
Section 7.2 Certificate of Limited Partnership
29
The General Partner has previously filed the Certificate of Limited
Partnership with the Secretary of State of the State of Delaware as required by
the Act. The General Partner shall use all reasonable efforts to cause to be
filed such other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and any other state, or the District of
Columbia, in which the Partnership may elect to do business or own property. 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 of Limited Partnership and do
all of 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, or the District of Columbia, in
which the Partnership may elect to do business or own property. Subject to the
terms of Section 8.5.A(d) hereof, the General Partner shall not be required,
before or after filing, to deliver or mail a copy of the Certificate of Limited
Partnership or any amendment thereto to any Limited Partner.
Section 7.3 Restrictions on General Partner 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 Limited Partners holding a majority of the Percentage Interests of the
Limited Partners (including Limited Partner Interests held by the General
Partner), or such other percentage of the Limited Partners as may be
specifically provided for under a provision of this Agreement.
B. Except as provided in Article 13 hereof, the General Partner may not,
directly or indirectly, cause the Partnership to sell, exchange, transfer or
otherwise dispose of all or substantially all of the Partnership's assets in a
single transaction or a series of related transactions (including by way of
merger (including a triangular merger), consolidation or other combination with
any other Persons) without the Consent of Limited Partners holding a majority of
the Percentage Interests of the Limited Partners (including the effect of any
Limited Partner Interests held by the General Partner).
Section 7.4 Reimbursement of the General Partner and the General Partner;
DRIP's and Repurchase Programs
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 organization, the ownership of its assets and its
operations. The General
30
Partner is hereby authorized to pay compensation for accounting, administrative,
legal, technical, management and other services rendered to the Partnership. The
General Partner and its 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 and its 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 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), 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.
C. 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 it incurs
relating to the General Partner's initial public offering of REIT Shares.
D. If the General Partner 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 General
Partner, any employee stock purchase plan adopted by the General Partner, or any
similar obligation or arrangement undertaken by the General Partner in the
future or for the purpose of retiring such REIT Shares, the purchase price paid
by the General Partner for such REIT Shares and any other expenses incurred by
the General Partner in connection with such purchase shall be considered
expenses of the Partnership and shall be advanced to the General Partner or
reimbursed to the General Partner, subject to the condition that: (i) if such
REIT Shares subsequently are sold by the General Partner, the General Partner
shall pay to the Partnership any proceeds received by the General Partner 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 Units pursuant to Section 8.6 would not be
considered a sale for such purposes); and (ii) if such REIT Shares are not
retransferred by the General Partner within thirty (30) days after the purchase
thereof, or the General Partner otherwise determines not to retransfer such REIT
Shares, the General Partner, shall cause the Partnership to redeem a number of
Partnership Units held by the General Partner, as a Limited Partner, equal to
the product obtained by dividing the number of such REIT Shares by the
Conversion Factor (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 Units held by the General Partner).
31
E. If and to the extent any reimbursement made pursuant to this Section
7.4 is determined for federal income tax purposes not to constitute a payment of
expenses of the Partnership, the amount so determined shall be treated as a
distribution to the General Partner and there shall be a corresponding special
allocation of gross income to the General Partner, for purposes of computing
Partners' capital accounts.
Section 7.5 Outside Activities of the General Partner
A. The General Partner shall not directly or indirectly enter into or
conduct any business other than in connection with the ownership, acquisition
and disposition of Partnership Interests and the management of the business of
the Partnership, and such activities as are incidental thereto; provided,
however, that the General Partner may make an acquisition (directly or through a
wholly owned Subsidiary) if such acquisition is made through the issuance of
REIT Shares and the acquisition has been approved by a majority of the
Independent Directors and if such acquisition is in turn contributed to the
Partnership in exchange for additional Partnership Interests; provided, further,
that the General Partner shall be permitted to (i) hold bank accounts or similar
instruments or accounts in its own name as it deems necessary to carry out its
responsibilities and purposes contemplated under this Agreement and its
organizational documents; and (ii) acquire, directly or through a Subsidiary, up
to a one percent (1%) interest in any partnership or limited liability company
at least ninety-nine percent (99%) of the equity of which is owned by the
Partnership. The General Partner and any Affiliates of the General Partner may
acquire Limited Partner Interests and shall be entitled to exercise all rights
of a Limited Partner relating to such Limited Partner Interests.
B. If at any time or from time to time the General Partner sells REIT
Shares pursuant to any Stock Option Plan, the General Partner shall transfer the
net proceeds of the sale of such REIT Shares to the Partnership as an additional
Capital Contribution in exchange for an amount of additional Partnership Units
equal to the number of REIT Shares so sold divided by the Conversion Factor.
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. Except as provided in Section 7.5, the Partnership may transfer assets
to joint ventures, other partnerships, corporations or other business entities
in which it is or thereby becomes a participant upon such terms and subject to
such conditions consistent with this
32
Agreement and applicable law as the General Partner, in its sole and absolute
discretion, believes are advisable.
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, or purchase any property from, the Partnership, directly or indirectly,
except pursuant to transactions contemplated by this Agreement or that are
determined by the General Partner in good faith to be fair and reasonable.
D. The General Partner, in its sole and absolute discretion and without
the approval of the Limited Partners, may propose and adopt, on behalf of the
Partnership, employee benefit plans, stock option plans, and similar plans
funded by the Partnership for the benefit of employees of the General Partner,
the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them
in respect of services performed, directly or indirectly, for the benefit of the
Partnership, the General Partner, or any Subsidiaries of the Partnership.
E. The General Partner is expressly authorized to enter into, in the name
and on behalf of the Partnership, a right of first opportunity arrangement and
other conflict avoidance agreements with various Affiliates of the Partnership
and 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 Delaware law, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorneys' 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 or the General Partner as set
forth in this Agreement, in which such Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise, unless it is established
that: (i) the act or omission of the Indemnitee was material to the matter
giving rise to the proceeding and either was committed in bad faith or was the
result of active and deliberate dishonesty; (ii) the Indemnitee actually
received an improper personal benefit in money, property or services; or (iii)
in the case of any criminal proceeding, the Indemnitee had reasonable cause to
believe that the act or omission was unlawful. Without limitation, the foregoing
indemnity shall extend to any liability of any Indemnitee, pursuant to a loan
guaranty (except a guaranty by a limited partner of nonrecourse indebtedness of
the Partnership or as otherwise provided in any such 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
33
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 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, creates a rebuttable
presumption that such Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A. Any indemnification pursuant to this Section 7.7 shall be
made only out of the assets of the Partnership, 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. Reasonable expenses incurred by an Indemnitee who is a party to a
proceeding shall be paid or reimbursed by the Partnership in advance of the
final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in Section 7.7.A. has been met, and (ii) a written undertaking by or
on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. The indemnification provided by this Section 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 unless otherwise provided in a written agreement pursuant to which
such Indemnitee is indemnified.
