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Exhibit 2.1(c)
EXHIBIT G
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
VORNADO REALTY L.P.
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Dated as of: ___, 1997
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IN RELIANCE UPON CERTAIN EXEMPTIONS FROM REGISTRATION, THE PARTNERSHIP INTERESTS
BEING OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS. ACCORDINGLY, NO
PARTNERSHIP INTEREST MAY BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
UNLESS SUBSEQUENTLY REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE
SECURITIES LAWS, OR UNLESS AN EXEMPTION FROM REGISTRATION IS AVAILABLE, AND
UNLESS THE OTHER TRANSFER RESTRICTIONS CONTAINED HEREIN HAVE BEEN SATISFIED.
INVESTORS SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS
OF THEIR INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF
THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THESE SECURITIES HAVE NOT BEEN
RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY
AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE
ACCURACY OR DETERMINED THE ADEQUACY OF THIS DOCUMENT. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
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TABLE OF CONTENTS
ARTICLE I
DEFINED TERMS.............................. 1
ARTICLE II
ORGANIZATIONAL MATTER.......................... 14
Section 2.1 Organization............................................... 14
Section 2.2 Name....................................................... 14
Section 2.3 Registered Office and Agent; Principal Office.............. 14
Section 2.4 Term....................................................... 15
ARTICLE III
PURPOSE................................. 15
Section 3.1 Purpose and Business....................................... 15
Section 3.2 Powers..................................................... 15
Section 3.3 Partnership Only for Purposes Specified.................... 16
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ISSUANCES
OF PARTNERSHIP INTERESTS......................... 16
Section 4.1 Capital Contributions of the Partners...................... 16
Section 4.2 Issuances of Partnership Interests......................... 17
Section 4.3 No Preemptive Rights....................................... 20
Section 4.4 Other Contribution Provisions.............................. 20
Section 4.5 No Interest on Capital..................................... 20
ARTICLE V
DISTRIBUTIONS.............................. 20
Section 5.1 Requirement and Characterization of Distributions.......... 20
Section 5.2 Amounts Withheld........................................... 22
Section 5.3 Distributions Upon Liquidation............................. 22
Section 5.4 Revisions to Reflect Issuance of Additional Partnership
Interests.................................................. 22
ARTICLE VI
ALLOCATIONS............................... 23
Section 6.1 Allocations For Capital Account Purposes................... 23
Section 6.2 Revisions to Allocations to Reflect Issuance of
Additional Partnership Interests........................... 24
ARTICLE VII
MANAGEMENT AND OPERATIONS OF BUSINESS.................. 25
Section 7.1 Management................................................. 25
Section 7.2 Certificate of Limited Partnership......................... 28
Section 7.3 Title to Partnership Assets................................ 28
Section 7.4 Reimbursement of the General Partner....................... 29
Section 7.5 Outside Activities of the General Partner...................30
Section 7.6 Transactions with Affiliates............................... 31
Section 7.7 Indemnification............................................ 32
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Section 7.8 Liability of the General Partner........................... 34
Section 7.9 Other Matters Concerning the General Partner............... 34
Section 7.10 Reliance by Third Parties.................................. 35
Section 7.11 Restrictions on General Partner's Authority................ 35
Section 7.12 Loans by Third Parties..................................... 43
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS................ 43
Section 8.1 Limitation of Liability.................................... 43
Section 8.2 Management of Business..................................... 43
Section 8.3 Outside Activities of Limited Partners..................... 43
Section 8.4 Return of Capital.......................................... 44
Section 8.5 Rights of Limited Partners Relating to the Partnership..... 44
Section 8.6 Redemption Right........................................... 45
Section 8.7 Right of Offset............................................ 48
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS.................. 49
Section 9.1 Records and Accounting..................................... 49
Section 9.2 Fiscal Year................................................ 49
Section 9.3 Reports.................................................... 49
ARTICLE X
TAX MATTERS............................... 50
Section 10.1 Preparation of Tax Returns................................. 50
Section 10.2 Tax Elections.............................................. 50
Section 10.3 Tax Matters Partner........................................ 50
Section 10.4 Organizational Expenses.................................... 51
Section 10.5 Withholding................................................ 51
ARTICLE XI
TRANSFERS AND WITHDRAWALS........................ 52
Section 11.1 Transfer................................................... 52
Section 11.2 Transfers of Partnership Interests of General Partner...... 52
Section 11.3 Limited Partners' Rights to Transfer....................... 53
Section 11.4 Substituted Limited Partners............................... 54
Section 11.5 Assignees.................................................. 54
Section 11.6 General Provisions......................................... 55
Section 11.7 Payment of Incremental Tax................................. 56
ARTICLE XII
ADMISSION OF PARTNERS.......................... 57
Section 12.1 Admission of Successor General Partner..................... 57
Section 12.2 Admission of Additional Limited Partners................... 57
Section 12.3 Amendment of Agreement and Certificate of Limited
Partnership................................................ 57
ARTICLE XIII
DISSOLUTION AND LIQUIDATION....................... 58
Section 13.1 Dissolution................................................ 58
Section 13.2 Winding Up................................................. 58
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Section 13.3 Compliance with Timing Requirements of Regulations......... 59
Section 13.4 Deemed Distribution and Recontribution..................... 59
Section 13.5 Rights of Limited Partners................................. 60
Section 13.6 Notice of Dissolution...................................... 60
Section 13.7 Cancellation of Certificate of Limited Partnership........ 60
Section 13.8 Reasonable Time for Winding Up............................. 60
Section 13.9 Waiver of Partition........................................ 60
Section 13.10 Liability of Liquidator.................................... 60
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS............... 61
Section 14.1 Amendments................................................. 61
Section 14.2 Meetings of the Partners................................... 62
ARTICLE XV
GENERAL PROVISIONS............................ 63
Section 15.1 Addresses and Notice....................................... 63
Section 15.2 Titles and Captions........................................ 63
Section 15.3 Pronouns and Plurals....................................... 63
Section 15.4 Further Action............................................. 63
Section 15.5 Binding Effect............................................. 63
Section 15.6 Creditors; Other Third Parties............................. 63
Section 15.7 Waiver..................................................... 64
Section 15.8 Counterparts............................................... 64
Section 15.9 Applicable Law............................................. 64
Section 15.10 Invalidity of Provisions................................... 64
Section 15.11 Power of Attorney.......................................... 64
Section 15.12 Entire Agreement........................................... 65
Section 15.13 No Rights as Shareholders.................................. 65
Section 15.14 Limitation to Preserve REIT Status ........................ 65
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EXHIBIT A
PARTNERS AND
PARTNERSHIP INTERESTS
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
EXHIBIT C
SPECIAL ALLOCATION RULES
EXHIBIT D
NOTICE OF REDEMPTION
EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
EXHIBIT F
RESTRICTED PARTNERS
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
VORNADO REALTY L.P.
THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
Vornado Realty L.P., dated as of ________________, 1997, is entered into by and
among Vornado Realty Trust, a Maryland real estate investment trust as the
General Partner of and a Limited Partner in the Partnership, FW/Mendik REIT,
L.L.C., a Delaware limited liability company, as a Limited Partner in the
Partnership, and The Mendik Company, Inc., a Maryland corporation, as a Limited
Partner in the Partnership, together with any other Persons who become Partners
in the Partnership as provided herein.
