Exhibit 99.3
LIMITED PARTNERSHIP AGREEMENT
OF
ARBOR REIT, L.P.
This Limited Partnership Agreement ("Agreement") of Arbor REIT, L.P. is
made and entered into effective as of the 5th day of August, 1998 (the
"Effective Date"), by and among Group Investors, L.L.C., a Delaware limited
liability company ("Group Investors"), as the general partner and ▇. ▇. ▇▇▇▇▇▇,
Nominee ("Nominee"), as the nominee limited partner.
WITNESSETH:
For and in consideration of the mutual covenants set forth herein and for
other good and valuable consideration, the adequacy, receipt, and sufficiency
of which are hereby acknowledged, Group Investors and Nominee (collectively, the
"Partners" and individually, a "Partner") hereby agree as follows:
ARTICLE I
ORGANIZATION AND PURPOSE
Section 1.01. Formation of Limited Partnership. The Partners hereby agree
to become partners and to form a limited partnership (the "Partnership")
pursuant to Del. Code ▇▇▇ 17-101 et seq., known as the Delaware Revised
Uniform Limited Partnership Act (the "Act"). Group Investors shall be the
general partner and is hereinafter sometimes referred to in such capacity as the
"General Partner." Nominee shall be the limited partner and together with any
beneficial owners of the interest held by Nominee admitted as limited partners
pursuant to this Agreement are hereinafter referred to individually as a
"Limited Partner" and collectively as the "Limited Partners."
Section 1.02. Name. The name of the Partnership shall be Arbor REIT,
L.P. All business and affairs of the Partnership shall be conducted solely
under, and all Partnership Assets (as that term is defined in Section 1.04)
shall be held solely in, such name unless otherwise determined by the General
Partner.
Section 1.03. Effective Date and Term. The Partnership shall be in effect
for a term beginning on the Effective Date and shall continue under this
Agreement (as amended from time to time) until dissolved upon the occurrence of
an event that causes the dissolution of the Partnership in accordance with the
provisions of this Agreement (unless reconstituted as provided herein), and
thereafter to the extent provided by applicable law, until wound up and
terminated as provided herein.
Section 1.04. Purposes and Scope of Business. The business and purposes
of the Partnership are to make investments of any kind and to do all things
permitted under the Act, specifically including, without limitation, acquiring
securities of any type or kind in each of MeriStar Hospitality Corp. and
MeriStar Hotels and Resorts, Inc. Subject to the terms and conditions of this
Agreement, the Partnership shall have the power and authority to do all such
other acts and things as may be necessary, desirable, expedient, convenient for,
or incidental to, the furtherance and accomplishment of the foregoing objectives
and purposes and for the protection and benefit of the Partnership. The assets
of the Partnership, whether now or hereafter owned, are hereinafter sometimes
referred to as the "Partnership Assets".
Section 1.05. Documents. The General Partner, or anyone designated by the
General Partner, is hereby authorized to execute a certificate of limited
partnership of the Partnership ("Certificate of Limited Partnership") in
accordance with the Act and cause the same to be filed in the office of the
Secretary of State of the State of Delaware in accordance with the provisions
of the Act. The Partnership shall promptly execute and duly file with the
proper offices in each state in which the Partnership may conduct the activities
hereinafter authorized, one or more certificates as required by the laws of each
such state in order that the Partnership may lawfully conduct the business,
purposes, and activities herein authorized in each such state, and the
Partnership shall take any other action or measures necessary in such state or
states for the Partnership to conduct such activities.
Section 1.06. Principal Place of Business. The principal place of
business of the Partnership shall be ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇ or at such other place or places as may be approved by the General
Partner. The General Partner shall be responsible for maintaining at the
Partnership's principal place of business those records required by the Act to
be maintained there.
Section 1.07. Registered Agent and Office. The Registered Agent (as
defined in the Act) for the Partnership in Delaware shall be Corporation Service
Company. The Registered Office (as defined in the Act) of the Partnership shall
be ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE II
OPERATIONS
Section 2.01. Management of Partnership.
(a) The right to manage, control, and conduct the business and affairs of
the Partnership shall be vested solely in the General Partner. Except as
provided in Sections 2.01(b) and 7.01, the Limited Partners shall not take part
in the management of the affairs of the Partnership and under no circumstances
may any Limited Partner control the Partnership business or sign for or bind the
Partnership. Without limiting the generality of the foregoing, and
notwithstanding anything to the contrary contained in this Agreement, the
General Partner shall have the exclusive authority to act for and on behalf of
the Partnership, and no third party shall ever be required to inquire into the
authority of the General Partner to take such action on behalf of the
Partnership. Except as expressly limited in this Agreement, the General Partner
shall have the rights, authority, and powers of general partners with respect
to the Partnership business and the Partnership Assets as set forth in the Act
as in effect upon the Effective Date of this Agreement. The General Partner
shall not be required to devote its full time and attention to the business of
the Partnership, but only such time as it deems necessary for the proper conduct
of the Partnership's affairs.
(b) No act shall be taken, sum expended or obligation incurred by the
General Partner for or on behalf of the Partnership with respect to a matter
within the scope of any of the following major decisions ("Major Decisions")
affecting, directly or indirectly, the Partnership, or the Partnership Assets,
unless approved as described in subsection 2.01(c):
(i) Financing or refinancing of the Partnership or the
Partnership Assets;
(ii) Selling, exchanging, or otherwise disposing of all or
substantially all of the Partnership Assets; or
(iii) Admitting a New Partner (as defined in Section 5.05) to
the Partnership.
(c) No Major Decision may be made or effected by or on behalf of the
Partnership without the approval of the Partners holding a majority of all
Percentage Interests (as defined in Section 4.01) in the Partnership. As used
in this Agreement, "Approved by the Partners", "Approval of the Partners", and
other like terms shall mean the approval or consent of the Partners holding a
majority of the Percentage Interests in the Partnership. Any Partner may at any
time propose a Major Decision to the other Partners by giving written notice to
the other Partners. Within ten (10) days after receipt of such notice, each
Partner shall indicate, in writing, to the requesting Partner, his or its
approval or disapproval of such Major Decision; provided, that, in the event any
Partner does not respond in such 10-day period, such Partner shall be deemed to
have disapproved such Major Decision. If any Partner or Partners holding a
majority of the Percentage Interests in the Partnership approve of, consent to,
or otherwise take any action contemplated by this Section 2.01(c), such action
shall neither require any further polling of any other Partners, nor require any
further approval, consent, or action of any other Partners.
Section 2.02. Affiliates. The General Partner shall have the right to
cause the Partnership to enter into contracts or otherwise deal with any
affiliates of any Partner in any capacity, including, without limitation, in
connection with the financing, management, and development of the Partnership
Assets, except that the terms of any such arrangement shall be commercially
reasonable and competitive with amounts that would be paid to third parties on
an "arms-length" basis.
Section 2.03. Expenses. The Partnership shall pay or reimburse the
General Partner and the Tax Matters Partner (as defined in Section 2.05) for all
direct, out-of-pocket expenses incurred by it with respect to its duties under
Section 2.01 and Section 2.05 to the Partnership, including, without limitation,
salaries, accounting expenses, insurance premiums attributable directly to the
Partnership, legal fees, and other direct costs associated with the formation
and operation of the Partnership.
Section 2.04. Exculpations, Indemnities.
(a) Neither the Partners, the Tax Matters Partner, their affiliates nor
any of their respective shareholders, officers, directors, partners, members,
managers, employees or agents (individually a "Covered Person") shall be liable
to the Partnership, any Partner, or any other person for any act or omission
taken or suffered by such Covered Person in good faith and in the belief that
such act or omission is in or is not opposed to the best interests of the
Partnership, provided, that such act or omission is not fraud, willful
misconduct, or a knowing violation of this Agreement by such Covered Person.
