FIRST INDUSTRIAL, L.P.
FOURTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE
SECURITIES LAWS PURSUANT TO A REGISTRATION OR EXEMPTION THEREFROM.
TABLE OF CONTENTS
Page
ARTICLE I - INTERPRETIVE PROVISIONS
Section 1.1 Certain Definitions ............................... 1
Section 1.2 Rules of Construction ............................. 12
ARTICLE II - CONTINUATION
Section 2.1 Continuation ...................................... 13
Section 2.2 Name .............................................. 13
Section 2.3 Place of Business; Registered Agent ............... 13
ARTICLE III - BUSINESS PURPOSE
Section 3.1 Business .......................................... 13
Section 3.2 Authorized Activities ............................. 13
ARTICLE IV - CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions ............................. 14
Section 4.2 Additional Partnership Interests .................. 14
Section 4.3 No Third Party Beneficiaries ...................... 15
Section 4.4 Capital Accounts .................................. 15
Section 4.5 Return of Capital Account; Interest ............... 16
Section 4.6 Preemptive Rights ................................. 16
Section 4.7 REIT Share Purchases .............................. 17
ARTICLE V - ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 Limited Liability ................................. 17
Section 5.2 Profits, Losses and Distributive Shares ........... 17
Section 5.3 Distributions ..................................... 22
Section 5.4 Distribution upon Redemption....................... 23
Section 5.5 Distributions upon Liquidation .................... 23
Section 5.6 Amounts Withheld .................................. 23
ARTICLE VI - PARTNERSHIP MANAGEMENT
Section 6.1 Management and Control of Partnership Business..... 23
Section 6.2 No Management by Limited Partners; Limitation
of Liability ...................................... 24
Section 6.3 Limitations on Partners ........................... 24
Section 6.4 Business with Affiliates .......................... 25
Section 6.5 Compensation; Reimbursement of Expenses ........... 25
Section 6.6 Liability for Acts and Omissions .................. 25
Section 6.7 Indemnification ................................... 26
ARTICLE VII - ADMINISTRATIVE, FINANCIAL AND TAX MATTERS
Section 7.1 Books and Records ................................. 26
Section 7.2 Annual Audit and Accounting ....................... 27
Section 7.3 Partnership Funds ................................. 27
Section 7.4 Reports and Notices ............................... 27
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Page
Section 7.5 Tax Matters ....................................... 27
Section 7.6 Withholding ....................................... 28
ARTICLE VIII - TRANSFER OF PARTNERSHIP INTERESTS; ADMISSIONS
OF PARTNERS
Section 8.1 Transfer by General Partner ....................... 28
Section 8.2 Obligations of a Prior General Partner ............ 28
Section 8.3 Successor General Partner ......................... 29
Section 8.4 Restrictions on Transfer and Withdrawal by Limited
Partner ........................................... 29
Section 8.5 Substituted Limited Partner ....................... 30
Section 8.6 Timing and Effect of Transfers .................... 30
Section 8.7 Additional Limited Partners ....................... 31
Section 8.8 Amendment of Agreement and Certificate ............ 31
ARTICLE IX - REDEMPTION
Section 9.1 Right of Redemption ............................... 31
Section 9.2 Timing of Redemption .............................. 32
Section 9.3 Redemption Price .................................. 32
Section 9.4 Assumption of Redemption Obligation ............... 32
Section 9.5 Further Assurances; Certain Representations ....... 32
Section 9.6 Effect of Redemption .............................. 33
Section 9.7 Registration Rights ............................... 33
ARTICLE X - DISSOLUTION AND LIQUIDATION
Section 10.1 Term and Dissolution .............................. 33
Section 10.2 Liquidation of Partnership Assets ................. 33
Section 10.3 Effect of Treasury Regulations .................... 35
Section 10.4 Time for Winding-Up ............................... 35
ARTICLE XI - AMENDMENTS AND MEETINGS
Section 11.1 Amendment Procedure ............................... 35
Section 11.2 Meetings and Voting ............................... 36
Section 11.3 Voting of LB Units................................. 36
ARTICLE XII - MISCELLANEOUS PROVISIONS
Section 12.1 Title to Property ................................. 37
Section 12.2 Other Activities of Limited Partners .............. 37
Section 12.3 Power of Attorney ................................. 37
Section 12.4 Notices ........................................... 38
Section 12.5 Further Assurances ................................ 38
Section 12.6 Titles and Captions ............................... 38
Section 12.7 Applicable Law .................................... 39
Section 12.8 Binding Agreement ................................. 39
Section 12.9 Waiver of Partition ............................... 39
Section 12.10 Counterparts and Effectiveness .................... 39
Section 12.11 Survival of Representations ....................... 39
Section 12.12 Entire Agreement .................................. 39
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Exhibit 1A - First Highland Partners
Exhibit 1B - Schedule of Partners
Exhibit 1C - LB Partners
Exhibit 1D - Contributor Partners
Exhibit 2 - Form of Redemption Notice
Exhibit 3 - Form of Registration Rights Agreement
FIRST INDUSTRIAL, L.P.
FOURTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
The undersigned, being the sole general partner of First Industrial, L.P.
(the "Partnership"), a limited partnership formed under the Delaware Revised
Uniform Limited Partnership Act, does hereby amend and restate the Third Amended
and Restated Partnership Agreement (as described below) this 6th day of June
1997 as follows:
R E C I T A L S:
A. The Partnership was formed pursuant to a Certificate of Limited
Partnership filed on November 23, 1993 with the Secretary of State of the State
of Delaware under the name "ProVest, L.P." and a Limited Partnership Agreement
dated November 23, 1993 (the "Original Partnership Agreement").
B. The Original Partnership Agreement was amended and restated as of
January 28, 1994 (such amended and restated partnership agreement, the "Prior
Partnership Agreement").
C. A Second Amended and Restated Limited Partnership Agreement was executed
as of June 30, 1994 (the "Second Partnership Agreement") and a Third Amended and
Restated Partnership Agreement was executed as of May 14, 1997 (the "Third
Partnership Agreement").
D. The General Partner desires to amend and restate the Third Partnership
Agreement to (i) reflect the interests granted to the Class C Limited Partner
(as hereinafter defined) and (ii) set forth the understandings and agreements,
including certain rights and obligations, among the Partners (as hereinafter
defined) with respect to the Partnership.
ARTICLE I - INTERPRETIVE PROVISIONS
Section 1.1 Certain Definitions. The following terms have the definitions
hereinafter indicated whenever used in this Agreement with initial capital
letters:
Act: The Delaware Revised Uniform Limited Partnership Act, ▇▇.▇▇. 17-101 to
17-1109 of the Delaware Code Annotated, Title 6, as amended from time to time.
Additional Limited Partner: A Person admitted to the Partnership as a
Limited Partner in accordance with Section 8.7 hereof and who is shown as such
on the books and records of the Partnership.
Adjusted Capital Account: With respect to any Partner, such Partner's
Capital Account maintained in accordance with Section 4.4 hereof, as of the end
of the relevant Fiscal Year of the Partnership, after giving effect to the
following adjustments:
(A) Credit to such Capital Account such Partner's share of Partnership
Minimum Gain determined in accordance with Treasury Regulations Section
1.704-2(g)(1) and such Partner's share of Partner Minimum Gain determined in
accordance with Treasury Regulations Section 1.704-2(i)(5).
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(B) Debit to such Capital Account the items described in Treasury
Regulations Section 1.704- 1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of "Adjusted Capital Account" is intended to
comply with the provisions of Treasury Regulations Sections 1.704-1(b)(2)(ii)
and 1.704-2 and shall be interpreted consistently therewith.
Adjusted Capital Account Deficit: With respect to any Partner, the deficit
balance, if any, in that Partner's Adjusted Capital Account as of the end of the
relevant Fiscal Year of the Partnership.
Affiliate: With respect to any referenced Person, (i) a member of such
Person's immediate family; (ii) any Person who directly or indirectly owns,
controls or holds the power to vote ten percent (10%) or more of the outstanding
voting securities of the Person in question; (iii) any Person ten percent (10%)
or more of whose outstanding securities are directly or indirectly owned,
controlled, or held with power to vote by the Person in question; (iv) any
Person directly or indirectly controlling, controlled by, or under direct or
indirect common control with the Person in question; (v) if the Person in
question is a corporation, any executive officer or director of such Person or
of any corporation directly or indirectly controlling such Person; and (vi) if
the Person in question is a partnership, any general partner of the partnership
or any limited partner owning or controlling ten percent (10%) or more of either
the capital or profits interest in such partnership. As used herein, "control"
shall mean the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
the ownership of voting securities, by contract, or otherwise.
Aggregate Protected Amount: With respect to the Contributor Partners, as a
group, the aggregate balances of the Protected Amounts, if any, of the
Contributor Partners, as determined on the date in question.
Agreed Value: In the case of any (i) Contributed Property acquired pursuant
to a Contribution Agreement, the value (exclusive of any related indebtedness
assumed by the Partnership or to which such Contributed Property is taken
subject) of such Contributed Property as set forth in such Contribution
Agreement or, if no such value is set forth for such Contributed Property, the
portion of the consideration provided for under such Contribution Agreement
allocable to such Contributed Property (exclusive of any related indebtedness
assumed by the Partnership or to which such Contributed Property is taken
subject), as determined by the General Partner in its reasonable discretion,
(ii) Contributed Property acquired other than pursuant to a Contribution
Agreement, the fair market value of such property at the time of contribution,
as determined by the General Partner using such method of valuation as it may
adopt in its reasonable discretion and (iii) property distributed to a Partner
by the Partnership, the Partnership's Book Value of such property at the time
such property is distributed, reduced by any indebtedness either assumed by such
Partner upon such distribution or to which such property is subject at the time
of distribution as determined under Code Section 752 and the Treasury
Regulations thereunder.
Agreement: This Fourth Amended and Restated Limited Partnership Agreement
and all Exhibits attached hereto, as the same may be amended or restated and in
effect from time to time.
Assignee: Any Person to whom one or more Partnership Units have been
Transferred as permitted under this Agreement but who has not become a
Substituted Limited Partner in accordance with the provisions hereof.
Bankruptcy: Either (i) a referenced Person's making an assignment for the
benefit of creditors, (ii) the filing by a referenced Person of a voluntary
petition in bankruptcy, (iii) a referenced Person's being adjudged insolvent or
having entered against him an order for relief in any bankruptcy or insolvency
proceeding, (iv) the filing by a referenced Person of an answer seeking any
reorganization, composition, readjustment, liquidation, dissolution,
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or similar relief under any law or regulation, (v) the filing by a referenced
Person of an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against him in any proceeding of
reorganization, composition, readjustment, liquidation, dissolution, or for
similar relief under any statute, law or regulation or (vi) a referenced
Person's seeking, consenting to, or acquiescing in the appointment of a trustee,
receiver or liquidator for all or substantially all of his property (or court
appointment of such trustee, receiver or liquidator).
Book-Tax Disparity: With respect to any item of Contributed Property, or
property the Book Value of which has been adjusted in accordance with Section
4.4(D), as of the date of determination, the difference between the Book Value
of such property and the adjusted basis of such property for federal income tax
purposes.
Book Value: With respect to any Contributed Property, the Agreed Value of
such property reduced (but not below zero) by all Depreciation with respect to
such property properly charged to the Partners' Capital Accounts and with
respect to any other asset, the asset's adjusted basis for federal income tax
purposes; provided, however, (a) the Book Value of all Partnership Assets shall
be adjusted in the event of a revaluation of Partnership Assets in accordance
with Section 4.4(D) hereof, (b) the Book Value of any Partnership Asset
distributed to any Partner shall be the fair market value of such asset on the
date of distribution as determined by the General Partner and (c) such Book
Value shall be adjusted by the Depreciation taken into account with respect to
such asset for purposes of computing Profits and Losses.
Capital Account: The account maintained by the Partnership for each Partner
described in Section 4.4 hereof.
Capital Contribution: The total amount of cash or cash equivalents and the
Agreed Value of Contributed Property which a Partner contributes or is deemed to
contribute to the Partnership pursuant to the terms of this Agreement.
Cash Payment: The payment to a Redeeming Party of a cash amount determined
by multiplying (i) the number of Partnership Units tendered for redemption by
such Redeeming Party pursuant to a validly proffered Redemption Notice by (ii)
the Unit Value on the date the Redemption Notice is received by the General
Partner.
Certificate: The Partnership's Certificate of Limited Partnership filed in
the office of the Secretary of State of the State of Delaware, as amended from
time to time.
Class B Deemed Original Issue Date: (i) in the case of any Class B Unit
which is part of the first issuance of such units or part of a subsequent
issuance of such units prior to July 1, 1997, the date of such first issuance
and (ii) in the case of any such unit which is part of a subsequent issuance of
such units on or after July 1, 1997, the later of (x) July 1, 1997 and (y) the
last Class B Distribution Period Commencement Date which precedes the date of
issuance of such unit and which succeeds the last Class B Distribution Period
for which full cumulative Class B Priority Return Amounts have been paid;
provided, however, that, in the case of any such unit which is part of a
subsequent issuance on or after July 1, 1997, the date of issuance of which
falls between (a) the record date for dividends payable on the Series B
Preferred Shares on the first succeeding dividend payment date on such stock and
(b) such dividend payment date, the "Class B Deemed Original Issue Date" means
the date of the Class B Distribution Period Commencement Date that immediately
follows the date of issuance of such unit.
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Class B Distribution Period: The Class B Initial Distribution Period, and
each quarterly distribution period thereafter, commencing on January 1, April 1,
July 1 and October 1 of each year and ending on and including the day preceding
the next Class B Distribution Period Commencement Date.
Class B Distribution Period Commencement Date: January 1, April 1, July 1
and October 1 of each year, commencing on July 1, 1997.
Class B Initial Distribution Period: The period from the Class B Deemed
Original Issue Date for a Class B Unit to, but excluding, July 1, 1997.
Class B Limited Partner: First Industrial Realty Trust, Inc., a Maryland
corporation, in its capacity as a limited partner in the Partnership holding
Class B Units.
Class B Priority Return Amount: With respect to each Class B Unit, (i) for
the Class B Initial Distribution Period, the pro rata portion of the amount
referred to in clause (ii) of this definition, computed in accordance with the
last sentence of Section 5.3(A) hereof, and (ii) for each Class B Distribution
Period thereafter, an amount equal to 2.1875% of that portion of the Capital
Contribution of the Class B Limited Partner allocable to each such unit. Class B
Priority Return Amounts on each Class B Unit that are not distributed as
provided in Section 5.3(A) shall be cumulative from the Class B Deemed Original
Issue Date of such unit.
Class B Redemption: As defined in Section 9.1(C) hereof.
Class B Redemption Price: As defined in Section 9.1(C) hereof.
Class B Unit: The Partnership Interest held by the Class B Limited Partner,
each full Class B Unit representing a $2,500 Capital Contribution.
Class C Deemed Original Issue Date: (i) in the case of any Class C Unit
which is part of the first issuance of such units or part of a subsequent
issuance of such units prior to October 1, 1997, the date of such first issuance
and (ii) in the case of any such unit which is part of a subsequent issuance of
such units on or after October 1, 1997, the later of (x) October 1, 1997 and (y)
the last Class C Distribution Period Commencement Date which precedes the date
of issuance of such unit and which succeeds the last Class C Distribution Period
for which full cumulative Class C Priority Return Amounts have been paid;
provided, however, that, in the case of any such unit which is part of a
subsequent issuance on or after October 1, 1997, the date of issuance of which
falls between (a) the record date for dividends payable on the Series C
Preferred Shares on the first succeeding dividend payment date on such stock and
(b) such dividend payment date, the "Class C Deemed Original Issue Date" means
the date of the Class C Distribution Period Commencement Date that immediately
follows the date of issuance of such unit.
Class C Distribution Period: The Class C Initial Distribution Period and
each quarterly distribution period thereafter, commencing on January 1, April 1,
July 1 and October 1 of each year and ending on and including the day preceding
the next Class C Distribution Period Commencement Date.
Class C Distribution Period Commencement Date: January 1, April 1, July 1
and October 1 of each year commencing October 1, 1997.
Class C Initial Distribution Period: The period from the Class C Deemed
Original Issue Date for a Class C Unit to, but excluding, October 1, 1997.
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Class C Limited Partner: First Industrial Realty Trust, Inc., a Maryland
corporation, in its capacity as a limited partner in the Partnership holding
Class C Units.
Class C Priority Return Amount: With respect to each Class C Unit, (i) for
the Class C Initial Distribution Period, the pro rata portion of the amount
referred to in clause (ii) of this definition, computed in accordance with the
last sentence of Section 5.3(B) hereof, and (ii) for each Class C Distribution
Period thereafter, an amount equal to 2.15625% of that portion of the Capital
Contribution of the Class C Limited Partner allocable to each such unit. Class C
Priority Return Amounts on each Class C Unit that are not distributed as
provided in Section 5.3(B) shall be cumulative from the Class C Deemed Original
Issue Date of such unit.
Class C Redemption: As defined in Section 9.1(D) hereof.
Class C Redemption Price: As defined in Section 9.1(D) hereof.
Class C Unit: The Partnership Interest held by the Class C Limited Partner,
each full Class C Unit representing a $2,500 Capital Contribution.
Code: The Internal Revenue Code of 1986, as amended from time to time.
Consent: Either the written consent of a Person or the affirmative vote of
such Person at a meeting duly called and held pursuant to this Agreement, as the
case may be, to do the act or thing for which the consent is required or
solicited, or the act of granting such consent, as the context may require.
Contributed Property: Each property or other asset (excluding cash and cash
equivalents) contributed or deemed contributed to the Partnership (whether as a
result of a Code Section 708 termination or otherwise).
Contribution Agreements: Those certain agreements among one or more of the
Initial Limited Partners (or Persons in which such Initial Limited Partners have
direct or indirect interests) and the Partnership pursuant to which, inter alia,
the Initial Limited Partners (or such Persons), directly or indirectly are
contributing property to the Partnership on the Effective Date in exchange for
Partnership Units.
Contributor Partner(s): That or those Limited Partner(s) listed as
Contributor Partner(s) on Exhibit 1D attached hereto and made a part hereof, as
such Exhibit may be amended from time to time by the General Partner, whether by
express amendment to this Partnership Agreement or by execution of a written
instrument by and between any additional Contributor Partner(s) being affected
thereby and the General Partner, acting on behalf of the Partnership and without
the prior consent of the Limited Partners (whether or not Contributor Partners
other than the Contributor Partner(s) being affected thereby). For purposes
hereof, any successor, assignee, or transferee of the Interest of a Contributor
Partner (other than the Partnership in connection with a redemption pursuant to
Article IX hereof) shall be considered a Contributor Partner for purposes
hereof.