WHEREAS, the Partnership was formed under the name "Mendik Real Estate
Group, L.P." on October 2, 1996, and, on October 2, 1996, the Partnership
adopted an Agreement of Limited Partnership (the "Prior Agreement");
WHEREAS, on November 7, 1996, the general partner of the Partnership
changed the Partnership's name to "The Mendik Company, L.P." and, in connection
therewith, caused a certificate of Amendment to the Certificate of Limited
Partnership of the Partnership to be filed in the office of the Delaware
Secretary of State on November 8, 1996;
WHEREAS, FW/Mendik REIT, L.L.C. and The Mendik Company, Inc., the
partners of the Partnership under the Prior Agreement, have immediately prior to
the Effective Date recapitalized the Partnership and propose to admit Vornado
Realty Trust as the substituted General Partner of the Partnership and to merge
with Vornado Sub and admit Vornado Realty Trust as an Additional Limited Partner
in the Partnership and to recognize the conversion of the General Partnership
Interest held by The Mendik Company, Inc. into a Limited Partnership Interest in
the Partnership, and, in connection with the foregoing transactions, the parties
hereto have agreed to amend and restate the Prior Agreement on the terms set
forth below;
NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby amend
and restate the Prior Agreement in its entirety and agree to continue the
Partnership as a limited partnership under the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time, as follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless
otherwise clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 12.2 hereof and who is
shown as such on the books and records of the Partnership.
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"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership Year (i) increased
by any amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Exhibit B hereto.
"Adjustment Date" has the meaning set forth in Section 4.2.B
hereof.
"Affiliate" means, with respect to any Person, (i) any Person
directly or indirectly controlling, controlled by or under common control with
such Person, (ii) any Person owning or controlling ten percent (10%) or more of
the outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests or
(iv) any officer, director, general partner or trustee of such Person or any
Person referred to in clauses (i), (ii), and (iii) above. For purposes of this
definition, "control," when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Affiliated Transferee" means, with respect to any Limited
Partner, a member of such Limited Partner's Immediate Family, a trust formed
solely for the benefit of such Limited Partner and/or members of such Limited
Partner's Immediate Family, or any partnership, limited liability company, joint
venture, corporation or other business entity all of the interests in which are,
and remain, owned and controlled solely by such Limited Partner and/or members
of such Limited Partner's Immediate Family, and if the Limited Partner is an
entity and owned Partnership Units on the Effective Date, Persons who, as of the
Effective Date, owned interests in or were beneficiaries of such Limited Partner
and continue to own such interests (or be beneficiaries) at the time of the
proposed transfers.
"Agreed Value" means (i) in the case of any Contributed
Property contributed to the Partnership as part of or in connection with the
Consolidation, the amount set forth on Exhibit E attached hereto as the Agreed
Value of such Property; (ii) in the case of any other Contributed Property, the
704(c) Value of such property as of the time of its contribution to the
Partnership, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed; and
(iii) in the case of any property distributed to a Partner by the Partnership,
the Partnership's Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the regulations
thereunder.
"Agreement" means this First Amended and Restated Agreement of
Limited Partnership, as it may be amended, supplemented or restated from time to
time.
"Assignee" means a Person to whom one or more Partnership
Units have been transferred in a manner permitted under this Agreement, but who
has not become a Substituted Limited Partner, and who has the rights set forth
in Section 11.5 hereof.
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"Bankruptcy" with respect to any Person shall be deemed to
have occurred when (a) the Person commences a voluntary proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Person is adjudged as
bankrupt or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Person, (c) the Person executes and delivers a general
assignment for the benefit of the Person's creditors, (d) the Person files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Person in any proceeding of the
nature described in clause (b) above, (e) the Person seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Person or for all or any substantial part of the Person's properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Person's consent or acquiescence of a
trustee, receiver of liquidator has not been vacated or stayed within ninety
(90) days of such appointment or (h) an appointment referred to in clause (g) is
not vacated within ninety (90) days after the expiration of any such stay.
"Book-Tax Disparities" means, with respect to any item of
Contributed Property or Adjusted Property, as of the date of any determination,
the difference between the Carrying Value of such Contributed Property or
Adjusted Property and the adjusted basis thereof for federal income tax purposes
as of such date. A Partner's share of the Partnership's Book-Tax Disparities in
all of its Contributed Property and Adjusted Property will be reflected by the
difference between such Partner's Capital Account balance as maintained pursuant
to Exhibit B hereto and the hypothetical balance of such Partner's Capital
Account computed as if it had been maintained, with respect to each such
Contributed Property or Adjusted Property, strictly in accordance with federal
income tax accounting principles.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.
"Capital Account" means the Capital Account maintained for a
Partner pursuant to Exhibit B hereto.
"Capital Contribution" means, with respect to any Partner, any
cash, cash equivalents or the Agreed Value of Contributed Property which such
Partner contributes or is deemed to contribute to the Partnership pursuant to
Section 4.1 or 4.2 hereof.
"Carrying Value" means (i) with respect to a Contributed
Property or Adjusted Property, the 704(c) Value of such property reduced (but
not below zero) by all Depreciation with respect to such Contributed Property or
Adjusted Property, as the case may be, charged to the Partners' Capital Accounts
and (ii) with respect to any other Partnership property, the adjusted basis of
such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Exhibit B hereto, and to reflect changes, additions or
other adjustments to the Carrying Value for dispositions and acquisitions of
Partnership properties, as deemed appropriate by the General Partner.
"Cash Amount" means an amount of cash equal to the Value on
the Valuation Date of the Shares Amount, subject to Section 8.6.A(iv).
"Certificate" means the Certificate of Limited Partnership of
the Partnership filed in the office of the Delaware Secretary of State on
October 2, 1996, as amended by a Certificate of Amendment filed in Delaware on
November 8, 1996, and as further amended from time to time in accordance with
the terms hereof and the Act.
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"Charter Documents" has the meaning set forth in Section
7.11.D hereof.
"Class A Unit" means any Partnership Unit that is not
specifically designated by the General Partner as being of another specified
class of Partnership Units.
"Class B Unit" means a Partnership Unit that is specifically
designated by the General Partner as being a Class B Unit.
"Class C Accumulated Amount" has the meaning set forth in
Section 4.2.D(i).
"Class C Preferential Distribution" has the meaning set forth
in Section 5.1.B.
"Class C Unit" means any Partnership Unit that is specifically
designated by the General Partner as being a Class C Unit.
"Class D/E Accumulated Amount" has the meaning set forth in
Section 4.2.D(ii).
"Class D/E Preferential Distribution" has the meaning set
forth in Section 5.1.B.
"Class D Unit" means a Partnership Unit that is specifically
designated by the General Partner as being a Class D Unit.
"Class E Unit" means any Partnership Unit that is specifically
designated by the General Partner as being a Class E Unit.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Consent" means the consent or approval of a proposed action
by a Partner given in accordance with Section 14.2 hereof.