No Covered Person shall be liable to the Partnership, any Partner, or any other
person for any action taken by any other Partner, nor shall any Covered Person
be liable to the Partnership, any other Partner, or any other person for any
action of any employee or agent of the Covered Person, provided, such action is
within the scope of the purposes of the Partnership and the Covered Person
seeking exculpation satisfies the parameters of the preceding sentence.
(b) To the fullest extent allowed or permitted under any provision of
applicable law, including, without limitation, the Act, the Partnership shall
indemnify, defend, and hold harmless each Partner, its affiliates and their
respective shareholders, officers, directors, partners, members, managers,
employees or agents (individually an "Indemnitee") to the extent of the
Partnership Assets, from and against any losses, expenses, judgments, fines,
settlements, and damages incurred by the Partnership or such Indemnitee arising
out of any claim based upon acts (including, without limitation, negligent acts)
performed or omitted to be performed by the Partnership or such Indemnitee in
connection with the business of the Partnership, including, without limitation,
costs, expenses, and attorneys' fees expended in the settlement or defense of
any such claim. All decisions of the Partnership concerning any action allowed
or permitted under applicable law concerning the indemnity of any person or
entity by the Partnership shall be made as Approved by the Partners.
Section 2.05. Tax Matters Partner. The General Partner shall act as the
"Tax Matters Partner" for federal income tax purposes. The Tax Matters Partner
shall mean the Partner (a) designated as the "tax matters partner" within the
meaning of Section 6231(a)(7) of the Internal Revenue Code of 1986, as amended
from time to time (or any corresponding provisions of succeeding law,
collectively the "Code") and (b) whose responsibilities as Tax Matters Partner
include, where appropriate, commencing on behalf of the Partnership certain
judicial proceedings regarding Partnership federal income tax items and
informing all Partners of any administrative or judicial proceeding involving
federal income taxes. In exercising its responsibilities as Tax Matters
Partner, the General Partner shall have the final decision making authority with
respect to all federal income tax matters involving the Partnership. Any direct
out-of-pocket expense incurred by the Tax Matters Partner in carrying out its
responsibilities and duties under this Agreement shall be allocated to and
charged to the Partnership as an expense of the Partnership for which the Tax
Matters Partner shall be reimbursed.
ARTICLE III
FINANCING
Section 3.01. Capital Contributions. The Partners may, but shall not be
obligated to, make capital contributions ("Capital Contributions") at such
times, in such manner and in such amounts as the General Partner may determine,
subject to the Approval of the Partners, provided, however, that each Partner
shall have the right to contribute his share of any Capital Contribution pro
rata in accordance with his existing Percentage Interest.
Section 3.02. Capital Accounts. The amount of a Partner's capital account
("Capital Account") in the Partnership shall be determined in accordance with
Regulations Section 1.704-1(b)(2)(iv), including by:
(a) crediting to such account (i) all contributions to the Partnership
made by or on behalf of such Partner or his or its predecessor in interest,
including the fair market value of any property contributed (less any
liabilities assumed by the Partnership or to which any property may be subject)
and (ii) all gains and income of the Partnership allocated to such Partner or
his or its predecessor in interest; and
(b) debiting to such account (i) all distributions from the Partnership
made to or on behalf of such Partner or his or its predecessor in interest,
including the fair market value of any property distributed (less any
liabilities assumed by the Partner or to which any property may be subject) and
(ii) all losses and deductions of the Partnership allocated to such Partner or
his or its predecessor in interest.
Section 3.03. Limited Liability of Limited Partners. Notwithstanding
anything contained in this Agreement to the contrary, the liability of each
Limited Partner for any of the debts, losses, or obligations of the Partnership
shall be limited to the amount of the sum of such Limited Partner's capital
contributions pursuant to Section 3.01 hereof. Accordingly, no Limited Partner
shall be obligated to provide additional capital to the Partnership or its
creditors by way of contribution, loan, or otherwise beyond the amount of the
capital contributions required of such Limited Partner pursuant to Section 3.01
hereof. Except as provided in the Act, no Limited Partner shall have any
personal liability whatsoever, whether to the Partnership or any third party,
for the debts of the Partnership or any of its losses beyond the amount of the
Limited Partner's capital contributions.
Section 3.04. Treatment of Capital Contributions. Except as provided in
this Agreement to the contrary, no Partner shall be entitled to interest on his
or its contributions to the capital of the Partnership nor shall any Partner be
entitled to demand the return of all or any part of such contributions to the
capital of the Partnership.
Section 3.05. Benefits of Agreement. Nothing in this Agreement, and,
without limiting the generality of the foregoing, in this Article III, expressed
or implied, is intended or shall be construed to give to any creditor of the
Partnership or to any creditor of any Partner or any other person or entity
whatsoever, other than the Partners and the Partnership, any legal or equitable
right, remedy, or claim under or in respect of this Agreement or any covenant,
condition, or provision herein contained, and such provisions are and shall be
held to be for the sole and exclusive benefit of the Partners and the
Partnership.
ARTICLE IV
ACCOUNTING, ALLOCATIONS, AND CURRENT DISTRIBUTIONS
Section 4.01. Percentage Interests. Except as adjusted pursuant to
Section 4.02, for purposes of allocating profits and losses in accordance with
Section 4.03, and for purposes of distributions under Section 4.08, each Partner
shall have the percentage interest in the Partnership (collectively the
"Percentage Interests" and individually, a "Percentage Interest") set forth on
such Partner's signature page attached hereto.
Section 4.02. Adjustments to Percentage Interests.
(a) If (i) more than a de minimis contribution or distribution is made
other than pro rata by Percentage Interests, as among the Partners, or (ii) a
New Partner is admitted to the Partnership in accordance with Section 5.05 (with
each such event described in Section 4.02(a)(i) or (ii) being referred to as an
"Adjusting Event"), then the Percentage Interests of the Partners shall be
immediately adjusted such that the Percentage Interest of each Partner equals
a fraction, expressed as a percentage, in which the numerator equals the Current
Value (as defined in Section 4.02(b)) of such Partner's interest in the
Partnership, and the denominator equals the Net Value of the Partnership Assets
(as defined in Section 4.02(b)). If the Percentage Interests of any Partners
are adjusted pursuant to this Section 4.02(a), no Partner shall have the right
to modify, rectify, or undo such adjustments thereafter, and such adjustments
shall be made without the need for any further act or writing to effect any such
adjustment. Each Partner hereby appoints the General Partner as his or its duly
authorized agent and attorney-in-fact for purposes of preparing and executing
any amendments to this Agreement necessary or desirable to reflect any
adjustment of Percentage Interests under this Section 4.02(a). The rights
granted to any Partner under this Section 4.02 shall be such Partner's sole and
exclusive remedy for seeking relief with respect to any Adjusting Event.
(b) For purposes of this Agreement, the "Net Value of the Partnership
Assets" shall mean the net fair market value of all of the Partnership Assets
at the time the Adjusting Event occurs, as determined by the General Partner in
its sole discretion, and such Net Value of the Partnership Assets shall include
the value of the contributions made in connection with the Adjusting Event. The
Partners agree that because of the difficulty of valuing an interest in the
Partnership due to the unique nature of the Partnership Assets, the General
Partner is granted the sole discretion to determine such values and shall take
into account whatever factors it deems appropriate to reflect such values,
including, without limitation, the dollar value of all contributions to date and
any other reasonable methods for determining the value of all of the Partnership
Assets at the time of the Adjusting Event. Without limiting the foregoing, the
General Partner may deem the Net Value of the Partnership Assets to equal the
historical net cost of those assets. The "Current Value" of any Partner's
interest in the Partnership shall be a dollar amount equal to the sum of (i) an
amount equal to such Partner's Percentage Interest immediately prior to the
Adjusting Event multiplied by the Net Value of the Partnership Assets determined
above excluding the net fair market value (as determined by the General Partner)
of any contributions associated with the Adjusting Event, plus (ii) the net fair
market value (as determined by the General Partner) of any contributions made
by such Partner associated with the Adjusting Event. Each Partner's Percentage
Interest shall be immediately adjusted to reflect such valuation by the General
Partner, effective as of the date of such Adjusting Event.