D. The Partnership may, but shall not be obligated to, purchase and
maintain insurance, on behalf of the Indemnitees and such other Persons as the
General Partner shall determine, against any liability that may be asserted
against or expenses that may be incurred by such Person in connection with the
Partnership's activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Agreement.
E. For purposes of this Section 7.7, the Partnership shall be deemed to
have requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of Section 7.7; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
34
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 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. Moreover, if and to the extent any reimbursement made pursuant to this
Section 7.7 is determined for federal income tax purpose not to constitute a
payment of expenses of the Partnership, the amount so determined shall be
treated as a distribution to the General Partner and there shall be a
corresponding special allocation of gross income to the General Partner for
purposes of computing Partners' Capital Accounts.
Section 7.8 Liability of the General Partner
A. Notwithstanding anything to the contrary set forth in this Agreement,
the General Partner and its officers, directors and stockholders shall not be
liable for monetary damages to the Partnership, any Partners or any Assignees
for losses sustained or 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 its officers, directors and stockholders acted in good
faith.
B. The Limited Partners expressly acknowledge that the General Partner is
acting on behalf of the Partnership and the stockholders of the General Partner
collectively, and that, as stated in Section 7.1.E, the General Partner is under
no obligation to consider the separate interests of the Limited Partners 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
General Partner 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 General Partner or the Limited
Partners; provided, however, that for so long as the General Partner, owns a
controlling interest in the Partnership, any such conflict that cannot be
resolved in a manner not adverse to either the stockholders of the General
35
Partner or the Limited Partners shall be resolved in favor of the stockholders.
The General Partner shall not be liable for monetary damages or otherwise 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. The General Partner
shall not be responsible for any misconduct or negligence on the part of any
such employee or agent appointed by the General Partner in good faith.
D. 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 directors' 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.
E. Whenever in this Agreement the General Partner is permitted or required
to make a decision (i) in its "sole discretion" or "discretion," or under a
similar grant of authority or latitude, the General Partner shall be entitled to
consider such interests and factors as it desires and may consider its own
interests, and shall have no duty or obligation to give any consideration to any
interest of or factors affecting the Partnership or the Limited partners, or
(ii) in its "good faith" or under another express standard, the general Partner
shall act under such express standard and shall not be subject to any other or
different standards imposed by this Agreement or by law or any other agreement
contemplated herein.
Section 7.9 Other Matters Concerning the General Partner
A. The General Partner may rely and shall be protected in acting, or
refraining from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.
B. The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investments 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 which such General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.
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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 duly appointed attorneys-in-fact. Each such attorney shall, to the
extent provided by the General Partner in the power of attorney, have full power
and authority to do and perform all and every act and duty which is permitted or
required to be done by the General Partner hereunder.
D. Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT; or (ii) to avoid the General Partner incurring any taxes
under Section 857 or Section 4981 of the Code, is expressly authorized under
this Agreement and is deemed approved by all of the Limited Partners.
Section 7.10 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and no Partner, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all
of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is held in the
name of the General Partner or any nominee or Affiliate of the General Partner
shall be held by the General Partner for the use and benefit of the Partnership
in accordance with the provisions of this Agreement; provided, however, that the
General Partner shall use its best efforts to cause beneficial and record title
to such assets to be vested in the Partnership as soon as reasonably practicable
if failure to so vest such title would have a material adverse effect on the
Partnership. All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which legal
title to such Partnership assets is held.
Section 7.11 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without 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 the General
Partner were the Partnership's sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection
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with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and
every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect; (ii) 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
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of his Agreement and is binding upon
the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this Agreement except
as expressly provided in this Agreement, including Section 10.5 hereof, or under
the Act.
Section 8.2 Management of Business
No Limited Partner (other than the General Partner if it acquires a
Limited Partner Interest, any of its Affiliates or any officer, director,
employee, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such) shall participate in the management
or control of Partnership business nor shall they transact any business for the
Partnership nor shall they have the power to sign for or bind the Partnership,
such powers being vested solely and exclusively in the General Partner. The
transaction of any such business by the General Partner, any of its respective
Affiliates or any officer, director, employee, partner, agent or trustee of the
General Partner, the Partnership or any of their Affiliates, in their capacity
as such, shall not affect, impair or eliminate the limitations on the liability
of the Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners
Subject to any agreements entered into pursuant to Section 7.6.E hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the Partnership or any of its Subsidiaries, any Limited Partner (other than
the General Partner) and any officer, director,
38
employee, agent, trustee, Affiliate or stockholder 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 competition with the Partnership or that are
enhanced by the activities of the Partnership. Neither the Partnership nor any
Partners shall have any rights by virtue of this Agreement in any business
ventures of any Limited Partner or Assignee. None of the Limited Partners (other
than the General Partner) 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 and such Person shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures
to the Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.
Section 8.4 Return of Capital
Except pursuant to a Redemption Right set forth in Section 8.6, 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 as
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 Rights of Limited Partners Relating to the Partnership
A. In addition to the other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.C hereof, each Limited Partner shall
have the right, for a purpose reasonably related to such Limited Partner's
interest as a limited partner in the Partnership, upon written demand with a
statement of the purpose of such demand and at such Limited Partner's own
expense (including such copying and administrative charges as the General
Partner may establish from time to time):
(a) to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by the General
Partner pursuant to the Securities Exchange Act of 1934;
(b) to obtain a copy of the Partnership's federal, state and
local income tax returns for each Partnership Year;
(c) to obtain a current list of the name and last known
business, residence or mailing address of each Partner;
39
(d) to obtain a copy of this Agreement and the Certificate of
Limited Partnership and all amendments thereto, together with executed
copies of all powers of attorney pursuant to which this Agreement, the
Certificate of Limited Partnership and all amendments thereto have been
executed; and
(e) to obtain true and full information regarding the amount
of cash and a description and statement of any other property or services
contributed by each Partner and which each Partner has agreed to
contribute in the future, and the date on which each became a Partner.
B. The Partnership shall notify each Limited Partner, upon request, of the
then current Conversion Factor and the REIT Shares Amount per Partnership Unit
and, with reasonable detail, how the same was determined.
C. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, any information that (i) the General Partner reasonably believes to
be in the nature of trade secrets or other information, the disclosure of which
the General Partner in good faith believes is not in the best interests of the
Partnership or could damage the Partnership or its business; or (ii) the
Partnership is required by law or by agreements with an unaffiliated third party
to keep confidential.