"Consent of Certain Limited Partners" means Consent of the
holders of 75% in the aggregate of the Two Penn Plaza Units, the Eleven Penn
Plaza Units, and the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, collectively considered as one group,
provided that:
(A) if:
(i) there has been a prior transaction
involving the Two Penn Plaza Property, the Eleven
Penn Plaza Property, or the 866 U.N. Plaza Property,
as the case may be, that has been approved by the
holders of the Two Penn Plaza Units, the Eleven Penn
Plaza Units, or the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case
may be, pursuant to Section 7.11.C(1), 7.11.C(2) or
7.11.C(3), as applicable, and
(ii) no holder of Two Penn Plaza Units,
Eleven Penn Plaza Units, or ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as
applicable with respect to a transaction involving
Two Penn Plaza, Eleven Penn Plaza or 866 U.N. Plaza,
respectively, would recognize gain for federal income
tax purposes with respect to (but only with respect
to) such Partnership Units in excess of $1.00 as a
result of the sale or other disposition of all such
Partnership
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Units for $1.00 (that is, no Limited Partner has a
"negative capital account" with respect to such
Partnership Units),
then the "Certain Limited Partners" shall not be considered to
include the holders of such Partnership Units; and
(B) if any holder of Two Penn Plaza Units, Eleven Penn Plaza
Units or ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as applicable, has received
from the Partnership the payment described in Section
7.11.C(7) in respect of such Partnership Units, and the amount
of such payment is, at the time that it is made, equal to the
full amount that would be payable under Section 7.11.C(7) with
respect to such Partnership Units if the Two Penn Plaza
Property, the Eleven Penn Plaza Property, or the 866 U.N.
Plaza Property, as applicable, were to have been sold on such
date for its market value, then the "Certain Limited Partners"
shall not include such holder.
"Consent of the Outside Limited Partners" means the Consent of
Limited Partners (excluding for this purpose any Limited Partnership Interests
held by the General Partner, any Person of which the General Partner owns or
controls more than fifty percent (50%) of the voting interests and any Person
owning or controlling, directly or indirectly, more than fifty percent (50%) of
the outstanding voting interests of the General Partner) holding Percentage
Interests regardless of class that are greater than fifty percent (50%) of the
aggregate Percentage Interest of all Limited Partners of all classes taken
together who are not excluded for the purposes hereof.
"Consolidation" means the transactions whereby the Partnership
will acquire all or substantially all of the interests in the assets currently
owned by the General Partner, interests in certain office properties located in
midtown Manhattan, and certain property management businesses that provide
services to those office properties and to other properties in the New York
metropolitan area, in exchange for Partnership Units, all as described in a
Master Consolidation Agreement dated as of March __, 1997 among the General
Partner, Vornado Sub, the Partnership and the other entities named therein.
"Consolidation Transaction" has the meaning set forth in
Section 7.11.C(6) hereof.
"Contributed Property" means each property or other asset
contributed to the Partnership, in such form as may be permitted by the Act, but
excluding cash contributed or deemed contributed to the Partnership. Once the
Carrying Value of a Contributed Property is adjusted pursuant to Exhibit B
hereto, such property shall no longer constitute a Contributed Property for
purposes of Exhibit B hereto, but shall be deemed an Adjusted Property for such
purposes.
"Conversion Factor" means 1.0; provided that in the event that
the General Partner Entity (i) declares (and the applicable record date has
passed or will have passed before a redeeming Partner would receive cash or
Common Shares in respect of the Partnership Units being redeemed) or pays a
dividend on its outstanding Shares in Shares or makes a distribution to all
holders of its outstanding Shares in Shares, (ii) subdivides its outstanding
Shares or (iii) combines its outstanding Shares into a smaller number of Shares,
the Conversion Factor shall be adjusted by multiplying the Conversion Factor by
a fraction, the numerator of which shall be the number of Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time) and the denominator of
which shall be the actual number of Shares (determined without the above
assumption) issued and outstanding on the record date for such dividend,
distribution, subdivision or combination; and provided further that in the event
that an entity shall cease to be the General Partner Entity (the "Predecessor
Entity") and another entity shall become the General Partner Entity (the
"Successor Entity"), the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a
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fraction, the numerator of which is the Value of one Share of the Predecessor
Entity, determined as of the time immediately prior to when the Successor Entity
becomes the General Partner Entity, and the denominator of which is the Value of
one Share of the Successor Entity, determined as of that same date. (For
purposes of the second proviso in the preceding sentence, in the event that any
shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the fair
market value of any securities and other consideration that the holder of one
Share in the Predecessor Entity could have received in such transaction
(determined without regard to any provisions governing fractional shares).) Any
adjustment to the Conversion Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for the
event giving rise thereto; it being intended that (x) adjustments to the
Conversion Factor are to be made in order to avoid unintended dilution or
anti-dilution as a result of transactions in which Shares are issued, redeemed
or exchanged without a corresponding issuance, redemption or exchange of
Partnership Units and (y) if a Specified Redemption Date shall fall between the
record date and the effective date of any event of the type described above,
that the Conversion Factor applicable to such redemption shall be adjusted to
take into account such event.
"Convertible Funding Debt" has the meaning set forth in
Section 7.5.F hereof.
"Debt" means, as to any Person, as of any date of
determination, (i) all indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (ii) all amounts owed by such
Person to banks or other Persons in respect of reimbursement obligations under
letters of credit, surety bonds and other similar instruments guaranteeing
payment or other performance of obligations by such Person, (iii) all
indebtedness for borrowed money or for the deferred purchase price of property
or services secured by any lien on any property owned by such Person, to the
extent attributable to such Person's interest in such property, even though such
Person has not assumed or become liable for the payment thereof, and (iv)
obligations of such Person incurred in connection with entering into a lease
which, in accordance with generally accepted accounting principles, should be
capitalized.
"Declaration of Trust" means the Declaration of Trust or other
similar organizational document governing the General Partner, as amended,
supplemented or restated from time to time.
"Deemed Partnership Interest Value" means, as of any date with
respect to any class of Partnership Interests, the Deemed Value of the
Partnership Interest of such class multiplied by the applicable Partner's
Percentage Interest of such class.
"Deemed Value of the Partnership Interest" means, as of any
date with respect to any class of Partnership Interests, (a) if the common
shares of beneficial interest (or other comparable equity interests) of the
General Partner are Publicly Traded (i) the total number of shares of beneficial
interest (or other comparable equity interest) of the General Partner
corresponding to such class of Partnership Interest (as provided for in Section
4.2.B hereof) issued and outstanding as of the close of business on such date
(excluding any treasury shares) multiplied by the Value of a share of such
beneficial interest (or other comparable equity interest) on such date divided
by (ii) the Percentage Interest of the General Partner in such class of
Partnership Interests on such date, and (b) otherwise, the aggregate Value of
such class of Partnership Interests determined as set forth in the fourth and
fifth sentences of the definition of Value.