(c) Notwithstanding anything contained in this Agreement to the contrary,
if the Partnership's interest in any partnership or any investment entity it has
invested in (each, an "Investment Entity"), be diminished, or if the
Partnership's interest in an Investment Entity would have been diminished but
for one or more Contributing Partners, due to a failure by the Partnership to
contribute funds to an Investment Entity (a "Diminishment") which is in turn due
to the failure of a Non-Contributing Partner to contribute his or its pro rata
portion of a Call, then the Percentage Interests of the Non-Contributing
Partners may be reallocated as determined by the General Partner in its sole
discretion by decreasing the Percentage Interests of those Non-Contributing
Partners, and increasing the Percentage Interests of the Contributing Partners,
or if none, then the other Partners, such that any loss of the Partnership's
interest in an Investment Entity which actually occurred or which would have
otherwise occurred to the Partnership due to the Diminishment which is in excess
of the aggregate decrease in Percentage Interest of the Non-Contributing
Partners pursuant to Section 4.02(a) is borne solely by the Non-Contributing
Partners.
Section 4.03. Tax Status, Reports, and Allocations.
(a) Notwithstanding any provision contained in this Agreement to the
contrary, solely for federal income tax purposes, each of the Partners hereby
recognizes that the Partnership will be subject to all provisions of Subchapter
K of the Code; provided, however, that the filing of United States Partnership
Returns of Income shall not be construed to extend the purposes of the
Partnership or expand the obligations or liabilities of the Partners.
(b) The General Partner or, at its discretion, an accountant
("Accountant") selected by the General Partner shall prepare or cause to be
prepared all tax returns and statements, if any, that must be filed on behalf
of the Partnership with any taxing authority and shall timely file such returns
or statements.
(c) For accounting and federal and (if any) state income tax purposes, all
income, deductions, credits, gains and losses shall be allocated to the Partners
pro rata in accordance with their respective Percentage Interests.
(d) Notwithstanding subsection (c) above, any loss or deductions
attributable to any Partnership recourse liability (as defined in Regulations
Section 1.752-1(a)(i)) ("Recourse Debt") must be specially allocated to any
Partner who bears the economic risk of loss with respect to the Recourse Debt
to which such loss or deductions are attributable. If any allocations are made
to any Partner pursuant to the foregoing sentence, then after any allocations
required by Sections 4.04 and 4.05 hereof have been made but prior to
allocations pursuant to Section 4.03(c), income shall be allocated to such
Partner until on a cumulative basis an aggregate amount of income equal to such
cumulative deductions and losses has been allocated to each such Partner.
Section 4.04. Certain Gross Asset Value/Tax Differences. In accordance
with Section 704(c) of the Code and the applicable Regulations thereunder,
income, gain, loss, deduction, and tax depreciation with respect to any property
contributed to the capital of the Partnership, or with respect to any property
which has a Gross Asset Value different than its adjusted tax basis, shall,
solely for income tax purposes, be allocated among the Partners so as to take
into account any variation between the adjusted tax basis of such property to
the Partnership and the Gross Asset Value of such property.
Section 4.05. Minimum Gain and Income Offsets.
(a) Definitions.
(i) "Partner Minimum Gain" shall be "partner nonrecourse debt
minimum gain," as defined in Regulations Section 1.704-2(i)(2) and
determined in accordance with Regulations Sections 1.704-2(i)(3) and
1.704-2(k).
(ii) "Partner Nonrecourse Debt" has the meaning set forth in
Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(iii) "Partner Nonrecourse Deduction" has the meaning set forth
in Regulations Section 1.704-2(i).
(iv) "Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(d) and shall be determined in accordance
with the provisions of Regulations Section 1.704-2(k).
(v) "Regulations" means the temporary and permanent Income Tax
Regulations promulgated under the Code, as such regulations may be
amended from time to time (including corresponding provisions of
succeeding Regulations).
(b) Minimum Gain.
(i) Notwithstanding any other provision of this Agreement to the
contrary, if the Partnership Minimum Gain on the last day of any fiscal
year is less than the Partnership Minimum Gain on the last day of the
immediately preceding fiscal year, then (before any other allocation of
Partnership items for such year under this Agreement, other than as
provided in paragraph (ii) below) there shall be specially allocated to
each Partner items of Partnership income and gain for such year (and, if
necessary, subsequent fiscal years) in an amount equal to such Partner's
share of the net decrease in Partnership Minimum Gain (determined in
accordance with Regulations Section 1.704-2(g)). The items to be so
allocated shall be determined in accordance with Regulations Sections
1.704-2(f)(6) and 1.704-2(j)(2)(i) and (iii). This Section 4.05(b)(i) is
intended to comply with the minimum gain chargeback requirement in
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.
(ii) Subsequent to any allocations under Section 4.05(b)(i) above,
other than allocations of gain from the disposition of property subject to
Partner Nonrecourse Debt, if Partner Minimum Gain on the last day of any
fiscal year is less than the Partner Minimum Gain on the last day of the
immediately preceding fiscal year, then, except as provided herein, each
Partner shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent fiscal years) in an amount
equal to that Partner's share, if any, (determined in accordance with
Regulations Section 1.704-2(i)(4)) of the net decrease in Partner Minimum
Gain (such net decrease to be determined in a manner consistent with the
provisions of Regulations Section 1.704-2(d) and 1.704-2(g)(3)). The
items to be so allocated shall be determined in accordance with the
provisions of Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii) and
(iii). Notwithstanding the foregoing, no such special allocations of
income and gain shall be made to the extent that the net decrease in
Partner Minimum Gain described above arises because the liability ceases
to be Partner Nonrecourse Debt due to a conversion, refinancing, or other
change in the debt instrument that causes it to become partially or wholly
a nonrecourse liability within the meaning of Regulations Section
1.752-1(a)(2). This Section 4.05(b)(ii) is intended to comply with the
chargeback and other provisions of Regulations Section 1.704-2(i) and
shall be interpreted consistently therewith.
(c) Qualified Income Offset. Notwithstanding any other provision of this
Agreement, if during any fiscal year any Partner (i) is allocated pursuant to
Code Section 706(d) or Regulations Section 1.751-1(b)(2)(ii) any loss, items of
loss, deductions, or Code Section 705(a)(2)(B) expenditures, (ii) is distributed
any cash or property from the Partnership and such distributions exceed
offsetting increases to such Partner's Capital Account that are reasonably
expected to occur during such year, or (iii) receives any other adjustment,
allocation, or distribution described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), (5), or (6) and, as a result of such adjustment,
allocation, or distribution, such Partner has a Qualified Income Offset Amount
(as hereinafter defined), then items of income and gain (including gross income)
for such fiscal year or other period (and, if necessary, subsequent fiscal
years) shall (prior to any allocation pursuant to Section 4.03 hereof) be
allocated to such Partner in an amount equal to his Qualified Income Offset
Amount; provided, however, that any allocation of income or gain shall be
required under this sentence only if and to the extent that such Partner would
have a Qualified Income Offset Amount after all other allocations provided for
in this Agreement have been tentatively made as if Sections 4.05(b) and (c) were
not contained herein. As used herein, the term "Qualified Income Offset Amount"
for a Partner means the excess, if any, of (x) the negative balance a Partner
has in its Capital Account following the adjustment, allocation, or distribution
described in the preceding sentence, over (y) the maximum amount that it is
obligated (or is deemed to be obligated) to restore to the Partnership upon
liquidation as determined in accordance with Regulations Sections 1.704-2(f),
(g), and (i). This Section 4.05(c) is intended to satisfy the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.