Section 8.6 Redemption Rights
A. Subject to Sections 8.6.C and 8.6.D hereof, on or after that date which
is twelve (12) months after the Effective Date, each Common Limited Partner
(other than the General Partner) shall have the right (the "Common Redemption
Right") to require the Partnership to redeem on a Specified Redemption Date all
or a portion of the Partnership Units held by such Limited Partner at a
redemption price per Unit equal to and in the form of the Cash Amount to be paid
by the Partnership. The Common Redemption Right shall be exercised pursuant to a
Notice of Redemption delivered to the Partnership (with a copy to the General
Partner) by the Common Limited Partner who is exercising the redemption right
(the "Common Redeeming Partner"); provided, however, that the Partnership shall
not be obligated to satisfy such Common Redemption Right if the General Partner
elects to purchase the Partnership Units subject to the Notice of Redemption
pursuant to Section 8.6.C. A Common Limited Partner may not exercise the Common
Redemption Right for less than one thousand (1,000) Partnership Units or, if
such Common Limited Partner holds less than one thousand (1,000) Partnership
Units, all of the Partnership Units held by such Common Limited Partner. The
Common Redeeming Partner shall have no right, with respect to any Partnership
Units so redeemed, to receive any distributions paid on or after the Specified
Redemption Date. The Assignee of any Common Limited Partner may exercise the
rights of such Common Limited
40
Partner pursuant to this Section 8.6, and such Common Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Assignee. In connection with any exercise of
such rights by an Assignee on behalf of a Common Limited Partner, the Cash
Amount shall be paid by the Partnership directly to such Assignee and not to
such Common Limited Partner.
B. Subject to Sections 8.6.C and 8.6.D hereof, on or after that date which
is six (6) months after the Effective Date, each Class B Limited Partner shall
have the right (the "Class B Redemption Right") to require the Partnership to
redeem on a Specified Redemption Date all or a portion of the Partnership Units
(whether Common Partnership Units or Class B Partnership Units) held by such
Class B Limited Partner at a redemption price per Unit equal to and in the form
of the Cash Amount to be paid by the Partnership. The Class B Redemption Right
shall be exercised pursuant to a Notice of Redemption delivered to the
Partnership (with a copy to the General Partner) by the Class B Limited Partner
who is exercising the redemption right (the "Class B Redeeming Partner");
provided, however, that the Partnership shall not be obligated to satisfy such
Class B Redemption Right if the General Partner elects to purchase the
Partnership Units subject to the Notice of Redemption pursuant to Section 8.6.C.
A Class B Limited Partner may not exercise the Class B Redemption Right for less
than one thousand (1,000) Partnership Units or, if such Class B Limited Partner
holds less than one thousand (1,000) Partnership Units, all of the Partnership
Units held by such Class B Limited Partner. The Class B Redeeming Partner shall
have no right, with respect to any Partnership Units so redeemed, to receive any
distributions paid on or after the Specified Redemption Date. The Assignee of
any Class B Limited Partner may exercise the rights of such Class B Limited
Partner pursuant to this Section 8.6, and such Class B Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Assignee. In connection with any exercise of
such rights by an Assignee on behalf of a Class B Limited Partner, the Cash
Amount shall be paid by the Partnership directly to such Assignee and not to
such Class B Limited Partner.
C. Notwithstanding the provisions of Sections 8.6.A and 8.6.B, a Limited
Partner that exercises a Redemption Right shall be deemed to have offered to
sell the Partnership Units described in the Notice of Redemption to the General
Partner, and the General Partner will, at the direction of the Partnership as
determined in the Partnership's sole and absolute discretion and only if so
directed, elect to purchase directly and acquire such Partnership Units by
paying to the Redeeming Partner either the Cash Amount or the REIT Shares Amount
(in the event the REIT Shares Amount is not a whole number of REIT Shares, the
Redeeming Partner shall be paid (i) that number of REIT Shares which equals the
nearest whole number less than such amount plus (ii) an amount of cash which the
General Partner determines, in its reasonable discretion, to represent the fair
value of the remaining fractional REIT Share which would otherwise be payable to
the Redeeming Partner), as directed by the Partnership, on the Specified
Redemption Date, whereupon the General Partner shall acquire the Partnership
Units offered for redemption by the Redeeming Partner and shall be treated for
41
all purposes of this Agreement as the owner of such Partnership Units. If the
General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.6.C with respect to a Notice of Redemption, it shall so
notify the Redeeming Partner within five (5) Business Days after the receipt by
it of such Notice of Redemption. Unless the General Partner (as directed by the
Partnership in its sole and absolute discretion) shall exercise its right to
purchase Partnership Units from the Redeeming Partner pursuant to this Section
8.6.C, the General Partner shall not have any obligation to the Redeeming
Partner or the Partnership with respect to the Redeeming Partner's exercise of a
Redemption Right. If the General Partner shall exercise its right to purchase
Partnership Units with respect to the exercise of a Redemption Right in the
manner described in the first sentence of this Section 8.6.C, the Partnership
shall have no obligation to pay any amount to the Redeeming Partner with respect
to such Redeeming Partner's exercise of such Redemption Right, and each of the
Redeeming Partner, the Partnership, and the General Partner shall treat the
transaction between the General Partner and the Redeeming Partner, for federal
income tax purposes, as a sale of the Redeeming Partner's Partnership Units to
the General Partner. Each Redeeming Partner agrees to execute such documents as
the General Partner may reasonably require in connection with the issuance of
REIT Shares upon exercise of a Redemption Right.
D. Notwithstanding the provisions of Sections 8.6.A, 8.6.B and 8.6.C, a
Partner shall not be entitled to exercise a Redemption Right pursuant to Section
8.6.A or Section 8.6.B if (but only as long as) the delivery of REIT Shares to
such Partner on the Specified Redemption Date by the General Partner pursuant to
Section 8.6.C (regardless of whether or not the General Partner would in fact
exercise its rights under Section 8.6.C), (i) would be prohibited under the
Articles of Incorporation of the General Partner or (ii) would be prohibited
under applicable federal or state securities laws or regulations.
E. If the Partnership issues additional Partnership Interests pursuant to
Section 4.2.A hereof, 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 (including setting forth any restrictions on
the exercise of a Redemption Right with respect to such Partnership Interests).