Conversion Factor: The factor applied for converting Partnership Units to
REIT Shares, which shall initially be 1.0; provided, however, in the event that
the REIT (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 (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator of
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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; provided further, in the event that
the Partnership (a) declares or pays a distribution on the outstanding
Partnership Units in Partnership Units or makes a distribution to all Partners
in Partnership Units, (b) subdivides the outstanding Partnership Units or (c)
combines the outstanding Partnership Units into a smaller number of Partnership
Units, the Conversion Factor shall be adjusted by multiplying the Conversion
Factor by a fraction, the numerator of which shall be the actual number of
Partnership Units issued and outstanding on the record date (determined without
giving effect to such dividend, distribution, subdivision or combination), and
the denominator of which shall be the actual number of Partnership Units
(determined after giving effect to such dividend, distribution, subdivision or
combination) issued and outstanding on such record date. 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.
Depreciation: For each Fiscal Year or other period, an amount equal to the
depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such year or other period, except that if the Book Value
of an asset differs from its adjusted basis for federal income tax purposes at
the beginning of such year or other period, Depreciation shall be adjusted as
necessary so as to be an amount which bears the same ratio to such beginning
Book Value as the federal income tax depreciation, amortization, or other cost
recovery deduction for such year or other period bears to the beginning adjusted
tax basis; provided, however, that if the federal income tax depreciation,
amortization or other cost recovery deduction for such year or other period is
zero, Depreciation for such year or other period shall be determined with
reference to such beginning Book Value using any reasonable method approved by
the General Partner.
Distributable Cash: with respect to any period, and without duplication:
(i) all cash receipts of the Partnership during such period from all
sources;
(ii) less all cash disbursements of the Partnership during such
period, including, without limitation, disbursements for operating expenses,
taxes, debt service (including, without limitation, the payment of principal,
premium and interest), redemption of Partnership Interests and capital
expenditures;
(iii) less amounts added to reserves in the sole discretion of the
General Partner, plus amounts withdrawn from reserves in the reasonable
discretion of the General Partner.
Effective Date: June 30, 1994.
ERISA: The Employee Retirement Income Security Act of 1976, as amended from
time to time.
First Highland Limited Partners: Those Limited Partners identified on
Exhibit 1A hereto.
First Highland Properties: Those certain properties acquired by the
Partnership pursuant to that certain Contribution Agreement, dated as of March
19, 1996.
First Highland Units: The Partnership Units issued to the First Highland
Limited Partners in connection with the acquisition of the First Highland
Properties by the Partnership.
Fiscal Year: The calendar year or such other twelve (12) month period
designated by the General Partner.
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General Partner: First Industrial Realty Trust, Inc., a Maryland
corporation, and its respective successor(s) who or which become Successor
General Partner(s) in accordance with the terms of this Agreement.
General Partner Interest: A Partnership Interest held by the General
Partner that is a general partner interest. A General Partner Interest may be
expressed as a number of Partnership Units.
Involuntary Withdrawal: As to any (i) individual shall mean such
individual's death, incapacity or adjudication of incompetence, (ii) corporation
shall mean its dissolution or revocation of its charter (unless such revocation
is promptly corrected upon notice thereof), (iii) partnership shall mean the
dissolution and commencement of winding up of its affairs, (iv) trust shall mean
the termination of the trust (but not the substitution of trustees), (v) estate
shall mean the distribution by the fiduciary of the estate's complete interest
in the Partnership and (vi) any Partner shall mean the Bankruptcy of such
Partner.
IRS: The Internal Revenue Service, which administers the internal revenue
laws of the United States.
LB Closing Date: January 31, 1997.
LB Partners: The persons identified on Exhibit 1C hereto, following their
admission to the Partnership as Additional Limited Partners.
LB Units: The Partnership Units issued to the LB Partners in connection
with the acquisition by the Partnership of certain properties on the LB Closing
Date.
Limited Partner: Those Persons listed as such on Exhibit 1B attached hereto
and made a part hereof, as such Exhibit may be amended from time to time,
including any Person who becomes a Substituted Limited Partner or an Additional
Limited Partner in accordance with the terms of this Agreement; provided such
term shall not include the Class B Limited Partner or the Class C Limited
Partner.
Limited Partner Interest: A Partnership Interest held by a Limited Partner
that is a limited partner interest. A Limited Partner Interest may be expressed
as a number of Partnership Units.
Nonrecourse Liability: A liability as defined in Treasury Regulations
Section 1.704-2(b)(3).
Notice: A writing containing the information required by this Agreement to
be communicated to a Person and delivered to such Person in accordance with
Section 12.4; provided, however, that any written communication containing such
information actually received by such Person shall constitute Notice for all
purposes of this Agreement.
Partner Minimum Gain: The gain (regardless of character) which would be
realized by the Partnership if property of the Partnership subject to a partner
nonrecourse debt (as such term is defined in Treasury Regulation Section
1.704-2(b)(4)) were disposed of in full satisfaction of such debt on the
relevant date. The adjusted basis of property subject to more than one partner
nonrecourse debt shall be allocated in a manner consistent with the allocation
of basis for purposes of determining Partnership Minimum Gain hereunder. Partner
Minimum Gain shall be computed hereunder using the Book Value, rather than the
adjusted tax basis, of the Partnership property in accordance with Treasury
Regulations Section 1.704-2(d)(3).
Partner Nonrecourse Deductions: With respect to any partner nonrecourse
debt (as such term is defined in Treasury Regulation Section 1.704-2(b)(4)), the
increase in Partner Minimum Gain during the tax year plus any
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increase in Partner Minimum Gain for a prior tax year which has not previously
generated a Partner Nonrecourse Deduction hereunder. The determination of which
Partnership items constitute Partner Nonrecourse Deductions shall be made in a
manner consistent with the manner in which Partnership Nonrecourse Deductions
are determined hereunder.
Partners: The General Partner, the Class B Limited Partner, the Class C
Limited Partner and the Limited Partners as a group. The term "Partner" shall
mean a General Partner, the Class B Limited Partner, the Class C Limited Partner
or a Limited Partner. Such terms shall be deemed to include such other Persons
who become Partners pursuant to the terms of this Agreement.
Partnership: The Delaware limited partnership referred to herein as First
Industrial, L.P., as such partnership may from time to time be constituted.
Partnership Assets: At any particular time, any assets or property
(tangible or intangible, ▇▇▇▇▇▇ or inchoate, fixed or contingent) owned by the
Partnership.
Partnership Interest or Interest: As to any Partner, such Partner's
ownership interest in the Partnership and including such Partner's right to
distributions under this Agreement and any other rights or benefits which such
Partner has in the Partnership, together with any and 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: The aggregate gain (regardless of character)
which would be realized by the Partnership if all of the property of the
Partnership subject to nonrecourse debt (other than partner nonrecourse debt as
such term is defined in Treasury Regulations Section 1.704-2(b)(4)) were
disposed of in full satisfaction of such debt and for no other consideration on
the relevant date. In the case of any Nonrecourse Liability of the Partnership
which is not secured by a mortgage with respect to any specific property of the
Partnership, any and all property of the Partnership to which the holder of said
liability has recourse shall be treated as subject to such Nonrecourse Liability
for purposes of the preceding sentence. Partnership Minimum Gain shall be
computed separately for each Nonrecourse Liability of the Partnership. For this
purpose, the adjusted basis of property subject to two or more liabilities of
equal priority shall be allocated among such liabilities in proportion to the
outstanding balance of such liabilities, and the adjusted basis of property
subject to two or more liabilities of unequal priority shall be allocated to the
liability of inferior priority only to the extent of the excess, if any, of the
adjusted basis of such property over the outstanding balance of the liability of
superior priority. Partnership Minimum Gain shall be computed hereunder using
the Book Value, rather than the adjusted tax basis, of the Partnership property
in accordance with Treasury Regulations Section 1.704-2(d)(3).
Partnership Nonrecourse Deductions: The amount of Partnership deductions
equal to the increase, if any, in the amount of the aggregate Partnership
Minimum Gain during the tax year (plus any increase in Partnership Minimum Gain
for a prior tax year which has not previously generated a Partnership
Nonrecourse Deduction) reduced (but not below zero) by the aggregate
distributions made during the tax year of the proceeds of a Nonrecourse
Liability of the Partnership which are attributable to an increase in
Partnership Minimum Gain within the meaning of Treasury Regulations Section
1.704-2(d). The Partnership Nonrecourse Deductions for a Partnership tax year
shall consist first of depreciation or cost recovery deductions with respect to
each property of the Partnership giving rise to such increase in Partnership
Minimum Gain on a pro rata basis to the extent of each such increase, with any
excess made up pro rata of all items of deduction.
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Partnership Unit: A fractional, undivided share of the Partnership
Interests of all Partners (other than the Class B Limited Partner and the Class
C Limited Partner) issued pursuant to Section 4.1 hereof.
Percentage Interest: As to any Partner, the percentage in the Partnership,
as determined by dividing the Partnership Units then owned by such Partner by
the total number of Partnership Units then outstanding, as the same may be
automatically adjusted from time to time to reflect the issuance and redemption
of Partnership Units in accordance with this Agreement, without requiring the
amendment of Exhibit 1B to reflect any such issuance or redemption.
Person: Any individual, partnership, corporation, trust or other entity.
Profits and Losses: For each Fiscal Year or other period, an amount equal
to the Partnership's taxable income or loss (as the case may be) for such year
or period, determined in accordance with Code Section 703(a) (for this purpose,
all items of income, gain, loss or deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:
a. Any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses
pursuant to this definition shall be added to such taxable income or loss;
b. Any expenditures of the Partnership described in Code Section
705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant
to Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into account in computing Profits or Losses pursuant to this
definition, shall be subtracted from such taxable income or loss;
c. Gain or loss resulting from any disposition of Partnership property
with respect to which gain or loss is recognized for federal income tax
purposes shall be computed by reference to the Book Value of the property
disposed of notwithstanding that the adjusted tax basis of such property
differs from such Book Value;
d. 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 Fiscal Year or
other period, computed in accordance with the definition of "Depreciation"
herein; and
e. In the event that any item of income, gain, loss or deduction that
has been included in the initial computation of Profit or Loss is subject
to the special allocation rules of Sections 5.2(C) and 5.2(D), Profit or
Loss shall be recomputed without regard to such item.
Protected Amount: With respect to any Contributor Partner, the amount set
forth opposite the name of such Contributor Partner on Exhibit 1D attached
hereto and made a part hereof, as such Exhibit may be modified from time to time
by an amendment to the Partnership Agreement or by execution of a written
instrument by and between the Contributor Partner being affected thereby and the
General Partner, acting on behalf of the Partnership and without the prior
written consent of the Limited Partners (whether or not Contributor Partners
other than the Contributor Partner being affected thereby).
Record Date: The record date established by the General Partner for
distributions pursuant to Section 5.3 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.
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Recourse Liabilities: The amount of liabilities owed by the Partnership
(other than nonrecourse liabilities and liabilities to which Partner Nonrecourse
Deductions are attributable in accordance with Treasury Regulations Section
1.704-2(i)).
Redeeming Party: A Limited Partner or Assignee (other than the General
Partner) who tenders Partnership Units for redemption pursuant to a Redemption
Notice.
Redemption Date: The date for redemption of Partnership Units as set forth
in Section 9.2.
Redemption Effective Date: The first date on which a Redeeming Party may
elect to redeem Partnership Units, which date shall be the later of (i) the
first anniversary of the execution of this Agreement and (ii) the effective date
of any registration statement filed by the Partnership with respect to the REIT
Shares to be issued upon redemption of Partnership Units by a Redeeming Party.
Redemption Notice: A Notice to the General Partner by a Redeeming Party,
substantially in the form attached as Exhibit 2, pursuant to which the Redeeming
Party requests the redemption of Partnership Units in accordance with Article
IX.
Redemption Obligation: The obligation of the Partnership to redeem the
Partnership Units as set forth in Section 9.1(A).
Redemption Period: The 45-day period immediately following the filing with
the SEC by the General Partner of an annual report of the General Partner on
Form 10-K or a quarterly report of the General Partner on Form 10-Q or such
other period or periods as the General Partner may otherwise determine.
Redemption Price: As defined in Section 8.4 hereof.
Redemption Restriction: A restriction on the ability of the Partnership to
redeem the Partnership Units as set forth in Section 9.1(A).
Registration Rights Agreement: A Registration Rights Agreement,
substantially in the form of Exhibit 3 hereto, pursuant to which First
Industrial will agree to register under the Securities Act of 1933, as amended,
REIT Shares issued in connection with Share Payments made under Article IX
hereof.
REIT: A real estate investment trust, as defined in Code Section 856.
REIT Charter: The Articles of Incorporation of First Industrial filed with
the Department of Assessments and Taxation of the State of Maryland on August
10, 1993, as the same may be amended or restated and in effect from time to
time.
REIT Share: A share of common stock representing an ownership interest in
the General Partner.
REIT Share Rights: Rights to acquire additional REIT Shares issued to all
holders of REIT Shares, whether in the form of rights, options, warrants or
convertible or exchangeable securities, to the extent the same have been issued
without additional consideration after the initial acquisition of such REIT
Shares.
SEC: The Securities and Exchange Commission.
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Series B Preferred Shares: 8 3/4% Series B Cumulative Preferred Stock of
First Industrial Realty Trust, Inc.
Series C Preferred Shares: 8 5/8% Series C Cumulative Preferred Stock of
First Industrial Realty Trust, Inc.
Share Payment: The payment to a Redeeming Party of a number of REIT Shares
determined by multiplying (i) the number of Partnership Units tendered for
redemption by such Redeeming Party pursuant to a validly proffered Redemption
Notice by (ii) the Conversion Factor. In the event the General Partner grants
any REIT Share Rights prior to such payment, any Share Payment shall include for
the Redeeming Party his ratable share of such REIT Share Rights other than REIT
Share Rights which have expired.
Subsidiary: With respect to any Person, any corporation 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: That Person or those Persons admitted to the
Partnership as substitute Limited Partner(s), in accordance with the provisions
of this Agreement. A Substituted Limited Partner, upon his admission as such,
shall succeed to the rights, privileges and liabilities of his predecessor in
interest as a Limited Partner.
Successor General Partner: Any Person who is admitted to the Partnership as
substitute General Partner pursuant to this Agreement. A Successor General
Partner, upon its admission as such, shall succeed to the rights, privileges and
liabilities of its predecessor in interest as General Partner, in accordance
with the provisions of the Act.
Tax Matters Partner: The General Partner or such other Partner who becomes
Tax Matters Partner pursuant to the terms of this Agreement.
Terminating Capital Transaction: The sale or other disposition of all or
substantially all of the Partnership Assets or a related series of transactions
that, taken together, result in the sale or other disposition of all or
substantially all of the Partnership Assets.
Threshold Percentage: A percentage equal to 85% on the LB Closing Date and
thereafter adjusted upwards (but not downwards) immediately prior to each
solicitation of any vote of, or the seeking of any consent, approval or waiver
from, the Limited Partners generally, to the sum of (i) 85% and (ii) the number
of percentage points equal to the positive difference, if any, between (a) the
aggregate Percentage Interest represented by the LB Units immediately following
the LB Closing Date and (b) the aggregate Percentage Interest represented by the
LP Units immediately prior to any such solicitation. For example, if on the LB
Closing Date the LB Units represent a 10% aggregate Percentage Interest, and if
immediately prior to a solicitation the Threshold Percentage is 85% and the
aggregate Percentage Interest represented by the LB Units is 8%, the Threshold
Percentage would be increased to 87% (85% = (10% - 8%)).
Transfer: With respect to any Partnership Unit shall mean a transaction in
which a Partner assigns his Partnership Interest to another Person and includes
any sale, assignment, gift, pledge, mortgage, exchange, hypothecation,
encumbrance or other disposition by law or otherwise; provided, however, the
redemption of any Partnership Interest pursuant to Article IX hereof shall not
constitute a "transfer" for purposes hereof.
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Transfer Restriction Date: June 23, 1995.
Treasury Regulations: The Income Tax Regulations promulgated under the
Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
Unit Value: With respect to any Partnership Unit, the average of the daily
market price for a REIT Share for the ten (10) consecutive trading days
immediately preceding the date of receipt of a Redemption Notice by the General
Partner multiplied by the Conversion Factor. If the REIT Shares are traded on a
securities exchange or the NASDAQ-National Market System, the market price for
each such trading day shall be the reported last sale price on such day or, if
no sales take place on such day, the average of the closing bid and asked prices
on such day. If the REIT Shares are not traded on a securities exchange or the
NASDAQ-National Market System, the market price for each such trading day shall
be determined by the General Partner using any reasonable method of valuation.
If a Share Payment would include any REIT Share Rights, the value of such REIT
Share Rights shall be determined by the General Partner using any reasonable
method of valuation, taking into account the Unit Value determined hereunder and
the factors used to make such determination and the value of such REIT Share
Rights shall be included in the Unit Value.
Voting Termination Date: The first date after the LB Closing Date on which
either (i) the General Partner holds 90% or more of all Partnership Units or
(ii) the aggregate number of Partnership Units held by the General Partner and
the LB Partners is less than the product of the Threshold Percentage and the
total number of Partnership Units then outstanding.
Section 1.2 Rules of Construction. The following rules of construction
shall apply to this Agreement:
(A) All section headings in this Agreement are for convenience of reference
only and are not intended to qualify the meaning of any section.
(B) All personal pronouns used in this Agreement, whether used in the
masculine, feminine or neuter gender, shall include all other genders, the
singular shall include the plural, and vice versa, as the context may require.
(C) Each provision of this Agreement shall be considered severable from the
rest, and if any provision of this Agreement or its application to any Person or
circumstances shall be held invalid and contrary to any existing or future law
or unenforceable to any extent, the remainder of this Agreement and the
application of any other provision to any Person or circumstances shall not be
affected thereby and shall be interpreted and enforced to the greatest extent
permitted by law so as to give effect to the original intent of the parties
hereto.
(D) Unless otherwise specifically and expressly limited in the context, any
reference herein to a decision, determination, act, action, exercise of a right,
power or privilege, or other procedure by the General Partner shall mean and
refer to the decision, determination, act, action, exercise or other procedure
by the General Partner in its sole and absolute discretion.
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ARTICLE II - CONTINUATION
Section 2.1 Continuation. The Partners hereby continue the Partnership as a
limited partnership under the Act. The General Partner shall take all action
required by law to perfect and maintain the Partnership as a limited partnership
under the Act and under the laws of all other jurisdictions in which the
Partnership may elect to conduct business, including but not limited to the
filing of amendments to the Certificate with the Delaware Secretary of State,
and qualification of the Partnership as a foreign limited partnership in the
jurisdictions in which such qualification shall be required, as determined by
the General Partner. The General Partner shall also promptly register the
Partnership under applicable assumed or fictitious name statutes or similar
laws.
Section 2.2 Name. The name of the Partnership is First Industrial, L.P. The
General Partner may adopt such assumed or fictitious names as it deems
appropriate in connection with the qualifications and registrations referred to
in Section 2.1.