Section 4.06. Accounting.
(a) The fiscal year of the Partnership shall end on the last day of
December of each year.
(b) The books of account of the Partnership shall be kept and maintained
at all times at the principal place of business of the Partnership or at such
other place or places approved by the General Partner. The books of account
shall be maintained according to federal income tax principles using the accrual
method of accounting, consistently applied, and shall show all items of income
and expense.
(c) If requested by any Partner, the General Partner shall cause a balance
sheet of the Partnership dated as of the end of the fiscal year and a related
statement of income or loss for the Partnership for such fiscal year to be
prepared by the Accountant and furnished, at the expense of the Partnership, to
each of the Partners on an annual basis, within ninety (90) days after the close
of each fiscal year.
(d) Each Partner shall have the right at reasonable times and upon
reasonable advance notice during usual business hours to audit, examine, and
make copies of or extracts from the books of account of the Partnership. Such
right may be exercised through any agent or employee of such Partner designated
by him or it or by an independent certified public accountant designated by such
Partner. Each Partner shall bear all expenses incurred in any examination made
on behalf of such Partner.
Section 4.07. Bank Accounts. Funds of the Partnership shall be deposited
in a Partnership account or accounts in the bank or banks as selected by the
General Partner. Withdrawals from bank accounts shall only be made by the
General Partner or such other parties as may be approved by the General Partner.
Section 4.08. Current Distributions to Partners. Except as provided in
Section 6.05 in connection with the termination and liquidation of the
Partnership, the General Partner shall distribute funds at such times and in
such amounts as it may determine, in its sole discretion, except that such funds
shall be distributed by the General Partner to the Partners in accordance with
their respective Percentage Interests at the time of the distribution. In
determining the amount of funds to distribute pursuant to this Section 4.08, the
General Partner may consider such factors as the need to allocate funds to any
reserves for Partnership contingencies or any other Partnership purposes that
the General Partner deems necessary or appropriate. The General Partner, in its
sole discretion, may distribute undivided interests in Partnership Assets in-
kind, provided, that such distribution shall be pro rata in accordance with the
Partners' relative Percentage Interests.
Section 4.09. Changes in Percentage Interests. If a Partner's Percentage
Interest changes during any fiscal year, the allocations to be made pursuant to
this Agreement shall be made in accordance with Section 706 of the Code, using
any convention permitted by Section 706 of the Code and the Regulations
promulgated thereunder and selected by the General Partner so as to equitably
effectuate the allocations of this Article IV.
Section 4.10. Tax Withholding.
(a) If at any time requested by the General Partner, each Partner and each
Substituted Partner (as defined in Section 5.03) shall deliver to the
Partnership (i) an affidavit in form specified in Treasury Regulations Section
1.1445-2(b)(2)(iii) or otherwise in form satisfactory to the General Partner
that the applicable Partner is not a "foreign person" within the meaning of
Section 1445(e)(3) of the Code or otherwise subject to withholding under the
provisions of any federal, state, local, foreign or other law, (ii) a
withholding certificate issued by the United States Internal Revenue Service
("IRS") pursuant to Section 1445 of the Code, (iii) any other certificate that
the General Partner may reasonably request with respect to any such laws, (iv)
any other form reasonably requested by the General Partner relating to any
Partner's status under any applicable law, and/or (v) a copy of any tax return
or similar document of the applicable Partner that the General Partner may
reasonably request with respect to any such law.
(b) To the extent that any person (including without limitation the Master
Partnership, the Partnership or the General Partner) is required by any
applicable law to withhold or to make tax payments on behalf of or with respect
to amounts distributed or distributable to, items allocated or allocable to, or
otherwise for any Partner (each a "Tax Liability"), the General Partner may
cause the Partnership to make such tax payments (each a "Tax Advance") as so
required. The Partnership and the Master Partnership may be subject to
provisions in the Master Agreement or otherwise that correspond to this Section
4.10; any payments corresponding to Tax Advances made directly or indirectly on
behalf of the Partnership shall be deemed made on behalf of each Partner, pro
rata in accordance with its relative Percentage Interest. At least ten (10)
days, if commercially possible, prior to making a Tax Advance on behalf of or
with respect to a Partner, the General Partner shall first notify such affected
Partner. All Tax Advances made or deemed made on behalf of a Partner from any
amount not otherwise distributable to such Partner shall be deemed to be a
recourse loan to such Partner by the Partnership and shall be due and payable
immediately after such Tax Advance is made by the Partnership, and if not repaid
within three (3) days after the Tax Advance is made by the Partnership, the Tax
Advance shall bear interest beginning on such third day at a rate equal to the
lesser of (i) fifteen percent (15%) per annum or (ii) the maximum rate permitted
by law until repaid.
(c) Notwithstanding anything to the contrary contained herein or in any
other agreement between or among Partners, each Partner hereby agrees to
indemnify, defend, and hold harmless the Master Partnership, the Partnership,
the General Partner, their respective Affiliates, and any other person who
directly or indirectly makes a Tax Advance or corresponding payment on behalf
of such Partner from and against any Tax Liability of or with respect to such
Partner, at any time, and this indemnity and hold harmless provision shall
survive this Agreement and the termination of the Partnership; provided however,
that the General Partner and its Affiliates shall not be indemnified hereunder
for any Tax Liabilities to the extent any of them has withheld or withdrawn
funds from the Partnership for purposes of making Tax Advances to satisfy such
Tax Liabilities, and misappropriated or converted the funds so withheld or
withdrawn. In the event of any claimed over-withholding, such Partner shall be
limited to an action against the applicable government agencies for refund and
hereby waives any claim or right of action against the General Partner or the
Partnership on account of such withholding.
(d) A payment to the Partnership or otherwise by a Partner with respect
to any Tax Advance relating to such Partner shall not be deemed to be a capital
contribution by such Partner and will in no way be considered in the
calculations used to determine distributions under this Agreement. The General
Partner may, and is hereby authorized to, withhold from any distributions or
payments otherwise due to a Partner from the Partnership under this Agreement
the amount of any Tax Advance made on behalf of such Partner that as of such
date has neither been repaid to the Partnership nor been previously offset
hereunder, and any amount withheld under this Section 4.10 shall be deemed for
all purposes of this Agreement to have been distributed or paid to such
Partner. If any Partner does not repay any Tax Advance within thirty (30)
days of the General Partner giving such Partner a written final demand for
payment, then such Partner's Percentage Interest may be forfeited in the
sole discretion of the General Partner, and each Partner hereby grants the
General Partner power of attorney, which shall survive each Partner's
disability, to execute all documents to reflect such forfeiture; provided,
however, that the applicable Partner shall remain liable to the Partnership
or other Partners, as applicable, on a recourse basis for the full amount of
the Tax Advance unpaid plus accrued, unpaid interest. Any Partner who does
not repay a Tax Advance after a written final demand has been given by the
General Partner shall pay, in addition to the Tax Advance and applicable
interest, all expenses, including without limitation reasonable attorneys
fees, incurred by the Partnership, the General Partner, and/or any other
Partner in collecting the Tax Advance plus interest and/or pursuing any
other remedy provided in this Section 4.10 and otherwise in this
Agreement.