F. Each Limited Partner covenants and agrees with the General Partner that
all Partnership Units delivered for redemption shall be delivered to the
Partnership or the General Partner, as the case may be, free and clear of all
liens, and notwithstanding anything contained herein to the contrary, neither
the General Partner nor the Partnership shall be under any obligation to acquire
Partnership Units which are or may be subject to any liens. 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 Partnership Units to the Partnership
or the General Partner, such Limited Partner shall assume and pay such transfer
tax.
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Section 8.7 Intentionally Omitted
Section 8.8 Class B Exchange Right
The Class B Limited Partners (acting in unison) shall have the right, but
not the obligation, at any time during the period commencing on and including
the earlier to occur of the first Business Day after the date that is 180 days
after the Effective Date and the first day the Class B Partnership Units are
exchangeable for REIT Shares pursuant to Section 8.6.B and ending on the close
of business on the fourteenth (14th) day thereafter (but in no event prior to
January 5, 1999) (the "Exchange Period"), to exchange all or part of its (or
their Class B Partnership Units directly for a number of Common Partnership
Units having an aggregate value (based on the average closing price per REIT
Share for the ten (10) consecutive trading days immediately preceding the
commencement of the Exchange Period) equal to the aggregate initial value of the
Class B Partnership Units issued to the Class B Limited Partners on the
Effective Date; it being understood that the value of each Class B Partnership
Unit on the Effective Date is equal to the value of one REIT Share as of the
Effective Date.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the principal office
of the Partnership 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,
9.3 or 11.3.F 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 of,
punch cards, 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,
or such other basis as the General Partner determines to be necessary or
appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3 Reports
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A. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each Partnership Year, the General Partner shall
cause to be mailed to each Limited Partner as of the close of the Partnership
Year, an annual report containing financial statements of the Partnership, or of
the General Partner if such statements are prepared solely on a consolidated
basis with the General Partner, for such Partnership Year, presented in
accordance with generally accepted accounting principles, such statements to be
audited by a nationally recognized firm of independent public accountants
selected by the General Partner.
B. If and to the extent that the General Partner mails quarterly reports
to its stockholders, as soon as practicable, but in no event later than the date
on which such reports are mailed, the General Partner shall cause to be mailed
to each Limited Partner as of the last day of the calendar quarter, a report
containing unaudited financial statements of the Partnership, or of the General
Partner, if such statements are prepared solely on a consolidated basis with the
General Partner, and such other information as may be required by applicable law
or regulation, or as the General Partner determines to be appropriate.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing of
all returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (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.
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. Notwithstanding the above, in making any such tax election
the General Partner shall take into account the tax consequences to the Limited
Partners resulting from any such election. The General Partner shall make such
tax elections on behalf of the Partnership as the Limited Partners holding a
majority of the Percentage Interests of the Limited Partners (including Limited
Partner Interests held by the General Partner) request; provided, that the
General Partner believes that such election is not adverse to the interests of
the General Partner, including its interest in preserving its qualification as a
REIT under the Code. The General Partner intends that Section 704(c) allocations
with respect to property contributed as of the Effective Date shall be made by
the election of the so-called "traditional method" without curative allocations.
The General Partner shall have the right to seek to revoke any tax
44
election it makes (including, without limitation, the election under Section 754
of the Code) upon the General Partner's determination, in its sole and absolute
discretion, that such revocation is in the best interests of the Partners.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes within the meaning of Section
6231(a)(7) of the Code. Pursuant to Section 6230(e) of the Code, upon receipt of
notice from the IRS of the beginning of an administrative proceeding with
respect to the Partnership, the tax matters partner shall furnish the IRS with
the name, address, taxpayer identification number, and profit interest of each
of the Limited Partners and the Assignees; provided, however, that such
information is provided to the Partnership by the Limited Partners and the
Assignees.
B. The tax matters partner is authorized, but not required:
(a) 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 Section 6231(a)(8) of the
Code) or a member of a "notice group" (as defined in Section 6223(b)(2) of
the Code);
(b) if 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 Tax Court or
the filing of a complaint for refund with the United States Claims Court
or the District Court of the United States for the district in which the
Partnership's principal place of business is located;
(c) to intervene in any action brought by any other Partner
for judicial review of a final adjustment;
45
(d) to file a request for an administrative adjustment with
the IRS 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;
(e) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any item required to
be taken account of by a Partner for tax purposes, or an item affected by
such item; and
(f) to take any other action on behalf of the Partners or the
Partnership in connection with any tax audit or judicial review proceeding
to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of the
tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.7 of this Agreement shall be fully
applicable to the tax matters partner in its capacity as such.
C. 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. 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.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a sixty (60) month period as provided in
Section 709 of the Code.
Section 10.5 Withholding
Each Limited Partner hereby authorizes the Partnership to withhold from,
or pay on behalf of or with respect to, such Limited Partner any amount of
federal, state, local, or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445 or 1446 of the Code. Any amount
paid on behalf of or with respect to a Limited Partner shall constitute a loan
by the Partnership to such Limited Partner, which loan shall be repaid by such
Limited Partner within fifteen (15) days after notice from the General Partner
that such payment must be made unless (i) the Partnership withholds such payment
from a distribution which would otherwise be made to the
46
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 which would, but for such payment, be distributed to
the Limited Partner. Any amounts withheld pursuant to the foregoing clause (i)
or (ii) shall be treated as having been distributed to such Limited Partner.
Each Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner's Partnership Interest
to secure such Limited Partner's obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5. If a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner. Without limitation, in
such event the General Partner shall have the right to receive distributions
that would otherwise be distributable to such defaulting Limited Partner until
such time as such loan, together with all interest thereon, has been paid in
full, and any such distributions so received by the General Partner shall be
treated as having been distributed to the defaulting Limited Partner and
immediately paid by the defaulting Limited Partner to the General Partner in
repayment of such loan. Any amounts payable by a Limited Partner hereunder shall
bear interest at the lesser of (A) 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 (4) percentage points, or (B) the maximum
lawful rate of interest on such obligation, such interest to accrue from the
date such amount is due (i.e., fifteen (15) days after demand) until such amount
is paid in full. Each Limited Partner shall take such actions as the Partnership
or the General Partner shall request in order to perfect or enforce the security
interest created hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with respect to a
Partnership Interest or Partnership Unit, shall be deemed to refer to a
transaction by which the General Partner purports to assign all or any part of
its General Partner Interest to another Person or by which a Limited Partner
purports to assign all or any part of its Limited Partner Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by operation of law
or otherwise. The term "transfer" when used in this Article 11 does not include
any redemption or repurchase of Partnership Interests by the Partnership from a
Partner or any acquisition of Partnership Units from a Limited Partner by the
General Partner pursuant to Section 8.6. No part of the interest of a Limited
Partner shall be subject to the claims of any creditor, any
47
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 or consented to by the General Partner.