"Depreciation" means, for each fiscal year, an amount equal to
the federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year, except that if the
Carrying Value of an asset differs from its adjusted basis for federal income
tax purposes at the beginning of such year or other period, Depreciation shall
be an amount which bears the same ratio to such
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beginning Carrying Value as the federal income tax depreciation, amortization,
or other cost recovery deduction for such year bears to such beginning adjusted
tax basis; provided, however, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Carrying Value
using any reasonable method selected by the General Partner.
"866 U.N. Plaza Associates" means 866 United Nations Plaza
Associates LLC, a New York limited liability company.
"866 U.N. Plaza Property" has the meaning set forth in Section
7.11.C hereof.
"866 U.N. Plaza Units" has the meaning set forth in Section
7.11.C hereof.
"Effective Date" means the date of the closing of the
Consolidation.
"Eleven Penn Partnerships" means M/F Associates, a New York
limited partnership, M/F Eleven Associates, a New York limited partnership, M/S
Associates, a New York limited partnership, and M/S Eleven Associates, a New
York limited partnership.
"Eleven Penn Plaza Property" has the meaning set forth in
Section 7.11.C hereof.
"Eleven Penn Plaza Units" has the meaning set forth in Section
7.11.C hereof.
"Equity Merger" has the meaning set forth in Section 7.11.D
hereof.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchanged Property" has the meaning set forth in Section
7.11.C hereof.
"Funding Debt" means the incurrence of any Debt by or on
behalf of the General Partner for the purpose of providing funds to the
Partnership.
"Funds From Operations" shall mean, with respect to any
period, the General Partner's "funds from operations," calculated in a manner
consistent with the calculation of such measure as it is used in the General
Partner's consolidated financial statements appearing in its most recent public
filing on Form 10-K or Form 10-Q (whichever is more recent).
"FW/Mendik LLC" means FW/Mendik REIT, L.L.C., a Delaware
limited liability company.
"General Partner" means Vornado Realty Trust, a Maryland real
estate investment trust, or its successors as general partner of the
Partnership.
"General Partner Entity" means the General Partner; provided,
however, that if (i) the common shares of beneficial interest (or other
comparable equity interests) of the General Partner are at any time not Publicly
Traded and (ii) the shares of common stock (or other comparable equity
interests) of an entity that owns, directly or indirectly, fifty percent (50%)
or more of the common shares of beneficial interest (or other comparable equity
interests) of the General Partner are Publicly Traded, the term "General Partner
Entity" shall refer to such entity whose shares of common stock (or other
comparable equity securities) are Publicly Traded. If both
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requirements set forth in clauses (i) and (ii) above are not satisfied, then the
term "General Partner Entity" shall mean the General Partner.
"General Partner Payment" has the meaning set forth in Section
15.14 hereof.
"General Partnership Interest" means a Partnership Interest
held by the General Partner that is a general partnership interest. A General
Partnership Interest may be expressed as a number of Partnership Units.
"Immediate Family" means, with respect to any natural Person,
such natural Person's spouse, parents, descendants, nephews, nieces, brothers
and sisters.
"Incapacity" or "Incapacitated" means, (i) as to any
individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating such Partner incompetent to manage his or
her Person or estate, (ii) as to any corporation which is a Partner, the filing
of a certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter, (iii) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership, (iv) as to any
estate which is a Partner, the distribution by the fiduciary of the estate's
entire interest in the Partnership, (v) as to any trustee of a trust which is a
Partner, the termination of the trust (but not the substitution of a new
trustee) or (vi) as to any Partner, the Bankruptcy of such Partner.
"Indemnitee" means (i) any Person made a party to a proceeding
or threatened with being made a party to a proceeding by reason of its status as
(A) the General Partner, (B) a Limited Partner or (C) an officer of the
Partnership (or any Subsidiary or other entity in which the Partnership owns an
equity interest) or a trustee/director, officer or shareholder of the General
Partner or the General Partner Entity (or any Subsidiary or other entity in
which the General Partner owns an equity interest (so long as the General
Partner's ownership of an interest in such entity is not prohibited by Section
7.5.A) or for which the General Partner, acting on behalf of the Partnership,
requests the trustee/director, officer or shareholder to serve as a director,
officer, trustee or agent, including serving as a trustee of an employee benefit
plan) and (ii) such other Persons (including Affiliates of the General Partner,
a Limited Partner or the Partnership) as the General Partner may designate from
time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"Limited Partner" means any Person named as a Limited Partner
in Exhibit A attached hereto, as such Exhibit may be amended and restated from
time to time, or any Substituted Limited Partner or Additional Limited Partner,
in such Person's capacity as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of
a Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement. A Limited Partnership Interest may
be expressed as a number of Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1
hereof.
"Liquidating Transaction" has the meaning set forth in Section
7.11.C hereof.
"Liquidator" has the meaning set forth in Section 13.2.A
hereof.
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"Majority in Interest" means Partners (excluding the General
Partner) who hold more than fifty percent (50%) of the outstanding Percentage
Interests not held by the General Partner.
"Mendik Owner" means, with respect to ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, as applicable, any member of his Immediate Family and any
trust formed solely for the benefit of him and/or members of his Immediate
Family, or any partnership, limited liability company, joint venture,
corporation or other business entity all of the interests in which are, and
remain, owned and controlled solely by him and/or members of his Immediate
Family.
"Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain for such taxable period over
the Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B hereto. If an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Exhibit C hereto, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any,
of the Partnership's items of loss and deduction for such taxable period over
the Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C hereto, Net Loss or the resulting Net Income, whichever the
case may be, shall be recomputed without regard to such item.
"New Securities" means (i) any rights, options, warrants or
convertible or exchangeable securities having the right to subscribe for or
purchase shares of beneficial interest (or other comparable equity interest) of
the General Partner, excluding grants under any Stock Option Plan, or (ii) any
Debt issued by the General Partner that provides any of the rights described in
clause (i).
"Non-Class D/E Units" has the meaning set forth in Section
5.1(B)(vii).
"Nonrecourse Built-in Gain" means, with respect to any
Contributed Properties or Adjusted Properties that are subject to a mortgage or
negative pledge securing a Nonrecourse Liability, the amount of any taxable gain
that would be allocated to the Partners pursuant to Section 2.B of Exhibit C
hereto if such properties were disposed of in a taxable transaction in full
satisfaction of such liabilities and for no other consideration.
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Notice of Redemption" means a Notice of Redemption
substantially in the form of Exhibit D attached hereto.
"Partner" means the General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
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"Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the
Act and continued upon the terms and conditions set forth in this Agreement, and
any successor thereto.
"Partnership Interest" means a Limited Partnership Interest or
the General Partnership Interest, as the context requires, and includes any and
all benefits to which the holder of such a Partnership Interest may be entitled
as provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by
the General Partner either (i) for the making of any distribution pursuant to
Section 5.1 hereof, which record date shall be the same as the record date
established by the General Partner Entity for a distribution to its shareholders
of some or all of its portion of such distribution received by the General
Partner if the shares of common stock (or comparable equity interests) of the
General Partner Entity are Publicly Traded, or (ii) if applicable, for
determining the Partners entitled to vote on or consent to any proposed action
for which the consent or approval of the Partners is sought pursuant to Section
14.2 hereof.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2
hereof, and includes Class A Units, Class B Units, Class C Units, Class D Units,
Class E Units and any other classes or series of Partnership Units established
after the date hereof. The number of Partnership Units outstanding and the
Percentage Interests in the Partnership represented by such Partnership Units
are set forth in Exhibit A hereto, as such Exhibit may be amended and restated
from time to time. The ownership of Partnership Units may be evidenced by a
certificate in a form approved by the General Partner.
