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EXHIBIT 3.1
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September 2, 1997
▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
SECOND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
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▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
SECOND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
TABLE OF CONTENTS
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1. Definitions and Exhibits.............................................. 1
1.1 Definitions.................................................. 1
1.2 Exhibits, etc................................................ 12
2. Organization.......................................................... 12
2.1 Formation of Partnership..................................... 12
2.2 Partnership Name............................................. 12
2.3 Location of the Principal Place of Business.................. 12
2.4 Registered Agent and Registered Office....................... 12
3. Capital............................................................... 13
3.1 Issuance of Units............................................ 13
3.2 Redemption Right............................................. 16
3.3 Additional Capital........................................... 18
3.4 No Third Party Beneficiary................................... 18
3.5 Capital Accounts............................................. 19
3.6 No Interest on or Return of Capital.......................... 20
3.7 Negative Capital Accounts.................................... 20
3.8 Limit on Contributions and Obligations of Partner............ 20
4. [Intentionally Omitted]............................................... 20
5. Purpose and Powers of Partnership..................................... 20
6. Term.................................................................. 21
7. Allocations........................................................... 21
7.1 Profits or Losses............................................ 21
7.2 Special Allocations.......................................... 22
7.3 Other Allocation Rules....................................... 23
7.4 Tax Allocations; Code Section 704(c)/Section 1245
and 1250 Recapture........................................... 23
7.5 Nonrecourse Liabilities...................................... 24
8. Cash Available For Distribution....................................... 24
(i)
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8.1 Operating Cash Flow.......................................... 24
8.2 Capital Cash Flow............................................ 25
8.3 Consolidated Distributed Cash................................ 25
8.4 Distributions to Partners.................................... 25
8.5 Distributions Among Partners of the Same Series
or Class..................................................... 26
8.6 REIT Distributions........................................... 26
8.7 Consent to Distributions..................................... 26
8.8 Liquidating Distributions.................................... 26
8.9 Special Distribution and Allocations for
Certain Properties........................................... 26
9. Management and Property of the Partnership............................ 27
9.1 General Partner.............................................. 27
9.2 [Intentionally Omitted]...................................... 30
9.3 Limitations on Powers and Authorities of Partners............ 30
9.4 Title Holder................................................. 30
9.5 Compensation of the General Partner.......................... 30
9.6 Standard of Conduct.......................................... 31
9.7 Waiver and Indemnification................................... 31
9.8 Other Activities of Partners and Agreements with
Related Parties.............................................. 32
9.9 Other Matters Concerning the General Partner................. 33
9.10 Partner Exculpation.......................................... 33
10. Banking............................................................... 34
11. Accounting............................................................ 34
11.1 Fiscal Year.................................................. 34
11.2 Books of Account............................................. 34
11.3 Reports...................................................... 34
11.4 Audits....................................................... 34
11.5 Method of Accounting......................................... 35
11.6 Tax Election................................................. 35
11.7 Tax Matters Partner.......................................... 35
11.8 Administrative Adjustments................................... 35
12. Transfers of Partnership Interests.................................... 35
12.1 Consent...................................................... 35
12.2 Limited Partners............................................. 36
12.3 Admission Adjustments........................................ 37
12.4 Unit Certificates............................................ 37
13. Rights and Obligations of the Limited Partners........................ 37
13.1 No Participation in Management............................... 37
13.2 Death, Legal Incompetency, Etc. of a Limited Partner......... 37
(ii)
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13.3 No Withdrawal................................................ 38
13.4 Duties and Conflicts......................................... 38
14. Indemnification and Security Interest................................. 38
14.1 [Intentionally Omitted]...................................... 38
14.2 Indemnity Collateral......................................... 38
14.3 Commons of Chicago Ridge..................................... 38
14.4 TTC Guarantors............................................... 41
15. Liquidation and Dissolution of Partnership............................ 42
15.1 Termination Events........................................... 42
15.2 Method of Liquidation........................................ 42
15.3 Distribution in Kind......................................... 43
15.4 Documentation of Liquidation................................. 44
15.5 Liability of the Liquidating Trustee......................... 44
16. Power of Attorney..................................................... 44
17. Amendment of Agreement................................................ 45
17.1 General...................................................... 45
17.2 Merger, Etc. of General Partner.............................. 45
18. Arbitration........................................................... 46
18.1 General...................................................... 46
18.2 Procedures................................................... 46
18.3 Binding Character............................................ 46
18.4 Exclusivity.................................................. 47
18.5 No Alteration of Agreement................................... 47
19. Miscellaneous......................................................... 47
19.1 Notices...................................................... 47
19.2 Successors and Assigns....................................... 47
19.3 Duplicate Originals.......................................... 48
19.4 Construction................................................. 48
19.5 Governing Law................................................ 48
19.6 Other Instruments............................................ 48
19.7 General Partner with Interest as Limited Partner............. 48
19.8 Gender....................................................... 48
19.9 Prior Agreements Superseded.................................. 48
19.10 Purchase for Investment...................................... 48
19.11 Waiver....................................................... 49
19.12 Severability................................................. 49
19.13 Counterparts................................................. 49
(iii)
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19.14 Notice for Certain Transactions.............................. 49
EXHIBIT A: Name of Partners and Number of Units held by Each Partner under
this Agreement
EXHIBIT B: Form of Notice of Redemption
(iv)
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▇▇▇▇▇▇▇ OPERATING LIMITED PARTNERSHIP
SECOND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
THIS SECOND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (the "Agreement"),
dated as of September 2, 1997 and executed by ▇▇▇▇▇▇▇ Real Estate, Inc, the
general partner (the "General Partner") of the Partnership (as hereinafter
defined), and those Limited Partners (as hereinafter defined) whose names appear
on the signature pages hereto, amends and restates the ▇▇▇▇▇▇▇ Operating Limited
Partnership Amended and Restated Agreement of Limited Partnership, dated March
15, 1996, as amended on January 1, 1997 by the First Amendment to the ▇▇▇▇▇▇▇
Operating Limited Partnership Amended and Restated Agreement of Limited
Partnership and on July 31, 1997 by the Second Amendment to the ▇▇▇▇▇▇▇
Operating Limited Partnership Amended and Restated Agreement of Limited
Partnership (collectively, the "Prior Agreement").
RECITALS
WHEREAS, pursuant to Section 17.1 of the Prior Agreement, the General
Partner, without the consent of the Limited Partners, may amend the Prior
Agreement in any respect by executing a written instrument setting forth the
terms of such amendment; provided, however, that the consent of the Limited
Partners holding more than 50% of the Partnership Interests (as therein and
hereinafter defined) held by all Limited Partners is required in connection with
certain amendments which alter (i) the distribution rights of any Limited
Partner under Article 8 of the Prior Agreement or (ii) a Limited Partner's
Redemption Rights (as therein and hereinafter defined) under Section 3.2 of the
Prior Agreement; and
WHEREAS, the General Partner and the Limited Partners holding more than
50% of the Partnership Interests deem it advisable to amend and restate the
Prior Agreement (i) to clarify certain ambiguities in the Prior Agreement
relative to the authority of the General Partner to alter the distribution
rights of the Limited Partners, (ii) to permit the General Partner, on behalf of
the Partnership, to issue Unit Certificates (as hereinafter defined) to evidence
ownership or Units (as hereinafter defined) or other Partnership Interests in
the Partnership, and (iii) to make additional amendments to the Partnership
Agreement.
NOW THEREFORE, the General Partner hereby amends and restates in its
entirety, and the Limited Partners holding more than 50% of the Partnership
Interests held by all Limited Partners whose signatures appear below hereby
consent and agree to such amendment and restatement of, the Prior Agreement to
read as follows:
1. Definitions and Exhibits.
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1.1 DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings set forth respectively after each:
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"Accountants" shall mean the firm or firms of independent certified
public accountants selected by the General Partner on behalf of the Partnership
to audit the books and records of the Partnership and to prepare statements and
reports in connection therewith.
"Act" shall mean the Revised Uniform Limited Partnership Act of the State
of Delaware, as amended from time to time, and any successor statute.
"Administrative Expenses" shall mean (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) those administrative costs
and expenses of the General Partner, including, without limitation, salaries
paid to officers of the General Partner, accounting and legal expenses, the
costs and expenses of preparing reports required to be filed by the General
Partner or distributed to the holders of Units or other Partnership Interests in
the Partnership or to the stockholders of the General Partner and the costs and
expenses incurred in complying with applicable laws, that are undertaken by the
General Partner on behalf of, or for the benefit of, the Partnership, and (iii)
such costs and expenses incurred by the General Partner in raising or
maintaining capital of the General Partner that the General Partner in good
faith determines is necessary or appropriate to be applied, raised, used or
maintained for the benefit of the Partnership.
"Affiliate" shall mean, with respect to any Partner (or as to any other
Person the affiliates of whom are relevant for purposes of any of the provisions
of this Agreement), (i) any member of the Immediate Family of such Partner or
Person; (ii) any trustee or beneficiary of a Partner; (iii) any legal
representative or successor of any Person referred to in the preceding clauses
(i) and (ii); (iv) any trust for the benefit of any Person referred to in the
preceding clauses (i) through (iii); or (v) any Entity which, directly or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with, any Person referred to in the preceding clauses (i)
through (iv).
"Affected Gain" shall have the meaning provided in Section 7.4.E.
"Agreement" shall mean this Second Restated Agreement of Limited
Partnership, as it may be amended, modified, supplemented or restated from time
to time, as the context requires.
"Audited Financial Statements" shall mean financial statements (balance
sheet, statement of income, statement of partners' equity and statement of cash
flows) prepared in accordance with generally accepted accounting principles and
accompanied by an independent auditor's report containing (i) an opinion
containing no material qualification and (ii) no explanatory paragraph
disclosing information relating to material uncertainties (except as to
litigation) or going concern issues.
"Bankruptcy" of a Partner shall mean (i) the filing by a Partner of a
voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
(or corresponding provisions of future laws) or any
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other federal or state insolvency law, or a Partner's filing an answer
consenting to or acquiescing in any such petition, (ii) the making by a Partner
of any assignment for the benefit of its creditors or the admission by a Partner
in writing of its inability to pay its debts as they mature, or (iii) the
expiration of ninety (90) days after the filing of an involuntary petition under
Title 11 of the United States Code (or corresponding provisions of future laws),
seeking an application for the appointment of a receiver for the assets of a
Partner, or an involuntary petition seeking liquidation, reorganization,
arrangement or readjustment of its debts under any other Federal or state
insolvency law, provided that the same shall not have been vacated, set aside or
stayed within such 90-day period.
"▇▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇▇ Real Estate, Inc., a Maryland Corporation,
and any successor entity (by merger, consolidation or sale of assets) to
substantially all of its business.
"▇▇▇▇▇▇▇ Group" shall mean ▇▇▇▇▇▇▇, the Partnership, the Financing
Partnership, the Financing Corporation and any other Entity in which one or more
other members of the ▇▇▇▇▇▇▇ Group has or will have a direct or indirect
interest of 50% or more (by vote or value).
"Capital Account" shall mean the capital account maintained by the
Partnership for each Partner as described in Section 3.5.
"Capital Cash Flow" shall have the meaning set forth in Section 8.2.
"Capital Contribution" shall mean, when used with respect to a Partner,
the amount of money or the fair market value of property contributed by a
Partner to the capital of the Partnership pursuant to the terms of this
Agreement, including, without limitation, the provisions of Section 3.1.
"Cash Amount" shall mean an amount of cash equal to the amount (or
portion thereof) of any Current Yield which has not been paid to the Redeeming
Partner pursuant to Section 8.4.A for any prior period, plus the product of (i)
the Current Per Share Market Price of a share of Common Stock on the Valuation
Date, (ii) the number of Units set forth in the Redeeming Partner's Notice of
Redemption, and (iii) the Conversion Factor.
"Certificate" shall mean the Certificate of Limited Partnership filed
with the Secretary of State of the State of Delaware, as such Certificate may be
amended from time to time.
"Charter" shall mean the Charter (as such term is defined in the Maryland
General Corporation Law) of the General Partner, as it may be amended from time
to time.
"Closing Price" on any date shall mean the last sale price of Common
Stock, regular way, or, in case no sale takes place on such day, the average of
the closing bid and asked prices, regular way, in each such case as reported in
the principal consolidated transaction reporting system with respect to the New
York Stock Exchange or, if the Common Stock is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal
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consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Common Stock is listed
or admitted to trading or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the other
principal automated quotations system that may then be in use or, if the Common
Stock is not quoted by any such organization, the average of the closing bid and
asked prices furnished by one or more professional market makers making a market
in the Common Stock selected, from time to time, by the Board of Directors of
the General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as the same may be
amended from time to time, and any successor statute.
"Common Stock" shall mean the shares of the common stock, par value $0.01
per share, of ▇▇▇▇▇▇▇.
"Commons of Chicago Ridge" shall mean the land and buildings known as the
"Commons of Chicago Ridge" described in Commonwealth Land Title Insurance
Company policy number 174-001172.
"Commons of Chicago Ridge Annex" shall mean the land and buildings known
as the "Commons of Chicago Ridge Annex" described in Chicago Title Insurance
Company policy number 1410007547079EP.
"Consolidated Distributed Cash" shall have the meaning set forth in
Section 8.3.
"Contributing Partner" shall have the meaning set forth in Section 3.1.B.
"Conversion Factor" shall mean 1.0, provided that in the event the
General Partner (i) declares or pays a dividend on its outstanding shares of
Common Stock in shares of Common Stock or makes a distribution to all holders of
its outstanding Common Stock in shares of Common Stock; (ii) subdivides its
outstanding shares of Common Stock; or (iii) combines its outstanding shares of
Common Stock into a smaller number of shares of Common Stock, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which will be the number of issued and outstanding shares of Common
Stock immediately after such dividend, distribution, subdivision or combination,
and the denominator of which will be the actual number of shares of Common Stock
issued and outstanding on the record date for such dividend, distribution,
subdivision or combination, unless the General Partner concurrently declares,
makes or pays an equivalent dividend, distribution, subdivision or combination
of Units such that a Partner would receive the same Cash Amount or REIT Shares
Amount if it exercised its redemption rights under Section 3.2 after such event
as it would have received if it had exercised its redemption rights immediately
prior to such event. Any adjustment to the Conversion Factor shall become
effective
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immediately after the effective date of such event retroactive to the record
date, if any, for such event.
"Current Per Share Market Price" on any date shall mean the average of
the Closing Prices for the most recent ten (10) Trading Days ending on such
date.
"Current Yield" shall mean, for the period in question, the Consolidated
Distributed Cash for such period multiplied by the Limited Partner Consolidated
Percentage as of the close of such period (it being acknowledged that Current
Yield shall be zero for periods as to which holders of Common Stock do not
receive a distribution with respect to their shares).
"Depreciation" shall mean, for any fiscal year or portion thereof, an
amount equal to the depreciation, amortization or other cost recovery deduction
allowable with respect to an asset for such period for federal income tax
purposes, except that if the Gross Asset Value of an asset differs from its
adjusted basis for federal income tax purposes at the beginning of such period,
Depreciation shall be an amount that bears the same relationship to such
beginning Gross Asset Value as the depreciation, amortization or cost recovery
deduction in such period for federal income tax purposes bears to the beginning
adjusted tax basis; provided, however, that if the adjusted basis for federal
income tax purposes of an asset at the beginning of such period is zero,
Depreciation shall be determined with reference to such beginning Gross Asset
Value using any reasonable method selected by the General Partner.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, business trust, limited liability company,
cooperative or association.