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 11.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of the General Partner Interest and General
Partner's Limited Partner Interest; Extraordinary
Transactions
A. The General Partner may not transfer any of its General Partner
Interest or withdraw as General Partner, and the General Partner may not
transfer any of its Limited Partner Interest, or engage in an Extraordinary
Transaction, except, in any such case, (i) if such Extraordinary Transaction is,
or such transfer or withdrawal is pursuant to an Extraordinary Transaction that
is, permitted under Section 11.2.B or (ii) if Limited Partners holding at least
a majority of the Percentage Interests of the Limited Partners (including
Limited Partner Interests held by the General Partner or its Affiliates) consent
to such transfer or withdrawal or Extraordinary Transaction, or (iii) if such
transfer is to an entity that is wholly owned by the General Partner and is a
Qualified REIT Subsidiary under Section 856(i) of the Code.
B. The General Partner is permitted to engage in the following
Extraordinary Transactions without the approval or vote of the Limited Partners:
(i) an Extraordinary Transaction in connection with which all
Limited Partners either will receive, or will have the right to elect to
receive, for each Partnership Unit an amount of cash, securities, or other
property equal to the product of the REIT Shares Amount and the greatest
amount of cash, securities or other property paid to a holder of one REIT
Share in consideration of one REIT Share pursuant to the terms of the
Extraordinary Transaction; provided, that, if, in connection with the
Extraordinary Transaction, a purchase, tender or exchange offer shall have
been made to and accepted by the holders of the outstanding REIT Shares,
each holder of Partnership Units shall receive, or shall have the right to
elect to receive, the greatest amount of cash, securities, or other
property which such holder would have received had it exercised its
Redemption Right (as set forth in Section 8.6) and received REIT Shares in
exchange for its Partnership Units immediately prior to the expiration of
such purchase, tender or exchange offer and had thereupon accepted such
purchase, tender or exchange offer and then such Extraordinary Transaction
shall have been consummated; and
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(ii) a merger (including a triangular merger), consolidation
or other combination with or into another Person, or any issuance of
equity securities in exchange assets if: (w) immediately after such
Extraordinary Transaction, substantially all of the assets directly or
indirectly owned by the surviving entity, other than Partnership Units
held by the General Partner, are owned directly or indirectly by the
Partnership or another limited partnership or limited liability company
which is the survivor of a merger, consolidation or combination of assets
with the Partnership (in each case, the "Surviving Partnership"); (x) the
Limited Partners own a percentage interest of the Surviving Partnership
based on the relative fair market value of the net assets of the
Partnership (as determined pursuant to Section 11.2.C) and the other net
assets of the Surviving Partnership (as determined pursuant to Section
11.2.C) immediately prior to the consummation of such transaction; (y) the
rights, preferences and privileges of the Limited Partners in the
Surviving Partnership are at least as favorable as those in effect
immediately prior to the consummation of such transaction and as those
applicable to any other limited partners or non-managing members of the
Surviving Partnership; and (z) such rights of the Limited Partners include
the right to exchange their interests in the Surviving Partnership for at
least one of: (a) the consideration available to such Limited Partners
pursuant to Section 11.2.B(i) or (b) if the ultimate controlling person of
the Surviving Partnership has publicly traded common equity securities,
such common equity securities, with an exchange ratio based on the
relative fair market value of such securities (as determined pursuant to
Section 11.2.C) compared to the fair market of value the REIT Shares.
C. In connection with any transaction permitted by Section 11.2.B, the
relative fair market values of the securities of the ultimate controlling person
of the Surviving Partnership compared to the REIT Shares shall be reasonably
determined by the General Partner as of the time of such transaction and, to the
extent applicable, shall be no less favorable to the Limited Partners than the
relative values reflected in the terms of such transaction.
Section 11.3 Limited Partners' Rights to Transfer
A. Subject to the provisions of Sections 11.3.C, 11.3.D, 11.3.E, 11.4 and
11.6, a Limited Partner (other than the General Partner) may transfer, with or
without the consent of the General Partner, all or any portion of its
Partnership Interest, or any of such Limited Partner's economic rights as a
Limited Partner.
B. 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 of the rights of a Limited Partner, but
not more rights than those enjoyed by other Limited Partners, for the purpose of
settling or managing the estate and such power as the Incapacitated Limited
Partner possessed to transfer all or any part of his or its interest in the
49
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
C. The General Partner may prohibit any transfer by a Limited Partner of
its Partnership Units if, in the opinion of legal counsel to the Partnership,
such transfer would require filing of a registration statement under the
Securities Act of 1933 or would otherwise violate any federal or state
securities laws or regulations applicable to the Partnership or the Partnership
Units.
D. No transfer by a Limited Partner of its Partnership Units may be made
to any Person if (i) in the opinion of legal counsel for the Partnership, it
would result in the Partnership being treated as an association taxable as a
corporation; (ii) it is made within one year after the consummation of the
initial public offering of the General Partner; (iii) such transfer is
effectuated through an "established securities market" or a "secondary market
(or the substantial equivalent thereof)" with the meaning of Section 7704 of the
Code; (iv) such transfer would cause the Partnership to become, with respect to
any employee benefit plan subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a "party-in-interest" (as defined in
Section 3(14) of ERISA) or a "disqualified person" (as defined in Section
4975(c) of the Code); (v) such transfer would, in the opinion of legal counsel
for the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.2-101; or (vi) such transfer would subject the
Partnership to be regulated under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended.
E. No transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of 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 for the Cash Amount any
Partnership Units in which a security interest is held simultaneously with the
time at which such lender would be deemed to be a partner in the Partnership for
purposes of allocating liabilities to such lender under Section 752 of the Code.
Section 11.4 Substituted Limited Partners
A. No Limited Partner shall have the right to substitute a transferee as a
Limited Partner in his place. The General Partner shall, however, have the right
to consent to the admission of a transferee of the interest of a Limited Partner
pursuant to this Section 11.4 as a Substituted Limited Partner, which consent
may be given or withheld by the General Partner in
50
its sole and absolute discretion. The General Partner's failure or refusal 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
any Partner.
B. A transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement. The admission of any transferee as a Substituted Limited Partner
shall be conditioned upon the transferee executing and delivering to the
Partnership an acceptance of all the terms and conditions of this Agreement and
such other documents or instruments as may be required to effect the admission.
C. Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion, does not
consent to the admission of any permitted transferee as a Substituted Limited
Partner, as described in Section 11.4, such transferee shall be considered an
Assignee for purposes of this Agreement. An Assignee shall be deemed to have had
assigned to it, and shall be entitled to receive distributions from the
Partnership and the share of Profits, Losses, and any other items, gain, loss
deduction and credit of the Partnership attributable to the Partnership Units
assigned to such transferee, but except as otherwise provided in Section 8.6
hereof shall not be deemed to be a holder of Partnership Units for any other
purpose under this Agreement, and shall not be entitled to vote such Partnership
Units in any matter presented to the Limited Partners for a vote (such
Partnership Units being deemed to have been voted on such matter in the same
proportion as all other Partnership Units held by Limited Partners are voted).
If any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all of the provisions of
this Article 11 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 11 or pursuant to redemption of all of its
Partnership Units under Section 8.6.
B. Any Limited Partner who shall transfer all of its Partnership Units in
a transfer permitted pursuant to this Article 11 shall cease to be a Limited
Partner upon the
51
admission of all Assignees of such Partnership Units as Substitute Limited
Partners. Similarly, any Limited Partner who shall transfer all of its
Partnership Units pursuant to a redemption of all of its Partnership Units under
Section 8.6 shall cease to be a Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on the first day
of a fiscal quarter of the Partnership, unless the General Partner otherwise
agrees.
D. If any Partnership Interest is transferred or assigned during any
quarterly segment of the Partnership's fiscal year in compliance with the
provisions of this Article 11 or redeemed or transferred pursuant to Section 8.6
on any day other than the first day of a Partnership Year, then Profits, Losses,
each item thereof and all other items attributable to such interest for such
Partnership Year shall be divided and allocated between the transferor Partner
and the transferee Partner by taking into account their varying interests during
the Partnership Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
assignment occurs shall be allocated to the transferee Partner, and none of such
items for the calendar month in which a redemption occurs shall be allocated to
the Redeeming Partner; provided, however, that the General Partner may adopt
such other conventions relating to allocations in connection with transfers,
assignments or redemptions as it determines are necessary or appropriate. All
distributions of 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
Redeeming Partner, as the case may be, and in the case of a transfer or
assignment other than a redemption, all distributions of cash thereafter
attributable to such Partnership Unit shall be made to the transferee Partner.
E. In addition to any other restrictions on transfer herein contained,
including, without limitation, the provisions of this Article 11, in no event
may any transfer or assignment of a Partnership Interest by any Partner
(including pursuant to Section 8.6 hereof) be made without the express consent
of the General Partner, in its sole and absolute discretion, (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) if,
in the opinion of legal counsel to the Partnership experienced in such matters
such transfer would cause a termination of the Partnership for federal or state
income tax purposes (except as a result of the redemption or exchange for REIT
Shares of all Partnership Units held by all Limited Partners or pursuant to a
transaction expressly permitted under Section 11.2); (v) if, in the opinion of
counsel to the Partnership experienced in such matters, such transfer would
cause the Partnership to cease to be classified as a partnership for federal
income tax purposes (except as a result of the redemption or exchange for REIT
Shares of all Partnership Units held by all Limited Partners or pursuant to a
transaction expressly permitted under Section 11.2); (vi) if such transfer would
52
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 Section 3(14)
of ERISA) or a "disqualified person" (as defined in Section 4975(c) of the
Code); (vii) if such transfer would, in the opinion of counsel to the
Partnership experienced in such matters, cause any portion of the assets of the
Partnership to constitute assets of any employee benefit plan pursuant to
Department of Labor Regulations Section 25101.2-101; (viii) if such transfer
requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (ix) if such transfer is
effectuated through an "established securities market" or a "secondary market"
(or the substantial equivalent thereof) within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a "publicly traded
partnership," as such term is defined in Section 469(k)(2) or Section 7704(b) of
the Code (provided, that this clause (ix) shall not be the basis for limiting or
restricting in any manner the exercise of the Redemption Right under Section 8.6
hereof unless, and only to the extent that, outside tax counsel experienced in
such matters provides to the General Partner an opinion to the effect 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); (x) 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; (xi) such transfer
could adversely affect the ability of the General Partner to remain qualified as
a REIT; or (xii) if in the opinion of independent legal counsel experienced in
such matters for the transferring Partner (which opinion and counsel shall be
reasonably satisfactory to the Partnership) or legal counsel for the
Partnership, such transfer would adversely affect the ability of the General
Partner to continue to qualify as a REIT or subject the General Partner to any
additional taxes under Section 857 or Section 4981 of the Code.
F. The General Partner shall monitor the transfers of interests in the
Partnership to determine (i) if such interests are being traded on an
"established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code and (ii)
whether additional transfers of interests would result in the Partnership being
unable to qualify for at least one of the "safe harbors" set forth in
Regulations Section 1.7704-1 (or such other guidance subsequently published by
the IRS setting forth safe harbors under which interests will not be treated as
"readily tradable on a secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code) (the "Safe Harbors"). The
General Partner shall take all steps reasonably necessary or appropriate in its
sole an absolute discretion to prevent any trading of interests or any
recognition by the Partnership of transfers made on such markets and, except as
otherwise provided herein, to insure that at least one of the Safe Harbors is
met; provided, however, that the foregoing shall not authorize the General
Partner to limit or restrict in any manner the right of the holder of a
Partnership Unit to exercise the Redemption Right in accordance with the terms
of Section 8.6 unless, and only to the extent that, outside tax counsel
experienced in such matters provides to the General Partner an opinion to the
effect that, in the absence of such limitation or
53
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.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A successor to all of the 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 upon such
transfer. Any such transferee shall carry on the business of the Partnership
without dissolution. In each case, the admission shall be subject to the
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission. In the case
of such admission on any day other than the first day of a Partnership Year, all
items attributable to the General Partner Interest for such Partnership Year
shall be allocated between the transferring General Partner and such successor
as provided in Section 11.6.D hereof.
Section 12.2 Admission of Additional Limited Partners
A. After the admission to the Partnership of the initial Limited Partners
on the date hereof, a Person 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 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 and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order
to effect such Person's admission as an Additional Limited Partner.
B. 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 Profits, Losses, each
item thereof and all other items allocable among Partners and Assignees for such
Partnership Year shall be allocated among such Additional Limited Partner and
all other Partners and Assignees by
54
taking into account their varying interests during the Partnership Year in
accordance with Section 706(d) of the Code, using any convention permitted by
law and selected by the General Partner. Solely for purposes of making such
allocations, each such item for the calendar month in which an admission of any
Additional Limited Partner occurs shall be allocated among all of the Partners
and Assignees, including such Additional Limited Partner; provided, however,
that the General Partner may adopt such other conventions relating to
allocations to Additional Limited Partners as it determines are necessary or
appropriate. All distributions of 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 cash thereafter shall be made to all of the Partners and
Assignees, including such Additional Limited Partner.