Section 2.3 Place of Business; Registered Agent. The principal office of
the Partnership is located at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇, which office may be changed to such other place as the General Partner
may from time to time designate. The Partnership may establish offices for the
Partnership within or without the State of Delaware as may be determined by the
General Partner. The initial registered agent for the Partnership in the State
of Delaware is The Corporation Trust Company, whose address is c/o Corporation
Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
ARTICLE III - BUSINESS PURPOSE
Section 3.1 Business. The business of the Partnership shall be (i)
conducting any business that may be lawfully conducted by a limited partnership
pursuant to the Act including, without limitation, acquiring, owning, managing,
developing, leasing, marketing, operating and, if and when appropriate, selling,
industrial properties, (ii) entering into any partnership, joint venture or
other relationship to engage in any of the foregoing or the ownership of
interests in any entity engaged in any of the foregoing, (iii) making loans,
guarantees, indemnities or other financial accommodations and borrowing money
and pledging its assets to secure the repayment thereof, (iv) to do any of the
foregoing with respect to any Affiliate or Subsidiary and (v) doing anything
necessary or incidental to the foregoing; provided, however, that business of
the Partnership shall be limited so as to permit the General Partner to elect
and maintain its status as a REIT (unless the General Partner determines no
longer to qualify as a REIT).
Section 3.2 Authorized Activities. In carrying out the purposes of the
Partnership, but subject to all other provisions of this Agreement, the
Partnership is authorized to engage in any kind of lawful activity, and perform
and carry out contracts of any kind, necessary or advisable in connection with
the accomplishment of the purposes and business of the Partnership described
herein and for the protection and benefit of the Partnership; provided that the
General Partner shall not be obligated to cause the Partnership to take, or
refraining from taking, any action which, in the judgment of the General
Partner, (i) could adversely affect the ability of the General Partner to
qualify and continue to qualify as a REIT, (ii) could subject the General
Partner to additional taxes under Code Section 857 or 4981 or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner or its securities.
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ARTICLE IV - CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions.
(A) Upon the contribution to the Partnership of property in accordance with
a Contribution Agreement, Partnership Units shall be issued in accordance with,
and as contemplated by, such Contribution Agreement, and the Persons receiving
such Partnership Units shall become Partners and shall be deemed to have made a
Capital Contribution as set forth on Exhibit 1. Exhibit 1 also sets forth the
initial number of Partnership Units owned by each Partner and the Percentage
Interest of each Partner, which Percentage Interest shall be adjusted from time
to time by the General Partner to reflect the issuance of additional Partnership
Units, the redemption of Partnership Units, additional Capital Contributions and
similar events having an effect on a Partner's Percentage Interest. Except as
set forth in Section 4.2 (regarding issuance of additional Partnership Units) or
Section 7.6 (regarding withholding obligations), no Partner shall be required
under any circumstances to contribute to the capital of the Partnership any
amount beyond that sum required pursuant to this Article IV.
(B) Anything in the foregoing Section 4.1(A) or elsewhere in this Agreement
notwithstanding, the Partnership Units held by the General Partner shall, at all
times, be deemed to be General Partner units and shall constitute the General
Partner Interest.
Section 4.2 Additional Partnership Interests.
(A) The Partnership may issue additional limited partnership interests in
the form of Partnership Units for any Partnership purpose at any time or from
time to time, to any Partner or other Person (other than the General Partner,
except in accordance with Section 4.2(B) below).
(B) The Partnership also may from time to time issue to the General Partner
additional Partnership Units or other Partnership Interests in such classes and
having such designations, preferences and relative rights (including preferences
and rights senior to the existing Limited Partner Interests) as shall be
determined by the General Partner in accordance with the Act and governing law.
Except as provided in Article IX, any such issuance of Partnership Units or
Partnership Interests to the General Partner shall be conditioned upon (i) the
undertaking by the General Partner of a related issuance of its capital stock
(with such shares having designations, rights and preferences such that the
economic rights of the holders of such capital stock are substantially similar
to the rights of the additional Partnership Interests issued to the General
Partner) and the General Partner making a Capital Contribution (a) in an amount
equal to the net proceeds raised in the issuance of such capital stock, in the
event such capital stock is sold for cash or cash equivalents or (b) the
property received in consideration for such capital stock, in the event such
capital stock is issued in consideration for other property or (ii) the issuance
by the General Partner of capital stock under any stock option or bonus plan and
the General Partner making a Capital Contribution in an amount equal to the
exercise price of the option exercised pursuant to such stock option or other
bonus plan.
(C) Except as contemplated by Article IX (regarding redemptions) or Section
4.2(B), the General Partner shall not issue any (i) additional REIT Shares, (ii)
rights, options or warrants containing the right to subscribe for or purchase
REIT Shares or (iii) securities convertible or exchangeable into REIT Shares
(collectively, "Additional REIT Securities") other than to all holders of REIT
Shares, pro rata, unless (x) the Partnership issues to the General Partner (i)
Partnership Interests, (ii) rights, options or warrants containing the right to
subscribe for
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or purchase Partnership Interests or (iii) securities convertible or
exchangeable into Partnership Interests such that the General Partner receives
an economic interest in the Partnership substantially similar to the economic
interest in the General Partner represented by the Additional REIT Securities
and (y) the General Partner contributes to the Partnership the net proceeds
from, or the property received in consideration for, the issuance of the
Additional REIT Securities and the exercise of any rights contained in any
Additional REIT Securities.
Section 4.3 No Third Party Beneficiaries. The foregoing provisions of this
Article IV are not intended to be for the benefit of any creditor of the
Partnership or other Person to whom any debts, liabilities or obligations are
owed by (or who otherwise has any claim against) the Partnership or any of the
Partners and no such creditor or other Person shall obtain any right under any
such foregoing provision against the Partnership or any of the Partners by
reason of any debt, liability or obligation (or otherwise).
Section 4.4 Capital Accounts.
(A) The Partnership shall establish and maintain a separate Capital Account
for each Partner in accordance with Code Section 704 and Treasury Regulations
Section 1.704-1(b)(2)(iv). The Capital Account of each Partner shall be credited
with:
(1) the amount of all Capital Contributions made to the Partnership by
such Partner in accordance with this Agreement; plus
(2) all income and gain of the Partnership computed in accordance with
this Section 4.4 and allocated to such Partner pursuant to Article V (including
for purposes of this Section 4.4(A), income and gain exempt from tax);
and shall be debited with the sum of:
(1) all losses or deductions of the Partnership computed in accordance
with this Section 4.4 and allocated to such Partner pursuant to Article V,
(2) such Partner's distributive share of expenditures of the
Partnership described in Code Section 705(a)(2)(B), and
(3) all cash and the Agreed Value of any property actually distributed
or deemed distributed by the Partnership to such Partner pursuant to the terms
of this Agreement.
Any reference in any section or subsection of this Agreement to the Capital
Account of a Partner shall be deemed to refer to such Capital Account as the
same may be credited or debited from time to time as set forth above.
(B) For purposes of computing the amount of any item of income, gain,
deduction or loss to be reflected in the Partners' Capital Accounts, the
determination, recognition and classification of each such item shall be the
same as its determination, recognition and classification for federal income tax
purposes, determined in accordance with Code Section 703(a), with the following
adjustments:
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(1) any income, gain or loss attributable to the taxable disposition
of any Partnership Asset shall be determined by treating the adjusted basis of
such property as of the date of such disposition as equal to the Book Value of
such property as of such date;
(2) the computation of all items of income, gain, loss and deduction
shall be made without regard to any Code Section 754 election that may be made
by the Partnership, except to the extent required in accordance with the
provisions of Treasury Regulations Section 1.704-1(b)(2)(iv)(m);
(3) in lieu of depreciation, amortization and other cost recovery
deductions taken into account in computing Profit and Loss, there shall be taken
into account Depreciation for such Fiscal Year;
(4) in the event the Book Value of any Partnership Asset is adjusted
pursuant to Section 4.4(D) below, the amount of such adjustment shall be treated
as gain or loss from the disposition of such asset.
(C) Any transferee of a Partnership Interest shall succeed to a pro rata
portion of the transferor's Capital Account transferred unless such Transfer
causes a Code Section 708 termination of the Partnership, in which case the Book
Value of all Partnership Assets shall be adjusted immediately prior to the
deemed distribution pursuant thereto as provided in Section 4.4(D).
(D) Consistent with the provisions of Treasury Regulations Section
1.704-1(b)(2)(iv)(f), (i) immediately prior to the acquisition of an additional
Partnership Interest by any new or existing Partner in connection with the
contribution of money or other property (other than a de minimis amount) to the
Partnership, (ii) immediately prior to the distribution by the Partnership to a
Partner of Partnership property (other than a de minimis amount) as
consideration for a Partnership Interest and (iii) immediately prior to the
liquidation of the Partnership as defined in Treasury Regulations Section
1.704-1(b)(2)(ii)(g), the Book Value of all Partnership Assets shall be revalued
upward or downward to reflect the fair market value of each such Partnership
Asset as determined by the General Partner using such reasonable method of
valuation as it may adopt.
(E) The foregoing provisions of this Section 4.4 are intended to comply
with Treasury Regulations Section 1.704-1(b) and shall be interpreted and
applied in a manner consistent with such Treasury Regulations. In the event the
General Partner shall determine that it is prudent to modify the manner in which
the Partners' Capital Accounts are computed hereunder in order to comply with
such Treasury Regulations, the General Partner may make such modification if
such modification is not likely to have a material effect on the amount
distributable to any Partner under the terms of this Agreement and the General
Partner notifies the other Partners in writing of such modification prior to
making such modification.
Section 4.5 Return of Capital Account; Interest. Except as otherwise
specifically provided in this Agreement, (i) no Partner shall have any right to
withdraw or reduce its Capital Contributions or Capital Account, or to demand
and receive property other than cash from the Partnership in return for its
Capital Contributions or Capital Account; (ii) no Partner shall have any
priority over any other Partners as to the return of its Capital Contributions
or Capital Account; (iii) any return of Capital Contributions or Capital
Accounts to the Partners shall be solely from the Partnership Assets, and no
Partner shall be personally liable for any such return; and (iv) no interest
shall be paid by the Partnership on Capital Contributions or on balances in
Partners' Capital Accounts.
Section 4.6 Preemptive Rights. No Person shall have any preemptive or
similar rights with respect to the issuance or sale of additional Partnership
Units.
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Section 4.7 REIT Share Purchases. If the General Partner acquires
additional REIT Shares pursuant to Article IX of the REIT Charter, the
Partnership shall purchase from the General Partner that number of Partnership
Units determined by applying the Conversion Multiple to the number of REIT
Shares purchased by the General Partner at the same price and on the same terms
as those upon which the General Partner purchased such REIT Shares.
ARTICLE V - ALLOCATIONS AND DISTRIBUTIONS
Section 5.1 Limited Liability. For bookkeeping purposes, the Profits of the
Partnership shall be shared, and the Losses of the Partnership shall be borne,
by the Partners as provided in Section 5.2 below; provided, however, that except
as expressly provided in this Agreement, neither any Limited Partner (in its
capacity as a Limited Partner) nor the Class B Limited Partner (in its capacity
as Class B Limited Partner) nor the Class C Limited Partner (in its capacity as
Class C Limited Partner) shall be personally liable for losses, costs, expenses,
liabilities or obligations of the Partnership in excess of its Capital
Contribution required under Article IV hereof.
Section 5.2 Profits, Losses and Distributive Shares.
(A) Profits. After giving effect to the special allocations, if any,
provided in Section 5.2(C), (D), and (I) Profits in each Fiscal Year shall be
allocated in the following order:
(1) First, to the General Partner until the cumulative Profits
allocated to the General Partner under this Section 5.2(A)(1) equal the
cumulative Profits allocated to such Partner under Section 5.2(B)(6);
(2) Second, to the Class B Limited Partner and Class C Limited
Partner, in proportion to the cumulative Losses allocated to each such Partner
under Section 5.2(B)(5), until the Cumulative Profits allocated to each such
Partner under this Section 5.2(A)(2) equal the cumulative Losses allocated to
each such Partner under Section 5.2(B)(5);
(3) Third, to each Partner in proportion to the cumulative Losses
allocated to such Partner under Section 5.2(B)(4), until the cumulative Profits
allocated to such Partner under this Section 5.2(A)(3) equal the cumulative
Losses allocated to such Partner under Section 5.2(B)(4);
(4) Fourth, to the General Partner until the cumulative Losses
allocated to the General Partner under this Section 5.2(A)(4) equal the
cumulative Losses allocated to such Partner under Section 5.2(B)(3);
(5) Fifth, to each Partner until the cumulative Profits allocated to
such Partner under Section 5.2(B)(2), until the cumulative Profits allocated to
such Partner under this Section 5.2(A)(5) equal the cumulative Losses allocated
to such Partner under Section 5.2(B)(2);
(6) Sixth, to each Partner in proportion to the cumulative Losses
allocated to such Partner under Section 5.2(B)(1), until the cumulative Profits
allocated to such Partner under this Section 5.2(A)(6) equal the cumulative
Losses allocated to such Partner under Section 5.2(B)(1); and
(7) Then, the balance, if any, to the Partners in proportion to their
respective Percentage Interests.
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(B) Losses. After giving effect to the special allocations, if any,
provided in Section 5.2(C), (D) and (I), Losses in each Fiscal Year shall be
allocated in the following order of priority:
(1) First, to the Partners (other than the Class B Limited Partner and
the Class C Limited Partner), in proportion to their respective Percentage
Interests, but not in excess of the positive Capital Account balance of any
Partner prior to the allocation provided for in this Section 5.2(B)(1);
(2) Second, to the Partners (other than the Class B Limited Partner
and the Class C Limited Partner) with positive Capital Account balances prior to
the allocation provided for in this Section 5.2(B)(2), in proportion to the
amount of such balances until all such balances are reduced to zero;
(3) Third, to the General Partner in an amount equal to the excess of
(i) the amount of Recourse Liabilities over (ii) the Aggregate Protected Amount;
(4) Fourth, to and among the Contributor Partners, in accordance with
their respective Protected Amounts, until such time as the Contributor Partners
have been allocated an aggregate amount of Loss pursuant to this Section
5.2(B)(4) equal to the Aggregate Protected Amount;
(5) Fifth, to the Class B Limited Partner and the Class C Limited
Partner, in accordance with their respective Adjusted Capital Accounts, until
their Adjusted Capital Accounts are reduced to zero; and
(6) Thereafter, to the General Partner;
provided, however, (i) that, from and following the first date upon which a
Contributor Partner is no longer a Partner of the Partnership, the provisions of
this Section 5.2(B) shall be null, void and without further force and effect
with respect to such Contributor Partner; (ii) that, this Section 5.2(B) shall
control, notwithstanding any reallocation or adjustment of taxable income, loss
or other items by the Internal Revenue Service or any other taxing authority;
provided, however, that neither the Partnership nor the General Partner (nor any
of their respective affiliates) is required to indemnify any Contributor Partner
(or its affiliates) for the loss of any tax benefit resulting from any
reallocation or adjustment of taxable income, loss or other items by the
Internal Revenue Service or other taxing authority; and (iii) that, during such
period as there are Contributor Partners in the Partnership, the provisions of
Section 5.2(B)(4) shall not be amended in a manner which adversely affects the
Contributor Partners (without the consent of each Contributor Partner).
(C) Special Allocations. Except as otherwise provided in this Agreement,
the following special allocations will be made in the following order and
priority:
(1) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Article V, if there is a net decrease in Partnership Minimum
Gain during any tax year or other period for which allocations are made, each
Partner will be specially allocated items of Partnership income and gain for
that tax year or other period (and, if necessary, subsequent periods) in an
amount equal to such Partner's share of the net decrease in Partnership Minimum
Gain during such tax year or other period determined in accordance with Treasury
Regulations Section 1.704-2(g). Allocations pursuant to the preceding 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 Treasury Regulations Sections 1.704-2(f)(6) and
1.704-2(j)(2). This Section 5.2(C)(1) is intended to comply with the minimum
gain chargeback requirements set forth in Treasury Regulations Section
1.704-2(f) and shall be interpreted consistently therewith, including the
exceptions to the minimum gain chargeback requirement
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set forth in Treasury Regulations Section 1.704-2(f) and (3). If the General
Partner concludes, after consultation with tax counsel, that the Partnership
meets the requirements for a waiver of the minimum gain chargeback requirement
as set forth in Treasury Regulations Section 1.704-2(f)(4), the General Partner
may take steps reasonably necessary or appropriate in order to obtain such
waiver.
(2) Partner Nonrecourse Debt Minimum Gain Chargeback. Notwithstanding
any other provision of this Section (other than Section 5.2(C)(1) which shall be
applied before this Section 5.2(C)(2)), if there is a net decrease in Partner
Minimum Gain during any tax year or other period for which allocations are made,
each Partner with a share of Partner Minimum Gain determined in accordance with
Treasury Regulations Section 1.704- 2(i)(5) shall be specially allocated items
of Partnership income and gain for that period (and, if necessary, subsequent
periods) in an amount equal to such Partner's share of the net decrease in
Partner Minimum Gain determined in accordance with Treasury Regulations Section
1.704-2(i)(4). The items to be so allocated shall be determined in accordance
with Treasury Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2)(ii). This
Section 5.2(C)(2) is intended to comply with the minimum gain chargeback
requirements of Treasury Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith, including the exceptions set forth in
Treasury Regulations Section 1.704-2(f)(2) and (3) to the extent such exceptions
apply to Treasury Regulations Sections 1.704-2(i)(4). If the General Partner
concludes, after consultation with tax counsel, that the Partnership meets the
requirements for a waiver of the Partner Minimum Gain chargeback requirement set
forth in Treasury Regulation 1.704-2(f), but only to the extent such exception
applies to Treasury Regulations Section 1.704-2(i)(4), the General Partner may
take steps necessary or appropriate to obtain such waiver.
(3) Qualified Income Offset. A Partner who unexpectedly receives any
adjustment, allocation or distribution described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) or (6) will be specially allocated items of
Partnership income and gain in an amount and manner sufficient to eliminate, to
the extent required by Treasury Regulations 1.704-1(b)(2)(ii)(d), the Adjusted
Capital Account Deficit of the Partner as quickly as possible, provided that an
allocation pursuant to this Section 5.2(C)(3) shall be made if and only to the
extent that such Partner would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Article V have been tentatively made
as if this Section 5.2(C)(3) were not contained in this Agreement.
(4) Partnership Nonrecourse Deductions. Partnership Nonrecourse
Deductions for any taxable year or other period for which allocations are made
will be allocated among the Partners in proportion to their respective
Partnership Interests in the Partnership.