ARTICLE V
ASSIGNMENT
Section 5.01. Prohibited Transfer. Except as specifically provided in
this Article V and in Section 7.01, no Limited Partner may sell, transfer,
assign, mortgage, hypothecate, or otherwise encumber or permit or suffer any
encumbrance of all or any part of his or its interest in the Partnership unless
prior written consent is obtained from the General Partner, and no General
Partner may sell, transfer, assign, mortgage, hypothecate, or otherwise encumber
or permit or suffer any encumbrance of all or any part of his or its interest
in the Partnership without obtaining prior written Approval of the Partners.
Any attempt so to transfer or encumber any such interest shall be null and void,
ab initio. The Partners will be excused from accepting the performance of and
rendering performance to any person other than the Partner hereunder (including
any trustee or assignee of or for such Partner) as to whom such prior written
consent has not been rendered.
Section 5.02. Further Restrictions on Transfer.
(a) In the event of any assignment or transfer permitted under this
Article, the interest so assigned or transferred shall remain subject to all
terms and provisions of this Agreement; the assignee or transferee shall be
deemed, by accepting the interest so assigned or transferred, to have assumed
all the obligations hereunder relating to the interests or rights so assigned
or transferred and shall agree in writing to the foregoing if requested by the
General Partner. Any transferee or assignee of the interest of a Partner shall
be entitled only to receive distributions hereunder until such transferee or
assignee has been admitted as a Substituted Partner; provided, however, that
such transferee or assignee shall be subject to the Additional Capital
Contribution provisions of Article III and that the Percentage Interest of such
transferee or assignee shall be subject to reallocation pursuant to Section 4.02
in the event of an Adjusting Event. Until such transferee or assignee (other
than an existing Partner) is admitted to the Partnership as a Substituted
Partner, the Partner transferring all or any portion of his or its interest to
such assignee or transferee shall remain primarily and directly liable for the
performance of all his or its obligations under this Agreement. After the
admission of such assignee or transferee as a Substituted Partner, such
transferor Partner shall only be primarily and directly liable under this
Agreement or otherwise for any obligations or liabilities accruing prior to the
effective time of the admission of such Substituted Partner, unless such
transferor Partner is released in writing from such obligations or liabilities
by the General Partner and such release is Approved by the Partners.
(b) Any Partner making or offering to make a transfer of all or any part
of his or its interest in the Partnership shall indemnify and hold harmless the
Partnership and all other Partners from and against any costs, damages, claims,
suits, or fees suffered or incurred by the Partnership or any such other Partner
arising out of or resulting from any claims by the transferee of such
Partnership interest or any offerees of such Partnership interest in connection
with such transfer or offer.
Section 5.03. Substituted Partner. Except as otherwise provided in
Section 7.01 hereof, an assignee or transferee (other than an existing Partner)
of the interest of a Partner may be admitted as a substitute partner
("Substituted Partner") only with the written consent of the General Partner,
which such consent shall be granted or denied in the sole discretion of the
General Partner. Unless the assignee is already a General Partner, any assignee
of a Partnership interest to whose admission such consent is given shall become
and shall have only the rights and duties of a Limited Partner and the assigned
Partnership interest shall thereafter be a Limited Partner's interest. Upon the
receipt by the General Partner of an appropriate supplement to this Agreement
pursuant to which such Substituted Partner agrees to be bound by all the terms
and provisions of this Agreement, the General Partner shall reflect the
admission of a Substituted Partner and the withdrawal of the transferring
Partner, if appropriate, by preparing a supplemental exhibit, dated as of the
date of such admission and withdrawal, and by filing it with the records of the
Partnership. Any Substituted Partner shall, if required by the General Partner,
prior to such admission, also execute any other documents requested by the
General Partner, including, without limitation, an irrevocable power of attorney
in form satisfactory to the General Partner appointing the General Partner as
such person's attorney-in-fact with full power to execute, swear to,
acknowledge, and file all certificates and other instruments necessary to carry
out the provisions of this Agreement, including, without limitation, such
undertakings as the General Partner may require for the payment of all fees and
costs necessary to effect any such transfer and admission. Upon admission, such
Substituted Partner shall be subject to all provisions of this Agreement in the
place and stead of his assignor as if the Substituted Partner originally was a
party to this Agreement.
Section 5.04. Basis Adjustment. The Tax Matters Partner may cause, in its
sole and absolute discretion, the Partnership to elect pursuant to Section 754
of the Code and the Regulations thereunder to adjust the basis of the
Partnership Assets as provided by Sections 743 or 734 of the Code and the
Regulations thereunder.
Section 5.05. Admission of Additional Partners.
(a) When Approved by the Partners, a new Partner (each a "New Partner")
may be admitted to the Partnership. Such New Partner shall (i) be admitted for
fair value, as determined by the General Partner in its reasonable discretion
and in a manner consistent with the reallocation of Percentage Interests set
forth in Section 4.02, and (ii) execute an appropriate supplement to this
Agreement and to Exhibit A pursuant to which he agrees to be bound by all the
terms and provisions of this Agreement.
(b) Upon the receipt of the supplement described in Section 5.05(a), the
General Partner shall reflect the admission of the New Partner and the
reallocation of Percentage Interests in the records of the Partnership. The
admission of a New Partner shall not cause the dissolution of the Partnership.
Upon the admission of a New Partner pursuant to Section 5.05(a), the Percentage
Interests shall be reallocated, with the New Partner receiving the Percentage
Interest calculated in accordance with Section 4.02 that reflects, as determined
by the General Partner in his sole discretion, the ratio of Current Value of the
New Partner's contribution to the Net Value of the Partnership Assets, and with
the Percentage Interests of each existing Partner being adjusted in accordance
with Section 4.02.
Section 5.06. Other Restricted Transfers. Notwithstanding any other
provision herein to the contrary, unless prior written consent is given by the
General Partner, no transfer of any interest in the Partnership may be made to
any person who is related (within the meaning of Regulations Section 1.752-4(b))
to any lender of the Partnership whose loan constitutes a nonrecourse liability
of the Partnership.
ARTICLE VI
WITHDRAWAL, DISSOLUTION, TERMINATION, AND LIQUIDATION
Section 6.01. Withdrawal. No Limited Partner shall at any time retire or
withdraw from the Partnership without obtaining the prior written consent of the
General Partner and, except as provided in Section 7.01 hereof, no General
Partner shall at any time retire or withdraw from the Partnership without
obtaining the prior written Approval of the Partners. Retirement or withdrawal
by any Partner in contravention of this Section 6.01 shall subject such Partner
to liability for all damages caused any other Partner (other than a Partner who
is, at the time of such withdrawal, in default under this Agreement) by such
retirement or withdrawal and the consequential dissolution of the Partnership.
Any notice of withdrawal must be in writing.
Section 6.02. Dissolution of the Partnership. The Partnership shall be
dissolved upon the occurrence of any of the following:
(a) The withdrawal, as defined in the Act, of a General Partner, unless:
(i) the remaining General Partner, if any, elects in writing
within ninety (90) days after such event to reconstitute the
Partnership, to continue as the General Partner, and to continue the
Partnership and its business, or
(ii) there is no remaining or Successor General Partner (as
defined in Section 7.01), then within ninety (90) days after such
event, all of the Limited Partners agree to appoint in writing a
successor General Partner, as of the date of the withdrawal of the
General Partner, and agree to reconstitute the Partnership and
continue the business of the Partnership, and such successor General
Partner agrees in writing to accept such election, or
(iii) the withdrawal of the General Partner results from its
removal by the Limited Partners as provided in Section 7.01 and a
Successor General Partner is appointed by the Limited Partners as
provided in Section 7.01;
(b) The sale or other disposition, not including an exchange, of
substantially all of the assets of the Partnership (except under circumstances
where all or a portion of the purchase price is payable after the closing of the
sale or other disposition);
(c) December 31, 2048, unless extended by the consent of all Partners; or
(d) When Approved by the Partners.