"Environmental Claim" shall mean any administrative, regulatory or
judicial action, suit, demand, demand letter, claim, lien, notice of
non-compliance or violation, investigation or proceeding relating in any way to
any Environmental Law or any permit issued under any such Environmental Law
including, without limitation, (i) by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (ii) by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or any applicable
Environmental Law or arising from alleged injury or threat of injury to health,
safety or the environment due the existence of Hazardous Materials or under any
applicable Environmental Law.
"Environmental Laws" shall mean all statutes specifically described in
the definition of Hazardous Materials below and all federal, state and local
environmental health and safety statutes, ordinances, codes, rules, regulations,
orders and decrees regulating, relating to or imposing liability or standards
concerning or in connection with Hazardous Materials or any applicable common
law right of action concerning or in connection with the Hazardous Materials.
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"Financing Corporation" shall mean ▇▇▇▇▇▇▇ Financing Corporation, a
Delaware corporation that is a wholly-owned subsidiary of ▇▇▇▇▇▇▇.
"Financing Partnership" shall mean ▇▇▇▇▇▇▇ Financing Partnership, a
Delaware general partnership, of which the Partnership and the Financing
Corporation comprise the sole partners.
"Fractional Share Cash Amount" shall mean an amount of cash equal to the
product of (i) the Current Per Share Market Price of a share of Common Stock on
the Valuation Date, (ii) the fractional Unit set forth in the Redeeming
Partner's Notice of Redemption, and (iii) the Conversion Factor.
"General Partner" shall mean ▇▇▇▇▇▇▇, its duly admitted successors and
assigns and any other person who is a general partner at the time referenced.
"General Partner Units" shall have the meaning set forth in Section
3.1.A.
"Gross Asset Value" shall mean, with respect to any asset of the
Partnership or any other member of the ▇▇▇▇▇▇▇ Group, the asset's adjusted basis
for federal income tax purposes, except as follows:
(i) The initial Gross Asset Value of any asset contributed to
the Partnership or any other member of the ▇▇▇▇▇▇▇ Group shall be the gross fair
market value of such asset, as determined by the General Partner;
(ii) The Gross Asset Value of all Partnership and other ▇▇▇▇▇▇▇
Group assets shall be adjusted to equal their respective gross fair market
values, as determined by the General Partner, as of the following times: (a) the
date of this Agreement; (b) the acquisition of an additional interest in the
Partnership by any new or existing Partner in exchange for more than a DE
MINIMIS Capital Contribution; (c) the distribution by the Partnership to a
Partner of more than a DE MINIMIS amount of Partnership property as
consideration for an interest in the Partnership; (d) the liquidation of the
Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g); (e)
the acquisition of an additional equity interest in any member of the ▇▇▇▇▇▇▇
Group in exchange for more than a DE MINIMIS contribution to such group member
(such as an issuance of additional shares by the General Partner); (f) the
distribution by any ▇▇▇▇▇▇▇ Group member to one or more of its members of more
than a DE MINIMUS amount of property as consideration for an equity interest in
such group member; and (g) the liquidation of any member of the ▇▇▇▇▇▇▇ Group;
provided, however, that (x) adjustments pursuant to clauses (b) - (g) above
shall be made only if the General Partner reasonably determines that such
adjustments are necessary or appropriate to maintain Capital Accounts and
provide for allocations of Profits and Losses that reflect the relative economic
interests of the Partners in the Partnership and (y) the hypothetical
liquidation required under Section 7.1 of this Agreement for purposes of
allocating Profits and
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Losses shall not be treated as a liquidation of the Partnership or any other
▇▇▇▇▇▇▇ Group member for purposes of the foregoing provisions of this clause
(ii).
(iii) The Gross Asset Value of (a) any Partnership asset
distributed to any Partner or (b) any asset of another member of the ▇▇▇▇▇▇▇
Group distributed to a shareholder, partner or other equity owner of such
▇▇▇▇▇▇▇ Group member shall be adjusted to equal the gross fair market value of
such asset, taking Section 7701(g) of the Code into account, on the date of
distribution as determined by the General Partner; and
(iv) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted basis of
such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to
the extent that such adjustments are taken into account in determining Capital
Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) and paragraph (vi)
of the definition of Profits and Losses; provided, however, that Gross Asset
Values shall not be adjusted pursuant to this paragraph (iv) to the extent the
General Partner determines that an adjustment pursuant to paragraph (ii) above
is necessary or appropriate in connection with a transaction that would
otherwise result in an adjustment pursuant to this paragraph (iv).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraphs (i), (ii) or (iv) above, such Gross Asset Value shall
thereafter be adjusted by the Depreciation taken into account with respect to
such asset. The General Partner may adjust the Capital Accounts to reflect any
adjustment to the Gross Asset Value of Partnership property if so required or
permitted under Section 1.704-1(b)(2)(iv) of the Regulations.
"Hazardous Materials" shall mean any substance, material, waste, gas or
particulate matter which is regulated by any local governmental authority, the
State of Illinois or the United States Government, including, but not limited
to, any material or substance which is (i) defined as a "hazardous waste",
"hazardous material", "hazardous substance", "extremely hazardous waste", or
"restricted hazardous waste" or words of similar import under any provision of
any Environmental Law; (ii) petroleum or petroleum products; (iii) asbestos;
(iv) poly chlorinated biphenyl; (v) radioactive material; (vi) radon gas; (vii)
designated as a "hazardous substance" pursuant to Section 311 of the Clean Water
Act, 33 U.S.C. ss.1251 ET SEQ. (33 U.S.C. ss.1317); (viii) defined as a
"hazardous waste" pursuant to Section 1004 of the Resource Conservation and
Recovery Act, 42 U.S. C. ss.6901 ET SEQ. (42 U.S.C. ss.6903); or (ix) defined as
a "hazardous substance" pursuant to Section 101 of the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S. C. ss.9601 ET
SEQ. (42 U.S.C. ss.9601).
"Immediate Family" shall mean, with respect to any Person, such Person's
spouse, parents, parents-in-law, descendants, nephews, nieces, brothers,
sisters, brothers-in-law, sisters-in-law and children-in-law.
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"Limited Partner" shall mean any Person (i) whose name is set forth as a
Limited Partner on EXHIBIT A or who has become a Limited Partner pursuant to the
terms and conditions of this Agreement and (ii) who holds a Partnership
Interest. "Limited Partners" means all such Persons. The Limited Partners at the
date of this Agreement are the Persons listed on EXHIBIT A.
"Limited Partner Consolidated Percentage" shall mean the fraction,
expressed as a percentage, determined as follows:
X
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X+Y
where X = the number of Units held by the Limited Partners
(excluding any Units held by the General Partner and
any Preferred Units) multiplied by the Conversion
Factor; and
Y = the number of shares of Common Stock then outstanding.
"Limited Partner Units" shall have the meaning set forth in Section
3.1.A.
"Net Proceeds" shall mean the net proceeds from the issuance by the
General Partner of any shares of Common Stock or other class of its capital
stock after all underwriting discounts, brokerage commissions or fees and other
costs attributable to such issuance.
"Nonrecourse Deductions" shall have the meaning set forth in Regulations
Section 1.704-2(b) and (c).
"Notice of Redemption" shall mean the Notice of Redemption substantially
in the form of EXHIBIT B.
"Operating Cash Flow" shall have the meaning set forth in Section 8.1.
"Original Agreement" shall mean the Agreement of Limited Partnership of
▇▇▇▇▇▇ Operating Limited Partnership, dated as of October 4, 1993, as amended.
"Original Limited Partner" shall mean each Person who executed the Prior
Agreement as a Limited Partner on March 15, 1996 and who holds a Partnership
Interest and any Transferee of such Original Limited Partner who holds a
Partnership Interest. "Original Limited Partners" means all such Persons.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set forth
in Regulations Section 1.704-2(i)(3).
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"Partner Nonrecourse Deductions" shall have the meaning set forth in
Regulations Section 1.704-2(i)(2).
"Partners" shall mean, collectively, the General Partner and the Limited
Partners, or any additional or successor partners of the Partnership. Reference
to a Partner shall be to any one of the Partners.
"Partnership" shall mean the limited partnership governed by this
Agreement, as amended and/or restated from time to time.
"Partnership Interest" shall mean the ownership interest of a Partner in
the Partnership at any particular time, including the right of such Partner to
any and all benefits to which such Partner may be entitled as provided in this
Agreement, and to the extent not inconsistent with this Agreement, under the
Act, together with the obligations of such Partner to comply with all of the
terms and provisions of this Agreement and of the Act.
"Partnership Minimum Gain" shall have the meaning set forth in Sections
1.704-2(h)(2) and 1.704-2(d) of the Regulations.
"Percentage Interest" of a Partner in the Partnership shall be equal to
the quotient (expressed as a percentage) arrived at by dividing the number of
Units held by such Partner (other than Preferred Units) by the total number of
Units then outstanding (other than Preferred Units).
"Person" shall mean any individual or Entity.
"Preferred Units" shall mean any Units or other Partnership Interests
issued by the Partnership pursuant to Section 3.1.C, in one or more classes, or
one or more series of any such class, which have been designated with rights or
preferences with respect to Partnership distributions and/or rights upon
dissolution or liquidation of the Partnership senior to the rights of other
classes or series of Units, except that neither Limited Partner Units nor
General Partner Units of the classes outstanding on the date of this Agreement
shall be Preferred Units.
"Prior Agreement" shall mean the ▇▇▇▇▇▇▇ Operating Limited Partnership
Amended and Restated Agreement of Limited Partnership, dated March 15, 1996, by
and among ▇▇▇▇▇▇ and each of the Limited Partners executing the signature page
thereto, as amended on January 1, 1997 by the First Amendment to the ▇▇▇▇▇▇▇
Operating Limited Partnership Amended and Restated Agreement of Limited
Partnership and on July 31, 1997 by the Second Amendment to the ▇▇▇▇▇▇▇
Operating Limited Partnership Amended and Restated Agreement of Limited
Partnership.
"Profits" and "Losses" shall mean, for each fiscal year or portion
thereof, an amount equal to the Partnership's items of taxable income or loss
for such year or period, determined in accordance with Section 703(a) of the
Code with the following adjustments:
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(i) any income which is exempt from Federal income tax and not
otherwise taken into account in computing Profits or Losses shall be added to
taxable income or loss;
(ii) any expenditures of the Partnership described in Code
Section 705(a)(2)(B) or treated as Section 705(a)(2)(B) expenditures under
Regulations Section 1.704-1(b)(2)(iv)(i) and not otherwise taken into account in
computing Profits or Losses will be subtracted from taxable income or loss;
(iii) in the event that the Gross Asset Value of any Partnership
asset is adjusted pursuant to the definition of Gross Asset Value contained in
this Article 1, the amount of such adjustment shall be taken into account as
gain or loss from the disposition of such asset for purposes of computing
Profits and Losses;
(iv) gain or loss resulting from any disposition of Partnership
assets with respect to which gain or loss is recognized for Federal income tax
purposes shall be computed by reference to the Gross Asset Value of the property
disposed of, notwithstanding that the adjusted tax basis of such property
differs from its Gross Asset Value;
(v) in lieu of the depreciation, amortization and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such fiscal year or other
period;
(vi) to the extent an adjustment to the adjusted tax basis of
any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m) to be taken into
account in determining Capital Accounts as a result of a distribution other than
in complete liquidation of a Partner's Partnership Interest, the amount of such
adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset)
from the disposition of the asset and shall be taken into account for purposes
of computing Profits or Losses; and
(vii) any items specially allocated pursuant to Section 7.2 shall
not be considered in determining Profits or Losses.
"Prospectus" shall mean the final form of prospectus relating to the
initial public offering of common stock of ▇▇▇▇▇▇ as it was first filed pursuant
to Rule 424(b) of the rules and regulations of the SEC, including all amendments
and supplements thereto.
"Redeeming Partner" shall have the meaning set forth in Section 3.2.
"Redemption Right" shall have the meaning set forth in Section 3.2.
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"Regulations" shall mean the Income Tax Regulations, including Temporary
Regulations, promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"Registration Statement" shall mean the Registration Statement on Form
S-11 (including the prospectus contained therein) relating to the initial public
offering of common stock of ▇▇▇▇▇▇, as filed with the SEC, and any amendments
made thereto, pursuant to which ▇▇▇▇▇▇ offered and sold certain shares of its
common stock.
"REIT" shall mean a real estate investment trust as defined in Section
856 of the Code.
"REIT Requirements" shall have the meaning set forth in Section 5.2.
"REIT Shares Amount" shall mean a number of shares of Common Stock equal
to the product of (i) the number of Limited Partner Units that are not Preferred
Units set forth in a Redeeming Partner's Notice of Redemption pursuant to
Section 3.2 less the amount of any fractional Unit, and (ii) the Conversion
Factor.
"Requesting Party" shall have the meaning set forth in Section 18.2.
"SEC" shall mean the United States Securities and Exchange Commission.
"Specified Redemption Date" shall mean the tenth (10th) Trading Day after
receipt by the General Partner of a Notice of Redemption from a Limited Partner.
"Trading Day" shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, shall mean any day other than a
Saturday, a Sunday or a day on which banking institutions in the State of New
York are authorized and obligated by law or executive order to close.
"Transferee" shall have the meaning set forth in Section 12.2.
"TTC Guarantors" shall mean ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
"▇▇▇▇▇▇" shall mean ▇▇▇▇▇▇ Properties Corporation, a Maryland corporation
that was the original general partner of the Partnership and that merged into
▇▇▇▇▇▇▇ on March 15, 1996.
"▇▇▇▇▇▇ Contribution Agreement(s)" shall have the meaning ascribed to the
term "Contribution Agreements" in the Original Agreement.
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"Unit Certificate" shall mean any certificate issued by the General
Partner on behalf of the Partnership in accordance with Section 3.1.A to
evidence the ownership of the number and class or series of Units or other
Partnership Interests specified therein.
"Units" shall have the meaning set forth in Section 3.1.
"Valuation Date" shall mean the date of receipt by the General Partner of
a Notice of Redemption or, if such date is not a Trading Day, the first Trading
Day thereafter.
1.2 EXHIBITS, ETC. References to an "Exhibit" or to a
"Schedule" are, unless otherwise specified, to one of the Exhibits or Schedules
attached to this Agreement, and references to an "Article" or a "Section" are,
unless otherwise specified, to one of the Articles or Sections of this
Agreement. Each Exhibit and Schedule attached hereto and referred to herein is
hereby incorporated herein by this reference.
2. Organization.
------------
2.1 FORMATION OF PARTNERSHIP. Upon the initial filing of the
Certificate with the Secretary of State of the State of Delaware on September 2,
1993, the Partnership was formed as a limited partnership pursuant to the
provisions of the Act, and all other pertinent laws of the State of Delaware.
The Partners agree that the rights and liabilities of the Partnership shall be
as provided in the Act except as otherwise herein expressly provided.
2.2 PARTNERSHIP NAME. The business of the Partnership shall be
conducted under the name of "▇▇▇▇▇▇▇ Operating Limited Partnership;" provided,
however, that the General Partner may, from time to time, change the name of the
Partnership or may adopt such trade or fictitious names as it may determine.
2.3 LOCATION OF THE PRINCIPAL PLACE OF BUSINESS. The location
of the principal place of business of the Partnership shall be at ▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, or such other location as
shall be selected from time to time by the General Partner in its sole
discretion.
2.4 REGISTERED AGENT AND REGISTERED OFFICE. The Registered
Agent of the Partnership shall be The Corporation Trust Company or such other
Person as the General Partner may select in its sole discretion. The Registered
Office of the Partnership shall be Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ or such other location as the General Partner may
select in its sole and absolute discretion.