(5) Partner Nonrecourse Deductions. Notwithstanding anything to the
contrary in this Agreement, any Partner Nonrecourse Deductions for any taxable
year or other period for which allocations are made will be allocated to the
Partner who bears the economic risk of loss with respect to the liability to
which the Partner Nonrecourse Deductions are attributable in accordance with
Treasury Regulations Section 1.704-2(i).
(6) Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset under Code Section 734(b) or 743(b)
is required to be taken into account in determining Capital Accounts under
Treasury Regulations Section 1.704-1(b)(2)(iv)(m)(2) or (4), the amount of the
adjustment to the Capital Accounts will be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment
decreases the basis of the asset), and the gain or loss will be specially
allocated to the Partners in a manner consistent with the manner in which their
Capital Accounts are required to be adjusted under Treasury Regulations Section
1.704-1(b)(2)(iv)(m).
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(7) Depreciation Recapture. In the event there is any recapture of
Depreciation or investment tax credit, the allocation thereof shall be made
among the Partners in the same proportion as the deduction for such Depreciation
or investment tax credit was allocated.
(8) Interest in Partnership. Notwithstanding any other provision of
this Agreement, no allocation of Profit or Loss (or item of Profit or Loss) will
be made to a Partner if the allocation would not have "economic effect" under
Treasury Regulations Section 1.704-1(b)(2)(ii)(a) or otherwise would not be in
accordance with the Partner's interest in the Partnership within the meaning of
Treasury Regulations Section 1.704-1(b)(3).
(D) Curative Allocations. The allocations set forth in Section 5.2(C)(1)
through (8) (the "Regulatory Allocations") are intended to comply with certain
requirements of Treasury Regulations Sections 1.704-1(b) and 1.704-2. The
Regulatory Allocations may not be consistent with the manner in which the
Partners intend to divide Partnership distributions. Accordingly, the General
Partner is authorized to further allocate Profits, Losses, and other items among
the Partners in a reasonable manner so as to prevent the Regulatory Allocations
from distorting the manner in which Partnership distributions would be divided
among the Partners under Section 5.3, but for application of the Regulatory
Allocations. In general, the reallocation will be accomplished by specially
allocating other Profits, Losses and items of income, gain, loss and deduction,
to the extent they exist, among the Partners so that the net amount of the
Regulatory Allocations and the special allocations to each Partner is zero. The
General Partner may accomplish this result in any reasonable manner that is
consistent with Code Section 704 and the related Treasury Regulations.
(E) Tax Allocations.
(1) Except as otherwise provided in Section 5.2(E)(2), each item of
income, gain, loss and deduction shall be allocated for federal income tax
purposes in the same manner as each correlative item of income, gain, loss or
deduction, is allocated for book purposes pursuant to the provisions of Section
5.1 hereof.
(2) Notwithstanding anything to the contrary in this Article V, in an
attempt to eliminate any Book-Tax Disparity with respect to a Contributed
Property, items of income, gain, loss or deduction with respect to each such
property shall be allocated for federal income tax purposes among the Partners
as follows:
(a) Depreciation, Amortization and Other Cost Recovery Items. In the
case of each Contributed Property with a Book-Tax Disparity, any item of
depreciation, amortization or other cost recovery allowance attributable to
such property shall be allocated as follows: (x) first, to Partners (the
"Non-Contributing Partners") other than the Partners who contributed such
property to the Partnership (or are deemed to have contributed the property
pursuant to Section 4.1(A) (the "Contributing Partners") in an amount up to
the book allocation of such items made to the Non-Contributing Partners
pursuant to Section 5.1 hereof, pro rata in proportion to the respective
amount of book items so allocated to the Non-Contributing Partners pursuant
to Section 5.1 hereof; and (y) any remaining depreciation, amortization or
other cost recovery allowance to the Contributing Partners in proportion to
their Percentage Interests. In no event shall the total depreciation,
amortization or other cost recovery allowance allocated hereunder exceed
the amount of the Partnership's depreciation, amortization or other cost
recovery allowance with respect to such property.
(b) Gain or Loss on Disposition. In the event the Partnership sells or
otherwise disposes of a Contributed Property with a Book-Tax Disparity, any
gain or loss recognized by the Partnership
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in connection with such sale or other disposition shall be allocated among
the Partners as follows: (x) first, any gain or loss shall be allocated to
the Contributing Partners in proportion to their Percentage Interests to
the extent required to eliminate any Book-Tax Disparity with respect to
such property; and (y) any remaining gain or loss shall be allocated among
the Partners in the same manner that the correlative items of book gain or
loss are allocated among the Partners pursuant to Section 5.1 hereof.
(3) In the event the Book Value of a Partnership Asset (including a
Contributed Property) is adjusted pursuant to Section 4.4(D) hereof, and such
asset has not been deemed distributed by, and recontributed to the Partnership
pursuant to Code Section 708 subsequent thereto, all items of income, gain, loss
or deduction in respect of such property shall be allocated for federal income
tax purposes among the Partners in the same manner as provided in Section
5.2(E)(2) hereof to take into account any variation between the fair market
value of the property, as determined by the General Partner using such
reasonable method of valuation as it may adopt, and the Book Value of such
property, both determined as of the date of such adjustment.
(4) The General Partner shall have the authority to elect alternative
methods to eliminate the Book-Tax Disparity with respect to one or more
Contributed Properties, as permitted by Treasury Regulations Sections 1.704-3
and 1.704-3T, and such election shall be binding on all of the Partners.
(5) The Partners hereby intend that the allocation of tax items
pursuant to this Section 5.2(E) comply with the requirements of Code Section
704(c) and Treasury Regulations Sections 1.704-3 and 1.704-3T.
(6) The allocation of items of income, gain, loss or deduction
pursuant to this Section 5.2(E) are solely for federal, state and local income
tax purposes, and the Capital Account balances of the Partners shall be adjusted
solely for allocations of "book" items in respect of Partnership Assets pursuant
to Section 5.1 hereof.
(F) Other Allocation Rules. The following rules will apply to the
calculation and allocation of Profits, Losses and other items:
(1) Except as otherwise provided in the Agreement, all Profits, Losses
and other items allocated to the Partners will be allocated among them in
proportion to their Percentage Interests.
(2) For purposes of determining the Profits, Losses or any other item
allocable to any period, Profits, Losses and other items will be determined on a
daily, monthly or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the related Treasury Regulations.
(3) Except as otherwise provided in this Agreement, all items of
Partnership income, gain, loss and deduction, and other allocations not provided
for in this Agreement will be divided among the Partners in the same proportions
as they share Profits and Losses, provided that any credits shall be allocated
in accordance with Treasury Regulations Section 1.704-1(b)(4)(ii).
(4) For purposes of Treasury Regulations Section 1.752-3(a), the
Partners hereby agree that any nonrecourse liabilities of the Partnership in
excess of the sum of (i) the Partnership Minimum Gain and (ii) the aggregate
amount of taxable gain that would be allocated to the Partners under Section
704(c) (or in the same manner as Section 704(c) in connection with a revaluation
of Partnership property) if the Partnership disposed of (in a taxable
transaction) all Partnership property subject to one or more nonrecourse
liabilities of the Partnership in full satisfaction of such liabilities and for
no other consideration, shall be allocated among the Partners in accordance
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with their respective shares of Profits. The General Partner shall have
discretion in any Fiscal Year to allocate such excess nonrecourse liabilities
among the Partners (a) in a manner reasonably consistent with allocations (that
have substantial economic effect) of some other significant item of Partnership
income or gain or (b) in accordance with the manner in which it is reasonably
expected that the deductions attributable to the excess nonrecourse liabilities
will be allocated.
(G) Partner Acknowledgment. The Partners agree to be bound by the
provisions of this Section 5.2 in reporting their shares of Partnership income,
gain, loss, deduction and credit for income tax purposes.
(H) Regulatory Compliance. The foregoing provisions of this Section 5.2
relating to the allocation of Profits, Losses and other items for federal income
tax purposes are intended to comply with Treasury Regulations Sections
1.704-1(b), 1.704-2, 1.704-3 and 1.704-3T and shall be interpreted and applied
in a manner consistent with such Treasury Regulations.
(I) Class B Priority Allocation. The holders of the Class B Units shall be
allocated gross income such that, from the inception of the Partnership through
the end of the fiscal year to which the allocation relates, the sum of all
priority allocations pursuant to this Section 5.2(I) equals (or approaches as
nearly as possible) the sum of all Class B Priority Return Amounts accrued
through the end of the fiscal year to which the allocation relates.
(J) Class C Priority Allocation. The holders of the Class C Units shall be
allocated gross income such that, from the inception of the partnership through
the end of the fiscal year to which the allocation relates, the sum of all
priority allocations pursuant to this Section 5.2(J) equals (or approaches as
nearly as possible) the sum of all Class C Priority Return Amounts accrued
through the end of the fiscal year to which the allocation relates.
Section 5.3 Distributions.
(A) The General Partner shall cause the Partnership to distribute to the
holder of each Class B Unit an amount in cash equal to the cumulative
undistributed Class B Priority Return Amount (but not in excess of the
Distributable Cash) on March 31, June 30, September 30 and December 31 of each
year, commencing on June 30, 1997 (or in the case of a Class B Unit with a Class
B Deemed Original Issue Date after June 30, 1997, on the first such distribution
date following the applicable Class B Deemed Original Issue Date); provided
that, if any such distribution date shall be a Saturday, Sunday or day on which
banking institutions in the State of New York are authorized or obligated by law
to close, or a day which is declared a national or New York State holiday (any
of the foregoing, a "Non-business Day"), then such distribution shall be made on
the next succeeding day which is not a Non-business Day. Class B Priority Return
Amounts that are distributable with respect to a period greater or less than a
full Class B Distribution Period shall be computed on the basis of a 360-day
year consisting of 12 30-day months.
(B) The General Partner shall cause the Partnership to distribute to the
holder of each Class C Unit an amount in cash equal to the cumulative
undistributed Class C Priority Return Amount (but not in excess of the
Distributable Cash) on March 31, June 30, September 30 and December 31 of each
year, commencing on September 30, 1997 (or in the case of a Class C Unit with a
Class C Deemed Original Issue Date after September 30, 1997, on the first such
distribution date following the applicable Class C Deemed Original Issue Date);
provided that, if any such distribution date shall be a Saturday, Sunday or day
on which banking institutions in the State of New York are authorized or
obligated by law to close, or a day which is declared a national or New York
State holiday (any of the foregoing, a "Non-business Day"), then such
distribution shall be made on the next succeeding day which is not a
Non-business Day. Class C Priority Return Amounts that are distributable with
respect to a period greater or
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less than a full Class C Distribution Period shall be computed on the basis of a
360-day year consisting of 12 30-day months.
(C) After giving effect to Sections 5.3(A) and (B), if applicable, the
General Partner shall have the authority to cause the Partnership to make
distributions from time to time as it determines, including without limitation,
distributions which are sufficient to enable the General Partner to (i) maintain
its status as a REIT, (ii) avoid the imposition of any tax under Code Section
857 and (iii) avoid the imposition of any excise tax under Code Section 4981;
except that the first distribution paid on Units issued after June 1, 1996 shall
be pro rated to reflect the actual portion of the period for which the
distribution is being paid during which such Units were outstanding, or shall be
in such other amount or computed on such other basis as may be agreed by the
General Partner and the holders of such Units, provided that such other amount
or the amount so computed, as applicable, may not exceed the aforementioned pro
rated amount.
(D) Distributions pursuant to Section 5.3(C) shall be made pro rata among
the Partners of record on the Record Date established by the General Partner for
the distribution, in accordance with their respective Percentage Interests,
without regard to the length of time the record holder has been such.
(E) The General Partner shall use its reasonable efforts to make
distributions to the Partners so as to preclude any distribution or portion
thereof from being treated as part of a sale of property to the Partnership by a
Partner under Section 707 of the Code or the Treasury 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 Partner being so treated.
Section 5.4 Distribution upon Redemption. Notwithstanding any other
provision hereof, proceeds of a Class B Redemption shall be distributed to the
Class B Limited Partner in accordance with Section 9.1(C) and Proceeds of a
Class C Redemption shall be distributed to the Class C Limited Partner, in
accordance with Section 9.1(D).
Section 5.5 Distributions upon Liquidation. Notwithstanding any other
provision hereof, proceeds of a Terminating Capital Transaction shall be
distributed to the Partners in accordance with Section 10.2.
Section 5.6 Amounts Withheld. All amounts withheld pursuant to the Code or
any provision of state or local tax law and Section 7.6 of this Agreement with
respect to any allocation, payment or distribution to the General Partner, the
Class B Limited Partner, the Class C Limited Partner, the Limited Partners or
Assignees shall be treated as amounts distributed to such General Partner, the
Class B Limited Partner, the Class C Limited Partner, the Limited Partner or
Assignees, as applicable, pursuant to Section 5.3 of this Agreement.
ARTICLE VI - PARTNERSHIP MANAGEMENT
Section 6.1 Management and Control of Partnership Business.
(A) Except as otherwise expressly provided or limited by the provisions of
this Agreement, the General Partner shall have full, exclusive and complete
discretion to manage the business and affairs of the Partnership, to make all
decisions affecting the business and affairs of the Partnership and to take all
such action as it deems necessary or appropriate to accomplish the purposes of
the Partnership as set forth herein. Except as set forth in this
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Agreement, the Limited Partners shall not have any authority, right, or power to
bind the Partnership, or to manage, or to participate in the management of the
business and affairs of the Partnership in any manner whatsoever. Such
management shall in every respect be the full and complete responsibility of the
General Partner alone as herein provided.
(B) In carrying out the purposes of the Partnership, the General Partner
shall be authorized to take all actions it deems necessary and appropriate to
carry on the business of the Partnership. The Limited Partners, the Class B
Limited Partner and the Class C Limited Partner, by execution hereof, agrees
that the General Partner is authorized to execute, deliver and perform any
agreement and/or transaction on behalf of the Partnership.
(C) The General Partner and its Affiliates may acquire Limited Partner
Interests from Limited Partners who agree so to transfer Limited Partner
Interests or from the Partnership in accordance with Section 4.2(a). Any Limited
Partner Interest acquired by the General Partner shall be converted into a
General Partner Interest. Upon acquisition of any Limited Partner Interest, any
Affiliate of the General Partner shall have all the rights of a Limited Partner.
Section 6.2 No Management by Limited Partners; Limitation of Liability.
(A) Neither the Limited Partners, in their capacity as Limited Partners,
the Class B Limited Partner, in its capacity as Class B Limited Partner, or the
Class C Limited Partner, in its capacity as Class C Limited Partner, shall take
part in the day-to-day management, operation or control of the business and
affairs of the Partnership or have any right, power, or authority to act for or
on behalf of or to bind the Partnership or transact any business in the name of
the Partnership. Neither the Limited Partners, the Class B Limited Partner, in
its capacity as Class B Limited Partner, or the Class C Limited Partner, in its
capacity as Class C Limited Partner, shall have any rights other than those
specifically provided herein or granted by law where consistent with a valid
provision hereof. Any approvals rendered or withheld by the Limited Partners,
the Class B Limited Partner or the Class C Limited Partner pursuant to this
Agreement shall be deemed as consultation with or advice to the General Partner
in connection with the business of the Partnership and, in accordance with the
Act, shall not be deemed as participation by the Limited Partners, the Class B
Limited Partner or the Class C Limited Partner in the business of the
Partnership and are not intended to create any inference that the Limited
Partners, the Class B Limited Partner or the Class C Limited Partner should be
classified as general partners under the Act.
(B) Neither the Limited Partner, the Class B Limited Partner or the Class C
Limited Partner shall have any liability under this Agreement except with
respect to withholding under Section 7.6, in connection with a violation of any
provision of this Agreement by such Limited Partner, the Class B Limited Partner
or the Class C Limited Partner or as provided in the Act.
(C) The General Partner shall not take any action which would subject a
Limited Partner (in its capacity as Limited Partner), the Class B Limited
Partner (in its capacity as Class B Limited Partner) or the Class C Limited
Partner (in its capacity as Class C Limited Partner) to liability as a general
partner.
Section 6.3 Limitations on Partners.
(A) No Partner or Affiliate of a Partner shall have any authority to
perform (i) any act in violation of any applicable law or regulation thereunder,
(ii) any act prohibited by Section 6.2(C), or (iii) any act which is required to
be Consented to or ratified pursuant to this Agreement without such Consent or
ratification.
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(B) No action shall be taken by a Partner if it would cause the Partnership
to be treated as an association taxable as a corporation for federal income tax
purposes or, without the consent of the General Partner, as a publicly-traded
partnership within the meaning of Section 7704 of the Code. A determination of
whether such action will have the above described effect shall be based upon a
declaratory judgment or similar relief obtained from a court of competent
jurisdiction, a favorable ruling from the IRS or the receipt of an opinion of
counsel.
Section 6.4 Business with Affiliates.
(A) The General Partner, in its discretion, may cause the Partnership to
transact business with any Partner or its Affiliates for goods or services
reasonably required in the conduct of the Partnership's business; provided that
any such transaction shall be effected only on terms competitive with those that
may be obtained in the marketplace from unaffiliated Persons. The foregoing
proviso shall not apply to transactions between the Partnership and its
Subsidiaries. In addition, neither the General Partner nor any Affiliate of the
General Partner may sell, transfer or otherwise convey any property to, or
purchase any property from, the Partnership, except (i) on terms competitive
with those that may be obtained in the marketplace from unaffiliated Persons or
(ii) where the General Partner determines, in its sole judgment, that such sale,
transfer or conveyance confers benefits on the General Partner or the
Partnership in respect of matters of tax or corporate or financial structure;
provided, in the case of this clause (ii), such sale, transfer, or conveyance is
not being effected for the purpose of materially disadvantaging the Limited
Partners.
(B) In furtherance of Section 6.4(A), the Partnership may lend or
contribute to its Subsidiaries on terms and conditions established by the
General Partner.
Section 6.5 Compensation; Reimbursement of Expenses. In consideration for
the General Partner's services to the Partnership in its capacity as General
Partner, the Partnership shall pay on behalf of or reimburse to the General
Partner (i) all expenses of the General Partner incurred in connection with the
management of the business and affairs of the Partnership, including all
employee compensation of employees of the General Partner and indemnity or other
payments made pursuant to agreements entered into in furtherance of the
Partnership's business, (ii) all amounts payable by the General Partner under
the Registration Rights Agreement and (iii) all general and administrative
expenses incurred by the General Partner. Except as otherwise set forth in this
Agreement, the General Partner shall be fully and entirely reimbursed by the
Partnership for any and all direct and indirect costs and expenses incurred in
connection with the organization and continuation of the Partnership pursuant to
this Agreement. In addition, the General Partner shall be reimbursed for all
expenses incurred by the General Partner in connection with (i) the initial
public offering of REIT Shares by the General Partner and (ii) any other
issuance of additional Partnership Interests or REIT Shares.
Section 6.6 Liability for Acts and Omissions.