Except as expressly provided, nothing contained in this Section 6.02 is intended
to grant to any Partner the right to dissolve the Partnership at will (by
retirement, resignation, withdrawal, or otherwise) or to exonerate any Partner
from liability to the Partnership and the remaining Partners if he or it
dissolves the Partnership at will.
Section 6.03. Continuation of Partnership. If the Partnership is
continued as provided in Section 6.02(a)(i), (ii) or (iii), then, as of the date
of withdrawal, the General Partner with respect to which an event of withdrawal
under Section 6.02 has occurred (or his or its estate or successor in interest)
(the "Withdrawing General Partner") shall have none of the powers of a General
Partner under this Agreement or applicable law and shall have only the rights
and powers of an assignee of a Partner hereunder to share in any Partnership
profits, losses, gains, and distributions in accordance with his or its
Percentage Interest and shall have no other rights or powers of a Partner
hereunder; provided, however, that any Withdrawing General Partner shall be
subject to the Additional Capital Contribution provisions of Article III, that
the Percentage Interest of such Withdrawing General Partner shall be subject to
reallocation under Section 4.02 in the event of any Adjusting Event, and that
any Withdrawing General Partner who was removed by the Limited Partners pursuant
to Section 7.01 shall become a Limited Partner if its interest is so converted
as provided in Section 7.01.
Section 6.04. Death, etc. of a Limited Partner, Divorce of a Partner.
(a) The death, disability, withdrawal, termination (in the case of a
Limited Partner that is a partnership or a trust), dissolution (in the case of
a Limited Partner that is a corporation or limited liability company),
retirement, or adjudication as a bankrupt of a Limited Partner (the "Withdrawing
Limited Partner") shall not dissolve the Partnership, but, subject to the
provisions of Section 6.04(b), the rights of such Withdrawing Limited Partner
to share in the profits and losses of the Partnership and to receive
distributions of Partnership funds shall, upon the happening of such an event,
pass to the Withdrawing Limited Partner's estate, legal representative, or
successors in interest, as the case may be, subject to this Agreement, and the
Partnership shall continue as a limited partnership.
(b) Upon the occurrence of an event described in Section 6.04(a), the
General Partner shall, in its sole discretion, elect to either continue the
Partnership business (i) with the successors, assigns, heirs, devises,
beneficiaries, estate, or other transferee of such Withdrawing Limited Partner
(collectively, the "Distributees") as provided in Section 6.04(c) or (ii) with
the Partnership purchasing the interest of such Withdrawing Limited Partner from
all of his or its Distributees as provided in Section 6.04(d).
(c) If the General Partner elects to proceed pursuant to Section
6.04(b)(i), the Distributees of such Withdrawing Limited Partner shall succeed
to his or its interest in the Partnership, shall be admitted as Limited Partners
if approved by the General Partner in its sole discretion, and shall be bound
by the terms and provisions of the Agreement; provided, however, if the interest
of such Withdrawing Limited Partner passes, either at the time of an occurrence
described in Section 6.04(a) or subsequent thereto, to more than one
Distributee, then within sixty (60) days after the distribution to more than one
Distributee, the Distributees shall appoint one person, firm, or corporation as
the agent of and for such Distributees (the "Agent"). Such Agent shall be
responsible for collecting, receiving, and making all payments and Additional
Capital Contributions required under this Agreement, shall vote the entire
interest of the Distributees if such vote is required by this Agreement, the
Act, or applicable law and shall perform all other obligations of such
Distributees performable by reason of or arising from their interest in the
Partnership as Limited Partners; provided, that the Agent shall not be admitted
as a Partner of the Partnership nor shall such Agent be entitled to exercise any
voting rights hereunder unless such rights are approved by the General Partner
in its sole discretion. All payments and/or disbursements due to the
Distributees for or arising from their interest in the Partnership shall be
deemed to have been validly made to such Distributees by paying the same to such
Agent. In the event that the Distributees for any reason fail to designate such
agent in writing in the manner and within the time prescribed and fail to cure
such default after ten (10) days written notice from the General Partner to
correct such default, the General Partner shall retain any funds or property
otherwise distributable to such Distributees under this Agreement and shall
appoint an Agent of and for the Distributees. To the fullest extent allowed by
applicable law, the defaulting Distributees will indemnify, defend, and hold
harmless such Agent, the General Partner, and the Partners from and against any
losses, expenses, judgments, fines, settlements, and damages incurred by any of
them with respect to the provisions of this Section 6.04(c).
(d) If the General Partner elects to proceed pursuant to Section
6.04(b)(ii), then the General Partner shall cause the Partnership to purchase
the interest of such Withdrawing Limited Partner in the Partnership from his or
its Distributees at a price equal to the Current Value of such interest,
determined as though the effective date of the withdrawal of such Withdrawing
Limited Partner were an Adjusting Event.
(e) If, upon the divorce of any individual Partner, the spouse of any such
Partner receives an interest in the Partnership pursuant to the terms of any
divorce property settlement agreement, divorce decree, or otherwise, then the
Partnership shall have the right, as determined by the General Partner, to
purchase the interest of such spouse in the Partnership at a price equal to the
Current Value of such interest, determined as though the effective date of such
divorce were an Adjusting Event.
Section 6.05. Termination and Liquidation of the Partnership.
(a) Upon dissolution of the Partnership unless continued pursuant to
Section 6.02, the Partnership shall be terminated as rapidly as business
circumstances will permit. At the direction of the General Partner, or a
Partner Approved by the Partners if the dissolution of the Partnership is caused
by the withdrawal of the General Partner (the General Partner or the other
Partner, as the case may be, being herein called the "Terminating Partner"), a
full accounting of the assets and liabilities of the Partnership shall be taken
and a statement of the Partnership Assets and a statement of each Partner's
Capital Account shall be furnished to all Partners as soon as is reasonably
practicable. The Terminating Partner shall take such action as is necessary so
that the Partnership's business shall be terminated, its liabilities discharged,
and its assets distributed as hereinafter described. The Terminating Partner
may sell all of the Partnership Assets or distribute the Partnership Assets in
kind; provided, however, that the Terminating Partner shall ascertain the Net
Value of the Partnership Assets by appraisal or other reasonable means of all
Partnership Assets remaining unsold and each Partner's Capital Account shall be
charged or credited, as the case may be, as if such Partnership Assets had been
sold at the Net Value of the Partnership Assets and the income, gains, losses,
deductions, and credits realized thereby had been allocated to the Partners in
accordance with Article IV hereof. A reasonable period of time shall be allowed
for the orderly termination of the Partnership to minimize the normal losses of
a liquidation process.
(b) After the payment of all expenses of liquidation and of all debts and
liabilities of the Partnership in such order or priority as provided by law
(including any debts or liabilities to Partners, who shall be treated as secured
or unsecured creditors, as may be the case, to the extent permitted by law, for
sums loaned to the Partnership, if any, as distinguished from capital
contributions) and after all resulting items of Partnership income, gain,
credit, loss, or deduction are credited or debited to the Capital Accounts of
the Partners in accordance with Articles III and IV hereof, all remaining
Partnership Assets shall then be distributed among the Partners in accordance
with relative Capital Account balances. Upon termination, a Partner may not
demand and receive cash in return for such Partner's capital contributions and
no Partner shall have any obligation to restore any deficit that may then exist
in that Partner's Capital Account. Distribution on termination may be made by
the distribution to each Partner of an undivided interest in any asset of the
Partnership that has not been sold at the time of termination of the
Partnership.
Section 6.06. General Partners Not Personally Liable. No General Partner
nor any affiliate of any General Partner shall be personally liable for the
return of the Capital Contributions of any Partner, and such return shall be
made solely from available Partnership Assets, if any, and each Limited Partner
hereby waives any and all claims it may have against any General Partner or any
such affiliate in this regard.