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3. Capital.
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3.1 Issuance of Units.
-----------------
A. The interest of a Partner in the Partnership is
sometimes referred to as a Partnership Interest and shall be evidenced by one or
more units of Partnership Interest ("Units"). All Units representing Partnership
Interests of a Limited Partner shall be designated as "Limited Partner Units."
Unless otherwise determined by the General Partner, all Units representing
Partnership Interests of the General Partner shall be designated as "General
Partner Units," notwithstanding that some of such Units may have been originally
issued to one or more Limited Partners and subsequently acquired by the General
Partner, whether pursuant to the provisions of Section 3.2.B or otherwise, and
upon the acquisition of Limited Partner Units by the General Partner such
Limited Partner Units shall automatically be redesignated as General Partner
Units. As used in this Agreement, the term "Units" shall refer to General
Partner Units and Limited Partner Units, collectively, unless otherwise required
by the context in which such term is used.
The aggregate total of all Units outstanding as of the date of this
Agreement, and the names of the Partners holding such Units (including the
number of Units owned by each such Partner) are set forth on EXHIBIT A.
The General Partner, in its sole and absolute discretion, is authorized
to issue on behalf of the Partnership Unit Certificates which evidence the
ownership of Units or other Partnership Interests by a Limited Partner or the
General Partner. Unit Certificates shall be in such form, not inconsistent with
the requirements of the Act or any other applicable law and this Agreement, as
shall be approved by the General Partner in its sole discretion. Each Unit
Certificate shall be signed by the Chief Executive Officer or the President or a
Vice President and by the Secretary or Assistant Secretary or the Treasurer or
Assistant Treasurer of the General Partner certifying the number of Units or
other Partnership Interests (and if there shall be more than one class or series
of Units or other Partnership Interests, the class or series thereof) owned by
such Partner; provided, however, that any or all of the signatures on the Unit
Certificate may be facsimiles. In case any officer of the General Partner who
shall have signed or whose facsimile signature or signatures shall have been
placed upon any such Unit Certificate or Unit Certificates is no longer an
officer of the General Partner at the date of issue, such Unit Certificate may
nevertheless be issued by the General Partner with the same effect as if such
person were such officer at the date of issue. Unit Certificates shall be
consecutively or serially numbered and shall be entered in the books and records
of the Partnership as they are issued and shall exhibit the holder's name and
the number of Units or other Partnership Interests held (and if there shall be
more than one class or series of Units or other Partnership Interests, the class
or series thereof). Unit Certificates are transferable only to the extent that
the Units or other Partnership Interests underlying such Unit Certificates are
transferable in accordance with the provisions of Article 12, and each Unit
Certificate shall bear the following legend to such effect:
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THE UNITS OR OTHER PARTNERSHIP INTERESTS
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN TRANSFER RESTRICTIONS CONTAINED IN
ARTICLE 12 OF THE ▇▇▇▇▇▇▇ OPERATING LIMITED
PARTNERSHIP SECOND RESTATED AGREEMENT OF
LIMITED PARTNERSHIP, DATED AS OF SEPTEMBER 2,
1997, AS AMENDED, AND/OR AMENDED AND RESTATED
FROM TIME TO TIME, (A COPY OF WHICH MAY BE
OBTAINED FROM ▇▇▇▇▇▇▇ OPERATING LIMITED
PARTNERSHIP WITHOUT CHARGE UPON REQUEST). THE
HOLDER OF THIS CERTIFICATE, BY ACCEPTANCE
HEREOF, SHALL BE DEEMED TO HAVE AGREED TO AND
SHALL BE BOUND BY SUCH AGREEMENT.
B. From time to time, the General Partner, subject to
the provisions of this Section 3.1.B and Section 3.1.E, may cause the
Partnership to issue additional Units to existing or newly-admitted Partners
(including itself) to reflect the contribution by a Partner (the "Contributing
Partner") of additional Capital Contributions to the Partnership. The number of
Units issued to a Contributing Partner that is a member of the ▇▇▇▇▇▇▇ Group
under this Section 3.1.B, shall, in the case of Capital Contributions equal to
the Net Proceeds from the sale of additional shares of Common Stock or other
capital stock of the General Partner, be the same number as the number of shares
sold, and in the case of Capital Contributions from other than the sale of
additional shares of the General Partner, be equal to the quotient (rounded to
the nearest whole number) arrived at by dividing (i) the amount of money or the
initial Gross Asset Value of the property contributed as additional Capital
Contributions (net of other liabilities to which such property is subject or
assumed by the Partnership in connection with such contribution but increased to
reflect any expenses attributable to such contribution) by (ii) the product of
(a) the Current Per Share Market Price of the Common Stock and (b) the
Conversion Factor. The number of Units issued to a Contributing Partner that is
not a member of the ▇▇▇▇▇▇▇ Group under this Section 3.1.B shall be determined
by the General Partner, in its sole discretion. The agreement or agreements and
other documents (collectively, the "Contribution Agreements") providing for
Capital Contributions after March 15, 1996 by any Contributing Partner that is
not a member of the ▇▇▇▇▇▇▇ Group may include specially negotiated terms
("Special Terms") relating to the rights or obligations of such Contributing
Partner as a Partner in the Partnership that differ in various respects from the
rights or obligations of other Partners in the Partnership, provided that the
application of such Special Terms does not adversely affect the rights or
obligations of any other Limited Partner; and, as between the Contributing
Partner on the one hand and the Partnership and the other Partners on the other
hand, such Special Terms of the Contribution Agreement shall be deemed to be a
part of, and shall supersede any conflicting terms of, this Agreement.
C. Subject to the provisions of Section 3.1.B and
Section 3.1.E, the General Partner is hereby authorized to cause the Partnership
from time to time to issue to the
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Partners (including the General Partner) or other Persons additional Units in
one or more classes, or one or more series of any such class with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to those
of Units held by the Limited Partners, all as shall be determined by the General
Partner in its sole and absolute discretion, including, without limitation (i)
the right of such class or series of Units to share in Partnership distributions
and (ii) the rights which each such class or series of Units shall have upon
dissolution or liquidation of the Partnership; PROVIDED THAT no Preferred Units
that have distribution or liquidation rights that are senior to the distribution
or liquidation rights of the Units held by the Limited Partners shall be issued
to the General Partner unless either (a)(1) the Preferred Units are issued in
connection with an issuance of shares of capital stock of the General Partner,
which shares have designations, preferences and other rights such that the
economic interests attributable to such shares are substantially similar to the
designations, preferences and other rights of the Preferred Units issued to the
General Partner in accordance with this Section 3.2.C, and (2) the General
Partner shall make a Capital Contribution to the Partnership in an amount equal
to the Net Proceeds raised in connection with such issuance, or (b) the
additional Units are issued to all Partners in proportion to their respective
Percentage Interests. Notwithstanding the foregoing, without the prior written
consent of the Original Limited Partners holding more than 50% of the
Partnership Interests held by the Original Limited Partners, no additional Units
may have rights, powers or duties that, prior to March 16, 1998, are senior to
the rights, powers or duties of the Units held by the Original Limited Partners.
D. No Limited Partner shall, by virtue of being the
holder of one or more Units, be deemed to be a shareholder of, or have any other
interest in, the General Partner.
E. Prior to March 16, 1998, the General Partner shall
not permit the Partnership to issue additional Units to existing or newly
admitted Partners if the issuance of such Units would cause a material adverse
tax consequence to the Original Limited Partners (determined in the manner
described below); provided, however, that notwithstanding the foregoing or
anything in this Agreement to the contrary, the General Partner shall have the
right to require the Partnership to issue additional new Units to existing or
newly-admitted Partners in connection with (i) the merger, consolidation or
combination of the General Partner or one of its corporate subsidiaries with or
into another Person in which securities of the General Partner are being issued,
acquired, converted or exchanged or (ii) the merger, consolidation or
combination of the Partnership with or into another Person in connection with
such merger, consolidation or combination of the General Partner or one of its
corporate subsidiaries with or into another Person in which securities of the
General Partner are being issued, acquired, converted or exchanged. For purposes
of this Section 3.1.E, an issuance of Units will be treated as having material
adverse tax consequences to the Original Limited Partners only if the Original
Limited Partners submit to the Partnership within twenty-one (21) days of
receipt of notice from the General Partner of such proposed issuance of Units an
opinion of ▇▇▇▇▇▇▇ and ▇▇▇▇▇▇, L.L.C. or such other certified public accounting
firm reasonably satisfactory to the General Partner, which opinion is in form
and substance
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reasonably satisfactory to the Accountants, to the effect that such issuance (x)
will result in a decrease in the Original Limited Partners' share of Partnership
liabilities under Code Section 752 and the Regulations thereunder and (y) such
decrease in the Original Limited Partners' share of liabilities will cause the
Original Limited Partners to recognize taxable income under Section 731 of the
Code of $50,000 in the aggregate or greater. Nothing in this Section 3.1.E shall
preclude the issuance of Units to the extent necessary to provide that the
Limited Partners as a class are entitled to at least 1% of the distributions to
the Partners pursuant to Section 8.4 for the taxable year and subsequent taxable
years.
F. The General Partner shall not issue any additional
shares of Common Stock or any shares of any other class of capital stock of the
General Partner (other than shares of Common Stock issued pursuant to Section
3.2) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase shares of Common Stock or any
shares of any other class of capital stock of the General Partner (collectively,
"New Securities") other than to all holders of Common Stock unless (i) the
General Partner shall cause the Partnership to issue to the General Partner
Units or other Partnership Interests or rights, options, warrants or convertible
or exchangeable securities of the Partnership having designations, preferences
and other rights (collectively, "New Units") such that the economic interests of
such New Units are substantially similar to those of the New Securities, and the
General Partner contributes to the Partnership the Net Proceeds from the
issuance of such New Securities and from the exercise of rights contained in
such New Securities. Without limiting the foregoing, the General Partner is
expressly authorized to issue New Securities for less than fair market value,
and the General Partner is expressly authorized to cause the Partnership to
issue to the General Partner corresponding Units or Partnership Interests, so
long as (x) the General Partner concludes in good faith that such issuance is in
the interests of the General Partner and the Partnership (for example, and not
by way of limitation, the issuance of shares of Common Stock and corresponding
Units pursuant to an employee stock purchase plan providing for employee
purchases of shares of Common Stock at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair
market value of the Common Stock, either at the time of issuance or at the time
of exercise), and (y) the General Partner contributes the Net Proceeds from such
issuance and exercise to the Partnership.
Notwithstanding the provisions of the preceding paragraph, the General
Partner may issue New Securities whose Net Proceeds need not be contributed to
the Partnership and without the issuance by the Partnership of New Units if,
when and to the extent that the General Partner determines that the Net Proceeds
from such issuance will be used for assets of the General Partner that are
separate from assets of the Partnership and in which the Partnership has no
interest.
3.2 Redemption Right.
----------------
A. Subject to Sections 3.2.B and 3.2.C, on or after the date
of this Agreement, each Limited Partner, other than the General Partner, shall
have the right (the
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"Redemption Right") to require the Partnership to redeem on a Specified
Redemption Date all or a portion of the Units (other than Preferred Units) held
by such Limited Partner for an aggregate amount equal to the Cash Amount, which
shall be paid by the Partnership. The Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the Partnership (with a copy to
the General Partner) by the Limited Partner who is exercising the redemption
right (the "Redeeming Partner"); provided, however, that the Partnership shall
not be obligated to satisfy such Redemption Right if the General Partner elects
to purchase the Units subject to the Notice of Redemption pursuant to Section
3.2.B. Effective as of the Specified Redemption Date, the Redeeming Partner
shall not receive any dividends or distributions with respect to any Units so
redeemed. The Transferee of any Limited Partner may exercise the rights of such
Limited Partner pursuant to this Section 3.2, and such Limited Partner shall be
deemed to have assigned such rights to such Transferee and shall be bound by the
exercise of such rights by such Transferee. In connection with any exercise of
such rights by such Transferee on behalf of such Limited Partner, the Cash
Amount shall be paid by the Partnership directly to such Transferee and not to
such Limited Partner.
B. Notwithstanding the provisions of Section 3.2.A, a Limited
Partner that exercises the Redemption Right shall be deemed to have offered to
sell the number of Units set forth in the Notice of Redemption to the General
Partner, and the General Partner may, in its sole and absolute discretion, elect
to purchase directly and acquire such Units by paying to the Redeeming Partner
either (i) the Cash Amount or (ii) the REIT Shares Amount and the Fractional
Share Cash Amount, as elected by the General Partner (in its sole and absolute
discretion), on the Specified Redemption Date, whereupon on such date the
General Partner shall acquire the Units offered for redemption by the Redeeming
Partner and shall be treated for all purposes of this Agreement as the owner of
such Units. If the General Partner shall elect to exercise its right to purchase
Units under this Section 3.2.B with respect to a Notice of Redemption, it shall
so notify the Redeeming Partner within five Trading Days after the receipt by
the General Partner of such Notice of Redemption. If the General Partner (in its
sole and absolute discretion) elects not to exercise its right to purchase Units
from the Redeeming Partner pursuant to this Section 3.2.B, the General Partner
shall not have any obligation to the Redeeming Partner or the Partnership with
respect to the Redeeming Partner's exercise of the Redemption Right, and the
Partnership shall be required to pay the Redeeming Partner the Cash Amount in
accordance with the provisions of Section 3.2.A. In the event the General
Partner shall exercise its right to purchase Units with respect to the exercise
of a Redemption Right as described in the first sentence of this Section 3.2.B,
the Partnership shall have no obligation to pay any amount to the Redeeming
Partner with respect to such Redeeming Partner's exercise of such Redemption
Right, and each of the Redeeming Partner, the Partnership and the General
Partner, as the case may be, shall treat the transaction between the General
Partner and the Redeeming Partner for federal income tax purposes as a sale of
the Redeeming Partner's Units to the General Partner. Each Redeeming Partner
agrees to execute such documents as the General Partner may reasonably require
in connection with the issuance of shares of Common Stock upon exercise of the
Redemption Right.
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C. Notwithstanding the provisions of Section 3.2.A and Section
3.2.B, (i) a Limited Partner shall not be entitled to exercise the Redemption
Right pursuant to Section 3.2.A if the delivery of shares of Common Stock to
such Partner on the Specified Redemption Date pursuant to Section 3.2.B would be
prohibited under or violate any provision of the Charter of the General Partner
or would violate any federal or state securities laws and (ii) a Limited Partner
shall not have the right to exercise the Redemption Right pursuant to Section
3.2.A if in the opinion of counsel for the General Partner the General Partner
would, as a result thereof, no longer qualify (or if there is a material risk
that the General Partner no longer would qualify) as a REIT.
D. A Limited Partner shall not be entitled to exercise the
Redemption Right with respect to any Preferred Unit; but this Section 3.2.D
shall not preclude the General Partner from amending this Agreement in
connection with the issuance or proposed issuance of Preferred Units pursuant to
Section 3.1.C so as to provide a right of holders hereof to have such Preferred
Units redeemed by the Partnership on terms set forth in such amendment.