"Partnership Year" means the fiscal year of the Partnership.
"Percentage Interest" means, as to a Partner holding a
Partnership Interest of any class issued hereunder, its interest in such class,
determined by dividing the Partnership Units of such class owned by such Partner
by the total number of Partnership Units of such class then outstanding as
specified in Exhibit A attached hereto, as such exhibit may be amended and
restated from time to time, multiplied by the aggregate Percentage Interest
allocable to such class of Partnership Interests. For such time or times as the
Partnership shall at any time have outstanding more than one class of
Partnership Interests, the Percentage Interest attributable to each class of
Partnership Interests shall be determined as set forth in Section 4.2.B hereof.
"Person" means a natural person, partnership (whether general
or limited), trust, estate, association, corporation, limited liability company,
unincorporated organization, custodian, nominee or any other individual or
entity in its own or any representative capacity.
"Predecessor Entity" has the meaning set forth in the
definition of "Conversion Factor" herein.
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"Preference Units" has the meaning set forth in Section 4.2.E.
"Publicly Traded" means listed or admitted to trading on the
New York Stock Exchange, the American Stock Exchange or another national
securities exchange or designated for quotation on the NASDAQ National Market,
or any successor to any of the foregoing.
"Qualified REIT Subsidiary" means any Subsidiary of the
General Partner that is a "qualified REIT subsidiary" within the meaning Section
856(i) of the Code. Except as otherwise specifically provided herein, a
Qualified REIT Subsidiary of the General Partner that holds as its only assets
direct and/or indirect interests in the Partnership will not be treated as an
entity separate from the General Partner.
"Recapture Income" means any gain recognized by the
Partnership (computed without regard to any adjustment required by Section 743
of the Code) upon the disposition of any property or asset of the Partnership,
which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.
"Redeeming Partner" has the meaning set forth in Section 8.6.A
hereof.
"Redemption Amount" means either the Cash Amount or the Shares
Amount, as determined by the General Partner in its sole and absolute
discretion; provided that in the event that the Shares are not Publicly Traded
at the time a Redeeming Partner exercises its Redemption Right, the Redemption
Amount shall be paid only in the form of the Cash Amount unless the Redeeming
Partner, in its sole and absolute discretion, consents to payment of the
Redemption Amount in the form of the Shares Amount; provided further, the
foregoing is subject to Section 8.6.A(iv). A Redeeming Partner shall have no
right, without the General Partner's consent, in its sole and absolute
discretion, to receive the Redemption Amount in the form of the Shares Amount.
"Redemption Right" has the meaning set forth in Section 8.6.A
hereof.
"Regulations" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856
of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to
the continuity of existence of the General Partner and any Person in which the
General Partner owns an equity interest, to the extent not prohibited by Section
7.5.A (and excluding expenses relating to any Person in which the General
Partner acquired an interest with the Consent of the Outside Limited Partners,
unless the Consent of the Outside Limited Partners has been obtained to include
such expenses within the definition of "REIT Expenses"), other than the
Partnership (which Persons shall, for purposes of this definition, be included
within the definition of "General Partner"), including taxes, fees and
assessments associated therewith (other than federal, state or local income
taxes imposed upon the General Partner as a result of the General Partner's
failure to distribute to its shareholders an amount equal to its taxable
income), any and all costs, expenses or fees payable to any trustee or director
of the General Partner or such Persons, (ii) costs and expenses relating to any
offer or registration of securities by the General Partner (the proceeds of
which will be contributed or advanced to the Partnership) and all statements,
reports, fees and expenses incidental thereto, including underwriting discounts
and selling commissions applicable to any such offer of securities, (iii) costs
and expenses associated with the preparation and filing of any periodic reports
by the General Partner under federal, state or local laws or regulations,
including filings with the SEC, (iv) costs and expenses associated with
compliance by the General Partner with laws, rules and regulations promulgated
by any regulatory body, including the Securities and Exchange Commission, and
(v) all other operating or administrative costs of the General Partner incurred
in the ordinary course of its business; provided, however, that any of the
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foregoing expenses that are determined by the General Partner to be expenses
relating to the ownership and operation of, or for the benefit of, the
Partnership shall be treated, subject to Section 7.4.E hereof, as reimbursable
expenses under Section 7.4.B hereof rather than as "REIT Expenses".
"REIT Requirements" has the meaning set forth in Section 5.1.A
hereof.
"Replacement Property" has the meaning set forth in Section
7.11.C hereof.
"Residual Gain" or "Residual Loss" means any item of gain or
loss, as the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C hereto to
eliminate Book-Tax Disparities.
"Restricted Partner" means any of FW/Mendik LLC, ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, any ▇▇▇▇▇▇ Owner and any other Person identified on
Exhibit F hereto.
"Safe Harbors" has the meaning set forth in Section 11.6.F
hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"704(c) Value" of any Contributed Property means the fair
market value of such property at the time of contribution as determined by the
General Partner using such reasonable method of valuation as it may adopt.
Subject to Exhibit B hereto, the General Partner shall, in its sole and absolute
discretion, use such method as it deems reasonable and appropriate to allocate
the aggregate of the 704(c) Values of Contributed Properties in a single or
integrated transaction among each separate property on a basis proportional to
their fair market values. The 704(c) Values of the Contributed Properties
contributed to the Partnership as part of or in connection with the
Consolidation are set forth on Exhibit E attached hereto.
"Share" means a share of beneficial interest (or other
comparable equity interest) of the General Partner Entity. Shares may be issued
in one or more classes or series in accordance with the terms of the Declaration
of Trust (or, if the General Partner is not the General Partner Entity, the
organizational documents of the General Partner Entity). In the event that there
is more than one class or series of Shares, the term "Shares" shall, as the
context requires, be deemed to refer to the class or series of Shares that
correspond to the class or series of Partnership Interests for which the
reference to Shares is made. When used with reference to Class A Units, Class C
Units, Class D Units or Class E Units, the term "Shares" refers to common shares
of beneficial interest (or other comparable equity interest) of the General
Partner Entity.
"Shares Amount" means a number of Shares equal to the product
of the number of Partnership Units offered for redemption by a Redeeming Partner
times the Conversion Factor; provided, that in the event the General Partner
Entity issues to all holders of Shares rights, options, warrants or convertible
or exchangeable securities entitling such holders to subscribe for or purchase
Shares or any other securities or property (collectively, the "rights"), then
the Shares Amount shall also include such rights that a holder of that number of
Shares would be entitled to receive; and provided, further, that the Shares
Amount shall be adjusted pursuant to Section 7.5 hereof in the event that the
General Partner acquires material assets other than on behalf of the
Partnership.