Section 6.07. Provisions Cumulative. All provisions of this Agreement
relating to the dissolution, liquidation, and termination of the Partnership
shall be cumulative to the extent not inconsistent with other provisions herein;
that is, the exercise or use of one of the provisions hereof shall not preclude
the exercise or use of any other provision of this Agreement to the extent not
inconsistent therewith.
ARTICLE VII
GENERAL
Section 7.01. Removal and Replacement of General Partner.
(a) The General Partner may be removed and replaced at any time upon the
Approval of the Partners by sending the General Partner a written notice of such
removal. In the event of the removal of the General Partner, a successor
General Partner ("Successor General Partner") shall be selected by Approval of
the Partners. The Limited Partners, by Approval of the Partners, shall have the
right to transfer a portion of their interests to such Successor General Partner
and such interest shall be converted to that of a general partner. The removal
will not be effective until the Successor General Partner has been admitted to
the Partnership as a General Partner, such admission to be Approved by the
Partners. After the admission of the Successor General Partner, the Successor
General Partner shall have all the rights, powers, and obligations of a General
Partner under this Agreement and all references in this Agreement to the
"General Partner" shall refer to the Successor General Partner appointed in this
Section 7.01. Third parties shall be conclusively deemed entitled to rely upon
the representation of Group Investors that Group Investors is the General
Partner unless such third parties have actual notice of its replacement.
(b) Following the replacement of the General Partner, the Limited Partners
may, as is Approved by the Partners, convert such Partner's interest into a
Limited Partner's interest. The Successor General Partner shall have the
authority to execute and file all documents necessary to signify such
conversion. The General Partner hereby appoints the Successor General Partner
as his or its attorney-in-fact to execute and file all documents signifying such
conversion including, without limitation, an amendment to the Certificate of
Limited Partnership.
Section 7.02. Competing Business. Notwithstanding anything to the
contrary contained in or inferable from this Agreement, the Act, or any other
statute or principle of law, neither the Partners nor any of their shareholders,
directors, officers, employees, partners, agents, family members, or affiliates
(each a "Partner Affiliate") shall be prohibited or restricted in any way from
investing in or conducting, either directly or indirectly, and may invest in
and/or conduct, either directly or indirectly, businesses of any nature
whatsoever, including the ownership and operation of businesses or properties
similar to or in the same geographical area as those held by the Partnership.
Any investment in or conduct of any such businesses by a Partner or any Partner
Affiliate shall not give rise to any claim for an accounting by the other
Partners or the Partnership or any right to claim any interest therein or the
profits therefrom.
Section 7.03. LIMITED PARTNER REPRESENTATIONS. NOTWITHSTANDING ANYTHING
CONTAINED IN THIS AGREEMENT TO THE CONTRARY, EACH LIMITED PARTNER HEREBY
REPRESENTS AND WARRANTS TO THE PARTNERSHIP, THE GENERAL PARTNER, AND TO EACH
OFFICER, DIRECTOR, SHAREHOLDER, CONTROLLING PERSON, AND AGENT OF THE GENERAL
PARTNER THAT: (a) THE INTEREST IN THE PARTNERSHIP OF SUCH LIMITED PARTNER IS
ACQUIRED FOR INVESTMENT PURPOSES ONLY FOR HIS OR ITS OWN ACCOUNT AND NOT WITH
A VIEW TO OR IN CONNECTION WITH ANY DISTRIBUTION, REOFFER, RESALE, OR OTHER
DISPOSITION NOT IN COMPLIANCE WITH THE SECURITIES ACT OF 1933, AS AMENDED, AND
THE RULES AND REGULATIONS THEREUNDER (THE "1933 ACT") AND APPLICABLE STATE
SECURITIES LAWS; (b) SUCH LIMITED PARTNER, ALONE OR TOGETHER WITH HIS OR ITS
REPRESENTATIVES, POSSESSES SUCH EXPERTISE, KNOWLEDGE, AND SOPHISTICATION IN
FINANCIAL AND BUSINESS MATTERS GENERALLY, AND IN THE TYPE OF TRANSACTIONS IN
WHICH THE PARTNERSHIP PROPOSES TO ENGAGE IN PARTICULAR, THAT HE OR IT IS CAPABLE
OF EVALUATING THE MERITS AND ECONOMIC RISKS OF ACQUIRING AND HOLDING HIS OR ITS
PARTNERSHIP INTEREST, AND THAT HE OR IT IS ABLE TO BEAR ALL SUCH ECONOMIC RISKS
NOW AND IN THE FUTURE; (c) SUCH LIMITED PARTNER HAS HAD ACCESS TO ALL OF THE
INFORMATION WITH RESPECT TO THE INTEREST ACQUIRED BY HIM OR IT UNDER THIS
AGREEMENT THAT HE OR IT DEEMS NECESSARY TO MAKE A COMPLETE EVALUATION THEREOF
AND HAS HAD THE OPPORTUNITY TO QUESTION THE GENERAL PARTNER CONCERNING SUCH
INTEREST; (d) SUCH LIMITED PARTNER'S DECISION TO ACQUIRE HIS OR ITS INTEREST FOR
INVESTMENT HAS BEEN BASED SOLELY UPON THE EVALUATION MADE BY HIM OR IT; (e) SUCH
LIMITED PARTNER IS AWARE THAT HE OR IT MUST BEAR THE ECONOMIC RISK OF HIS OR ITS
INVESTMENT IN THE PARTNERSHIP FOR AN INDEFINITE PERIOD OF TIME BECAUSE INTERESTS
IN THE PARTNERSHIP HAVE NOT BEEN REGISTERED UNDER THE 1933 ACT OR UNDER THE
SECURITIES LAWS OF ANY STATES, AND, THEREFORE, CANNOT BE SOLD UNLESS SUCH
INTERESTS ARE SUBSEQUENTLY REGISTERED UNDER THE 1933 ACT AND ANY APPLICABLE
STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE; (f) SUCH
LIMITED PARTNER IS AWARE THAT ONLY THE PARTNERSHIP CAN TAKE ACTION TO REGISTER
SUCH INTEREST IN THE PARTNERSHIP AND THE PARTNERSHIP IS UNDER NO SUCH OBLIGATION
AND DOES NOT PROPOSE TO ATTEMPT TO DO SO; AND (g) SUCH LIMITED PARTNER IS AWARE
THAT THIS AGREEMENT PROVIDES RESTRICTIONS ON THE ABILITY OF A LIMITED PARTNER
TO SELL, TRANSFER, ASSIGN, MORTGAGE, HYPOTHECATE, OR OTHERWISE ENCUMBER HIS OR
ITS INTEREST IN THE PARTNERSHIP.
Section 7.04. Notice.
(a) All notices, demands, or requests provided for or permitted to be
given pursuant to this Agreement must be in writing.
(b) All notices, demands, and requests to be sent to a Partner, any
Distributee(s) (or their Agent) of the interest of a Partner, or any Substituted
Partner pursuant to this Agreement shall be deemed to have been properly given
or served if: (i) personally delivered, (ii) deposited prepaid for next day
delivery by Federal Express, or other similar overnight courier services,
addressed to such Partner, (iii) deposited in the United States mail, addressed
to such Partner, prepaid and registered or certified with return receipt
requested, or (iv) transmitted via telecopier or other similar device to the
attention of such Partner, all at the address or telecopy number for such
Partner set forth on such Partner's signature page attached hereto (as may be
changed in accordance with subsection (d) below).
(c) All notices, demands, and requests so given shall be deemed received:
(i) when personally delivered, (ii) twenty-four (24) hours after being deposited
for next day delivery with an overnight courier, (iii) forty-eight (48) hours
after being deposited in the United States mail, or (iv) twelve (12) hours after
being telecopied or otherwise transmitted and receipt has been confirmed.