3.3 ADDITIONAL CAPITAL. Except as otherwise provided in Section 3.1
with respect to the General Partner, no Partner shall be assessed or required to
contribute additional funds or other property to the Partnership. If and as the
General Partner or any other Partner makes additional Capital Contributions to
the Partnership, each such Contributing Partner shall receive additional Units
or other Partnership Interests as provided for in Section 3.1. The General
Partner shall also have the right (but not the obligation) to raise any
additional funds required for the Partnership by lending funds to the
Partnership, or by causing the Partnership to borrow funds from third parties or
other members of the ▇▇▇▇▇▇▇ Group, on such terms and conditions as the General
Partner shall deem appropriate in its sole discretion. If the General Partner
elects to cause the Partnership to borrow funds, it may cause one or more of the
Partnership's assets to be encumbered to secure the loan. No Limited Partner
shall have the right to contribute additional Capital Contributions to the
Partnership without the prior written consent of the General Partner.
3.4 NO THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners.
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3.5 CAPITAL ACCOUNTS. A separate Capital Account shall be maintained
for each Partner. Each Partner's Capital Account shall be adjusted as set forth
below in this Section 3.5.
A. To each Partner's Capital Account there shall be credited
such Partner's Capital Contributions, such Partner's distributive share of
Profits and any items in the nature of income or gain which are specifically
allocated pursuant to Section 7.2, and the amount of any Partnership liabilities
assumed by such Partner or which are secured by any Partnership property
distributed to such Partner.
B. To each Partner's Capital Account there shall be debited
the amount of cash and the Gross Asset Value of any Partnership property
distributed to such Partner pursuant to any provision of this Agreement, such
Partner's distributive share of Losses and any items in the nature of expenses
or losses which are specifically allocated pursuant to Section 7.2, and the
amount of any liabilities of such Partner assumed by the Partnership or which
are secured by any property contributed by such Partner to the Partnership.
C. In the event all or a portion of a Partnership Interest is
transferred in accordance with the terms of this Agreement (including a transfer
of Units pursuant to Section 3.2), the transferee shall succeed to the Capital
Account of the transferor to the extent it relates to the transferred
Partnership Interest.
D. In determining the amount of any liability for purposes of
Sections 3.5.A and 3.5.B, there shall be taken into account Code Section 752(c)
and any other applicable provisions of the Code and Regulations.
E. This Section 3.5 and the other provisions of this Agreement
relating to the maintenance of Capital Accounts (and the determination of
credits and debits thereto) are intended to comply with Section 704(b) of the
Code and Regulations Section 1.704-1(b), and shall be interpreted and applied in
a manner consistent with such Regulations. In the event the General Partner
shall determine that it is prudent to modify the manner in which the Capital
Accounts, or any debits or credits thereto (including, without limitation, (i)
allocations pursuant to Article 7 or (ii) debits or credits relating to
liabilities which are secured by contributed or distributed property or which
are assumed by the Partnership or the Partners) are computed in order to comply
with such Regulations or more accurately reflect the Partners' interests in the
Partnership, the General Partner may make such modification. The General Partner
also may (i) make any adjustments that are necessary or appropriate to maintain
equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership's balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(g),
(ii) make any appropriate modifications in the event unanticipated events (for
example, the acquisition by the Partnership of oil or gas properties) might
otherwise cause this Agreement not to comply with Regulations Section
1.704-1(b), and (iii) adopt such conventions and make such elections for
purposes of
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maintaining Capital Accounts and the allocation of items for tax purposes as it
determines are necessary or appropriate.
3.6 No Interest on or Return of Capital.
-----------------------------------
A. Except to the extent authorized by Partnership
Interests issued pursuant to Section 3.1.C, no Partner shall be entitled to any
interest on its Capital Account or on its contributions to the capital of the
Partnership.
B. Except as provided by law, or to the extent
otherwise provided by this Agreement or authorized by Units or other Partnership
Interests issued pursuant to Section 3.1.C, no Partner shall have the right to
demand or to receive the return of all or any part of his capital contributions
to the Partnership and there shall be no priority of one Partner over another as
to the return of capital contributions or withdrawals or distributions of
profits and losses. Except to the extent authorized by Partnership Interests
issued pursuant to Section 3.1.C, no Partner shall have the right to demand or
receive property other than cash in return for the contributions of such Partner
to the Partnership.
3.7 NEGATIVE CAPITAL ACCOUNTS. Except as otherwise provided by
law or as specifically agreed in writing by a Partner, no Partner shall be
required to pay to the Partnership any deficit or negative balance which may
exist in its Capital Account.
3.8 LIMIT ON CONTRIBUTIONS AND OBLIGATIONS OF PARTNER. Neither
the Limited Partners nor the General Partner shall be required to make any
additional advances or contributions to or on behalf of the Partnership or to
endorse any obligations of the Partnership.
4. [Intentionally Omitted].
5. Purpose and Powers of Partnership.
---------------------------------
5.1 The purposes of the Partnership shall be to acquire, hold,
purchase, own, operate, manage, develop, redevelop, construct, improve,
maintain, invest in, finance, refinance, sell, convey, exchange, transfer,
encumber, lease and otherwise deal with the properties of the Partnership and
other real and personal property; to exercise all of the powers of a general
partner in the Financing Partnership and to acquire, own, sell, convey,
exchange, dispose of and otherwise deal with partnership interests in the
Financing Partnership; to undertake such other activities as may be necessary,
advisable, desirable or convenient to the business of the Partnership, and to
engage in such other ancillary activities as shall be necessary or desirable to
effectuate the foregoing purposes. The Partnership shall have all powers
necessary or desirable to accomplish the purposes enumerated. In connection with
the foregoing, but subject to all of the terms, covenants, conditions and
limitations contained in this Agreement and any other agreement entered into by
the Partnership, the Partnership shall have full power and authority, directly
or through its interests in the Financing Partnership, the
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Financing Corporation or any other partnership, subsidiary, limited liability
company, other entity or joint venture, to enter into, perform and carry out
contracts of any kind, to borrow money and to issue evidences of indebtedness,
whether or not secured by mortgage, trust deed, pledge or other lien, and
directly or indirectly to acquire and construct additional properties as
necessary or useful in connection with its business.
5.2 The Partners acknowledge and agree that the Partnership
shall be operated in a manner that will enable the General Partner to (i)
satisfy the requirements for qualifying and taxation as a REIT under the Code
and the Regulations (the "REIT Requirements") and (ii) avoid the imposition of
any federal income or excise tax liability. The Partnership shall avoid taking
any action, or permitting any Affiliate to take any action, which would result
in the General Partner ceasing to satisfy the REIT Requirements or would result
in the imposition of any federal income or excise tax liability on the General
Partner.
6. Term.
----
6.1 The Partnership shall continue until the Partnership is
terminated upon the earliest to occur of the following events:
A. December 31, 2050;
B. The election to dissolve the Partnership made in
writing by the General Partner;
C. The Bankruptcy of the General Partner;
D. Dissolution required by operation of law; or
E. The sale or other disposition of all or
substantially all the assets of the Partnership unless the General Partner
elects to continue the Partnership business for the purpose of the receipt and
the collection of indebtedness or the collection of any other consideration to
be received in exchange for the assets of the Partnership (which activities
shall be deemed to be part of the winding up of the affairs of the Partnership).
6.2 Notwithstanding any other provision in this
Agreement, the General Partner hereby covenants and agrees that it will not
prior to March 16, 1998 (i) elect to dissolve the Partnership pursuant to
Section 6.1.B or (ii) sell or otherwise dispose of all or substantially all of
the assets of the Partnership.
7. Allocations.
-----------
7.1 PROFITS OR LOSSES. Profits and Losses for each taxable
year shall be allocated among the Partners and shall be credited or debited to
the respective Capital Accounts so that, to the maximum extent possible, the
balance of each Partner's Capital
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Account at the end of any taxable year (increased by the sum of such Partner's
share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Section 1.704-2) would be positive in
the amount of cash that such Partner would receive (or negative in the amount of
cash that such Partner would be required to contribute to the Partnership) if
each member of the ▇▇▇▇▇▇▇ Group sold all of its property for an amount of cash
equal to the Gross Asset Value of such property (reduced, but not below zero, by
the amount of Nonrecourse Liabilities to which such property is subject) and all
of the cash of the Partnership and each member of the ▇▇▇▇▇▇▇ Group remaining
after payment of all liabilities (other than Nonrecourse Liabilities) of the
Partnership and each member of the ▇▇▇▇▇▇▇ Group were distributed in liquidation
of each such entity immediately following the end of such taxable year. For
purposes of calculating the distribution that would be made to the Partners
pursuant to the hypothetical liquidation described in the preceding sentence,
(i) Section 15.2.C shall be applied as if such hypothetical liquidation occurred
in connection with the liquidation of the ▇▇▇▇▇▇▇ Group (so that the
hypothetical liquidating distribution to the Partners shall be calculated under
Sections 8.4 and 8.5) and (ii) Section 8.4 shall be applied as if the
Consolidated Distributed Cash for the taxable year ending with such hypothetical
liquidation equaled the amount of cash that would be distributed to the holders
of Common Stock and Units (other than Units held by the General Partner) in such
hypothetical liquidation (without regard to the actual market price or fair
market value of the Common Stock).
7.2 SPECIAL ALLOCATIONS. The following special allocations
shall be made in the following order:
A. MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Regulations Section 1.704-2(f), notwithstanding any other provision
of this Article 7, if there is a net decrease in Partnership Minimum Gain during
any fiscal year, each Partner shall be specially allocated items of Partnership
income and gain for such fiscal year (and, if necessary, subsequent fiscal
years) in an amount equal to such Partner's share of the net decrease in
Partnership Minimum Gain, determined in accordance with Regulations Section
1.704-2(g). The items to be so allocated shall be determined in accordance with
Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2) (assuming for this purpose
that this Agreement complies with the requirements of Regulations Section
1.704-1(e)). This Section 7.2.A is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith.
B. PARTNER MINIMUM GAIN CHARGEBACK. Except as otherwise
provided in Regulations Section 1.704-2(i)(4), notwithstanding any other
provision of this Article 7, if there is a net decrease in Partner Nonrecourse
Debt Minimum Gain attributable to a Partner Nonrecourse Debt during any
Partnership fiscal year, each Partner who has a share of the Partner Nonrecourse
Debt Minimum Gain attributable to such Partner Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated
items of Partnership income and gain for such fiscal year (and, if necessary,
subsequent fiscal years) in an amount equal to such Partner's share of the net
decrease in
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Partner Nonrecourse Debt Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(4) (assuming
for this purpose that this Agreement complies with the requirements of
Regulations Section 1.704-1(e)). The items to be so allocated shall be
determined in accordance with Regulations Sections 1.7042(i)(4) and
1.704-2(j)(2). This Section 7.2.B is intended to comply with the minimum gain
chargeback requirement in Regulations Section 1.704-2(i)(4) and shall be
interpreted consistently therewith.
C. NONRECOURSE DEDUCTIONS. Nonrecourse Deductions for
any fiscal year shall be allocated among the Partners in accordance with their
respective Percentage Interests.
D. PARTNER NONRECOURSE DEDUCTIONS. Any Partner
Nonrecourse Deductions for any fiscal year shall be specially allocated to the
Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable,
in accordance with Regulations Section 1.704-2(i)(1).
7.3 Other Allocation Rules.
----------------------
A. For purposes of determining the Profits, Losses or
any other items allocable to any period, Profits, Losses and any such other
items shall be determined in a daily, monthly or other basis, as determined by
the General Partner using any permissible method under Code Section 706 and the
Regulations thereunder (including proration or a closing of the books).
B. The Partners are aware of the income tax
consequences of the allocations made by this Article 7 and hereby agree to be
bound by the provisions of this Article 7 in reporting their shares of
Partnership income and loss for income tax purposes.
7.4 Tax Allocations; Code Section 704(c)/Section 1245 and 1250
----------------------------------------------------------
Recapture.
---------
A. Except as otherwise provided in this Agreement, for
federal, state and local income tax purposes, all items of Partnership income,
gain, loss, deduction, credit and any other allocations not otherwise provided
for shall be allocated among Partners in the same manner as the corresponding
item of income, gain, loss or deduction was allocated pursuant to the preceding
sections.
B. Income, gain, loss, and deduction with respect to
any property contributed to the capital of the Partnership shall, solely for tax
purposes, be allocated among the Partners so as to take account of any variation
between the adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value in accordance with any
permissible manner under Code Section 704(c) and the Regulations thereunder.
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C. In the event the Gross Asset Value of any asset is
adjusted pursuant to the definition of "Gross Asset Value" contained in Article
1, subsequent allocations of income, gain, loss, and deduction with respect to
such asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value in the same
manner or manners permitted under Code Section 704(c) and the Regulations
thereunder.
D. Any elections or other decisions relating to tax
allocations pursuant to this Section 7.4 shall be made by the General Partner in
any permissible manner under the Code or the Regulations that the General
Partner may elect in its sole discretion, and the General Partner may adopt such
conventions and methods for complying with the requirements of Code Section
704(c) and the Regulations thereunder as the General Partner deems appropriate.
Allocations pursuant to this Section 7.4 are solely for purposes of federal,
state, and local taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of Profits or Losses.
E. Except as otherwise required under Section 7.1, 7.2
or 7.4.C, if any portion of gain from the sale of property is treated as gain
which is ordinary income by virtue of the application of Code Section 1245 or
1250 ("Affected Gain"), then, to the extent possible, (i) such Affected Gain
shall be allocated among the Partners in the same proportion that the
depreciation and amortization deductions giving rise to the Affected Gain were
allocated and (ii) other Tax Items of gain of the same character that would have
been recognized, but for the application of Code Section 1245 and/or 1250, shall
be allocated away from those Partners who are allocated Affected Gain pursuant
to clause (i) so that, to the extent possible, the other Partners are allocated
the same amount, and type, of capital gain that would have been allocated to
them had Code Section 1245 and/or 1250 not applied.
7.5 NONRECOURSE LIABILITIES. The Partners agree that the
Partnership's "excess nonrecourse liabilities" within the meaning of Regulations
Section 1.752-3(a)(3) shall be allocated among the Partners in accordance with
their respective interests in Partnership profits which, solely for purposes of
Regulations Section 1.752-3(a)(3), shall be deemed to be their Percentage
Interests.
8. Cash Available For Distribution.
-------------------------------
8.1 OPERATING CASH FLOW. As used in this Agreement, "Operating
Cash Flow" shall mean and be defined as all cash receipts of the Partnership
from whatever source (but excluding Capital Cash Flow and excluding the proceeds
of any additional Capital Contributions to the Partnership pursuant to Section
3.1 or 3.3) during the period in question in excess of all items of Partnership
expense (other than non-cash expenses such as depreciation) and other cash needs
of the Partnership, including, without limitation, Administrative Expenses,
amounts paid by the Partnership as principal or interest on debts and advances,
during such period, capital expenditures and any reserves (as determined by the
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General Partner) established or increased during such period. In the discretion
of the General Partner, reserves may include cash held for future acquisitions
or any other purpose.
8.2 CAPITAL CASH FLOW. As used in this Agreement, "Capital Cash
Flow" shall mean and be defined as collectively (i) gross proceeds realized in
connection with the sale of any assets of the Partnership, (ii) gross financing
or refinancing proceeds, (iii) gross condemnation proceeds (excluding
condemnation proceeds applied to restoration of remaining property), (iv) gross
proceeds from the issuance and sale of capital stock (whether common or
preferred) or debt securities of the General Partner and contributed to the
Partnership, and (v) gross insurance proceeds (excluding rental insurance
proceeds or insurance proceeds applied to restoration of property) less (a)
closing costs, (b) the cost to discharge any Partnership financing encumbering
or otherwise associated with the asset(s) in question, (c) the establishment of
reserves (as determined by the General Partner, and which may include, but is
not limited to, cash held for future acquisitions), and (d) other expenses of
the Partnership (including Administrative Expenses) to the extent not deducted
in calculating Operating Cash Flow and then due and owing.