(A) The General Partner shall not be liable, responsible or accountable in
damages or otherwise to the Partnership or any of the other Partners for any act
or omission performed or omitted in good faith on behalf of the Partnership and
in a manner reasonably believed to be (i) within the scope of the authority
granted by this Agreement and (ii) in the best interests of the Partnership or
the stockholders of the General Partner. In exercising its authority hereunder,
the General Partner may, but shall not be under any obligation to, take into
account the tax consequences to any Partner of any action it undertakes on
behalf of the Partnership. Neither the General Partner nor the Partnership shall
have any liability as a result of any income tax liability incurred by a Partner
as a result of any action or inaction of the General Partner hereunder and, by
their execution of this Agreement, the Limited Partners acknowledge the
foregoing.
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(B) Unless otherwise prohibited hereunder, the General Partner shall be
entitled to exercise any of the powers granted to it and perform any of the
duties required of it under this Agreement directly or through any agent. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any agent; provided that the General Partner selected or appointed such
agent in good faith.
(1) The General Partner acknowledges that it owes fiduciary duties
both to its stockholders and to the Limited Partners and it shall use its
reasonable efforts to discharge such duties to each; provided, however, that in
the event of a conflict between the interests of the stockholders of the General
Partner and the interests of the Limited Partners, the Limited Partners agree
that the General Partner shall discharge its fiduciary duties to the Limited
Partners by acting in the best interests of the General Partner's stockholders.
Nothing contained in the preceding sentence shall be construed as entitling the
General Partner to realize any profit or gain from any transaction between the
General Partner and the Partnership (except in connection with a distribution in
accordance with this Agreement), including from the lending of money by the
General Partner to the Partnership or the contribution of property by the
General Partner to the Partnership, it being understood that in any such
transaction the General Partner shall be entitled to cost recovery only.
Section 6.7 Indemnification.
(A) The Partnership shall indemnify the General Partner and each director,
officer and stockholder of the General Partner and each Person (including any
Affiliate) designated as an agent by the General Partner in its reasonable
discretion (each, an "Indemnified Party") to the fullest extent permitted under
the Act (including any procedures set forth therein regarding advancement of
expenses to such Indemnified Party) from and against any and all losses, claims,
damages, liabilities, expenses (including reasonable attorneys' fees),
judgments, fines, settlements and any other amounts arising out of or in
connection with any claims, demands, actions, suits or proceedings (civil,
criminal or administrative) relating to or resulting (directly or indirectly)
from the operations of the Partnership, in which such Indemnified Party becomes
involved, or reasonably believes it may become involved, as a result of the
capacity referred to above.
(B) The Partnership shall have the authority to purchase and maintain such
insurance policies on behalf of the Indemnified Parties as the General Partner
shall determine, which policies may cover those liabilities the General Partner
reasonably believes may be incurred by an Indemnified Party in connection with
the operation of the business of the Partnership. The right to procure such
insurance on behalf of the Indemnified Parties shall in no way mitigate or
otherwise affect the right of any such Indemnified Party to indemnification
pursuant to Section 6.7(A) hereof.
(C) The provisions of this Section 6.7 are for the benefit of the
Indemnified Parties, their heirs, successors, assigns and administrators and
shall not be deemed to create any rights in or benefit to any other Person.
ARTICLE VII - ADMINISTRATIVE, FINANCIAL AND TAX MATTERS
Section 7.1 Books and Records. The General Partner shall maintain at the
office of the Partnership full and accurate books of the Partnership showing all
receipts and expenditures, assets and liabilities, profits and losses, names and
current addresses of Partners, and all other records necessary for recording the
Partnership's business and affairs. Each Limited Partner shall have, upon
written demand and at such Limited Partner's expense,
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the right to receive true and complete information regarding Partnership matters
to the extent required (and subject to the limitations) under Delaware law.
Section 7.2 Annual Audit and Accounting. The books and records of the
Partnership shall be kept for financial and tax reporting purposes on the
accrual basis of accounting in accordance with generally accepted accounting
principles ("GAAP"). The accounts of the Partnership shall be audited annually
by a nationally recognized accounting firm of independent public accountants
selected by the General Partner (the "Independent Accountants").
Section 7.3 Partnership Funds. The General Partner shall have
responsibility for the safekeeping and use of all funds and assets of the
Partnership, whether or not in its direct or indirect possession or control. All
funds of the Partnership not otherwise invested shall be deposited in one or
more accounts maintained in such banking institutions as the General Partner
shall determine, and withdrawals shall be made only in the regular course of
Partnership business on such signatures as the General Partner may from time to
time determine.
Section 7.4 Reports and Notices. The General Partner shall provide all
Partners with the following reports no later than the dates indicated or as soon
thereafter as circumstances permit:
(A) By March 31 of each year, IRS Form 1065 and Schedule K-1, or similar
forms as may be required by the IRS, stating each Partner's allocable share of
income, gain, loss, deduction or credit for the prior Fiscal Year;
(B) Within ninety (90) days after the end of each of the first three (3)
fiscal quarters, as of the last day of the fiscal quarter, a report containing
unaudited financial statements of the Partnership, or of the General Partner if
such statements are prepared on a consolidated basis with the General Partner,
and such other information as may be legally required or determined to be
appropriate by the General Partner; and
(C) Within one hundred twenty (120) days after the end of each Fiscal Year,
as of the close of the Fiscal Year, an annual report containing audited
financial statements of the Partnership, or of the General Partner if such
statements are prepared on a consolidated basis with the General Partner,
presented in accordance with GAAP and certified by the Independent Accountants.
Section 7.5 Tax Matters.
(A) The General Partner shall be the Tax Matters Partner of the Partnership
for federal income tax matters pursuant to Code Section 6231(a)(7)(A). The Tax
Matters Partner is authorized and required to represent the Partnership (at the
expense of the Partnership) in connection with all examinations of the affairs
of the Partnership by any federal, state, or local tax authorities, including
any resulting administrative and judicial proceedings, and to expend funds of
the Partnership for professional services and costs associated therewith. The
Tax Matters Partner shall deliver to the Limited Partners within ten (10)
business days of the receipt thereof a copy of any notice or other communication
with respect to the Partnership received from the IRS (or other governmental tax
authority), or any court, in each case with respect to any administrative or
judicial proceeding involving the Partnership. The Partners agree to cooperate
with each other in connection with the conduct of all proceedings pursuant to
this Section 7.5(A).
(B) The Tax Matters Partner shall receive no compensation for its services
in such capacity. If the Tax Matters Partner incurs any costs related to any tax
audit, declaration of any tax deficiency or any administrative
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proceeding or litigation involving any Partnership tax matter, such amount shall
be an expense of the Partnership and the Tax Matters Partner shall be entitled
to full reimbursement therefor.
(C) The General Partner shall cause to be prepared all federal, state and
local income tax returns required of the Partnership at the Partnership's
expense.
(D) Except as set forth herein, the General Partner shall determine whether
to make (and, if necessary, revoke) any tax election available to the
Partnership under the Code or any state tax law; provided, however, upon the
request of any Partner, the General Partner shall make the election under Code
Section 754 and the Treasury Regulations promulgated thereunder. The Partnership
shall elect to deduct expenses, if any, incurred by it in organizing the
Partnership in accordance with the provisions of Code Section 709.
Section 7.6 Withholding. Each Partner hereby authorizes the Partnership to
withhold from or pay to any taxing authority on behalf of such Partner any tax
that the General Partner determines the Partnership is required to withhold or
pay with respect to any amount distributable or allocable to such Partner. Any
amount paid to any taxing authority which does not constitute a reduction in the
amount otherwise distributable to such Partner shall be treated as a loan from
the Partnership to such Partner, which loan shall bear interest at the "prime
rate" as published from time to time in The Wall Street Journal plus two (2)
percentage points, and shall be repaid within ten (10) business days after
request for repayment from the General Partner. The obligation to repay any such
loan shall be secured by such Partner's Partnership Interest and each Partner
hereby grants the Partnership a security interest in his Partnership Interest
for the purposes set forth in this Section 7.6, this Section 7.6 being intended
to serve as a security agreement for purposes of the Uniform Commercial Code
with the General Partner having in respect hereof all of the remedies of a
secured party under the Uniform Commercial Code. Each Partner agrees to take
such reasonable actions as the General Partner may request to perfect and
continue the perfection of the security interest granted hereby. In the event
any Partner fails to repay any deemed loan pursuant to this Section 7.6 the
Partnership shall be entitled to avail itself of any rights and remedies it may
have. Furthermore, upon the expiration of ten (10) business days after demand
for payment, the General Partner shall have the right, but not the obligation,
to make the payment to the Partnership on behalf of the defaulting Partner and
thereupon be subrogated to the rights of the Partnership with respect to such
defaulting Partner.
ARTICLE VIII - TRANSFER OF PARTNERSHIP INTERESTS; ADMISSIONS OF PARTNERS
Section 8.1 Transfer by General Partner. The General Partner may not
voluntarily withdraw or Transfer all or any portion of its General Partner
Interest. Notwithstanding the foregoing, the General Partner may pledge its
General Partner Interest in furtherance of the Partnership's business (including
without limitation, in connection with a loan agreement under which the
Partnership is a borrower) without the consent of any Partner.
Section 8.2 Obligations of a Prior General Partner. Upon an Involuntary
Withdrawal of the General Partner and the subsequent Transfer of the General
Partner's Interest, such General Partner shall (i) remain liable for all
obligations and liabilities (other than Partnership liabilities payable solely
from Partnership Assets) incurred by it as General Partner before the effective
date of such event and (ii) pay all costs associated with the admission of its
Successor General Partner. However, such General Partner shall be free of and
held harmless by the Partnership against any obligation or liability incurred on
account of the activities of the Partnership from and after the effective date
of such event, except as provided in this Agreement.
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Section 8.3 Successor General Partner. A successor to all of a General
Partner's General Partner Interest who is proposed to be admitted to the
Partnership as a Successor General Partner shall be admitted as the General
Partner, effective upon the Transfer. Any such transferee shall carry on the
business of the Partnership without dissolution. In addition, the following
conditions must be satisfied:
(A) The Person shall have accepted and agreed to be bound by all the terms
and provisions of this Agreement by executing a counterpart thereof and such
other documents or instruments as may be required or appropriate in order to
effect the admission of such Person as a General Partner; and
(B) An amendment to this Agreement evidencing the admission of such Person
as a General Partner shall have been executed by all General Partners and an
amendment to the Certificate shall have been filed for recordation as required
by the Act.
(C) Any consent required under Section 10.1(A) shall have been obtained.
Section 8.4 Restrictions on Transfer and Withdrawal by Limited Partner.
(A) Subject to the provisions of Section 8.4(D), no Limited Partner may
Transfer all or any portion of his Partnership Interest without first obtaining
the Consent of the General Partner, which Consent may be granted or withheld in
the sole and absolute discretion of the General Partner. Any such purported
transfer undertaken without such Consent shall be considered to be null and void
ab initio and shall not be given effect. Each Limited Partner acknowledges that
the General Partner has agreed not to grant any such consent prior to the
Transfer Restriction Date.
(B) No Limited Partner may withdraw from the Partnership other than as a
result of a permitted Transfer (i.e., a Transfer consented to as contemplated by
clause (A) above or clause (D) below or a Transfer pursuant to clause (C) below)
of all of his Partnership Units pursuant to this Article VIII or pursuant to a
redemption or exchange of all of his Partnership Units pursuant to Article IX.
Upon the permitted Transfer or redemption of all of a Limited Partner's
Partnership Units, such Limited Partner shall cease to be a Limited Partner.
(C) Upon the Involuntary Withdrawal of any Limited Partner (which shall
under no circumstance cause the dissolution of the Partnership), the executor,
administrator, trustee, guardian, receiver or conservator of such Limited
Partner's estate shall become a Substituted Limited Partner upon compliance with
the provisions of Section 8.5(A)(1)-(3).
(D) Subject to clause (E) below, a Limited Partner may Transfer, with the
Consent of the General Partner, all or a portion of his Partnership Units to (a)
a parent or parents, spouse, natural or adopted descendant or descendants,
spouse of such a descendant, or brother or sister, or a trust created by such
Limited Partner for the benefit of such Limited Partner and/or any such
person(s), of which trust such Limited Partner or any such person(s) is a
trustee, (b) a corporation controlled by a Person or Persons named in (a) above,
or (c) if the Limited Partner is an entity, its beneficial owners, and the
General Partner shall grant its Consent to any Transfer pursuant to this Section
8.4(D) unless such Transfer, in the reasonable judgment of the General Partner,
would cause (or have the potential to cause) the General Partner to fail to
qualify for taxation as a REIT, in which case the General Partner shall have the
absolute right to refuse to permit such Transfer, and any purported Transfer in
violation of this Section 8.4(D) shall be null and void ab initio.
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(E) No Transfer of Limited Partnership Units shall be made if such Transfer
would (i) in the opinion of Partnership counsel, cause the Partnership to be
terminated for federal income tax purposes or to be treated as an association
taxable as a corporation (rather than a partnership) for federal income tax
purposes; (ii) be effected through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Code Section 7704 and the Treasury Regulations thereunder, (iii) in the opinion
of Partnership counsel, violate the provisions of applicable securities laws;
(iv) violate the terms of (or result in a default or acceleration under) any
law, rule, regulation, agreement or commitment binding on the Partnership; (v)
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(e) of the
Code); (vi) in the opinion of counsel to the Partnership, cause any portion of
the underlying assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101; or
(vii) result in a deemed distribution to any Partner attributable to a failure
to meet the requirements of Treasury Regulations Section 1.752- 2(d)(1), unless
such Partner consents thereto.
(F) Prior to the consummation of any Transfer under this Section 8.4, the
transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.
Section 8.5 Substituted Limited Partner.
(A) No transferee shall become a Substituted Limited Partner in place of
his assignor unless and until the following conditions have been satisfied:
(1) The assignor and transferee file a Notice or other evidence of
Transfer and such other information reasonably required by the General Partner,
including, without limitation, names, addresses and telephone numbers of the
assignor and transferee;
(2) The transferee executes, adopts and acknowledges this Agreement,
or a counterpart hereto, and such other documents as may be reasonably requested
by the General Partner, including without limitation, all documents necessary to
comply with applicable tax and/or securities rules and regulations;
(3) The assignor or transferee pays all costs and fees incurred or
charged by the Partnership to effect the Transfer and substitution; and
(4) The assignor or transferee obtains the written Consent of the
General Partner, which may be given or withheld in its sole and absolute
discretion.
(B) If a transferee of a Limited Partner does not become a Substituted
Limited Partner pursuant to Section 8.5(A), such transferee shall be an Assignee
and shall not have any rights to require any information on account of the
Partnership's business, to inspect the Partnership's books or to vote or
otherwise take part in the affairs of the Partnership (such Partnership Units
being deemed to have been voted in the same proportion as all other Partnership
Units held by Limited Partners have been voted). Such Assignee shall be
entitled, however, to all the rights of an assignee of a limited partnership
interest under the Act. Any Assignee wishing to Transfer the Partnership Units
acquired shall be subject to the restrictions set forth in this Article VIII.
Section 8.6 Timing and Effect of Transfers. Unless the General Partner
agrees otherwise, Transfers under this Article VIII may only be made as of the
first day of a fiscal quarter of the Partnership. Upon any
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Transfer of a Partnership Interest in accordance with this Article VIII or
redemption of a Partnership Interest in accordance with Article IX, the
Partnership shall allocate all items of Profit and Loss between the assignor
Partner and the transferee Partner in accordance with Section 5.2(F)(2) hereof.
The assignor Partner shall have the right to receive all distributions as to
which the Record Date precedes the date of Transfer and the transferee Partner
shall have the right to receive all distributions thereafter.
Section 8.7 Additional Limited Partners. Other than in accordance with the
transactions specified in the Contribution Agreements, after the initial
execution of this Agreement and the admission to the Partnership of the Initial
Limited Partners, any Person making a Capital Contribution to the Partnership in
accordance herewith shall be admitted as an Additional Limited Partner of the
Partnership only (i) with the Consent of the General Partner and (ii) upon
execution, adoption and acknowledgment of this Agreement, or a counterpart
hereto, and such other documents as may be reasonably requested by the General
Partner, including without limitation, the power of attorney required under
Section 12.3. Upon satisfaction of the foregoing requirements, such Person shall
be admitted as an Additional Limited Partner effective on the date upon which
the name of such Person is recorded on the books of the Partnership.
Section 8.8 Amendment of Agreement and Certificate. Upon any admission of a
Person as a Partner to the Partnership, the General Partner shall make any
necessary amendment to this Agreement to reflect such admission and, if required
by the Act, to cause to be filed an amendment to the Certificate.
ARTICLE IX - REDEMPTION
Section 9.1 Right of Redemption.
(A) Subject to any restriction on the General Partner, which restriction
may arise as a result of the REIT Charter, the laws governing the General
Partner or otherwise (a "Redemption Restriction"), beginning on the Redemption
Effective Date, during each Redemption Period each Redeeming Party shall have
the right to require the Partnership to redeem all or a portion of the
Partnership Units held by such Redeeming Party by providing the General Partner
with a Redemption Notice. A Limited Partner may invoke its rights under this
Article IX with respect to 100 Partnership Units or an integral multiple thereof
or all of the Partnership Units held by such Limited Partner. Upon the General
Partner's receipt of a Redemption Notice from a Redeeming Party, the Partnership
shall be obligated (subject to the existence of any Redemption Restriction) to
redeem the Partnership Units from such Redeeming Party (the "Redemption
Obligation").
(B) Upon receipt of a Redemption Notice from a Redeeming Party, the General
Partner shall either (i) cause the Partnership to redeem the Partnership Units
tendered in the Redemption Notice, (ii) assume the Redemption Obligation, as set
forth in Section 9.4, or (iii) provide written Notice to the Redeeming Party of
each applicable Redemption Restriction.
(C) On and after May 14, 2002 at any time or from time to time, the
Partnership may redeem all or such other number of Class B Units (any such
redemption, a "Class B Redemption") at a cash redemption price per Class B Unit
equal to that portion of the Capital Contribution of the Class B Limited Partner
allocable to each such unit, plus all accumulated and unpaid Priority Return
Amounts to the date of Class B Redemption (such price, the "Class B Redemption
Price"). Upon any Class B Redemption, an amount equal to the product of the
Class B
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Redemption Price and the number of Class B Units redeemed by the Partnership
shall be distributed by the Partnership to the Class B Limited Partner.
(D) On and after June 6, 2007 at any time or from time to time, the
Partnership may redeem all or such other number of Class C Units (any such
redemption, a "Class C Redemption") at a cash redemption price per Class C Unit
equal to that portion of the Capital Contribution of the Class C Limited Partner
allocable to each such unit, plus all accumulated and unpaid Class C Priority
Return Amounts to the date of Class C Redemption (such price, the "Class C
Redemption Price"). Upon any Class C Redemption, an amount equal to the product
of the Class C Redemption Price and the number of Class C Units redeemed by the
Partnership shall be distributed by the Partnership to the Class C Limited
Partner.