"Specified Redemption Date" means the tenth Business Day after
receipt by the General Partner of a Notice of Redemption; provided, that if the
Shares are not Publicly Traded, the Specified Redemption Date means the
thirtieth Business Day after receipt by the General Partner of a Notice of
Redemption.
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"Stock Option Plan" means any share or stock incentive plan or
similar compensation arrangement (including, without limitation, any arrangement
whereby the Partnership or the General Partner delivers Units or shares of
capital stock of the General Partner into a "rabbi trust") of the General
Partner, the Partnership or any Affiliate of the Partnership or the General
Partner, as the context may require.
"Subsidiary" means, with respect to any Person, any
corporation, limited liability company, partnership or joint venture, or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted
as a Limited Partner to the Partnership pursuant to Section 11.4 hereof.
"Successor Entity" has the meaning set forth in the definition
of "Conversion Factor" herein.
"Successor Partnership" has the meaning set forth in Section
7.11.C hereof.
"Tenant" means any tenant from which the General Partner
derives rent, either directly or indirectly through limited liability companies
or partnerships, including the Partnership, or through any Qualified REIT
Subsidiary.
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership for
cash or a related series of transactions that, taken together, result in the
sale or other disposition of all or substantially all of the assets of the
Partnership for cash.
"Termination Transaction" has the meaning set forth in Section
11.2.B hereof.
"Title 8" means Title 8 of the Corporations and Associations
Article of the Annotated Code of Maryland.
"Transferred Property" has the meaning set forth in Section
7.11.C. hereof.
"Two Penn Plaza Associates" means Two Penn Plaza Associates,
L.P., a New York limited partnership.
"Two Penn Plaza Property" has the meaning set forth in Section
7.11.C hereof.
"Two Penn Plaza Units" has the meaning set forth in Section
7.11.C hereof.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i) the
fair market value of such property (as determined under Exhibit B hereto) as of
such date, over (ii) the Carrying Value of such property (prior to any
adjustment to be made pursuant to Exhibit B hereto) as of such date.
"Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i) the
Carrying Value of such property (prior to any adjustment to be made pursuant to
Exhibit B hereto) as of such date, over (ii) the fair market value of such
property (as determined under Exhibit B hereto) as of such date.
"Valuation Date" means the date of receipt by the General
Partner of a Notice of Redemption or, if such date is not a Business Day, the
first Business Day thereafter.
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"Value" means, with respect to any outstanding Shares of the
General Partner Entity that are Publicly Traded, the average of the daily market
price for the ten (10) consecutive trading days immediately preceding the date
with respect to which value must be determined or, if such day is not a Business
Day, the immediately preceding Business Day. The market price for each such
trading day shall be the closing price, regular way, on such day, or if no such
sale takes place on such day, the average of the closing bid and asked prices on
such day. In the event that the outstanding Shares of the General Partner Entity
are Publicly Traded and the Shares Amount includes rights that a holder of
Shares would be entitled to receive, then the Value of such rights shall be
determined by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable judgment,
appropriate. In the event that the Shares of the General Partner Entity are not
Publicly Traded, the Value of the Shares Amount per Partnership Unit offered for
redemption (which will be the Cash Amount per Partnership Unit offered for
redemption payable pursuant to Section 8.6.A hereof) means the amount that a
holder of one Partnership Unit would receive if each of the assets of the
Partnership were to be sold for its fair market value on the Specified
Redemption Date, the Partnership were to pay all of its outstanding liabilities,
and the remaining proceeds were to be distributed to the Partners in accordance
with the terms of this Agreement. Such Value shall be determined by the General
Partner, acting in good faith and based upon a commercially reasonable estimate
of the amount that would be realized by the Partnership if each asset of the
Partnership (and each asset of each partnership, limited liability company,
joint venture or other entity in which the Partnership owns a direct or indirect
interest) were sold to an unrelated purchaser in an arms' length transaction
where neither the purchaser nor the seller were under economic compulsion to
enter into the transaction (without regard to any discount in value as a result
of the Partnership's minority interest in any property or any illiquidity of the
Partnership's interest in any property). In connection with determining the
Deemed Value of the Partnership Interest for purposes of determining the number
of additional Partnership Units issuable upon a Capital Contribution funded by
an underwritten public offering of shares of beneficial interest (or other
comparable equity interest) of the General Partner, the Value of such shares
shall be the public offering price per share of such class of beneficial
interest (or other comparable equity interest) sold.
"Vornado Sub" means Vornado/Saddle Brook L.L.C., a Delaware
limited liability company and a wholly-owned subsidiary of the General Partner.
ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.1 Organization
The Partnership is a limited partnership organized pursuant to
the provisions of the Act and upon the terms and conditions set forth in the
Prior Agreement. The Partners hereby continue the Partnership and amend and
restate the Prior Agreement in its entirety. Except as expressly provided herein
to the contrary, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all
purposes.
Section 2.2 Name
The name of the Partnership is Vornado Realty L.P. The
Partnership's business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words "Limited Partnership," "L.P.," "Ltd." or
similar words or letters shall be included in the Partnership's name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires. The General Partner in its sole and absolute discretion may change
the name of the
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Partnership at any time and from time to time and shall notify the Limited
Partners of such change in the next regular communication to the Limited
Partners.
Section 2.3 Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the
State of Delaware shall be located at Corporation Trust Center, ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ of ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the registered
agent for service of process on the Partnership in the State of Delaware at such
registered office shall be Corporation Trust Company. The principal office of
the Partnership shall be Vornado Realty L.P., Park ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the General Partner deems advisable.
Section 2.4 Term
The term of the Partnership commenced on October 2, 1996, the
date on which the Certificate was filed in the office of the Secretary of State
of the State of Delaware in accordance with the Act, and shall continue until
December 31, 2095 (as such date may be extended by the General Partner in its
sole discretion), unless it is dissolved sooner pursuant to the provisions of
Article XIII hereof or as otherwise provided by law.
ARTICLE III
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner Entity (or the General Partner, as applicable) at all times to
be classified as a REIT and avoid the imposition of federal income and excise
taxes on the General Partner Entity (or the General Partner, as applicable),
unless the General Partner Entity (or the General Partner, as applicable) ceases
to qualify, or is not qualified, as a REIT for any reason or reasons; (ii) to
enter into any partnership, joint venture, limited liability company or other
similar arrangement to engage in any of the foregoing or the ownership of
interests in any entity engaged, directly or indirectly, in any of the
foregoing; and (iii) to do anything necessary or incidental to the foregoing. In
connection with the foregoing, the Limited Partners acknowledge that the status
of the General Partner Entity (or the General Partner, as applicable) as a REIT
and the avoidance of federal income and excise taxes on the General Partner
Entity (or the General Partner, as applicable) inures to the benefit of all the
Partners and not solely the General Partner or its Affiliates. Notwithstanding
the foregoing, the Limited Partners acknowledge and agree that the General
Partner Entity (or the General Partner, as applicable) may terminate its status
as a REIT under the Code at any time to the full extent permitted under the
Declaration of Trust.