8.3 CONSOLIDATED DISTRIBUTED CASH. As used in this Agreement,
"Consolidated Distributed Cash" with respect to any period shall mean the total
amount of cash that will be distributed with respect to shares of Common Stock
and Units (other than Units held by the General Partner and Preferred Units) by
members of the ▇▇▇▇▇▇▇ Group with respect to such period. The amount of
Consolidated Distributed Cash with respect to any period shall be determined by
the General Partner in its sole discretion, and such determination shall be
conclusive and binding as to all Partners.
8.4 DISTRIBUTIONS TO PARTNERS. Except as provided in Section
15.2, Operating Cash Flow and Capital Cash Flow with respect to any period shall
be distributed to the Partners at such time or times as the General Partner
shall determine consistent with the following order of priority:
A. First, to those Partners (whether Limited or
General) as a class holding Preferred Units, if any, issued by the Partnership
amount sufficient to satisfy the distribution rights of such Preferred Units (to
the extent such distribution rights have been designated as senior to the
distribution rights of other Units or Partnership Interests);
B. Second, at such times, if ever, as holders of Common
Stock receive a distribution with regard to their shares, to the Limited
Partners as a class (excluding for such purposes Limited Partners who hold only
Preferred Units with distribution rights designated as senior to the
distribution rights of other Units or Partnership Interests), an amount equal to
the lesser of (i) (A) the Current Yield for such period plus (B) the excess, if
any, of the aggregate of the Current Yield for all prior periods over the
aggregate amount distributed pursuant to this Section 8.4.B for all prior
periods, and (ii) 99% of the excess for
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such period of the Operating Cash Flow and Capital Cash Flow over distributions
pursuant to the preceding Section 8.4.A. for such period; and
C. Third, any remaining Operating Cash Flow and Capital
Cash Flow for such period shall be distributed to the General Partner.
8.5 Distributions Among Partners of the Same Series or Class.
--------------------------------------------------------
A. The amount distributed as a class or series to the
Partners holding Preferred Units pursuant to Section 8.4.A or Section 15.2.C.1
shall be distributed among such Partners (i) first, if more than one class or
series of Preferred Units have been issued, in accordance with the relative
seniority and preference rights of such classes or series of Preferred Units
designated by the General Partner pursuant to Section 3.1.C, and (ii) second,
among the holders of each class or series of Preferred Units in accordance with
the respective number of such Preferred Units held by them as of a record date
established by the General Partner.
B. The amount distributed as a class to Limited
Partners holding Units that are not Preferred Units pursuant to Section 8.4.B or
Section 15.1.C.2 shall be distributed among such Limited Partners in accordance
with the respective number of Units (other than Preferred Units) held by them as
of a record date established by the General Partner, which record date shall be
the same as the record date for determination of stockholders of the General
Partner who are entitled to receive payment of dividends on their shares of
Common Stock.
8.6 REIT DISTRIBUTIONS. The General Partner shall use its best
efforts to cause Operating Cash Flow and Capital Cash Flow to be distributed so
as to allow the General Partner to satisfy the REIT Requirements and avoid
imposition of any federal income or excise tax.
8.7 CONSENT TO DISTRIBUTIONS. Each of the Partners hereby
consents to the distributions provided for in this Agreement.
8.8 LIQUIDATING DISTRIBUTIONS. Distributions upon liquidation
of the Partnership shall be made in accordance with Section 15.2.
8.9 Special Distribution and Allocations for Certain
------------------------------------------------
Properties.
----------
A. Notwithstanding anything to the contrary in this
Agreement, for the Partnership's 1995 fiscal year and all subsequent fiscal
years, (a) 100% of the Operating Cash Flow, Capital Cash Flow and proceeds of
liquidation of the Partnership with respect to the property contributed to the
Partnership by the Village of Chicago Ridge (the "Village Property") shall be
distributed to the General Partner as determined by the General Partner pursuant
to Sections 8.1, 8.2 and 15.2, (b) 100% of all items of Partnership income,
gain,
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loss, deduction and credit with respect to the Village Property shall be
allocated to the General Partner, (c) 100% of the liabilities and expenditures
attributable to the Village Property shall be charged to the General Partner,
and (d) the General Partner shall indemnify and hold harmless the share of the
Limited Partners' Operating Cash Flow, Capital Cash Flow and proceeds of
liquidation from and against any liabilities or expenditures attributable to the
Village Property.
B. Notwithstanding anything to the contrary in this
Agreement, for the Partnership's 1995 fiscal year and all subsequent fiscal
years, (a) 100% of the Operating Cash Flow, Capital Cash Flow and proceeds of
liquidation of the Partnership with respect to the note issued to the
Partnership by the Village of Round Lake Beach (the "Village Note") shall be
distributed to the General Partner as determined by the General Partner pursuant
to Sections 8.1, 8.2 and 15.2, (b) 100% of all items of Partnership income,
gain, loss, deduction and credit with respect to the Village Note shall be
allocated to the General Partner, (c) 100% of the liabilities and expenditures
attributable to the Village Note shall be charged to the General Partner, and
(d) the General Partner shall indemnify and hold harmless the share of the
Limited Partners' Operating Cash Flow, Capital Cash Flow and proceeds of
liquidation from and against any liabilities or expenditures attributable to the
Village Note.
9. Management and Property of the Partnership.
------------------------------------------
9.1 GENERAL PARTNER. The General Partner shall be the sole
manager of the Partnership business, and shall have the right and power to make
all decisions and take any and every action with respect to the property,
business and affairs of the Partnership and shall have all the rights, power and
authority generally conferred by law, or necessary, advisable or consistent with
accomplishing the purposes of the Partnership. All such decisions or actions
made or taken by the General Partner hereunder shall be binding upon all of the
Partners and the Partnership. Except as otherwise expressly provided herein, the
powers of the General Partner to manage the Partnership business shall include,
without limitation, the power and authority to:
A. Manage, control, invest, reinvest, acquire by
purchase, lease or otherwise sell, contract to purchase or sell, grant, obtain,
or exercise options to purchase, options to sell or conversion rights, assign,
transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal with
any and all property of whatsoever kind and nature, and wheresoever situated, in
furtherance of the purposes of the Partnership;
B. Acquire, directly or indirectly, interests in real
estate of any kind and of any type, and any and all kinds of interests therein,
and to determine the manner in which title thereto is to be held; to manage,
insure against loss, protect and subdivide any of the real estate, interests
therein or parts thereof; to improve, develop or redevelop any such real estate;
to participate in the ownership and development of any property; to dedicate for
public use, to vacate any subdivisions or parts thereof, to resubdivide, to
contract to sell, to
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grant options to purchase or lease, to sell on any terms; to convey, to
mortgage, pledge or otherwise encumber said property, or any part thereof; to
lease said property or any part thereof from time to time, upon any terms and
for any period of time, and to renew or extend leases, to amend, change or
modify the terms and provisions of any leases and to grant options to lease and
options to renew leases and options to purchase; to partition or to exchange
said real property, or any part thereof, for other real or personal property; to
grant easements or charges of any kind; to release, convey or assign any right,
title or interest in or about or easement appurtenant to said property or any
part thereof; to construct and reconstruct, remodel, alter, repair add to or
take from buildings on said premises; to insure any Person having an interest in
or responsibility for the care, management or repair of such property; to direct
the trustee of any land trust to mortgage, lease, convey or contract to convey
the real estate held in such land trust or to execute and deliver deeds,
mortgages, notes, and any and all documents pertaining to the property subject
to such land trust or in any matter regarding such trust; to execute assignments
of all or any part of the beneficial interest in such land trust;
C. Employ, engage or contract with or dismiss from
employment or engagement Persons to the extent deemed necessary by the General
Partner for the operation and management of the Partnership business, including
but not limited to, contractors, subcontractors, engineers, architects,
surveyors, mechanics, consultants, accountants, attorneys, insurance brokers,
real estate brokers and others;
D. Enter into contracts on behalf of the Partnership;
E. Borrow money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure from any Person,
credit or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to repay,
discharge, settle, adjust, compromise, or liquidate any such loan, advance,
credit, obligation or liability;
F. Pledge, hypothecate, mortgage, assign, deposit,
deliver, enter into sale and leaseback arrangements or otherwise give as
security or as additional or substitute security, or for sale or other
disposition any and all Partnership property, tangible or intangible, including,
but not limited to, real estate and beneficial interests in land trusts, and to
make substitutions thereof, and to receive any proceeds thereof upon the release
or surrender thereof; to sign, execute and deliver any and all assignments,
deeds and other contracts and instruments in writing; to authorize, give, make,
procure, accept and receive moneys, payments, property, notices, demands,
vouchers, receipts, releases, compromises and adjustments; to waive notices,
demands, protests and authorize and execute waivers of every kind and nature; to
enter into, make, execute, deliver and receive written agreements, undertakings
and instruments of every kind and nature; to give oral instructions and make
oral agreements; and generally to do any and all other acts and things
incidental to any of the foregoing or with reference to any dealings or
transactions which any attorney may deem necessary, proper or advisable;
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G. Acquire and enter into any contract of insurance
which the General Partner deems necessary or appropriate for the protection of
the Partnership, for the conservation of the Partnership's assets or for any
purpose convenient or beneficial to the Partnership;
H. Conduct any and all banking transactions on behalf
of the Partnership; to adjust and settle checking, savings, and other accounts
with such institutions as the General Partner shall deem appropriate; to draw,
sign, execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into, or from any
account in the Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts; and to approve and adopt the form of any
banking resolutions of any financial institution as though set forth in full
herein;
I. Demand, ▇▇▇ for, receive, and otherwise take steps
to collect or recover all debts, rents, proceeds, interests, dividends, goods,
chattels, income from property, damages and all other property, to which the
Partnership may be entitled or which are or may become due the Partnership from
any Person; to commence, prosecute or enforce, or to defend, answer or oppose,
contest and abandon all legal proceedings in which the Partnership is or may
hereafter be interested; and to settle, compromise or submit to arbitration any
accounts, debts, claims, dispute and matters which may arise between the
Partnership and any other Person and to grant an extension of time for the
payment or satisfaction thereof on any terms, with or without security;
J. Make arrangements for financing, including the
taking of all action deemed necessary or appropriate by the General Partner to
cause any approved loans to be closed;
K. Take all reasonable measures necessary to insure
compliance by the Partnership with applicable arrangements, and other
contractual obligations and arrangements entered into by the Partnership from
time to time in accordance with the provisions of this Agreement, including
periodic reports as required to lenders and using all due diligence to insure
that the Partnership is in compliance with its contractual obligations;
L. Maintain the Partnership's books and records;
M. Prepare and deliver, or cause to be prepared and
delivered by the Partnership's Accountants, all financial and other reports with
respect to the operations of the Partnership, and preparation and filing of all
Federal and state tax returns and reports; and
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N. Organize one or more partnerships or corporations
which are controlled, directly or indirectly, by the Partnership and make any
capital contributions required pursuant to the partnership agreements of any
such partnerships.
9.2 [Intentionally Omitted].
9.3 LIMITATIONS ON POWERS AND AUTHORITIES OF PARTNERS.
Notwithstanding the powers of the General Partner set forth in Section 9.1, the
General Partner shall have no right or power to do any of the following:
A. Do any act in contravention of this Agreement, or
any amendment hereto;
B. Do any act which would make it impossible to carry
on the ordinary business of the Partnership, except to the extent that such act
is specifically permitted by the terms hereof;
C. Possess Partnership property or assign rights in
specific Partnership property for other than Partnership purposes; or
D. Do any act in contravention of applicable law.
9.4 Title Holder.
------------
A. To the extent allowable under applicable law, title
to all or any part of the properties of the Partnership may be held in the name
of the Partnership, the General Partner or any other individual, corporation,
partnership, trust or otherwise, 100% of the beneficial interest in which shall
at all times be vested in the Partnership. Any such title holder shall perform
any and all of its respective functions to the extent and upon such terms and
conditions as may be determined from time to time by the General Partner.
B. Except as the General Partner may otherwise specify
from time to time, all property held by the General Partner or any wholly-owned
subsidiary of the General Partner (except the General Partner Units and other
Partnership Interests in the Partnership held by the General Partner and except
for the capital stock of any such wholly-owned subsidiary of the General
Partner) shall be deemed to be held for the benefit of the Partnership under
Section 9.4.A. The provisions of this Section 9.4.B shall not affect the
provisions of Section 8.9.
9.5 COMPENSATION OF THE GENERAL PARTNER. The General Partner
shall not be entitled to any compensation for services rendered to the
Partnership solely in its capacity as General Partner except with respect to
reimbursement for (i) those costs and expenses constituting Administrative
Expenses and (ii) such other amounts for which reimbursement is
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provided in this Agreement. The Partners acknowledge that all expenses of the
General Partner are for the benefit of the Partnership.
9.6 Standard of Conduct.
-------------------
A. Each Partner and each Person designated or delegated
by a Partner shall discharge its or his respective duties as a Partner or a
designee or delegate of a Partner in a manner it or he reasonably believes to be
in the best interests of the ▇▇▇▇▇▇▇ Group as a whole, including, without
limitation, the interests of the shareholders of the General Partner. For
purposes hereof, a person acting in a manner which either (i) is in the best
interests of the shareholders of the General Partner or (ii) furthers compliance
with the REIT Requirements, shall be deemed to be acting in the best interests
of the ▇▇▇▇▇▇▇ Group and shall be deemed to satisfy his standard of conduct
hereunder.
B. Without limiting the scope of the protections
afforded by the foregoing Section 9.6.A, no officer, director, employee or
shareholder of the General Partner, and no Partner or Person designated or
delegated by a Partner, shall be liable for any actions or omissions taken by
him or her, excepting for any actions or omissions which constitute actual
fraud, gross negligence, or deliberately dishonest conduct. The foregoing
limitations on liability include, but are not limited to, liability arising from
claims by Limited Partners, individually and/or derivatively, for alleged
breaches of fiduciary duty against any officer, director, employee or
shareholder of the General Partner or any Partner or Person designated or
delegated by a Partner hereunder.
C. Each Partner and each Person or Persons designated
or delegated by a Partner shall, in the performance of its or his duties, be
fully protected in relying in good faith upon the records of the Partnership and
upon such information, opinions, reports or statements presented to such Partner
or such Person or Persons designated or delegated by a Partner, as applicable,
by any Person (including, without limitation, legal counsel and public
accountants) as to matters that such Partner, or such Person or Persons
designated or delegated by a Partner reasonably believes are within such
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Partnership, such Partner, or such Person
or Persons designated or delegated by a Partner.
9.7 Waiver and Indemnification.
--------------------------
A. Neither the General Partner, any Person acting on
its behalf, nor any Person designated or delegated by the General Partner
pursuant hereto, shall be liable, responsible or accountable in damages or
otherwise to the Partnership or to any Partner for any acts or omissions
performed or omitted to be performed by them within the scope of the authority
conferred upon the General Partner by this Agreement and the Act, provided that
the General Partner's or such other Person's action or omission to act was taken
in good faith and in the belief that such action or omission was in the best
interests of the ▇▇▇▇▇▇▇ Group as a whole, including, without limitation, the
interests of the shareholders of the General Partner,
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and, provided further, that the General Partner's or such other Person's actions
or omissions shall not constitute actual fraud or gross negligence or
deliberately dishonest conduct. The Partnership shall, and hereby does,
indemnify and hold harmless the General Partner and its Affiliates and any
individual acting on their behalf from any loss, damage, claim or liability,
including, but not limited to, reasonable attorneys' fees and expenses, incurred
by them by reason of any act performed by them in accordance with the standards
set forth above or in enforcing the provisions of this indemnity; provided,
however, except as provided in Article 14, no Partner shall have any personal
liability with respect to the foregoing indemnification, any such
indemnification to be satisfied solely out of the assets of the Partnership.