Section 9.2 Timing of Redemption. The Redemption Obligation (or the
obligation to provide Notice of an applicable Redemption Restriction, if one
exists) shall mature on the date which is seven (7) business days after the
receipt by the General Partner of a Redemption Notice from the Redeeming Party
(the "Redemption Date").
Section 9.3 Redemption Price. On or before the Redemption Date, the
Partnership (or the General Partner if it elects pursuant to Section 9.4) shall
deliver to the Redeeming Party, in the sole and absolute discretion of the
General Partner either (i) a Share Payment or (ii) a Cash Payment. In order to
enable the Partnership to effect a redemption by making a Share Payment pursuant
to this Section 9.3, the General Partner in its sole and absolute discretion may
issue to the Partnership the number of REIT Shares required to make such Share
Payment in exchange for the issuance to the General Partner of Partnership Units
equal in number to the quotient of the number of REIT Shares issued and
Conversion Factor.
Section 9.4 Assumption of Redemption Obligation. Upon receipt of a
Redemption Notice, the General Partner, in its sole and absolute discretion,
shall have the right to assume the Redemption Obligation of the Partnership. In
such case, the General Partner shall be substituted for the Partnership for all
purposes of this Article IX and, upon acquisition of the Partnership Units
tendered by the Redeeming Party pursuant to the Redemption Notice shall be
treated for all purposes of this Agreement as the owner of such Partnership
Units. Such exchange transaction shall be treated for federal income tax
purposes by the Partnership, the General Partner and the Redeeming Party as a
sale by the Redeeming Party as seller to the General Partner as purchaser.
Section 9.5 Further Assurances; Certain Representations. Each party to this
Agreement agrees to execute any documents deemed reasonably necessary by the
General Partner to evidence the issuance of any Share Payment to a Redeeming
Party. Notwithstanding anything herein to the contrary, each holder of First
Highland Units agrees that, if the General Partner shall elect to satisfy a
Redemption Obligation with respect to First Highland Units by making a Share
Payment, such Redemption Obligation shall mature on the date which is seven (7)
business days after receipt by the Partnership and the General Partner of
documents similar to the "Investor Materials" submitted in connection with the
sale of the First Highland Properties to the Partnership and any other similar
documents reasonably required by, and in form reasonably satisfactory to, the
Partnership. Each Limited Partner, by executing this Agreement, shall be deemed
to have represented to the General Partner and the Partnership that (i) its
acquisition of its Partnership Interest on the date hereof is made as a
principal for its own account, for investment purposes only and not with a view
to the resale or distribution of such Partnership Interest and (ii) if it shall
receive REIT Shares pursuant to this Article IX other than pursuant to an
effective registration statement under the Securities Act of 1933, as amended,
that its acquisition of such REIT Shares is made as a principal for its own
account, for investment purposes only and not with a view to the resale or
distribution of such REIT Shares and agrees that such REIT Shares may be bear a
legend to the effect that such REIT Shares have not been so registered and may
not be sold other than pursuant to such a registration statement or an exemption
from the registration requirements of such Act.
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Section 9.6 Effect of Redemption. Upon the satisfaction of the Redemption
Obligation by the Partnership or the General Partner, as the case may be, the
Redeeming Party shall have no further right to receive any Partnership
distributions in respect of the Partnership Units so redeemed and shall be
deemed to have represented to the Partnership and the General Partner that the
Partnership Units tendered for redemption are not subject to any liens, claims
or encumbrances. Upon a Class B Redemption by the Partnership, the Class B
Limited Partner shall have no further right to receive any Partnership
distributions or allocations in respect of the Class B Units so redeemed. Upon a
Class C Redemption by the Partnership, the Class C Limited Partner shall have no
further right to receive any Partnership distributions or allocations in respect
of the Class C Units so redeemed.
Section 9.7 Registration Rights. In the event a Limited Partner receives
REIT Shares in connection with a redemption of Partnership Units originally
issued to Initial Limited Partners on June 30, 1994 pursuant to this Article IX,
such Limited Partner shall be entitled to have such REIT Shares registered under
the Securities Act of 1933, as amended, as provided in the Registration Rights
Agreement.
ARTICLE X - DISSOLUTION AND LIQUIDATION
Section 10.1 Term and Dissolution. The Partnership commenced as of November
23, 1993, and shall continue until December 31, 2092, at which time the
Partnership shall dissolve or until dissolution occurs prior to that date for
any one of the following reasons:
(A) An Involuntary Withdrawal or a voluntary withdrawal, even though in
violation of this Agreement, of the General Partner unless, within ninety (90)
days after such event of withdrawal all the remaining Partners agree in writing
to the continuation of the Partnership and to the appointment of a Successor
General Partner;
(B) Entry of a decree of judicial dissolution of the Partnership under the
Act; or
(C) The sale, exchange or other disposition of all or substantially all of
the Partnership Assets.
Section 10.2 Liquidation of Partnership Assets.
(A) Subject to Section 10.2(E), in the event of dissolution pursuant to
Section 10.1, the Partnership shall continue solely for purposes of winding up
the affairs of, achieving a final termination of, and satisfaction of the
creditors of, the Partnership. The General Partner (or, if there is no General
Partner remaining, any Person elected by a majority in interest of the Limited
Partners (the "Liquidator")) shall be responsible for oversight of the winding
up and dissolution of the Partnership. The Liquidator shall obtain a full
accounting of the assets and liabilities of the Partnership and such Partnership
Assets shall be liquidated (including, at the discretion of the Liquidator, in
exchange, in whole or in part, for REIT Shares) as promptly as the Liquidator is
able to do so without any undue loss in value, with the proceeds therefrom
applied and distributed in the following order:
(1) First, to the discharge of Partnership debts and liabilities to
creditors other than Partners;
(2) Second, to the discharge of Partnership debts and liabilities to
the Partners;
(3) Third, to the Class B Limited Partner in an amount equal to any
unpaid Class B Priority Return Amounts and the Class C Limited Partner in an
amount equal to any unpaid Class C Priority Return Amounts,
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provided, that if the proceeds are inadequate to pay all of the unpaid Class B
Priority Return Amounts and the unpaid Class C Priority Return Amounts, such
proceeds shall be distributed to the Class B Limited Partner and the Class C
Limited Partner pro rata based on the unpaid Class B Priority Return Amounts and
the unpaid Class C Priority Return Amounts;
(4) The balance, if any, to the Partners in accordance with their
positive Capital Accounts after giving effect to all contributions,
distributions and allocations for all periods.
(B) In accordance with Section 10.2(A), the Liquidator shall proceed
without any unnecessary delay to sell and otherwise liquidate the Partnership
Assets; provided, however, that if the Liquidator shall determine that an
immediate sale of part or all of the Partnership Assets would cause undue loss
to the Partners, the Liquidator may defer the liquidation except (i) to the
extent provided by the Act or (ii) as may be necessary to satisfy the debts and
liabilities of the Partnership to Persons other than the Partners.
(C) If, in the sole and absolute discretion of the Liquidator, there are
Partnership Assets that the Liquidator will not be able to liquidate, or if the
liquidation of such assets would result in undue loss to the Partners, the
Liquidator may distribute such Partnership Assets to the Partners in-kind, in
lieu of cash, as tenants-in-common in accordance with the provisions of Section
10.2(A). The foregoing notwithstanding, such in-kind distributions shall only be
made if in the Liquidator's good faith judgment that is in the best interest of
the Partners.
(D) Upon the complete liquidation and distribution of the Partnership
Assets, the Partners shall cease to be Partners of the Partnership, and the
Liquidator shall execute, acknowledge and cause to be filed all certificates and
notices required by law to terminate the Partnership. Upon the dissolution of
the Partnership pursuant to Section 10.1, the Liquidator shall cause to be
prepared, and shall furnish to each Partner, a statement setting forth the
assets and liabilities of the Partnership. Promptly following the complete
liquidation and distribution of the Partnership Assets, the Liquidator shall
furnish to each Partner a statement showing the manner in which the Partnership
Assets were liquidated and distributed.
(E) Notwithstanding the foregoing provisions of this Section 10.2, in the
event that the Partnership shall dissolve as a result of the expiration of the
term provided for herein or as a result of the occurrence of an event of the
type described in Section 10.1(B) or (C), then each Limited Partner shall be
deemed to have delivered a Redemption Notice on the date of such dissolution. In
connection with each such Redemption Notice, the General Partner shall have the
option of either (i) complying with the redemption procedures contained in
Article IX or (ii) at the request of any Limited Partner, delivering to such
Limited Partner, Partnership property approximately equal in value to the value
of such Limited Partner's Partnership Units upon the assumption by such Limited
Partner of such Limited Partner's proportionate share of the Partnership's
liabilities and payment by such Limited Partner (or the Partnership) of any
excess (or deficiency) of the value of the property so delivered over the value
of such Limited Partner's Partnership Units. In lieu of requiring such Limited
Partner to assume its proportionate share of Partnership liabilities, the
General Partner may deliver to such Limited Partner unencumbered Partnership
property approximately equal in value to the net value of such Limited Partner's
Partnership Units.
Section 10.3 Effect of Treasury Regulations.
(A) In the event the Partnership is "liquidated" within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g), distributions made to
Partners pursuant to Section 10.2 shall be made within the time period provided
in Treasury Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Contributor
Partner has a deficit balance in its Capital Account (after giving effect to all
contributions (without regard to this Section 10.3(A)), distributions
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and allocations), each such Contributor Partner shall contribute to the capital
of the Partnership an amount equal to its respective deficit balance, such
obligation to be satisfied within ninety (90) days following the liquidation and
dissolution of the Partnership in accordance with the provisions of this Article
X hereof. Conversely, if any Partner other than a Contributor Partner has a
deficit balance in its Capital Account (after giving effect to all contributions
(without regard to this Section 10.3(A)), distributions and allocations), such
Partner shall have no obligation to make any contribution to the capital of the
Partnership. Any deficit restoration obligation pursuant to the provisions
hereof shall be for the benefit of creditors of the Partnership or any other
Person to whom any debts, liabilities, or obligations are owed by (or who
otherwise has any claim against) the Partnership or the general partner, in its
capacity as General Partner of the Partnership.
(B) In the event the Partnership is "liquidated" within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g) but there has been no
dissolution of the Partnership under Section 10.1 hereof, then the Partnership
Assets shall not be liquidated, the Partnership's liabilities shall not be paid
or discharged and the Partnership's affairs shall not be wound up. In the event
of such a liquidation there shall be deemed to have been a distribution of
Partnership Assets in kind to the Partners in accordance with Section 10.2
followed by a recontribution of such Partnership Assets by the Partners in the
same proportions.
Section 10.4 Time for Winding-Up. Anything in this Article X
notwithstanding, a reasonable time shall be allowed for the orderly winding-up
of the business and affairs of the Partnership and the liquidation of the
Partnership Assets in order to minimize any potential for losses as a result of
such process. During the period of winding-up, this Agreement shall remain in
full force and effect and shall govern the rights and relationships of the
Partners inter se.
ARTICLE XI - AMENDMENTS AND MEETINGS
Section 11.1 Amendment Procedure.
(A) Amendments to this Agreement may be proposed by the General Partner. An
amendment proposed at any time when the General Partner holds less than 90% of
all Partnership Units will be adopted and effective only if it receives the
Consent of the holders of a majority of the Partnership Units not then held by
the General Partner and an amendment proposed at any time when the General
Partner holds 90% or more of all Partnership Units may be made by the General
Partner without the Consent of any Limited Partner; provided, however, no
amendment shall be adopted if it would (i) convert a Limited Partner's Interest
in the Partnership into a general partner interest, (ii) increase the liability
of a Limited Partner under this Agreement, (iii) except as otherwise permitted
in this Agreement, alter the Partner's rights to distributions set forth in
Article V, or the allocations set forth in Article V, (iv) alter or modify any
aspect of the Partners' rights with respect to redemption of Partnership Units,
(v) cause the early termination of the Partnership (other than pursuant to the
terms hereof) or (vi) amend this Section 11.1(A), in each case without the
Consent of each Partner adversely affected thereby. In connection with any
proposed amendment of this Agreement requiring Consent, the General Partner
shall either call a meeting to solicit the vote of the Partners or seek the
written vote of the Partners to such amendment. In the case of a request for a
written vote, the General Partner shall be authorized to impose such reasonable
time limitations for response, but in no event less than ten (10) days, with the
failure to respond being deemed a vote consistent with the vote of the General
Partner.
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(B) Notwithstanding the foregoing, amendments may be made to this Agreement
by the General Partner, without the Consent of any Limited Partner, to (i) add
to the representations, duties or obligations of the General Partner or
surrender any right or power granted to the General Partner herein; (ii) cure
any ambiguity, correct or supplement any provision herein which may be
inconsistent with any other provision herein or make any other provisions with
respect to matters or questions arising hereunder which will not be inconsistent
with any other provision hereof; (iii) reflect the admission, substitution,
termination or withdrawal of Partners in accordance with this Agreement; or (iv)
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 reasonably promptly
notify the Limited Partners whenever it exercises its authority pursuant to this
Section 11.1(B).
(C) Within ten (10) days of the making of any proposal to amend this
Agreement, the General Partner shall give all Partners Notice of such proposal
(along with the text of the proposed amendment and a statement of its purposes).
Section 11.2 Meetings and Voting.
(A) Meetings of Partners may be called by the General Partner. The General
Partner shall give all Partners Notice of the purpose of such proposed meeting
not less than seven (7) days nor more than thirty (30) days prior to the date of
the meeting. Meetings shall be held at a reasonable time and place selected by
the General Partner. Whenever the vote or Consent of Partners is permitted or
required hereunder, such vote or Consent shall be requested by the General
Partner and may be given by the Partners in the same manner as set forth for a
vote with respect to an amendment to this Agreement in Section 11.1(A).
(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 to be taken is signed by the Partners owning Percentage Interests
required to vote in favor of such action, which consent may be evidenced in one
or more instruments. Consents need not be solicited from any other Partner if
the written consent of a sufficient number of Partners has been obtained to take
the action for which such solicitation was required.
(C) Each Limited Partner may authorize any Person or Persons, including
without limitation the General Partner, to act for him by proxy on all matters
on which a Limited Partner may participate. Every proxy (i) must be signed by
the Limited Partner or his attorney-in-fact, (ii) shall expire eleven (11)
months from the date thereof unless the proxy provides otherwise and (iii) shall
be revocable at the discretion of the Limited Partner granting such proxy.
Section 11.3 Voting of LB Units.
On any matter on which the Limited Partners shall be entitled to vote,
consent or grant an approval or waiver, following the admissions of the LB
Partners to the Partnership as Additional Limited Partners and through the
Voting Termination Date, each holder of the LB Units shall be deemed (i) in
connection with any matter submitted to a vote, to have cast all votes
attributable to such holder's LB Units in the same manner as the votes
attributable to the Units held by the General Partner are cast on such matter,
and (ii) in connection with any consent, approval or waiver, to have taken the
same action as the General Partner shall have taken with respect to its Units in
connection therewith. If the General Partner shall not have the right to vote,
consent or grant an approval or waiver on a matter, each holder of LB Units
shall vote or act as directed by the General Partner.
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ARTICLE XII - MISCELLANEOUS PROVISIONS
Section 12.1 Title to Property. All property owned by the Partnership,
whether real or personal, tangible or intangible, shall be deemed to be owned by
the Partnership as an entity, and no Partner, individually, shall have any
ownership of such property. The Partnership may hold any of its assets in its
own name or, in the name of its nominee, which nominee may be one or more
individuals, corporations, partnerships, trusts or other entities.
Section 12.2 Other Activities of Limited Partners. Except as expressly
provided otherwise in this Agreement or in any other agreement entered into by a
Limited Partner or any Affiliate of a Limited Partner and the Partnership, the
General Partner or any Subsidiary of the Partnership or the General Partner, any
Limited Partner or any Affiliate of any Limited Partner may engage in, or
possess an interest in, other business ventures of every nature and description,
independently or with others, including, without limitation, real estate
business ventures, whether or not such other enterprises shall be in competition
with any activities of the Partnership, the General Partner or any Subsidiary of
the Partnership or the General Partner; and neither the Partnership, the General
Partner, any such Subsidiary nor the other Partners shall have any right by
virtue of this Agreement in and to such independent ventures or to the income or
profits derived therefrom.
Section 12.3 Power of Attorney.
(A) Each Partner hereby irrevocably appoints and empowers the General
Partner (which term shall include the Liquidator, in the event of a liquidation,
for purposes of this Section 12.3) and each of their authorized officers and
attorneys-in-fact with full power of substitution as his true and lawful agent
and attorney-in-fact, with full power and authority in his name, place and ▇▇▇▇▇
to:
(1) make, execute, acknowledge, publish and file in the appropriate
public offices (a) any duly approved amendments to the Certificate pursuant to
the Act and to the laws of any state in which such documents are required to be
filed; (b) any certificates, instruments or documents as may be required by, or
may be appropriate under, the laws of any state or other jurisdiction in which
the Partnership is doing or intends to do business; (c) any other instrument
which may be required to be filed by the Partnership under the laws of any state
or by any governmental agency, or which the General Partner deems advisable to
file; (d) any documents which may be required to effect the continuation of the
Partnership, the admission, withdrawal or substitution of any Partner pursuant
to Article VIII, dissolution and termination of the Partnership pursuant to
Article X, or the surrender of any rights or the assumption of any additional
responsibilities by the General Partner; (e) any document which may be required
to effect an amendment to this Agreement to correct any mistake, omission or
inconsistency, or to cure any ambiguity herein, to the extent such amendment is
permitted by Section 11.1(B); and (f) all instruments (including this Agreement
and amendments and restatements hereof) relating to the determination of the
rights, preferences and privileges of any class or series of Partnership Units
issued pursuant to Section 4.2(B) of this Agreement; and
(2) sign, execute, swear to and acknowledge all voting ballots,
consents, approvals, waivers, certificates and other instruments appropriate or
necessary, in the sole discretion of the General Partner, 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 Agreement and appropriate or necessary, in the sole discretion of the
General Partner, to effectuate the terms or intent of this Agreement.
-38-
(B) Nothing herein contained shall be construed as authorizing the General
Partner to amend this Agreement except in accordance with Article XI or as may
be otherwise expressly provided for in this Agreement.