(d) The Partners, any Substituted Partners, and their respective
Distributee(s)(or their Agent) shall have the right from time to time, and at
any time during the term of this Agreement, to change their respective addresses
and each shall have the right to specify as his or its address any other address
within the United States of America by giving to the other parties at least
thirty (30) days written notice thereof, in the manner prescribed in Section
7.04(b); provided, however, that to be effective, any such notice must be
actually received (as evidenced by a return receipt).
(e) All distributions to any Partner shall be made at the address to which
notices are to be sent unless otherwise specified in writing by such Partner.
Section 7.05. Amendments. Amendments and supplements may be made to or
restatements made of this Agreement or the Certificate of Limited Partnership
(or any exhibits or schedules attached to any of them), from time to time by the
General Partner, without the consent of any of the other Partners, to effect any
Major Decisions Approved by the Partners or any amendments which amend this
Agreement to admit Substituted Partners, to reflect the removal and replacement
of the General Partner, to reflect adjustments to the Percentage Interests of
the Partners following an Adjusting Event, to reflect other transfers,
assignments, admissions, withdrawals, conversions, or removals authorized by
this Agreement, or to effect any non-material amendments to this Agreement or
the Certificate of Limited Partnership. All other amendments to this Agreement
and the Certificate of Limited Partnership shall require the Approval of the
Partners.
Section 7.06. Powers of Attorney. Each Limited Partner hereby constitutes
and appoints the General Partner, with full power of substitution, as his or its
true and lawful attorney-in-fact and empowers and authorizes such attorney, in
the name, place, and stead of such Limited Partner, to make, execute, sign,
swear to, acknowledge, and file in all necessary or appropriate places all
documents (and all amendments or supplements to or restatements of such
documents necessitated by valid amendments to or actions permitted under this
Agreement) relating to the Partnership and its activities, including, without
limitation: (a) any amendments to this Agreement approved as provided herein,
(b) the Certificate of Limited Partnership and any amendments thereto, under the
laws of the State of Delaware or in any other state or jurisdiction in which
such filing is deemed advisable by the General Partner, (c) any applications,
forms, certificates, reports, or other documents, or amendments thereto which
may be requested or required by any federal, state, or local governmental
agency, securities exchange, securities association, self-regulatory
organization, or similar institution and which are deemed necessary or advisable
by the General Partner, (d) any other instrument which may be required to be
filed or recorded in any state or county or by any governmental agency, or which
the General Partner deems advisable to file or record, including, without
limitation, certificates of assumed name and documents to qualify foreign
limited partnerships in other jurisdictions, (e) any documents which may be
required to effect the continuation of the Partnership, the admission of New
Partners, Substituted Partners, or Distributees, the withdrawal of any Partner,
the purchase of the interest in the Partnership of any ex-spouse of a Partner,
or the dissolution and termination of the Partnership, (f) any and all reports,
schedules, certificates, forms and other documents, including, but not limited
to, Schedules 13D and 13F, Forms 3 and 4, and any other such forms as may be
required to be filed by the Partnership under the Securities Exchange Act of
1934, Federal Reserve U-1s, notes, drafts, credit or loan agreements, financing
statements, security agreements, bank resolutions, and any and all other
documents and instruments as may be necessary or desirable in the sole
discretion of the attorney so acting, all in carrying out the purposes of the
Partnership, (g) making certain elections contained in the Code or state law
governing taxation of limited partnerships, and (h) performing any and all other
ministerial duties or functions necessary for the conduct of the business of the
Partnership. Each Limited Partner hereby ratifies, confirms, and adopts as his
own, all actions that may be taken by such attorney-in-fact pursuant to this
Section 7.06. Each Limited Partner acknowledges that this Agreement permits
certain amendments to be made and certain other actions to be taken or omitted
to be taken by less than all of the Partners if approved in accordance with the
provisions hereof. By their execution hereof, each Limited Partner also grants
the General Partner a power of attorney to execute any and all documents
necessary to reflect any action that is approved in accordance with the
provisions hereof. This power of attorney is coupled with an interest and shall
continue notwithstanding the subsequent incapacity or death of the Limited
Partner. Each Limited Partner shall execute and deliver to the General Partner
an executed and appropriately notarized power of attorney in such form
consistent with the provisions of this Section 7.06 as the General Partner may
request.
Section 7.07. GOVERNING LAWS AND VENUE. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTNERS HEREUNDER SHALL BE INTERPRETED, CONSTRUED, AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
Section 7.08. Rule of Construction. The general rule of construction for
interpreting a contract, which provides that the provisions of a contract should
be construed against the party preparing the contract, is waived by the
parties. Each party acknowledges that he or it was represented by separate
legal counsel in this matter who participated in the preparation of this
Agreement or he or it had the opportunity to retain counsel to participate
in the preparation of
this Agreement but chose not to do so.
Section 7.09. Entire Agreement. This Agreement, including all exhibits
to this Agreement and, if any, exhibits to such exhibits, contains the entire
agreement among the parties relative to the matters contained in this Agreement.
Section 7.10. Waiver. No consent or waiver, express or implied, by any
Partner to or for any breach or default by any other Partner in the performance
by such other Partner of his or its obligations under this Agreement shall be
deemed or construed to be a consent or waiver to or of any other breach or
default in the performance by such other Partner of the same or any other
obligations of such other Partner under this Agreement. Failure on the part of
any Partner to complain of any act or failure to act of any of the other
Partners or to declare any of the other Partners in default, regardless of how
long such failure continues, shall not constitute a waiver by such Partner of
his or its rights hereunder.
Section 7.11. Severability. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid or
unenforceable to any extent, the remainder of this Agreement and the application
of such provisions to other persons or circumstances shall not be affected
thereby, and the intent of this Agreement shall be enforced to the greatest
extent permitted by law.
Section 7.12. Binding Agreement. Subject to the restrictions on transfers
and encumbrances set forth in this Agreement, this Agreement shall inure to the
benefit of and be binding upon the undersigned Partners and their respective
legal representatives, successors, and assigns. Whenever, in this Agreement,
a reference to any party or Partner is made, such reference shall be deemed to
include a reference to the legal representatives, successors, and assigns of
such party or Partner.
Section 7.13. Tense and Gender. Unless the context clearly indicates
otherwise, the singular shall include the plural and vice versa. Whenever the
masculine, feminine, or neuter gender is used inappropriately in this Agreement,
this Agreement shall be read as if the appropriate gender was used.
Section 7.14. Captions. Captions are included solely for convenience of
reference and if there is any conflict between captions and the text of this
Agreement, the text shall control.
Section 7.15. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original for all purposes and all
of which when taken together shall constitute a single counterpart instrument.
Executed signature pages to any counterpart instrument may be detached and
affixed to a single counterpart, which single counterpart with multiple executed
signature pages affixed thereto constitutes the original counterpart
instrument. All of these counterpart pages shall be read as though one
and they shall have the same force and effect as if all of the parties
had executed a single signature page.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Each of the undersigned has executed and delivered this Agreement
in Fort Worth, Texas, to be effective as of the Effective Date.
GENERAL PARTNER
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ GROUP INVESTORS , L.L.C.,
Suite 3100 a Delaware limited liability company
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇, Vice President
LIMITED PARTNER
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
/s/ ▇. ▇. ▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇, Nominee
EXHIBIT A
TO THE
LIMITED PARTNERSHIP AGREEMENT
OF
ARBOR REIT, L.P.
INITIAL CAPITAL PERCENTAGE
GENERAL PARTNER CONTRIBUTION INTEREST
Group Investors $ 10.00 1.00%
LIMITED PARTNER
Nominee $ 990.00 99.00%
$ 1,000.00 100.00%