B. Any Person entitled to indemnification under this
Agreement shall be entitled to receive, upon application therefor, advances to
cover the costs of defending any proceeding against such Person; provided,
however, that such advances shall be repaid to the Partnership without interest,
if such Person is found by a court of competent jurisdiction upon entry of a
final judgment not to be entitled to such indemnification. All rights of the
indemnity hereunder shall survive the dissolution of the Partnership; provided,
however, that a claim for indemnification under this Agreement must be made by
or on behalf of the Person seeking indemnification prior to the time the
Partnership is liquidated hereunder. The indemnification rights contained in
this Agreement shall be cumulative of, and in addition to, any and all rights,
remedies and recourse to which the person seeking indemnification shall be
entitled, whether at law or at equity. Indemnification pursuant to this
Agreement shall be made solely and entirely from the assets of the Partnership
and no Partner shall be liable therefor.
9.8 OTHER ACTIVITIES OF PARTNERS AND AGREEMENTS WITH RELATED
PARTIES. The General Partner shall devote its full-time effort in furtherance of
the business of the ▇▇▇▇▇▇▇ Group, it being expressly understood that the
General Partner may conduct its activities directly, through members of the
▇▇▇▇▇▇▇ Group as well as and through the Partnership, as the General Partner
determines is appropriate in its sole and absolute discretion. Without limiting
the foregoing, the General Partner, either directly or through other members of
the ▇▇▇▇▇▇▇ Group other than the Partnership, may acquire, own, manage, develop,
improve, lease, invest in or otherwise deal with commercial real estate
including, without limitation, any shopping center, office building or retail
project. Except as may otherwise be agreed to in writing, each Limited Partner
and its affiliates shall be free to engage in, to conduct or to participate in
any business or activity whatsoever, including, without limitation, the
acquisition, development, management and exploitation of real and personal
property (other than property of the Partnership), without any accountability,
liability or obligation whatsoever to the Partnership or to any other Partner,
even if such business or activity competes with or is enhanced by the business
of the Partnership. The General Partner, in the exercise of its power and
authority under this Agreement, may contract and otherwise deal with, or
otherwise obligate the Partnership to deal with, entities in which the General
Partner or any one or more of the officers, directors or stockholder of the
General Partner may have an ownership or other financial interest, whether
direct or indirect.
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9.9 Other Matters Concerning the General Partner.
--------------------------------------------
A. The General Partner shall be protected in relying,
acting or refraining from acting on any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, bond, debenture,
or other paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
B. The General Partner may exercise any of the powers
granted or perform any of the duties imposed by this Agreement either directly
or through agents. The General Partner may consult with counsel, accountants,
appraisers, management consultants, investments bankers and other consultants
selected by it, each of whom may serve as consultants for the Partnership. An
opinion by any consultant on a matter which the General Partner believes to be
within its professional or expert competence shall be full and complete
protection as to any action taken or omitted by the General Partner based on the
opinion and taken or omitted in good faith. The General Partner shall not be
responsible for the misconduct, negligence, acts or omissions of any consultant
or contractor of the Partnership or of the General Partner, and shall assume no
obligations other than to use due care in the selection of all consultants and
contractors.
C. No mortgagee, grantee, creditor or any other person
dealing with the Partnership shall be required to investigate the authority of
the General Partner or secure the approval of or confirmation by any Limited
Partner of any act of the General Partner in connection with the conduct of the
Partnership business.
D. The General Partner may retain such persons or
entities as it shall determine (including the General Partner or any entity in
which the General Partner shall have an interest or with which it is affiliated)
to provide services to or on behalf of the Partnership. The General Partner
shall be entitled to reimbursement from the Partnership for its out-of-pocket
expenses (including, without limitation, amounts paid or payable to the General
Partner or any entity in which the General Partner shall have an interest or
with which it is affiliated) incurred in connection with Partnership business.
Such expenses shall be deemed to include those expenses required in connection
with the administration of the Partnership such as the maintenance of
Partnership books and records, management of the Partnership property and
assets, preparation of information respecting the Partnership needed by the
Partners in the preparation of their individual tax returns and all other
Administrative Expenses.
9.10 PARTNER EXCULPATION. Except as provided in Article 14 and
except for fraud, willful misconduct and gross negligence, no property or assets
of any Partner, other than its interest in the Partnership shall be subject to
levy, execution or other enforcement procedures for satisfaction of judgment (or
other judicial process) in connection with the debts or liabilities of the
Partnership or in connection with this Agreement. To the fullest extent
permitted by law, no officer, director or shareholder of the Partnership shall
be liable to the Partnership or any Partner for money damages or recision except
for (i) active and deliberate dishonesty established by a final judgment or (ii)
actual receipt of an improper benefit or profit
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in money, property or services. This Agreement is executed by an officer of the
General Partner solely as an officer of the same and not in his own individual
capacity. Except as provided in Article 14, no advisor, director, participant or
agent of any Partner (or of any partner of a Partner) shall be personally liable
in any matter or to any extent under or in connection with this Agreement, and
the Partnership, each Partner and their respective successors or assigns shall
look solely to the interest of the other Partners in the Partnership for the
payment of any claim or for any performance hereunder.
10. BANKING. The funds of the Partnership shall be kept in accounts
designated by the General Partner and all withdrawals therefrom shall be made on
such signature or signatures as shall be designated by the General Partner.
11. Accounting.
----------
11.1 FISCAL YEAR. The fiscal and taxable year of the Partnership
shall end on the last day of December of each year, unless another fiscal year
end is selected by the General Partner.
11.2 BOOKS OF ACCOUNT. The Partnership books of account shall be
maintained at the principal office designated in Section 2.3 above or at such
other locations and by such person or persons as may be designated by the
General Partner. The Partnership shall pay the expense of maintaining its books
of account. Each Partner shall have, during reasonable business hours and upon
reasonable prior notice, access to the books of the Partnership and, in
addition, at its expense, shall have the right to copy such books. The General
Partner, at the expense of the Partnership, shall cause to be prepared and
distributed to the Partners annual financial data sufficient to reflect the
status and operations of the Partnership and its assets and to enable each
Partner to file its federal income tax return.
11.3 REPORTS. The General Partner shall cause copies of the
consolidated Audited Financial Statements for the Partnership and the Financing
Partnership, together with the reports thereon, and all supplementary schedules
and information prepared by the Accountants, to be submitted to each Limited
Partner who requests the same in writing by the latest of (i) ten (10) business
days following receipt of the such documents from the Accountants, (ii) ten (10)
business days following receipt of the Limited Partner's request, or (iii) April
1 of the year following the calendar year with respect to which such documents
are prepared. The Partnership shall also cause to be prepared such reports
and/or information as are necessary for the General Partner to determine its
qualification as a REIT and its compliance with REIT Requirements.
11.4 AUDITS. Not less frequently than annually, the books and
records of the Partnership shall be audited by the Accountants. The General
Partner shall, unless determined otherwise by the General Partner, engage the
Accountants to audit the books and records of the Financing Partnership and any
other consolidated subsidiary of the Partnership.
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11.5 METHOD OF ACCOUNTING. Except for purposes of Article 7 and
the maintenance of Capital Accounts, the Partnership books of account shall be
maintained and kept, and its income, gains, losses and deductions shall be
accounted for, in accordance with sound principles of accounting consistently
applied, or such other method of accounting as may be adopted hereafter by the
General Partner. All elections and options available to the Partnership for
federal or state income tax purposes shall be taken or rejected by the
Partnership in the sole discretion of the General Partner.
11.6 TAX ELECTION. All elections required or permitted to be
made by the Partnership under any applicable tax law shall be made by the
General Partner in its sole discretion.
11.7 TAX MATTERS PARTNER. The General Partner is hereby
designated the Tax Matters Partner (hereinafter referred to as the "TMP") of the
Partnership and shall have all the rights and obligations of the TMP under the
Code.
11.8 ADMINISTRATIVE ADJUSTMENTS. If the TMP receives notice of a
Final Partnership Administrative Adjustment (the "FPAA") or if a request for an
administrative adjustment made by the TMP is not allowed by the United States
Internal Revenue Service (the "IRS") and the IRS does not notify the TMP of the
beginning of an administrative proceeding with respect to the Partnership's
taxable year to which such request relates (or if the IRS so notifies the TMP
but fails to mail a timely notice of an FPAA), the TMP may, but shall not be
obligated to, petition a court for readjustment of partnership items. In the
case of notice of an FPAA, if the TMP determines that the United States District
Court or Claims Court is the most appropriate forum for such petition, the TMP
shall notify each person who was a Partner at any time during the Partnership's
taxable year to which the IRS notice relates of the approximate amount by which
the IRS notice relates of the approximate amount by which its tax liability
would be increased (based on such assumptions as the TMP may in good faith make)
if the treatment of partnership items on his return was made consistent with the
treatment of partnership items on the Partnership's return, as adjusted by the
FPAA. Each such person shall deposit with the TMP, for deposit with the IRS, the
approximate amount of his increased tax "liability" together with a written
agreement to make additional deposits if required to satisfy the jurisdictional
requirements of the Court, within thirty days after the TMP's notice to such
person.
12. Transfers of Partnership Interests.
----------------------------------
12.1 CONSENT. The General Partner may, in its sole and absolute
discretion, transfer, assign, sell, encumber or otherwise dispose of all or any
part of its interest in the Partnership, without the consent of the Limited
Partners; provided, however, that, prior to March 16, 1998, the General Partner
shall not, without the consent of a majority of the Limited Partners, transfer,
assign, sell, encumber or otherwise dispose of all or any part of its interest
in the Partnership to any of its Affiliates other than an Affiliate whose
securities will, in connection with such transfer, become issuable upon
redemption of the Units. Nothing in
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this Section 12.1 shall preclude the transfer of Units to the extent necessary
to provide that the Partners (other than the General Partner) are entitled to at
least 1% in the aggregate of the distributions to the Partners pursuant to
Section 8.4 for the taxable year and subsequent taxable years.
12.2 Limited Partners.
----------------
A. No Limited Partner or substituted Limited Partner
shall, without the prior written consent of the General Partner which consent
may be withheld in its sole and absolute discretion, transfer, assign, sell,
encumber or otherwise dispose of (a "Transfer") all or any part of his interest
in the Partnership, except (i) as otherwise permitted by Section 13.2 of this
Agreement and for intervivos intra-family transfers for estate planning
purposes, and (ii) for pledges of Units by Limited Partners to secure the
repayment of a loan, provided that the Limited Partner shall have (A) first
obtained the written agreement of the pledgee to exercise its redemption rights
with respect to any pledged Units pursuant to Section 3.2.C immediately upon
taking any action with respect to such Units and (B) submitted a copy of such
agreement and pledge to the General Partner. Any Transferee (as defined below)
of Units transferred as permitted hereby shall be subject to the provisions of
Article 14 to the extent applicable. A Limited Partner shall notify the General
Partner of any Transfers of beneficial interest or other interest which occurs
without a transfer of record ownership, as well as any pledge or other
collateral transfer. No part of the interest of a Limited Partner shall be
subject to the claims of any creditor, any spouse for alimony or support, or to
legal process, or be voluntarily or involuntarily alienated or encumbered,
except as may be specifically provided for in Section 12.2.A or Section 13.2 of
this Agreement. A Limited Partner shall not be permitted to retire or withdraw
from the Partnership except as expressly permitted by this Agreement.
B. An assignee, legatee, distributee or other
transferee (whether by conveyance, operation of law or otherwise) (a
"Transferee") of all or any portion of a Limited Partner's interest in the
Partnership shall be entitled to receive distributions hereunder attributable to
such interest acquired by reason of such Transfer, from and after the effective
date of the Transfer of such interest; provided, however, anything in this
Agreement to the contrary notwithstanding, except as provided in Section 12.2.A
or 13.2, (i) no Transfer by a Limited Partner shall be effective until such
Transfer has been consented to by the General Partner, (ii) no Transferee shall
be considered a substituted Limited Partner, (iii) the Partnership and the
General Partner shall be entitled to treat the transferor of such interest as
the absolute owner thereof in all respects, and shall incur no liability for
distributions which are made to such transferor until such time as the written
instrument of Transfer has been received by the General Partner and the
"effective date" of the Transfer has passed, and (iv) the General Partner shall
have the right to require any such transferor to have such transferor's
Partnership Interest redeemed in accordance with the provisions of Section 3.2.
The "effective date" of any Transfer shall be the last day of the month set
forth on the written instrument of Transfer or such other date consented to in
writing by the General Partner as the "effective date."
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C. Notwithstanding anything to the contrary contained
in this Article 12, (a) no Transfer shall be effective to the extent that such
Transfer, by treating the Unit or Partnership Interest so transferred as if it
had been tendered for redemption and then acquired by the General Partner for
Common Stock in accordance with Section 3.2, would be prohibited by or violate
any provision of the Charter of the General Partner (including those limiting
the ownership of Common Stock in certain instances) and (b) no Transfer of a
Partnership Interest by any Partner shall be made (i) to any person or entity
that lacks the legal right, power or capacity to own a Partnership Interest,
(ii) in violation of applicable law, (iii) if such Transfer would cause the
General Partner to fail to qualify as a REIT, (iv) if such Transfer would cause
a termination of the Partnership for federal income tax purposes (unless the
General Partner consents to such transfer), (v) if such Transfer would, in the
opinion of counsel to the Partnership, cause the Partnership or the Financing
Partnership (or any other entity taxed as a partnership for federal income tax
purposes) (A) to cease to be classified and taxed as a partnership for federal
income tax purposes or (B) to be a "publicly traded partnership" within the
meaning of Section 7704 of the Code, (vi) if such Transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title 1 of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(c) of the Code), or (vii)
if such Transfer would, in the opinion of counsel to the Partnership, cause any
portion of the assets of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations Section 2510.3-101.
12.3 ADMISSION ADJUSTMENTS. The General Partner, when necessary,
shall cause this Agreement to be amended from time to time to reflect the
addition or withdrawal of Partners, including the corresponding adjustments to
Percentage Interests and Units required pursuant to Section 3.1.
12.4 UNIT CERTIFICATES. Unit Certificates are transferable only
to the extent that the Units or other Partnership Interests evidenced by such
Unit Certificates are transferable under this Article 12.
13. Rights and Obligations of the Limited Partners.
----------------------------------------------
13.1 NO PARTICIPATION IN MANAGEMENT. Except as expressly
permitted hereunder, the Limited Partners shall not take part in the management
of the Partnership's business, transact any business in the Partnership's name
or have the power to sign documents for or otherwise bind the Partnership.
13.2 DEATH, LEGAL INCOMPETENCY, ETC. OF A LIMITED PARTNER. The
death, legal incompetency, insolvency, dissolution or bankruptcy of a Limited
Partner shall not dissolve or terminate the Partnership. Upon ten Trading Days'
notice to the General Partner of the death or incapacity of an individual
Limited Partner, such individual Limited Partner's interest in the Partnership
shall be transferred either by will, the laws of intestacy or otherwise to the
legal representative or successor of such individual Limited Partner who shall
be bound in all
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respects by the terms of this Agreement, subject to the General Partner's right
to redeem such interest in accordance with the provisions of Section 3.2.