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 of
Limited Partnership and may for this purpose exercise the power of attorney
granted pursuant to Section 2.4 hereof.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of Substituted
Limited Partners or Additional Limited Partners or by the admission of a
successor General Partner in accordance with the terms of this Agreement. Upon
the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
its affairs shall be wound up, only upon the first to occur of any of the
following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5 hereof;
B. an event of withdrawal of the General Partner, as defined in the Act
(other than an event of bankruptcy), unless, within ninety (90) days after such
event of withdrawal Partners holding a majority of the Percentage Interests of
the remaining Partners agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date of withdrawal, of a
successor General Partner;
55
C. from and after the date of this Agreement through December 31, 2048, an
election to dissolve the Partnership made by the General Partner with the
Consent of Partners holding eighty-five percent (85%) of the Percentage
Interests of the Limited Partners (including Limited Partner Interests held by
the General Partner);
D. on or after January 1, 2049, an election to dissolve the Partnership
made by the General Partner, in its sole and absolute discretion;
E. entry of a decree of judicial dissolution of the Partnership pursuant
to the provisions of the Act;
F. the sale of all or substantially all of the assets and properties of
the Partnership; or
G. a final and non-appealable judgment 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 judgment all of the remaining Partners 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 order or judgment, 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.
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, if there is no remaining General Partner, any Person
elected by a majority in interest of the 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 common stock in the
General Partner) shall be applied and distributed in the following order:
(a) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the Partners;
56
(b) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General Partner;
(c) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other Partners; and
(d) The balance, if any, to the General Partner and Partners
in accordance with their Capital Accounts, after giving effect to all
contributions, distributions, and allocations for all periods.
The General Partner shall not receive any additional
compensation for any services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) 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.
C. In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made to the General Partner and Limited
Partners pursuant to this Article 13 may be:
(a) distributed to a trust established for the benefit of the
General Partner and Limited Partners for the purposes of liquidating
Partnership assets, collecting amounts owed to the Partnership, and paying
any contingent or unforeseen liabilities or obligations of the Partnership
or the General Partner arising out of or in connection with the
Partnership. The assets of any such trust shall be distributed to the
General Partner and Limited Partners from time to time, in the reasonable
discretion of the Liquidator, in the same proportions as the amount
distributed to such trust by the Partnership would otherwise have been
distributed to the General Partner and Limited Partners pursuant to this
Agreement; or
57
(b) 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 as soon as practicable.
Section 13.3 Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, if the Partnership
is considered "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 the Partnership property to a new partnership, in exchange for
an interest in the new partnership, which new partnership shall be deemed to
have assumed and taken such property subject to all Partnership liabilities.
Immediately thereafter, the Partnership shall be deemed to have distributed the
interests in the new partnership in liquidation of the Partnership, to the
General Partner and the Limited Partners, in proportion to their respective
Partnership Interests for the continuation of the business.
Section 13.4 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited Partner shall
look solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to demand or receive property
other than cash from the Partnership. Except as otherwise provided in this
Agreement, no Limited Partner shall have priority over any other Partner as to
the return of its Capital Contributions, distributions, or allocations.
Section 13.5 Notice of Dissolution
If a Liquidating Event occurs or an event occurs that would, but for the
provisions of an election or objection by one or more Partners pursuant to
Section 13.1, result in a dissolution of the Partnership, the General Partner
shall, within thirty (30) days thereafter, provide written notice thereof to
each of the Partners.
Section 13.6 Termination of Partnership and Cancellation of Certificate of
Limited Partnership
Upon the completion of the liquidation of the Partnership's assets, as
provided in Section 13.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed, and all qualifications of the
Partnership as a foreign limited partnership in jurisdictions
58
other than the State of Delaware shall be canceled and such other actions as may
be necessary to terminate the Partnership shall be taken.
Section 13.7 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.
Section 13.8 Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership
property.
Section 13.9 Liability of Liquidator
The Liquidator shall be indemnified and held harmless by the Partnership
in the same manner and to the same degree as an Indemnitee may be indemnified
pursuant to Section 7.7 hereof.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
A. Amendments to this Agreement may be proposed by the General Partner or
by any Limited Partners (other than the General Partner) holding twenty percent
(20%) or more of the Partnership Interests. Following such proposal, the General
Partner shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written vote of the Partners on the proposed amendment or
shall call a meeting to vote thereon and to transact any other business that it
may deem appropriate. For purposes of obtaining a written vote, the General
Partner may require a response within a reasonable specified time, but not less
than fifteen (15) days, and failure to respond in such time period shall
constitute a vote which is consistent with the General Partner's recommendation
with respect to the proposal. Except as provided in Section 13.1.C, 14.1.B,
14.1.C or 14.1.D, or in connection with an amendment made to reflect the
issuance of additional Partnership Interests and the relative rights, powers and
duties incident thereto, a proposed amendment shall be adopted and be effective
as an amendment hereto if it is approved by the General Partner and it receives
the Consent of Partners holding a majority of the Percentage Interests of the
Limited Partners (including Limited Partner Interests held by the General
Partner); provided, that an action shall
59
become effective at such time as the requisite consents are received even if
prior to such specified time.
B. Notwithstanding Section 14.1.A, the General Partner shall have the
power, without the consent of the Limited Partners, to amend this Agreement as
may be required to facilitate or implement any of the following purposes:
(a) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or any
Affiliate of the General Partner for the benefit of the Limited Partners;
(b) to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement;
(c) to set forth and reflect in the Agreement the
designations, rights, powers, duties, and preferences of the holders of
any additional Partnership Interests issued pursuant to Section 4.2.A
hereof;
(d) to reflect a change that is of an inconsequential nature
and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision in
this Agreement not inconsistent with law or with other provisions, or make
other changes with respect to matters arising under this Agreement that
will not be inconsistent with law or with the provisions of this
Agreement; and
(e) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation of a
federal or state agency or contained in federal or state law.
The General Partner shall provide notice to the Limited
Partners when any action under this Section 14.1.B is taken.