Section 3.2 Powers
The Partnership shall have full power and authority to do any
and all acts and things necessary, appropriate, proper, advisable, incidental to
or convenient for the furtherance and accomplishment of the purposes and
business described herein and for the protection and benefit of the Partnership,
including, without limitation, directly or through its ownership interest in
other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and
develop real property, and lease, sell, transfer and
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dispose of real property; provided, however, that the Partnership shall not
take, or refrain from taking, any action which, in the judgment of the General
Partner, in its sole and absolute discretion, (i) could adversely affect the
ability of the General Partner Entity (or the General Partner, as applicable) to
continue to qualify as a REIT, (ii) could subject the General Partner Entity (or
the General Partner, as applicable) to any additional taxes under Section 857 or
Section 4981 of the Code or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the General Partner Entity
(or the General Partner, if different) or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.
Section 3.3 Partnership Only for Purposes Specified
The Partnership shall be a partnership only for the purposes
specified in Section 3.1 above, and this Agreement shall not be deemed to create
a partnership among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.1 above.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ISSUANCES
OF PARTNERSHIP INTERESTS
Section 4.1 Capital Contributions of the Partners
A. Capital Contributions to the Partnership on the Effective
Date. The Mendik Company, Inc. and FW/Mendik LLC previously made Capital
Contributions to the Partnership. Immediately prior to the Effective Date, the
Partnership was recapitalized and FW/Mendik LLC was issued [_________] Class D
Units as the sole Limited Partner of the Partnership and The Mendik Company,
Inc. was issued 1,000 Class D Units as the then general partner of the
Partnership, which Units will be subject to Section 4.2.D(iii). On the Effective
Date, the General Partner and certain other Persons will make additional Capital
Contributions to the Partnership in connection with the Consolidation. On the
Effective Date, the General Partner will be admitted to the Partnership as a
substituted General Partner, and the General Partnership Interest held by The
Mendik Company, Inc. will be converted into a Limited Partnership Interest.
Thereafter, the General Partner will complete Exhibit A hereto to reflect the
Capital Contributions made by each Partner, the number of Partnership Units (by
class) held by each Partner and the Percentage Interest in the Partnership
represented by such Partnership Units. The Capital Accounts of the Partners and
the Carrying Values of the Partnership's Assets shall be determined as of the
Effective Date pursuant to Section I.D of Exhibit B hereto to reflect the
Capital Contributions made prior to and on the Effective Date.
B. General Partnership Interest. A number of Partnership Units
held by the General Partner equal to one percent (1%) of all outstanding
Partnership Units shall be deemed to be the General Partner Partnership Units
and shall be the General Partnership Interest. All other Partnership Units held
by the General Partner shall be Limited Partnership Interests and shall be held
by the General Partner in its capacity as a Limited Partner in the Partnership.
C. Capital Contributions By Merger. To the extent the
Partnership acquires any property by the merger of any other Person into the
Partnership, Persons who receive Partnership Interests in exchange for their
interests in the Person merging into the Partnership shall become Partners and
shall be deemed to have made Capital Contributions as provided in the applicable
merger agreement and as set forth in Exhibit A hereto.
D. No Obligation to Make Additional Capital Contributions.
Except as provided in Sections 7.5 and 10.5 hereof, the Partners shall have no
obligation to make any additional Capital Contributions
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or provide any additional funding to the Partnership (whether in the form of
loans, repayments of loans or otherwise). No Partner shall have any obligation
to restore any deficit that may exist in its Capital Account, either upon a
liquidation of the Partnership or otherwise.
Section 4.2 Issuances of Partnership Interests
A. General. The General Partner is hereby authorized to cause
the Partnership from time to time to issue to Partners (including the General
Partner and its Affiliates) or other Persons (including, without limitation, in
connection with the contribution of property to the Partnership) Partnership
Units or other Partnership Interests in one or more classes, or in one or more
series of any of such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties, including
rights, powers and duties senior to Limited Partnership Interests, all as shall
be determined, subject to applicable Delaware law, by the General Partner in its
sole and absolute discretion, including, without limitation, (i) the allocations
of items of Partnership income, gain, loss, deduction and credit to each such
class or series of Partnership Interests, (ii) the right of each such class or
series of Partnership Interests to share in Partnership distributions and (iii)
the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership; provided that, no such
Partnership Units or other Partnership Interests shall be issued (x) to the
General Partner unless either (a) the Partnership Interests are issued in
connection with the grant, award or issuance of Shares or other equity interests
in the General Partner having designations, preferences and other rights such
that the economic interests attributable to such Shares or other equity
interests are substantially similar to the designations, preferences and other
rights (except voting rights) of the additional Partnership Interests issued to
the General Partner in accordance with this Section 4.2.A, or (b) the
Partnership Interests are issued to all Partners holding Partnership Interests
in the same class in proportion to their respective Percentage Interests in such
class or (c) the Partnership Interests are issued in connection with a
Termination Transaction or a transaction in which another person is merged,
combined or consolidated with or into the General Partner and in exchange for
the transfer or contribution of all or substantially all of the assets of such
other person by the General Partner to the Partnership, or (y) to any Person in
violation of Section 4.2.E. In the event that the Partnership issues Partnership
Interests pursuant to this Section 4.2.A, the General Partner shall make such
revisions to this Agreement (including but not limited to the revisions
described in Section 5.4, Section 6.2 and Section 8.6 hereof) as it deems
necessary to reflect the issuance of such additional Partnership Interests.
B. Percentage Interest Adjustments in the Case of Capital
Contributions for Partnership Units. Upon the acceptance of additional Capital
Contributions in exchange for Partnership Units, the Percentage Interest related
thereto shall be equal to a fraction, the numerator of which is equal to the
amount of cash, if any, plus the Agreed Value of Contributed Property, if any,
contributed with respect to such additional Partnership Units and the
denominator of which is equal to the sum of (i) the Deemed Value of the
Partnership Interests for all outstanding classes (computed as of the Business
Day immediately preceding the date on which the additional Capital Contributions
are made (such contribution date being referred to as an "Adjustment Date"))
plus (ii) the aggregate amount of additional Capital Contributions contributed
to the Partnership on such Adjustment Date in respect of such additional
Partnership Units. The Percentage Interest of each other Partner holding
Partnership Interests not making a full pro rata Capital Contribution shall be
adjusted to a fraction the numerator of which is equal to the sum of (i) the
Deemed Partnership Interest Value of such Limited Partner (computed as of the
Business Day immediately preceding the Adjustment Date) plus (ii) the amount of
additional Capital Contributions (such amount being equal to the amount of cash,
if any, plus the Agreed Value of Contributed Property, if any, so contributed),
if any, made by such Partner to the Partnership in respect of such Partnership
Interest as of such Adjustment Date and the denominator of which is equal to the
sum of (i) the Deemed Value of the Partnership Interests of all outstanding
classes (computed as of the Business Day immediately preceding such Adjustment
Date) plus (ii) the aggregate amount of the additional Capital Contributions
contributed to the Partnership on such Adjustment Date in respect of such
additional Partnership Interests. For purposes of calculating a Partner's
Percentage Interest pursuant to this Section 4.2.B, cash Capital Contributions
by the General Partner will be
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deemed to equal the cash contributed by the General Partner plus (a) in the case
of cash contributions funded by an offering of any equity interests in or other
securities of the General Partner, the offering costs attributable to the cash
contributed to the Partnership, and (b) in the case of Partnership Units issued
pursuant to Section 7.5.E hereof, an amount equal to the difference between the
Value of the Shares sold pursuant to any Stock Option Plan and the net proceeds
of such sale.