13.3 NO WITHDRAWAL. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner.
13.4 DUTIES AND CONFLICTS. The General Partner recognizes that
the Limited Partners and their Affiliates have or may have other business
interests, activities and investments, some of which may be in conflict or
competition with the business of the Partnership, and that such persons are
entitled to carry on such other business interests, activities and investments.
The Limited Partners and their Affiliates may engage in or possess an interest
in any other business or venture of any kind, independently or with others, on
their own behalf or on behalf of other entities with which they are affiliated
or associated, and such persons may engage in any activities, whether or not
competitive with the Partnership, without any obligation to offer any interest
in such activities to the Partnership or to any Partner. Neither the Partnership
nor any Partner shall have any right, by virtue of this Agreement, in or to such
activities, or the income or profits derived therefrom, and the pursuit of such
activities, even if competitive with the business of the Partnership, shall not
be deemed wrongful or improper.
14. Indemnification and Security Interest.
-------------------------------------
14.1 [Intentionally Omitted].
14.2 INDEMNITY COLLATERAL. Indemnity Collateral shall mean with
respect to the TTC Guarantors: (a) the shares of Common Stock and Units held or
otherwise beneficially owned by the TTC Guarantors and their family members
which are set forth on EXHIBIT F to the Prior Agreement; (b) any shares of
Common Stock received by the TTC Guarantors as a result of the exchange of Units
for shares of Common Stock; (c) any Units transferred by the TTC Guarantors to a
family member for estate planning purposes in accordance with Section 12.2.A(i);
and (d) stock dividends, stock splits or other securities received with respect
to the shares of Common Stock or Units described in (a), (b) or (c), but
expressly excluding any cash dividends payable with respect to Units or shares
of Common Stock prior to any claim by an Indemnified Party hereunder.
▇▇.▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇.
------------------------
A. With respect to the Commons of Chicago Ridge, the
TTC Guarantors agree to indemnify and hold harmless the General Partner and the
Partnership and each of their subsidiaries and all members of the ▇▇▇▇▇▇▇ Group
and their respective officers, directors, employees and representatives (each,
an "Indemnified Party" and collectively, the "Indemnified Parties") from and
against all demands, claims, actions or causes of action, assessments, losses,
fines, penalties, damages, liabilities, costs and expenses (including without
limitation, reasonable attorneys' fees and expenses of counsel chosen by the
Indemnified
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Parties and costs of litigation and reasonable fees and expenses of accountants
chosen by the Indemnified Parties) and charges sustained or incurred by any of
the Indemnified Parties as a result of or arising out of any matter, condition
or act at the Commons of Chicago Ridge involving any Environmental Claim, which
matter, condition or act existed on or arose prior to the date of the Original
Agreement (whether or not disclosed in the environmental reports set forth as
exhibits to the ▇▇▇▇▇▇ Contribution Agreements or as described in the Prospectus
or other reports filed by ▇▇▇▇▇▇ with the SEC or otherwise known by any of the
TTC Guarantors), except for the Remediation Work (as defined in that certain
Agreement Concerning Commons of Chicago Ridge, dated as of October 30, 1995, by
and among ▇▇▇▇▇▇▇, the Partnership and the TTC Guarantors); provided that, no
claim for indemnity may be maintained pursuant to this Section 14.3, unless such
Indemnified Party shall have delivered a written notice specifying the details
of such claim to the TTC Guarantors on or before October 4, 2003.
The indemnification obligation set forth in the preceding paragraph shall
cover all demands, claims, actions or causes of action, assessments, losses,
fines, penalties, damages, liabilities, costs and expenses (including without
limitation, reasonable attorneys' fees and expenses of counsel chosen by the
Indemnified Parties and costs of litigation and reasonable fees and expenses of
accountants chosen by the Indemnified Parties) and charges sustained or incurred
by any of the Indemnified Parties as a result of or arising out of any matter,
condition or act at the Commons of Chicago Ridge Annex involving any
Environmental Claim only to the extent that such matter, condition or act is the
result of or arises out of a matter, condition or act at the Commons of Chicago
Ridge that existed on or arose prior to the date of the Original Agreement.
B. The Indemnified Parties shall have full recourse to
the TTC Guarantors and all of their assets for the indemnity obligation set
forth in this Section 14.3; provided that the Indemnified Parties shall first
use their best efforts to realize upon their security interests in the Indemnity
Collateral owned by the TTC Guarantors prior to asserting any recourse against
any other assets owned by the TTC Guarantors.
C. The Indemnified Parties agree to the following with
respect to any indemnification obligations of the TTC Guarantors hereunder:
(i) to furnish the TTC Guarantors with copies of all claims,
reports, orders, or other documentation which in any
material way relate to the subject matter of an indemnity
obligation asserted or which may be asserted against a TTC
Guarantor as soon as possible after the same are received;
(ii) to advise the TTC Guarantors of meetings with the Illinois
EPA with respect to any remediation plan or other material
matter bearing directly on such indemnity obligation of the
TTC Guarantors and invite the TTC Guarantors to attend such
meeting;
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(iii) not to agree to a remediation plan with the Illinois EPA
without first disclosing the plan to the TTC Guarantors and
reasonably considering in good faith any comments of the
TTC Guarantors thereon or any alternate remediation plan
proposed by the TTC Guarantors;
(iv) that any remediation plan proposed by the Indemnified
Parties shall propose a scope of work appropriate to a
retail use of the subject premises and not to a more
rigorous standard of remediation, except as may be required
by applicable laws;
(v) that the TTC Guarantors and their consultants shall have
reasonable access to the premises which are the subject of
the indemnification obligation for testing, provided that
the TTC Guarantors shall be responsible for any claims,
losses, costs or expenses of Indemnified Parties arising
therefrom;
(vi) not to settle any Environmental Claims which are subject to
an indemnification obligation hereunder without first
disclosing the terms of the settlement to the TTC
Guarantors and reasonably considering in good faith any
comments of the TTC Guarantors thereon;
(vii) to use on-site any materials excavated in connection with
construction on the Commons of Chicago Ridge, to the extent
deemed appropriate by the Indemnified Parties in light of
relevant legal requirements and construction standards;
provided that if the transport or disposal off-site of any
"special waste", including "hazardous waste" (both as
defined under Illinois statutes and regulations), or of any
other material subject to special or hazardous waste
requirements, has an incremental cost above the cost that
would be incurred if such materials were not so classified
or regulated, the TTC Guarantors shall bear such
incremental cost; and
(viii) to obligate contractors with respect to construction on the
Commons of Chicago Ridge to require workers to wear
protective clothing and apparatus to the extent required by
law if, in connection with the construction, such workers
will be exposed to special or hazardous wastes or other
materials subject to special or hazardous waste
requirements.
The agreements of the Indemnified Parties set forth in sub-sections (i)
through (viii) above shall not be deemed to require the consent or approval of
the TTC Guarantors as to any actions by the Indemnified Parties relating to the
subject matter of any indemnity obligation.
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14.4 TTC Guarantors.
--------------
A. With respect to indemnity obligations of the TTC
Guarantors under Section 14.3, the TTC Guarantors have granted and hereby
confer, subject to the provisions of Section 14.4.D, to the General Partner a
lien upon and a continuing security interest in, the Indemnity Collateral which
shall be security for the indemnity obligations of the TTC Guarantors, as
applicable, under this Article 14. Notwithstanding the foregoing, (i) Units
owned by the TTC Guarantors and their family members subject to the lien and
security interest granted under this Section 14.4.A may be transferred in
accordance with the provisions of Section 13.2 free and clear of such lien and
security interest and (ii) shares of Common Stock of the General Partner owned
by the TTC Guarantors and their family members subject to the lien and security
interest granted under this Section 14.4.A may be transferred free and clear of
such lien and security interest; provided, however, that, in each instance, once
a claim for indemnity has been made in accordance with this Article 14, the TTC
Guarantors may not under any circumstance sell or otherwise transfer such Units
or shares of Common Stock or any other Indemnity Collateral. In addition, once
an indemnity claim has been made hereunder, all cash or other dividends made
with respect to Units or shares of Common Stock shall be considered Indemnity
Collateral and shall be placed by the General Partner in an escrow account until
such claim is resolved.
B. The TTC Guarantors have (i) delivered to the General
Partner certificates representing all of the shares of Common Stock owned by
them in such manner and accompanied by such instruments, including stock
transfer powers duly endorsed in blank, as shall be necessary to grant the
General Partner a fully perfected first priority security interest in such
shares and in any shares of Common Stock that may, after the date hereof, be
issued to the TTC Guarantors by stock dividend, stock split or similar
distribution and (ii) prepared and filed UCC financing statements and such other
documents and have taken other action necessary to grant the General Partner a
fully perfected first priority security interest in all of their respective
Units. In the event the TTC Guarantors are determined to have an indemnification
obligation pursuant to Section 14.4.D, then each Indemnified Party shall have
all of the rights now or hereafter existing under applicable law, and all rights
as a secured creditor under the Uniform Commercial Code ("UCC") in all relevant
jurisdictions, with respect to the Indemnity Collateral, and the TTC Guarantors
agree to take all such actions as may be reasonably requested of them by an
Indemnified Party to ensure that the Indemnified Parties can realize on such
security interest.
C. In the event an Indemnified Party asserts, within
the time period set forth in Section 14.3.A, that the TTC Guarantors have an
indemnification obligation to an Indemnified Party under this Article 14, and
TTC Guarantors are determined to have an indemnification obligation pursuant to
Section 14.4.D, then (x) the General Partner shall, to the full extent permitted
by law, be deemed, without payment of further consideration or the taking of
further action by the TTC Guarantors or any of their subsidiaries, to have
acquired from any or all of the TTC Guarantors such portion of the Indemnity
Collateral as shall be equal in value (based, in the case of Units, on the
number of shares of Common Stock for
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which such Units could be exchanged, computed as of the date the Indemnity
Collateral is acquired by the General Partner pursuant to this Section 14.3.C,
and in the case of the Units or the Common Stock, on the Current Per Share
Market Price computed as of the date of such acquisition) to the amount
recoverable from or payable by or indemnified by the TTC Guarantors under this
Article 14, and (y) the Indemnified Parties shall have all of the rights now or
hereafter existing under applicable law and all rights as a secured creditor
under the UCC in all relevant jurisdictions, with respect to the Indemnity
Collateral and the TTC Guarantors agree to take all such actions as may be
reasonably requested of them by the General Partner to ensure that the
Indemnified Parties can realize on such security interest.
D. Each of the Indemnified Parties shall have the right
to submit any dispute concerning whether a particular environmental claim is
within the parameters of Section 14.3.A to arbitration in accordance with the
provisions of Article 18. The lien and the security interest in Indemnity
Collateral granted hereunder shall not be released with respect to the TTC
Guarantors' shares of Common Stock and Units until all of the indemnification
obligations of the TTC Guarantors hereunder have expired or been satisfied in
accordance with their terms; provided, however, that Units owned by the TTC
Guarantors and their family members may be transferred in accordance with this
Agreement and shares of Common Stock owned by the TTC Guarantors and their
family members may be transferred free and clear of such lien and security
interest, in each such case subject to the limitations of Section 14.4.A. Upon
satisfaction of the conditions to the release of the lien and security interest
in the Indemnity Collateral set forth above, the General Partner shall prepare
and file all documents and shall take all other action necessary on its part to
release such security interest in the applicable Indemnity Collateral.
15. Liquidation and Dissolution of Partnership.
------------------------------------------
15.1 TERMINATION EVENTS. The Partnership shall be dissolved and
its affairs wound up in the manner hereinafter provided upon the occurrence of
an event described in Article 6.
15.2 METHOD OF LIQUIDATION. Upon the happening of any of the
events specified in Article 6, the General Partner (or if there be no General
Partner, a liquidating trustee selected by those Limited Partners holding in the
aggregate more than fifty percent (50%) of the Percentage Interests held by all
Limited Partners) shall immediately commence to wind up the Partnership's
affairs and shall liquidate the assets of the Partnership as promptly as
possible, unless the General Partner, or the liquidating trustee, shall
determine that an immediate sale of Partnership assets would cause undue loss to
the Partnership, in which event the liquidation may be deferred for a reasonable
time. The Partners shall continue to share Operating Cash Flow and Capital Cash
Flow during the period of liquidation in the same proportions as before
dissolution. The proceeds from liquidation of the Partnership, including
repayment of any debts of Partners to the Partnership, shall be applied in the
order of priority as follows:
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A. Debts of the Partnership, including repayment of
principal and interest on loans and advances made by the General Partner; then
B. To the establishment of any reserves deemed
necessary or appropriate by the General Partner, or by the person(s) winding up
the affairs of the Partnership in the event there is no remaining General
Partner of the Partnership, for any contingent or unforeseen liabilities or
obligations of the Partnership. Such reserves established hereunder shall be
held for the purpose of paying any such contingent or unforeseen liabilities or
obligations and, at the expiration of such period as the General Partner, or
such person(s) deems advisable, the balance of such reserves shall be
distributed in the manner provided hereinafter in this Section 15.2 as though
such reserves had been distributed contemporaneously with the other funds
distributed hereunder; then
C. To the Partners in accordance with the provisions of
Sections 8.4 and 8.5; provided, however, that if the Partnership is liquidated
other than in connection with the liquidation of the ▇▇▇▇▇▇▇ Group,
distributions to the Partners under this Section 15.2.C shall be made in the
following order and priority:
1. First, to those Partners (whether Limited or
General) holding Preferred Units, if any, issued by the Partnership pursuant to
Section 3.1.C, an amount sufficient to satisfy the liquidation rights of such
Preferred Units (to the extent such liquidation rights have been designated as
senior to the liquidation rights of other Units or Partnership Interests);
2. Second, to the Limited Partners as a class
(excluding for such purposes, all Preferred Units with liquidation rights
designated as senior to the liquidation rights of other Units or Partnership
Interests), an amount equal to the lesser of (a) the sum of (i) the amount (or
portion thereof) of any Current Yield which has not been paid to the Limited
Partners pursuant to Section 8.4.A for any prior period, plus (ii) the product
of (x) the Conversion Factor, (y) the number of Units held by the Limited
Partners and (z) the Current Per Share Market Price of the Common Stock as of
the close of the period ending with the liquidation and (b) 99% of the
liquidation proceeds remaining after the application of Sections 15.2.A, 15.2.B
and 15.2.C.1; and
3. Third, the remainder of liquidation proceeds
shall be distributed to the General Partner.
15.3 DISTRIBUTION IN KIND. The General Partner may make
distributions pursuant to this Agreement in cash or in kind, as it determines is
appropriate in its sole discretion; provided that no in-kind distributions shall
be made to any Limited Partner other than the General Partner. In the event the
General Partner determines that it is necessary or desirable to make a
distribution of Partnership property in kind, the General Partner may transfer
and convey such property to the distributees as tenants in common, subject to
any liabilities attached thereto, so as to vest in them undivided interests in
the whole of such
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property in proportion to their respective rights to share in the proceeds of
the sale of such property (other than as a creditor) in accordance with the
provisions of Section 15.2.
15.4 DOCUMENTATION OF LIQUIDATION. Upon the completion of the
resolution and liquidation of the Partnership, the Partnership shall terminate
and the liquidating trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
15.5 LIABILITY OF THE LIQUIDATING TRUSTEE. The liquidating
trustee shall be indemnified and held harmless by the Partnership from and
against any and all claims, demands, liabilities, costs, damages and causes of
action of any nature whatsoever arising out of or incidental to the liquidating
trustee's taking of any action authorized under or within the scope of this
Agreement; provided, however, that the liquidating trustee shall not be entitled
to indemnification, and shall not be held harmless, where the claim, demand,
liability, cost, damage or cause of action at issue arose out of:
A. A matter entirely unrelated to the liquidating
trustee's action or conduct pursuant to the provisions of this Agreement; or
B. The proven misconduct or negligence of the
liquidating trustee.