(C) The foregoing grant of authority (i) is a special power of attorney,
coupled with an interest, and it shall survive the Involuntary Withdrawal of any
Partner and shall extend to such Partner's heirs, successors, assigns and
personal representatives; (ii) may be exercised by the General Partner for each
and every Partner acting as attorney-in-fact for each and every Partner; and
(iii) shall survive the Transfer by a Limited Partner of all or any portion of
its Interest and shall be fully binding upon such transferee; except that the
power of attorney shall survive such assignment with respect to the assignor
Limited Partner for the sole purpose of enabling the General Partner to execute,
acknowledge and file any instrument necessary to effect the admission of the
transferee as a Substitute Limited Partner. Each Partner hereby agrees to be
bound by any representations made by the General Partner, acting in good faith
pursuant to such power of attorney. Each Partner shall execute and deliver to
the General Partner, within fifteen (15) days after receipt of the General
Partner's request therefor, such further designations, powers of attorney and
other instruments as the General Partner deems necessary to effectuate this
Agreement and the purposes of the Partnership.
(D) Each LB Partner hereby irrevocably appoints and empowers the General
Partner and the Liquidator, in the event of a liquidation, and each of their
authorized officers and attorneys-in-fact with full power of substitution, as
the true and lawful agent and attorney-in-fact of such LB Partner with full
power and authority in the name, place and stead of such LB Partner to take such
actions (including waivers under the Partnership Agreement) or refrain from
taking such action as the General Partner reasonably believes are necessary or
desirable to achieve the purposes of Section 11.3 of the Partnership Agreement.
Section 12.4 Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, (i) if to a Limited Partner, at the most current address given by such
Limited Partner to the General Partner by means of a notice given in accordance
with the provisions of this Section 12.4, which address initially is the address
contained in the records of the General Partner, or (ii) if to the General
Partner, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn:
President.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if hand delivered; five business days
after being deposited in the mail, postage prepaid, if mailed; when answered
back, if telexed; or when receipt is acknowledged, if telecopied.
Section 12.5 Further Assurances. The parties agree to execute and deliver
all such documents, provide all such information and take or refrain from taking
any action as may be necessary or desirable to achieve the purposes of this
Agreement and the Partnership.
Section 12.6 Titles and Captions. All article or section titles or captions
in this Agreement are solely for convenience and shall not be deemed to be part
of this Agreement or otherwise define, limit or extend the scope or intent of
any provision hereof.
Section 12.7 Applicable Law. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its terms and by the
law of the State of Delaware, without regard to its principles of conflicts of
laws.
-39-
Section 12.8 Binding Agreement. This Agreement shall be binding upon the
parties hereto, their heirs, executors, personal representatives, successors and
assigns.
Section 12.9 Waiver of Partition. Each of the parties hereto irrevocably
waives during the term of the Partnership any right that it may have to maintain
any action for partition with respect to any property of the Partnership.
Section 12.10 Counterparts and Effectiveness. This Agreement may be
executed in several counterparts, which shall be treated as originals for all
purposes, and all so executed shall constitute one agreement, binding on all of
the parties hereto, notwithstanding that all the parties are not signatory to
the original or the same counterpart. Any such counterpart shall be admissible
into evidence as an original hereof against each Person who executed it. The
execution of this Agreement and delivery thereof by facsimile shall be
sufficient for all purposes, and shall be binding upon any party who so
executes.
Section 12.11 Survival of Representations. All representations and
warranties herein shall survive the dissolution and final liquidation of the
Partnership.
Section 12.12 Entire Agreement. This Agreement (and all Exhibits hereto)
contains the entire understanding among the parties hereto and supersedes all
prior written or oral agreements among them respecting the within subject
matter, unless otherwise provided herein. There are no representations,
agreements, arrangements or understandings, oral or written, among the Partners
hereto relating to the subject matter of this Agreement which are not fully
expressed herein and in said Exhibits.
-40-
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the parties hereto as of the day and year first above written.
General Partner: FIRST INDUSTRIAL REALTY
TRUST, INC., as sole General Partner
of the Partnership
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Class C Limited Partner FIRST INDUSTRIAL REALTY
TRUST, INC., as Class C Limited Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
EXHIBIT 1A
First Highland Partners Number of Units
▇▇▇▇▇▇ Road Associates Limited Partnership 2,751
Highland Associates Limited Partnership 69,039
▇▇▇▇▇ ▇▇▇▇▇▇ 56,184
North Star Associates Limited Partnership 19,333
▇▇▇▇▇ ▇'▇▇▇▇▇▇ 63,845
▇▇▇▇▇ ▇'▇▇▇▇▇▇ 118,281
▇▇▇▇▇▇▇▇▇ Road Associates Limited Partnership 2,751
Shadeland Associates Limited Partnership 42,975
Shadeland Corporation 4,442
▇▇▇▇▇ ▇▇▇▇▇ 13,571
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 182,126
Exhibit 1B
Schedule of Partners
General Partner Number of Units
First Industrial Realty Trust, Inc. 30,043,617
Limited Partners
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, TR of the ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Trust UA Dec 29 92 137,489
▇▇ ▇▇▇▇▇▇▇▇ Venture 24,789
▇▇▇▇ ▇. de B ▇▇▇▇▇▇▇, ▇▇ of the ▇▇▇▇ ▇.
De B Blockey Trust 8,187
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 7,587
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ &
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ TR of the ▇▇▇▇▇▇▇ Childrens
Education Trust UA Dec 20 94
FBO ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ 770
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ &
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ TR of the ▇▇▇▇▇▇▇ childrens
Education Trust UA Dec 20 94
FBO ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 770
▇▇▇▇▇▇ ▇▇▇▇▇▇ 9,261
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ TR
of the ▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Trust UA Aug 28 92 12,551
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, TR of the ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ Trust UA Nov 4 69 144,296
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 6,286
General Partner Number of Units
▇▇▇▇▇ ▇. ▇▇▇▇▇ Trust UA Jan 16 81 36,476
▇. ▇▇▇▇▇ ▇▇▇▇▇ ▇▇ of the W. ▇▇▇▇▇
▇▇▇▇▇ Trust UA May 31, 91 4,416
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,000
▇▇▇▇▇▇ Road Associates Limited Partnership 2,751
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ Trust 450
▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇ ▇▇▇▇▇▇ JT TEN WROS 15,159
Highland Associates Limited Partnership 69,039
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 150,134
▇▇▇▇▇▇ ▇. ▇▇▇▇ 250,000
▇▇▇▇▇▇▇▇ ▇. ▇▇▇ 3,880
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 3,831
▇▇▇▇▇ ▇▇▇▇▇ 9,261
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 39,737
▇▇▇▇▇▇▇ Investment Corporation 13,606
LGR Investment Fund Ltd 22,556
▇▇▇▇▇ ▇▇▇▇ 13,617
▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,880
General Partner Number of Units
▇▇▇▇▇ ▇▇▇▇▇▇ 2,000
▇▇▇▇▇ ▇▇▇▇▇▇ 56,184
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 81,654
North Star Associates Limited Partnership 19,333
▇▇▇▇▇ ▇'▇▇▇▇▇▇ 63,845
▇▇▇▇▇ ▇'▇▇▇▇▇▇ 66,181
▇▇▇▇▇▇▇ Equities LP 254,541
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,000
▇▇▇▇▇▇▇▇▇ Road Associates Limited Partnership 2,751
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ 38,697
Shadeland Associates Limited Partnership 42,976
Shadeland Corporation 4,442
▇▇▇ ▇. ▇▇▇▇▇▇▇ 65,118
▇▇▇ ▇. ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
TEN ENT 1,223
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 2.829
▇▇▇▇▇ ▇▇▇▇▇ 13,571
General Partner Number of Units
▇▇▇▇▇▇ ▇▇▇▇▇ 56,778
S. ▇▇▇▇▇ ▇▇▇▇▇ 56,778
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ 130,026
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 23,868
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 25,206
▇▇▇▇▇▇/▇▇▇▇▇▇▇ Investment Corporation 22,079
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 149,531
The ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Revocable Trust
dated October 22, 1976 149,531
The ▇▇▇▇ ▇▇▇▇▇▇▇▇ Revocable Living Trust
dated March 23, 1978 26,005
Jernie Holdings Corp. 180,499
Fourbur Family Co., L.P. 50,478
Fourbur Co., L.L.C. 27,987
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 18,653
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 417,961
▇▇▇▇▇ ▇▇▇▇▇▇ 523,155
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 331,742
General Partner Number of Units
▇▇▇ ▇▇▇▇▇▇ 18,653
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6,538
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 6,538
▇▇▇▇▇ ▇▇▇▇▇▇▇ 13,078
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 754
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 1,388
▇▇▇▇▇▇▇ ▇. ▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇, tenants in the entirety 634
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. 2,262
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,388
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 1,508
Fitz & ▇▇▇▇▇ Partnership 3,410
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, tenants in the entirety 6,166
Internal Investment Company 3,016
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, tenants in the entirety 2,142
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,183
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 754
General Partner Number of Units
▇▇▇▇▇▇ ▇▇▇▇▇ 1,508
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ 10,076
▇▇▇▇ ▇. ▇▇▇▇ 1,071
▇▇▇▇▇ ▇. & ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 2,142
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 1,508
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, tenants in the entirety 8,308
W.F.O. ▇▇▇▇▇▇▇▇▇▇▇ 634
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇, and
▇▇▇▇▇ ▇. ▇▇▇▇▇, tenants in the entirety 754
▇▇▇▇ ▇. ▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇, tenants in the entirety 1,508
SRS PARTNERSHIP 2,142
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 2,142
Exhibit 1C
LB Partners
Jernie Holdings Corp., a New York corporation
Fourbur Family Co., L.P., a New York limited partnership
Fourbur Co., L.L.C., a New York limited liability company
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as custodian
under the NYUGMA until
the age of 21 for ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as custodian
under the NYUGMA until
the age of 21 for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as custodian
under the NYUGMA until
the age of 21 for ▇▇▇▇▇ ▇▇▇▇▇▇▇
Exhibit 1D
Additional Transferee
Limited Partners Partner Protected
Additional Limited Partners Protected Amount Transferee Partner Amount
--------------------------- ---------------- ------------------ ------
1. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Associates 100,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100,000
▇▇▇ ▇▇▇▇▇▇ 0
2. ▇▇▇ ▇▇▇▇▇▇ Management 200,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100,000
Company ▇▇▇ ▇▇▇▇▇▇ 100,000
3. ▇▇▇▇▇ ▇▇▇▇▇▇▇ Management 2,500,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,260,394
Co. ▇▇▇ ▇▇▇▇▇▇ 1,239,606
4. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 600,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 305,792
Management Company ▇▇▇ ▇▇▇▇▇▇ 294,208
5. Red Ground Co. 4,000,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 2,307,610
▇▇▇ ▇▇▇▇▇▇ 1,692,390
6. Surrey Company 6,700,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 3,350,000
▇▇▇ ▇▇▇▇▇▇ 3,350,000
7. Jernie Investors Co. 900,000 ▇▇▇▇▇▇▇▇▇ Lazqarus 720,000
▇▇▇▇▇ ▇▇▇▇▇▇ 180,000
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 0
Jernie Holdings Corp. 0
8. 109 Industrial Co., LLC 4,300,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,228,630
▇▇▇ ▇▇▇▇▇▇ 71,370
9. LB Management Co. 5,600,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 5,507,043
▇▇▇ ▇▇▇▇▇▇ 92,947
10. JOHJ Co. 1,200,000 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,200,000
11. Laz-Bur co 900,000 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 449,990
▇▇▇▇▇ ▇▇▇▇▇▇ 450,010
Total 27,000,000 27,000,000
========== ==========
EXHIBIT 1D
Total by Transferee Partner Protected Amount
1. ▇▇▇ ▇▇▇▇▇▇ (6,300,000)
2. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (17,000,000)
3. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (3,600,000)
4. Jernie Holdings Corp. (100,000)
-- -----------
Total (27,000,000)
===========
FIRST INDUSTRIAL, L.P.
EXHIBIT 2
TO
FOURTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
Form of Redemption Notice
Exhibit 2
Redemption Notice
The undersigned hereby irrevocably (i) elects to exercise its redemption
rights contained in Section 9.1(A) of the Fourth Amended and Restated Limited
Partnership Agreement of First Industrial, L.P. (the "Partnership Agreement")
with respect to an aggregate of _____ Partnership Units (as defined in the
Partnership Agreement), (ii) surrenders such Partnership Units and all right,
title and interest therein and (iii) directs that the REIT shares (as defined in
the Partnership Agreement), or applicable cash amount if so determined by the
General Partner (as defined in the Partnership Agreement) in accordance with the
Partnership Agreement, deliverable upon redemption of such Partnership Units be
delivered to the address specified below.
Dated: _______________________
Name of Limited Partner: ____________________
Social Security or
Federal Employer ID Number: ____________________
____________________________________
(Signature of Limited Partner)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
____________________________________
FIRST INDUSTRIAL, L.P.
EXHIBIT 3
TO
FOURTH AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
Form of Registration Rights Agreement
Exhibit 3
--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
Dated as of June __, 1994
of
First Industrial Realty Trust, Inc.
for the benefit of
HOLDERS OF LIMITED PARTNERSHIP UNITS
of
First Industrial, L.P.
--------------------------------------------------------------------------------
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of June , 1994, by First Industrial Realty Trust, Inc. (the "Company")
for the benefit of the persons who own limited partnership units ("Units") of
First Industrial, L.P. (the "Partnership") on the date hereof and their
successors, assigns and transferees (herein referred to collectively as the
"Holders" and individually as a "Holder").
WHEREAS, on the date hereof each Holder is or will become the owner of
Units in the Partnership in connection with the contribution (the
"Contributions") of certain real properties and other assets to the Partnership;
WHEREAS, on the date hereof the Company is consummating an initial public
offering of its common stock and is becoming the sole general partner of the
Partnership;
WHEREAS, in connection with the foregoing, the Company has agreed, subject
to the terms, conditions and limitations set forth in the limited partnership
agreement of the Partnership (the "Partnership Agreement"), to provide the
Holders with certain registration rights.
NOW, THEREFORE, the Company for the benefit of the Holders agrees as
follows:
Section 1. Definitions.
As used in this Agreement, the following capitalized defined terms shall
have the following meanings:
Exchange Act: The Securities Exchange Act of 1934, as amended from time to
time.
Holder or Holders: As set forth in the preamble.
Majority Holders: At any time, Holders of Registrable Securities and Units
then redeemable for Registrable Securities who, if all such Units were so
redeemed, would then hold a majority of the Registrable Securities.
NASD: The National Association of Securities Dealers, Inc.
Person: Any individual, partnership, corporation, trust or other entity.
Prospectus: A prospectus included in the Shelf Registration Statement,
including any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Securities covered by the Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
Registrable Securities: The Shares, excluding (i) Shares for which the
Shelf Registration Statement shall have become effective under the Securities
Act and which have been disposed of under the Shelf Registration Statement, (ii)
Shares sold or otherwise distributed pursuant to Rule 144 under the Securities
Act and (iii) Shares as to which registration under the Securities Act is not
required to permit the sale thereof to the public.
Registration Expenses: shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without limitation:
(i) all SEC, stock exchange or NASD registration and filing fees, (ii) all fees
and expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualification of any of the Registrable
-2-
Securities and the preparation of a Blue Sky Memorandum) and compliance with the
rules of the NASD, (iii) all expenses of any Persons in preparing or assisting
in preparing, word processing, printing and distributing the Shelf Registration
Statement, any Prospectus, certificates and other documents relating to the
performance of and compliance with this Agreement, (iv) all fees and expenses
incurred in connection with the listing, if any, of any of the Registrable
Securities on any securities exchange or exchanges pursuant to Section 3(1)
hereof, and (v) the fees and disbursements of counsel for the Company and of the
independent public accountants of the Company, including the expenses of any
special audits or "cold comfort" letters, if any, required by or incident to
such performance and compliance. Registration Expenses shall specifically
exclude underwriting discounts and commissions, brokerage or dealer fees, the
fees and disbursements of counsel, accountants or other representatives of a
selling Holder, and transfer taxes, if any, relating to the sale or disposition
of Registrable Securities by a selling Holder, all of which shall be borne by
such Holder in all cases.
Registration Notice: As set forth in Section 3(b) hereof.
Sale Period: The 45-day period immediately following the filing with the
SEC by the Company of an annual report of the Company on Form 10-K or a
quarterly report of the Company on Form 10-Q or such other period as the Company
may determine.
SEC: The Securities and Exchange Commission.
Securities Act: The Securities Act of 1933, as amended from time to time.
Shares: The shares of common stock, $.01 par value, of the Company issued
to Holders of Units upon redemption or exchange of their Units.
Shelf Registration: A registration required to be effected pursuant to
Section 2 hereof.
Shelf Registration Statement: shall mean a "shelf" registration statement
of the Company and any other entity required to be a registrant with respect to
such shelf registration statement pursuant to the requirements of the Securities
Act which covers all of the Registrable Securities on an appropriate form under
Rule 415 under the Securities Act, or any similar rule that may be adopted by
the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
Units: Limited partnership interests in the Partnership issued to the
Holders in connection with the Contributions.
Section 2. Shelf Registration Under the Securities Act.
(a) Filing of Shelf Registration Statement. Within 13 months following the
date hereof, the Company shall cause to be filed a Shelf Registration Statement
providing for the sale by the Holders of all of the Registrable Securities in
accordance with the terms hereof and will use its reasonable best efforts to
cause such Shelf Registration Statement to be declared effective by the SEC as
soon as reasonably practicable. The Company agrees to use its reasonable best
efforts to keep the Shelf Registration Statement continuously effective under
the Securities Act until such time as the aggregate number of Units and
Registrable Securities outstanding is less than 5% of the aggregate number of
Units outstanding on the date hereof (after giving effect to the Contributions)
and, subject to Section 3(b) and Section 3(i), further agrees to supplement or
amend the Shelf Registration Statement, if and as required by the rules,
regulations or instructions applicable to the registration form used by the
Company for such
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Shelf Registration Statement or by the Securities Act or by any other rules and
regulations thereunder for Shelf Registration. Each Holder who sells Shares as
part of the Shelf Registration shall be deemed to have agreed to all of the
terms and conditions of this Agreement and to have agreed to perform any an all
obligations of a Holder hereunder.
(b) Expenses. The Company shall pay all Registration Expenses in connection
with the registration pursuant to Section 2(a). Each Holder shall pay all
underwriting discounts and commissions, brokerage or dealer fees, the fees and
disbursements of counsel, accountants or other representatives of such Holder
and transfer taxes, if any, relating to the sale or disposition of such Holder's
Registrable Securities pursuant to the Shelf Registration Statement or Rule 144
under the Securities Act.
(c) Inclusion in Shelf Registration Statement. Not later than 30 days prior
to filing the Shelf Registration Statement with the SEC, the Company shall
notify each Holder of its intention to make such filing and request advice from
each Holder as to whether such Holder desires to have Registrable Securities
held by it or which it is entitled to receive not later than the last day of the
first Sale Period occurring in whole or in part after the date of such notice
included in the Shelf Registration Statement at such time. Any Holder who does
not provide the information reasonably requested by the Company in connection
with the Shelf Registration Statement as promptly as practicable after receipt
of such notice, but in no event later than 20 days thereafter, shall not be
entitled to have its Registrable Securities included in the Shelf Registration
Statement at the time it becomes effective, but shall have the right thereafter
to deliver to the Company a Sale Notice as contemplated by Section 3(b).