C. Notwithstanding Sections 14.1.A and 14.1.B hereof, this Agreement shall
not be amended without the Consent of each Partner adversely affected if such
amendment would (i) convert a Limited Partner's interest in the Partnership into
a General Partner Interest; (ii) modify the limited liability of a Limited
Partner in a manner adverse to such Limited Partner; (iii) alter rights of the
Partner (other than as a result of the issuance of Partnership Interests) to
receive distributions pursuant to Article 5 or Article 13 or the allocations
specified in Article 6 (except as permitted pursuant to Section 4.2 and Section
14.1.B(c) hereof); (iv) alter or modify a Redemption Right and REIT Shares
Amount as set forth in Sections 8.6 and 11.2.B, and the related definitions, in
a manner adverse to such Partner; (v) cause the termination of the Partnership
prior to the time set forth in Section 2.5 or 13.1; or (vi) amend this Section
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14.1.C. Further, no amendment may alter the restrictions on the General
Partner's authority set forth in Section 7.3 without the Consent specified in
that section.
D. Notwithstanding anything in this Article 14 or elsewhere in this
Agreement to the contrary, any amendment and restatement of Exhibit A authorized
or permitted by this Agreement, whether pursuant to Section 7.1.A(w) hereof or
otherwise, shall not be deemed an amendment of this Agreement and may be done at
any time and from time to time, as necessary by the General Partner without the
Consent of the Limited Partners.
Section 14.2 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
Limited Partners (other than the General Partner) holding twenty percent (20%)
or more of the Partnership Interests. The request 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 (7) days nor more than thirty (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 the Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of the
Partners or may be given in accordance with the procedure prescribed in Section
14.1.A hereof. Except as otherwise expressly provided in this Agreement, the
Consent of holders of a majority of the Percentage Interests held by Limited
Partners (including Limited Partner Interests held by the General Partner) shall
control.
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).
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 him
by proxy on all matters in which a Limited Partner is entitled to participate,
including waiving notice of any meeting, or voting or participating at a
meeting. Every proxy must be signed by the Limited Partner or his
attorney-in-fact. No proxy shall be valid after the expiration of twelve (12)
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership's receipt of written notice of
such revocation from the Limited Partner executing such proxy.
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D. Each meeting of the 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. Without limitation, meetings of Partners may be conducted in the
same manner as meetings of the stockholders of the General Partner and may be
held at the same time, and as part of, meetings of the stockholders of the
General Partner.
ARTICLE 15
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 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" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement shall
include the corresponding masculine, feminine or neuter forms, and the singular
form of nouns, pronouns and verbs shall include the plural and vice versa.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
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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 Creditors
Other than as expressly set forth herein with respect to the Indemnitees,
none of the provisions of this Agreement shall be for the benefit of, or shall
be enforceable by, any creditor of the Partnership.
Section 15.7 Waiver
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
Section 15.8 Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of 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 15.9 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.
Section 15.10 Invalidity of Provisions
If any provision of this Agreement shall to any extent be held void or
unenforceable (as to duration, scope, activity, subject or otherwise) by a court
of competent jurisdiction, such provision shall be deemed to be modified so as
to constitute a provision conforming as nearly as possible to the original
provision while still remaining valid and enforceable. In such event, the
remainder of this Agreement (or the application of such provision to persons or
circumstances other than those in respect of which it is deemed to be void or
unenforceable) shall not be affected thereby. Each other provision of this
Agreement, unless specifically conditioned upon the voided aspect of such
provision, shall remain valid and enforceable to the fullest extent permitted by
law; any other provisions of this Agreement that are specifically conditioned on
the voided aspect of such invalid provision shall also be deemed to be modified
so as to constitute a provision conforming as nearly as possible to the original
provision while still remaining valid and enforceable to the fullest extent
permitted by law.
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Section 15.11 Entire Agreement
This Agreement contains the entire understanding and agreement among the
Partners with respect to the subject matter hereof and supersedes any other
prior written or oral understandings or agreements among them with respect
thereto.
Section 15.12 No Rights as Stockholders
Nothing contained in this Agreement shall be construed as conferring upon
the holders of the Partnership Units any rights whatsoever as stockholders of
the General Partner, including, without limitation, any right to receive
dividends or other distributions made to stockholders of the General Partner or
to vote or to consent or receive notice as stockholders in respect to any
meeting of stockholders for the election of directors of the General Partner or
any other matter.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
GENERAL PARTNER:
MACKLOWE PROPERTIES, INC.
By:______________________________
Name:
Title:
65
LIMITED PARTNER SIGNATURE PAGE
The undersigned, desiring to become one of the within named Limited
Partners of Macklowe Properties, L.P., hereby becomes a party to the Agreement
of Limited Partnership of Macklowe Properties, L.P. by and among Macklowe
Properties, Inc. and such Limited Partners, dated as of ________, 1998. The
undersigned agrees that this signature page may be attached to any counterpart
of said Agreement of Limited Partnership.
Signature Line for Limited Partner:
MACKLOWE PROPERTIES, INC.
By:______________________________
Name:
Title:
Address of Limited Partner: ▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
66
[OTHER SIGNATURE PAGES]
67
Exhibit A
Partners' Contributions and Partnership Interests
GENERAL PARTNER
Macklowe Properties, Inc.
Address for notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇
with a copy to:
▇▇▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇.
COMMON LIMITED PARTNERS
CLASS B LIMITED PARTNERS
A-1
Exhibit B
Notice of Redemption
The undersigned Limited Partner hereby irrevocably (i) redeems [_____]
Partnership Units in Macklowe Properties, L.P. in accordance with the terms of
the Agreement of Limited Partnership of Macklowe Properties, L.P. and the
Redemption Right referred to therein; (ii) surrenders such Partnership Units and
all right, title and interest therein; and (iii) directs that the Cash Amount or
REIT Shares Amount (as determined by the General Partner) deliverable upon
exercise of the Redemption Right be delivered to the address specified below,
and if REIT Shares are to be delivered, such REIT Shares be registered or placed
in the name(s) and at the address(es) specified below. The undersigned hereby,
represents, warrants, and certifies that the undersigned (a) has marketable and
unencumbered title to such Partnership Units, free and clear of the rights or
interests of any other person or entity; (b) has the full right, power, and
authority to redeem and surrender such Partnership Units as provided herein; and
(c) has obtained the consent or approval of all person or entities, if any,
having the right to consent or approve such redemption and surrender.
Capitalized terms used herein and not otherwise defined shall have the meaning
ascribed to them in the Agreement of Limited Partnership of Macklowe Properties,
L.P.
Dated:________________________
Name of Limited Partner:
_________________________________________
(Please Print)
_________________________________________
(Signature of Partner)
_________________________________________
(▇▇▇▇▇▇ ▇▇▇▇▇▇▇)
_________________________________________
(City) (State) (Zip Code)
Signature Guaranteed By:
_________________________________________
B-1
If REIT Shares are to be issued, issue to:
Name:
_________________________________________
Please insert social security or identifying number:
_________-___________-_____________