16. POWER OF ATTORNEY. Each Limited Partner hereby irrevocably
constitutes and appoints the Chief Executive Officer, the President and each
person holding the office of Executive Vice President of the General Partner,
with full power of substitution, its true and lawful attorney, for him and in
his name, place and ▇▇▇▇▇ and for his use and benefit, to sign, swear to,
acknowledge, file and record:
(i) this Agreement, and amendments to this
Agreement;
(ii) any certificates, instruments and documents
(including assumed and fictitious name certificates) as may be required by, or
may be appropriate under, the laws of the State of Delaware or any other State
or jurisdiction in which the Partnership is doing or intends to do business, in
order to discharge the purposes of the Partnership or otherwise in connection
with the use of the name or names used by the Partnership;
(iii) any other instrument which may be required to
be filed or recorded by the Partnership on behalf of the Partners under the laws
of any State or by any governmental agency in order for the Partnership to
conduct its business;
(iv) any documents which may be required to effect
the continuation of the Partnership, the admission of a substitute or additional
Partner, or the dissolution and termination of the Partnership, provided such
continuation, admission or dissolution and termination is not in violation of
any provision of this Agreement; and
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(v) any documents which may be required or
desirable to have the General Partner appointed, and act as, the "Tax Matters
Partner" as described in the Code.
The foregoing grant of authority is a special power of attorney coupled with an
interest, is irrevocable and shall survive the death or incapacity of any
individual Limited Partner, and shall survive the delivery of any assignment by
a Limited Partner of the whole or any portion of his interest in the
Partnership.
17. Amendment of Agreement.
----------------------
17.1 GENERAL. The General Partner, without the consent of the
Limited Partners, may amend this Agreement in any respect by executing a written
instrument setting forth the terms of such amendment; provided, however, that,
except as provided in Section 17.2, any amendment which alters or changes (i)
the distribution rights of any Limited Partner under Article 8, or (ii) a
Limited Partner's Redemption Rights under Section 3.2, shall require the consent
of Limited Partners holding more than 50% of the Limited Partner Units (other
than Preferred Units), except that the consent of such Limited Partners shall
not be required to amend Article 8 to the extent deemed necessary, in the sole
discretion of the General Partner, to reflect the seniority of any distribution
or liquidation rights of any Preferred Units issued under Section 3.1.C.
17.2 MERGER, ETC. OF GENERAL PARTNER. Notwithstanding anything
to the contrary contained herein, in the event that (i) the General Partner or
any of its corporate subsidiaries engages in any merger, consolidation or other
combination with or into another Person in which securities of the General
Partner are being issued, acquired, converted or exchanged, (ii) the General
Partner engages in the sale of all or substantially all of its assets, or (iii)
the General Partner engages in a reclassification, recapitalization or change in
the outstanding shares of its stock (other than a change in par value or from
par value to no par value, or as a result of a subdivision or combination as
described in the definition of Conversion Factor) which results in the holders
of Common Stock receiving cash, securities or other property (any of the events
listed in clauses (i), (ii) or (iii) hereinafter referred to as a
"Transaction"), the General Partner (or its successor or transferee) may amend
the provisions of this Agreement (including, without limitation, the definition
of Conversion Factor) in any respect in connection with such Transaction
(regardless of whether the amendment alters or changes the distributions to a
Limited Partner or a Limited Partner's Redemption Rights) without obtaining the
consent of any Limited Partner; provided that either (i) in connection with the
Transaction, the Limited Partners are offered the opportunity to receive for
each Unit held by them an amount of cash, securities, or other property equal to
the product of the Conversion Factor and the amount of cash, securities or other
property, if any, paid to a holder of one share of Common Stock as a result of
the Transaction, or (ii) the General Partner or its corporate subsidiary is the
acquiror in such Transaction and the holders of the Common Stock of the General
Partner are not receiving cash, securities, or other property in such
Transaction.
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18. Arbitration.
-----------
18.1 GENERAL. Notwithstanding anything to the contrary contained
in this Agreement, all claims, disputes and controversies between the parties
hereto (including, without limitation, any claims, disputes and controversies
between the Partnership and any one or more of the Partners and any claims,
disputes and controversies between any one or more Partners and the
indemnification obligations of the TTC Guarantors under Article 14) arising out
of or in connection with this Agreement or the Partnership created hereby, or
any act or failure to act by the General Partner or any other Partner hereunder,
in each case whether or not a party has responded to a claim for indemnification
in accordance with Section 14.4.D, shall be resolved by binding arbitration in
Boston, Massachusetts by J.A.M.S./ENDISPUTE, in accordance with this Article 18.
18.2 PROCEDURES. Any arbitration called for by this Article 18
shall be conducted in accordance with the following procedures:
A. The Partnership or any Partner (the "Requesting
Party") may demand arbitration pursuant to Section 18.1 at any time by giving
written notice of such demand (the "Demand Notice") to all other Partners and
(if the Requesting Party is not the Partnership) to the Partnership which Demand
Notice shall describe in reasonable detail the nature of the claim, dispute or
controversy.
B. Within fifteen (15) days after the giving of a
Demand Notice, J.A.M.S./ENDISPUTE shall select and designate in writing three
reputable, disinterested individuals willing to act as an arbitrator of the
claim, dispute or controversy in question.
C. The presentations of the parties hereto in the
arbitration proceeding shall be commenced and completed within sixty (60) days
after the selection of the arbitration panel pursuant to subsection B above, and
the arbitration panel shall render its decision in writing within thirty (30)
days after the completion of such presentations. Any decision concurred in by
any two (2) of the arbitrators shall constitute the decision of the arbitration
panel, and unanimity shall not be required.
D. The arbitration panel shall have the discretion to
include in its decision a direction that all or part of the attorneys' fees and
costs of any party or parties and/or the costs of such arbitration be paid by
any other party or parties. On the application of a party before or after the
initial decision of the arbitration panel, and proof of its attorneys' fees and
costs, the arbitration panel shall order the other party to make any payments
directed pursuant to the preceding sentence.
18.3 BINDING CHARACTER. Any decision rendered by the arbitration
panel pursuant to this Section shall be final and binding on the parties hereto,
and judgment thereon may be entered by any state or federal court of competent
jurisdiction.
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18.4 EXCLUSIVITY. Arbitration shall be the exclusive method
available for resolution of claims, disputes and controversies described in
Section 18.1, and the Partnership and its Partners stipulate that the provisions
hereof shall be a complete defense to any suit, action, or proceeding in any
court or before any administrative or arbitration tribunal with respect to any
such claim, controversy or dispute. The provisions of this Section 18.4 shall
survive the dissolution of the Partnership.
18.5 NO ALTERATION OF AGREEMENT. Nothing contained herein shall
be deemed to give the arbitrators any authority, power or right to alter,
change, amend, modify, add to, or subtract from any of the provisions of this
Agreement.
19. Miscellaneous.
-------------
19.1 NOTICES. Any notice, election or other communication
provided for or required by this Agreement shall be in writing and shall be
deemed to have been given when delivered by telecopy or other facsimile
transmission (confirmed by any of the methods that follow) or by hand, the first
business day after sent by overnight courier (such as Federal Express), or on
the second business day after deposit in the United States Mail, certified or
registered, return receipt requested, postage prepaid, properly addressed to the
Partner to whom such notice is intended to be given at the address for the
Partner set forth on EXHIBIT A, or at such other address as such person may have
previously furnished or may subsequently furnish in writing to the Partnership
and each Partner. A copy of all such notices also should be sent to the General
Partner and addressed as follows:
General Partner: ▇▇▇▇▇▇▇ Real Estate, Inc.
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. D'Arcy, President
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
With copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, P.C.
▇▇▇▇▇▇▇, Procter & ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
19.2 SUCCESSORS AND ASSIGNS. Any person acquiring or claiming an
interest in the Partnership, in any manner whatsoever, shall be subject to and
bound by all of the terms, conditions and obligations of this Agreement to which
his predecessor-in-interest was subject or bound, without regard to whether such
a person has executed a counterpart hereof or any other document contemplated
hereby. No person, including the legal representative, heir or legatee of a
deceased Partner, shall have any rights or obligations greater than those set
forth in this Agreement, and no person shall acquire an interest in the
Partnership or become a Partner thereof except as expressly permitted by and
pursuant to the terms of this Agreement.
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Subject to the foregoing, and the provisions of Article 12 above, this Agreement
shall be binding upon and inure to the benefit of the Partners and their
respective successors, assigns, heirs, legal representatives, executors and
administrators.
19.3 DUPLICATE ORIGINALS. For the convenience of the Partners,
any number of counterparts hereof may be executed, and each such counterpart
shall be deemed to be an original instrument, and all of which taken together
shall constitute one agreement.
19.4 CONSTRUCTION. The titles of the Sections and subsections
herein have been inserted as a matter of convenience of reference only and shall
not control or affect the meaning or construction of any of the terms or
provisions herein.
19.5 GOVERNING LAW. This Agreement shall be governed by the laws
of the State of Delaware. Except to the extent the Act is inconsistent with the
provisions of this Agreement, the provisions of such Act shall apply to the
Partnership.
19.6 OTHER INSTRUMENTS. The parties hereto covenant and agree
that they will execute such other and further instruments and documents as, in
the opinion of the General Partner, are or may become necessary or desirable to
effectuate and carry out the Partnership as provided for by this Agreement.
19.7 GENERAL PARTNER WITH INTEREST AS LIMITED PARTNER. Except as
set forth to the contrary in this Agreement, if the General Partner has an
interest as a Limited Partner in the Partnership, the General Partner shall,
with respect to such interest, enjoy all of the rights and be subject to all of
the obligations and duties of a Limited Partner.
19.8 GENDER. Whenever the context shall so require, all words
herein in any gender shall be deemed to include the masculine, feminine or
neuter gender, all singular words shall include the plural, and all plural words
shall include the singular.
19.9 PRIOR AGREEMENTS SUPERSEDED. This Agreement supersedes any
prior understandings or written or oral agreements amongst the Partners, or any
of them, respecting the within subject matter and contains the entire
understanding amongst the Partners with respect thereto.
19.10 PURCHASE FOR INVESTMENT. Each Partner represents, warrants
and agrees that it has acquired and continues to hold its interest in the
Partnership for its own account for investment only and not for the purpose of,
or with a view toward, the resale or distribution of all or any part thereof,
nor with a view toward selling or otherwise distributing such interest or any
part thereof at any particular time or under any predetermined circumstances.
Each Partner further represents and warrants that it is a sophisticated
investor, able and accustomed to handling sophisticated financial matters for
itself, particularly real estate investments, and that it has a sufficiently
high net worth that it does not anticipate a need for the funds it has
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invested in the Partnership in what it understands to be a highly speculative
and illiquid investment.
19.11 WAIVER. No consent or waiver, express or implied, by any
Partner to or of any breach or default by any other Partner in the performance
by such other Partner of its obligations hereunder shall be deemed or construed
to be a consent to or waiver of any other breach of default in the performance
by such other Partner of the same or any other obligations of such Partner
hereunder. Failure on the part of any Partner to complain of any act or failure
to act on the part of any other Partner or to declare any other Partner in
default, irrespective of how long such failure continues, shall not constitute a
waiver by such Partner of its rights hereunder.
19.12 SEVERABILITY. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to which it is held invalid by such court, shall not be affected thereby.
19.13 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, which when taken together, shall constitute but one original.
19.14 NOTICE FOR CERTAIN TRANSACTIONS. In the event of (a) a
dissolution or liquidation of the Partnership or the General Partner, (b) a
merger, consolidation or combination of the Partnership or the General Partner
with or into another Person (including the events set forth in Section 17.2),
(c) the sale of all or substantially all of the assets of the Partnership or the
General Partner, or (d) the transfer by the General Partner of all or any part
of its interest in the Partnership, the General Partner shall give written
notice thereof to each Limited Partner at least twenty (20) Trading Days prior
to the effective date or, to the extent applicable, record date of such
transaction, whichever comes first.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.
GENERAL PARTNER:
▇▇▇▇▇▇▇ Real Estate, Inc.
By:
-----------------------------------
Name:
Title:
LIMITED PARTNERS:
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
LEXINGTON HOLDING COMPANY
By:
-----------------------------------
Name:
Title:
COUNTY LINE 31 COMPANY, L.P.
By:
-----------------------------------
Name:
Title:
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EXHIBIT A
NUMBER OF UNITS HELD UNDER THIS AGREEMENT
(AT SEPTEMBER 2, 1997)
--------------------------------------------------------------------------------------------
NAME OF PARTNER NUMBER OF UNITS ADDRESS
--------------------------------------------------------------------------------------------
GENERAL PARTNER
--------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ Real Estate, Inc.............. 21,676,375 ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------
SUBTOTAL, GENERAL PARTNER UNITS....... 21,676,375
--------------------------------------------------------------------------------------------
LIMITED PARTNERS
--------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 197,157
The ▇▇▇▇▇▇ Companies.................. 2,178
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇ Street, Inc.............. 1,249 ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇......................... 6,860
--------------------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇........................ 58,024
▇▇▇▇▇▇ ▇▇▇▇▇▇......................... 3,738
▇▇▇▇▇ ▇▇▇▇▇▇ Trust.................... 409 ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust................... ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust.................. 409
--------------------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇...................... 27,683 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Ridge Family Partnership.............. 10,427
--------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇........................ 411 ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust................ ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Trust.................. 409
--------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇........................ 411 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇ Trust.................... 409 41 Willow
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Trust.................. 409
--------------------------------------------------------------------------------------------
Lexington Holding Company............. 281,300 ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------
County Line 31 Company, L.P........... 478,619 c/o ▇.▇. ▇▇▇▇▇▇ Company, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------------------
SUBTOTAL, LIMITED PARTNER UNITS....... 1,070,920
--------------------------------------------------------------------------------------------
TOTAL UNITS........................... 22,747,295
--------------------------------------------------------------------------------------------
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EXHIBIT B
NOTICE OF REDEMPTION
The undersigned Limited Partner hereby irrevocably (i) redeems __________
Units in ▇▇▇▇▇▇▇ Operating Limited Partnership in accordance with the terms of
the Second Restated Agreement of Limited Partnership of ▇▇▇▇▇▇▇ Operating
Limited Partnership as amended from time to time and the Redemption Right
referred to therein, (ii) surrenders such Units (and any Unit Certificate(s)
issued in connection therewith) and all right, title and interest therein, and
(iii) directs that the Cash Amount or the REIT Shares Amount (as elected and
determined by the General Partner pursuant to the terms of the Agreement)
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if Common Stock is to be delivered, such Common Stock be
registered or placed in the name(s) and at the address(es) specified below. The
undersigned hereby represents, warrants, and certifies that the undersigned (a)
has marketable and unencumbered title to such Units, free and clear of the
rights or interests of any other person or entity, (b) has the full right,
power, and authority to redeem and surrender such Units as provided herein, and
(c) has obtained the consent or approval of all persons or entities, if any,
having the right to consent or approve such redemption and surrender.
Dated:__________________________________________________________________________
Name of Limited Partner:________________________________________________________
Please Print
______________________________________________
(Signature of Limited Partner)
______________________________________________
(Street Address)
______________________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:
______________________________________________
If Common Stock is to be issued, issue to:
Name:____________________________________
Please insert social security or identifying number:____________________________
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