Section 3. Registration Procedures.
In connection with the obligations of the Company with respect to the Shelf
Registration Statement pursuant to Section 2 hereof, the Company shall:
(a) prepare and file with the SEC, within the time period set forth in
Section 2(a) hereof, a Shelf Registration Statement, which Shelf Registration
Statement (i) shall be available for the sale of the Registrable Securities in
accordance with the intended method or methods of distribution by the selling
Holders thereof and (ii) shall comply as to form in all material respects with
the requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith.
(b) subject to the last three sentences of this Section 3(b) and to Section
3(i) hereof, (i) prepare and file with the SEC such amendments and
post-effective amendments to the Shelf Registration Statement as may be
necessary to keep the Shelf Registration Statement effective for the applicable
period; (ii) cause each Prospectus to be supplemented by any required prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424 or any
similar rule that may be adopted under the Securities Act; (iii) respond
promptly to any comments received from the SEC with respect to the Shelf
Registration Statement, or any amendment, post-effective amendment or supplement
relating thereto; and (iv) comply with the provisions of the Securities Act with
respect to the disposition of all securities covered by the Shelf Registration
Statement during the applicable period in accordance with the intended method or
methods of distribution by the selling Holders thereof. Notwithstanding anything
to the contrary contained herein, the Company shall not be required to take any
of the actions described in clauses (i), (ii) or (iii) above with respect to
each particular Holder of Registrable Securities unless and until the Company
has received either a written notice (a "Registration Notice") from a Holder
that such Holder intends to make offers or sales under the Shelf Registration
Statement as specified in such Registration Notice or a written response from
such Holder of the type contemplated by Section 2(c); provided, however, that
the Company shall have 7 business days to prepare and file any such amendment or
supplement after receipt of a Registration Notice. Once a Holder has delivered
such a written response or a Registration Notice to the Company, such Holder
shall promptly provide to the Company
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such information as the Company reasonably requests in order to identify such
Holder and the method of distribution in a post-effective amendment to the Shelf
Registration Statement or a supplement to a Prospectus. Offers or sales under
the Shelf Registration Statement may be made only during a Sale Period. Such
Holder also shall notify the Company in writing upon completion of such offer or
sale or at such time as such Holder no longer intends to make offers or sales
under the Shelf Registration Statement.
(c) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, as many copies of each
applicable Prospectus, including each preliminary Prospectus, and any amendment
or supplement thereto and such other documents as such Holder may reasonably
request, in order to facilitate the public sale or other disposition of the
Registrable Securities; the Company consents to the use of such Prospectus,
including each preliminary Prospectus, by each such Holder of Registrable
Securities in connection with the offering and sale of the Registrable
Securities covered by such Prospectus or the preliminary Prospectus.
(d) use its reasonable best efforts to register or qualify the Registrable
Securities by the time the Shelf Registration Statement is declared effective by
the SEC under all applicable state securities or "blue sky" laws of such
jurisdictions as any Holder of Registrable Securities covered by the Shelf
Registration Statement shall reasonably request in writing, keep each such
registration or qualification effective during the period the Shelf Registration
Statement is required to be kept effective or during the period offers or sales
are being made by a Holder that has delivered a Registration Notice to the
Company, whichever is shorter, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder to consummate the
disposition in each such jurisdiction of such Registrable Securities owned by
such Holder; provided, however, that the Company shall not be required (i) to
qualify generally to do business in any jurisdiction or to register as a broker
or dealer in such jurisdiction where it would not be required so to qualify or
register but for this Section 3(d), (ii) to subject itself to taxation in any
such jurisdiction or (iii) to submit to the general service of process in any
such jurisdiction.
(e) notify each Holder when the Shelf Registration Statement has become
effective and notify each Holder of Registrable Securities that has delivered a
Registration Notice to the Company promptly and, if requested by such Holder,
confirm such advice in writing (i) when any post-effective amendments and
supplements to the Shelf Registration Statement become effective, (ii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose, (iii) if the Company receives
any notification with respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the initiation of any
proceeding for such purpose and (iv) of the happening of any event during the
period the Shelf Registration Statement is effective as a result of which the
Shelf Registration Statement or a related Prospectus contains any untrue
statement of a material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading.
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of the Shelf Registration Statement at the earliest
possible moment.
(g) furnish to each Holder of Registrable Securities that has delivered a
Registration Notice to the Company, without charge, at least one conformed copy
of the Shelf Registration Statement and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto, unless
requested).
(h) cooperate with the selling Holders of Registrable Securities to
facilitate the timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any Securities
-5-
Act legend; and enable certificates for such Registrable Securities to be issued
for such numbers of shares and registered in such names as the selling Holders
may reasonably request at least two business days prior to any sale of
Registrable Securities.
(i) subject to the last three sentences of Section 3(b) hereof, upon the
occurrence of any event contemplated by Section 3(e)(iv) hereof, use its
reasonable best efforts promptly to prepare and file a supplement or prepare,
file and obtain effectiveness of a post-effective amendment to the Shelf
Registration Statement or a related Prospectus or any document incorporated
therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities, such Prospectus will
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading.
(j) make available for inspection by representatives of the Holders of the
Registrable Securities and any counsel or accountant retained by such Holders,
all financial and other records, pertinent corporate documents and properties of
the Company, and cause the respective officers, directors and employees of the
Company to supply all information reasonably requested by any such
representative, counsel or accountant in connection with the Shelf Registration
Statement; provided, however, that such records, documents or information which
the Company determines in good faith to be confidential, and notifies such
representatives, counsel or accountants in writing that such records, documents
or information are confidential, shall not be disclosed by the representatives,
counsel or accountants unless (i) the disclosure of such records, documents or
information is necessary to avoid or correct a material misstatement or omission
in the Shelf Registration Statement, (ii) the release of such records, documents
or information is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or (iii) such records, documents or information have been
generally made available to the public otherwise than in violation of this
Agreement.
(k) a reasonable time prior to the filing of any Prospectus, any amendment
to the Shelf Registration Statement or amendment or supplement to a Prospectus,
provide copies of such document (not including any documents incorporated by
reference therein unless requested) to the Holders of Registrable Securities
that have provided a Registration Notice to the Company.
(l) use its reasonable best efforts to cause all Registrable Securities to
be listed on any securities exchange on which similar securities issued by the
Company are then listed.
(m) obtain a CUSIP number for all Registrable Securities, not later than
the effective date of the Shelf Registration Statement.
(n) otherwise use its reasonable efforts to comply with all applicable
rules and regulations of the SEC and make available to its security holders, as
soon as reasonably practicable, an earnings statement covering at least 12
months which shall satisfy the provisions of Section 11(a) of the Securities Act
and Rule 158 thereunder.
(o) use its reasonable best efforts to cause the Registrable Securities
covered by the Shelf Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary by virtue of
the business and operations of the Company to enable Holders that have delivered
Registration Notices to the Company to consummate the disposition of such
Registrable Securities.
The Company may require each Holder of Registrable Securities to furnish to
the Company in writing such information regarding the proposed distribution by
such Holder of such Registrable Securities as the Company may from time to time
reasonably request in writing.
-6-
In connection with and as a condition to the Company's obligations with
respect to the Shelf Registration Statement pursuant to Section 2 hereof and
this Section 3, each Holder agrees that (i) it will not offer or sell its
Registrable Securities under the Shelf Registration Statement until (A) it has
either (1) provided a Registration Notice pursuant to Section 3(b) hereof or (2)
had Registrable Securities included in the Shelf Registration Statement at the
time it became effective pursuant to Section 2(c) hereof and (B) it has received
copies of the supplemented or amended Prospectus contemplated by Section 3(b)
hereof and receives notice that any post-effective amendment has become
effective; (ii) upon receipt of any notice from the Company of the happening of
any event of the kind described in Section 3(b)(iv) hereof, such Holder will
forthwith discontinue disposition of Registrable Securities pursuant to the
Shelf Registration Statement until such Holder receives copies of the
supplemented or amended Prospectus contemplated by Section 3(i) hereof and
receives notice that any post-effective amendment has become effective, and, if
so directed by the Company, such Holder will deliver to the Company (at the
expense of the Company) all copies in its possession, other than permanent file
copies then in such Holder's possession, of the Prospectus covering such
registrable Securities current at the time of receipt of such notice; and (iii)
all offers and sales under the Shelf Registration Statement shall be completed
within forty-five (45) days after the first date on which offers or sales can be
made pursuant to clause (i) above, and upon expiration of such forty-five (45)
day period the Holder will not offer or sell its Registrable Securities under
the Shelf Registration Statement until it has again complied with the provisions
of clauses (i)(A)(1) and (B) above, except that if the applicable Registration
Notice was delivered to the Company at a time which was not part of a Sale
Period, such forty-five (45) day period shall be the next succeeding Sale
Period.
Section 4. Restrictions on Public Sale by Holders of Registrable
Securities.
Each Holder agrees with the Company that:
(a) If the Company determines in its good faith judgment, after
consultation with counsel, that the filing of the Shelf Registration Statement
under Section 2 hereof or the use of any Prospectus would require the disclosure
of important information which the Company has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede the Company's
ability to consummate a significant transaction, upon written notice of such
determination by the Company, the rights of the Holders to offer, sell or
distribute any Registrable Securities pursuant to the Shelf Registration
Statement or to require the Company to take action with respect to the
registration or sale of any Registrable Securities pursuant to the Shelf
Registration Statement (including any action contemplated by Section 3 hereof)
will be suspended until the date upon which the Company notifies the Holders in
writing that suspension of such rights for the grounds set forth in this Section
4(a) is no longer necessary.
(b) In the case of the registration of any underwritten equity offering
proposed by the Company (other than any registration by the Company on Form S-8,
or a successor or substantially similar form, of (i) an employee stock option,
stock purchase or compensation plan or of securities issued or issuable pursuant
to any such plan or (ii) a dividend reinvestment plan), each Holder agrees, if
requested in writing by the managing underwriter or underwriters administering
such offering, not to effect any offer, sale or distribution of Registrable
Securities (or any option or right to acquire Registrable Securities) during the
period commencing on the 10th day prior to the expected effective date (which
date shall be stated in such notice) of the registration statement covering such
underwritten primary equity offering and ending on the date specified by such
managing underwriter in such written request to such Holder, which date shall
not be later than six months after such expected date of effectiveness.
(c) In the event that any Holder uses a Prospectus in connection with the
offering and sale of Registrable Securities covered by such Prospectus, such
Holder will use only the latest version of such Prospectus provided to it by the
Company.
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Section 5. Indemnification; Contribution.
(a) Indemnification by the Company. The Company agrees to indemnify and
hold harmless each Holder and its officers and directors and each person, if
any, who controls any Holder within the meaning of Section 15 of the Securities
Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Shelf Registration
Statement (or any amendment thereto) or any Prospectus, including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
reasonable fees and disbursements of counsel), reasonably incurred in
investigating, preparing or defending against any litigation, or
investigation or proceeding by any governmental agency or body, commenced
or threatened, in each case whether or not a party, or any claim whatsoever
based upon any such untrue statement or omission, or any such alleged
untrue statement or omission, to the extent that any such expense is not
paid under clause (i) or (ii) above;
provided, however, that the indemnity provided pursuant to this Section 5(a)
does not apply to any Holder with respect to any loss, liability, claim, damage
or expense to the extent arising out of any untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with written information furnished to the Company by such Holder expressly for
use in the Shelf Registration Statement (or any amendment thereto) or any
Prospectus.
(b) Indemnification by Holders. Each Holder severally agrees to indemnify
and hold harmless the Company and the other selling Holders, and each of their
respective directors and officers (including each director and officer of the
Company who signed the Shelf Registration Statement), and each person, if any,
who controls the Company or any other selling Holder within the meaning of
Section 15 of the Securities Act, to the same extent as the indemnity contained
in Section 5(a) hereof (except that any settlement described in Section 5(a)(2)
shall be effected with the written consent of such Holder), but only insofar as
such loss, liability, claim, damage or expense arises out of or is based upon
any untrue statement or omission, or alleged untrue statement or omission, made
in the Shelf Registration Statement (or any amendment thereto) or any Prospectus
in reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in the Shelf Registration
Statement (or any amendment thereto) or such Prospectus. In no event shall the
liability of any Holder under this Section 5(b) be greater in amount than the
dollar amount of the proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.
(c) Each indemnified party shall give reasonably prompt notice to each
indemnifying party of any action or proceeding commenced against it in respect
of which indemnity may be sought hereunder, but failure so to notify an
indemnifying party (i) shall not relieve it from any liability which it may have
under the indemnity
-8-
agreement provided in Section 5(a) or (b) unless and to the extent it did not
otherwise learn of such action and the lack of notice by the indemnified party
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) shall not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided under Section 5(a) or (b). If the indemnifying party so
elects within a reasonable time after receipt of such notice, the indemnifying
party may assume the defense of such action or proceeding at such indemnifying
party's own expense with counsel chosen by the indemnifying party; provided,
however, that, if such indemnified party or parties reasonably determine that a
conflict of interest exists where it is advisable for such indemnified party or
parties to be represented by separate counsel or that, upon advice of counsel,
there may be legal defenses available to them which are different from or in
addition to those available to the indemnifying party, then the indemnifying
party shall not be entitled to assume such defense and the indemnified party or
parties in the aggregate shall be entitled to one separate counsel at the
indemnifying party's expense. If an indemnifying party is not so entitled to
assume the defense of such action or does not assume such defense, after having
received the notice referred to in the first sentence of this Section 5(c), the
indemnifying party or parties will pay the reasonable fees and expenses of
counsel for the indemnified party or parties. In such event however, no
indemnifying party will be liable for any settlement effected without the
written consent of such indemnifying party. If an indemnifying party is entitled
to assume, and assumes, the defense of such action or proceeding in accordance
with this paragraph, such indemnifying party shall not be liable for any fees
and expenses of counsel for the indemnified parties incurred thereafter in
connection with such action or proceeding.
(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in this Section 5 is
for any reason held to be unenforceable although applicable in accordance with
its terms, the Company and the selling Holders shall contribute to the aggregate
losses, liabilities, claims, damages and expenses of the nature contemplated by
such indemnity agreement incurred by the Company and the selling Holders, in
such proportion as is appropriate to reflect the relative fault of and benefits
to the Company on the one hand and the selling Holders on the other (in such
proportions that the selling Holders are severally, not jointly, responsible for
the balance), in connection with the statements or omissions which resulted in
such losses, liabilities, claims, damages or expenses, as well as any other
relevant equitable considerations. The relative benefits to the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, the total proceeds received by the indemnifying party and indemnified
parties in connection with the offering to which such losses, liabilities,
claims, damages, or expenses relate. The relative fault of the indemnifying
party and indemnified parties shall be determined by reference to, among other
things, whether the action in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact, has been made by, or relates to information supplied by, such indemnifying
party or the indemnified parties, and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such action.
The Company and the Holders agree that it would not be just or equitable if
contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
Notwithstanding the provisions of this Section 5(d), no selling Holder shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities of such selling Holder were offered to
the public exceeds the amount of any damages which such selling Holder is
otherwise required to pay by reason of such untrue statement or omission.
Notwithstanding the foregoing, no Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 5(d), each Person, if
any, who controls a Holder within the meaning of Section 15 of the Securities
Act and directors and officers of a Holder shall have the same rights to
contribution as such Holder, and each director of the Company, each officer of
the Company who signed the Shelf
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Registration Statement and each Person, if any, who controls the Company within
the meaning of Section 15 of the Securities Act shall have the same rights to
contribution as the Company.
Section 6. Rule 144 Sales.
(a) The Company covenants that it will file the reports required to be
filed by the Company under the Securities Act and the Exchange Act, so as to
enable any Holder to sell Registrable Securities pursuant to Rule 144 under the
Securities Act.
(b) In connection with any sale, transfer or other disposition by any
Holder of any Registrable Securities pursuant to Rule 144 under the Securities
Act, the Company shall cooperate with such Holder to facilitate the timely
preparation and delivery of certificates representing Registrable Securities to
be sold and not bearing any Securities Act legend, and enable certificates for
such Registrable Securities to be for such number of shares and registered in
such names as the selling Holders may reasonably request at least two business
days prior to any sale of Registrable Securities.
Section 7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given
without the written consent of the Company and Holders constituting Majority
Holders; provided, however, that no amendment, modification or supplement or
waiver or consent to the departure with respect to the provisions of Sections 2,
3, 4, 5, 6 or 7(a) hereof or the definition of Registrable Securities or which
would impair the rights of any Holder under such provisions, shall be effective
as against any Holder of Registrable Securities or Units redeemable for
Registrable Securities unless consented to in writing by such Holder of
Registrable Securities or Units. Notice of any amendment, modification or
supplement to this Agreement adopted in accordance with this Section 7(a) shall
be provided by Company to each Holder of Registrable Securities or Units
redeemable for Registrable Securities at least thirty (30) days prior to the
effective date of such amendment, modification or supplement.
(b) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, registered first-class
mail, telex, telecopier or any courier guaranteeing overnight delivery, (i) if
to a Holder, at the most current address given by such Holder to the Company by
means of a notice given in accordance with the provisions of this Section 7(b),
which address initially is, with respect to each Holder, the address set forth
in the Partnership Agreement, or (ii) if to the Company, at ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President.
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; or at
the time delivered if delivered by an air courier guaranteeing overnight
delivery.
(c) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of each of the
Company and the Holders, including without limitation and without the need for
an express assignment, subsequent Holders. If any successor, assignee or
transferee of any Holder shall acquire Registrable Securities, in any manner,
whether by operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and holding
such
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Registrable Securities such Person shall be entitled to receive the benefits
hereof and shall be conclusively deemed to have agreed to be bound by all of the
terms and provisions hereof.
(d) Headings. The headings in this Agreement are for the convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(e) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT GIVING EFFECT TO THE
CONFLICTS OF LAW PROVISIONS THEREOF.
(f) Specific Performance. The Company and the Holders acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that the Company and each
Holder, in addition to any other remedy to which it may be entitled at law or in
equity, shall be entitled to compel specific performance of the obligations of
another under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
(g) Entire Agreement. This Agreement is intended by the Company as a final
expression of its agreement and is intended to be a complete and exclusive
statement of the agreement and understanding of the Company in respect of the
subject matter contained herein. This Agreement supersedes all prior agreements
and understandings of the Company with respect to such subject matter.
IN WITNESS WHEREOF, the Company has executed this Agreement as of the date
first written above.
FIRST INDUSTRIAL REALTY TRUST, INC.
By: _________________________________
Name: _________________________________
Title:_________________________________