C. Classes of Partnership Units. From and after the Effective
Date, subject to Section 4.2.A above, the Partnership shall have four classes of
Partnership Units entitled "Class A Units", "Class B Units", "Class C Units",
"Class D Units" and "Class E Units" which shall be issued to the Partners in
connection with the Consolidation as set forth below:
(i) the General Partner will receive Class A Units in
respect of its General Partnership Interest and its Limited Partnership
Interest;
(ii) initially, no Class B Units will be issued to any
Partner;
(iii) as specified on Exhibit A, certain Persons will
receive Class C Units, certain Persons will receive Class D Units and certain
Persons will receive Class E Units in respect of their Limited Partnership
Interests.
The General Partner may, in its sole and absolute discretion but subject to
Section 4.2.E, issue to newly admitted Partners Class A Units, Class B Units,
Class C Units, Class D Units, Class E Units or Partnership Units of any other
class established by the Partnership in accordance with Section 4.2.A (subject
to Section 4.2.E below) in exchange for the contribution by such Partners of
cash, real estate partnership interests, stock, notes or any other assets or
consideration; provided that any Partnership Unit that is not specifically
designated by the General Partner as being of a particular class shall be deemed
to be a Class A Unit unless the context clearly requires otherwise.
D. Conversion of Class C Units, Class D Units and Class E
Units.
(i) At such time as all holders of Class A Units have received
quarterly distributions in accordance with Article V equal to $.845 per
Partnership Unit for each of four consecutive quarters (without including for
these purposes distributions, if any, made to holders of Class A Units pursuant
to Subsections 4.2.D(i) and 4.2.D(ii)), the Class C Units will be converted
automatically into Class A Units and thereafter will have the same distribution
rights as all other Class A Units. The foregoing conversion will be deemed to
have occurred as of the first day of the quarter immediately succeeding the
fourth consecutive quarter with respect to which the distributions described in
the preceding sentence are made.
At any time prior to the first distribution made
in respect of Partnership Units that were converted from Class C Units to Class
A Units pursuant to this Subsection 4.2.D(i), the General Partner may, in its
sole discretion but subject to Section 5.2.B, elect to make a one-time
distribution of the Class C Accumulated Amount, calculated as of the date of
such distribution, pro rata among those Persons who hold Class A Units;
provided, however, that the foregoing distribution right shall only be available
if during each of the preceding four (4) consecutive fiscal quarters the
Partnership has earned Funds From Operations sufficient to enable the
Partnership to distribute to holders of Class A Units on a per Partnership Unit
basis (assuming a 100% payout of Funds From Operations) at least $0.845 per
Partnership Unit (which payment must be made in a quarter prior to the quarter
in which Class C Units are converted to Class A Units pursuant to the preceding
paragraph). For purposes hereof, the "Class C Accumulated Amount" means, as of
any date the lesser of (A) $1,500,000.00 and (B)(x)the sum of all amounts
previously distributed to holders of Class C Units pursuant to Subsections
5.1.B(iv) and 5.1.B(v) during the most recently completed twelve (12)
consecutive fiscal quarters less (y) the sum of all amounts previously
distributed to holders of Class A Units (excluding Class A Units that were
converted from
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Class C Units prior to such distribution) during such period pursuant to
Subsection 5.1.B(vi) but not Subsection 5.1.B(vii); provided that the Class C
Accumulated Amount shall not exceed the Partnership's aggregate Funds From
Operations for such twelve quarter period less (without duplication) the
distributions pursuant to Subsections 5.1(B)(i) through (vi).
(ii) At such time as all holders of Class A Units have
received quarterly distributions in accordance with Article V in an amount at
least equal to $1.0075 per Partnership Unit for each of four consecutive
quarters (without including for these purposes distributions, if any, made to
holders of Class A Units pursuant to Subsections 4.2.D(i) and 4.2.D(ii)), the
Class D Units and the Class E Units, if any, will be converted automatically
into Class A Units and thereafter will have the same distribution rights as all
other Class A Units. The foregoing conversion will be deemed to have occurred as
of the first day of the quarter immediately succeeding the fourth consecutive
quarter with respect to which the distributions described in the preceding
sentence are made.
At any time prior to the first distribution made in respect of
Partnership Units that were converted from Class D Units or Class E Units to
Class A Units pursuant to this Subsection 5.1.D(ii), the General Partner may, in
its sole discretion but subject to Section 5.2.B, elect to make a one time
distribution of the Class D/E Accumulated Amount, calculated as of the date of
such distribution, pro rata among those Persons who hold Class A Units;
provided, however, that the foregoing distribution right shall only be available
if during each of the preceding four (4) consecutive fiscal quarters the
Partnership has earned Funds From Operations sufficient to enable the
Partnership to distribute to holders of Class A Units on a per Partnership Unit
basis (assuming a 100% payout of Funds From Operations) at least $1.0075 per
Partnership Unit. For purposes hereof, the "Class D/E Accumulated Amount" means,
as of any date the lesser of (A) $1,500,000 less any amount distributed pursuant
to Subsection 4.2.D(i) above and (B) (x) the sum of all amounts previously
distributed to holders of Class D Units and Class E Units pursuant to
Subsections 5.1.B(ii) and (iii) during the most recently completed twelve (12)
consecutive fiscal quarters less (y) the sum of all amounts previously
distributed to holders of Class A Units (excluding Class A Units that were
converted from Class D Units or Class E Units prior to or during such period, if
any) during such period pursuant to Subsections 5.1.B(vi) and (vii) during such
period and less the Class C Accumulated Amount distributed previously or
contemporaneously therewith, provided that the maximum amount of the Class D/E
Accumulated Amount shall not exceed the Partnership's Funds From Operations less
(without duplication) distributions pursuant to Subsections 5.1.B(i) through
(vii).
(iii) Immediately after the time on the Effective Date at
which this Agreement becomes effective, every Class D Unit held by any of ▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇ or any Mendik Owner with respect to either such individual
shall automatically, and without any further payment or action of any kind by
any Person, be converted into Class C Units and thereafter shall have all of the
same distribution rights as any other Class C Unit, and the General Partner
shall reflect said conversion on Exhibit A.*
E. Limitation on the Issuance of Partnership Units. The
General Partner may not, without the Consent of the Outside Limited Partners
(taking into account, for these purposes, only those Limited Partnership
Interests being issued concurrently herewith as part of the Consolidation),
cause the Partnership to issue any Limited Partnership Interests of any class
ranking senior (as to distributions or redemption or voting rights) to the Class
C Units, the Class D Units or the Class E Units ("Preference Units") unless the
distribution and redemption (but not voting) rights of such Partnership Units
are substantially similar to the terms of securities issued by the General
Partner and the proceeds or other consideration from the issuance of such
securities have been contributed to the Partnership. The foregoing limitation
will expire with respect to the Partnership Units
----------
* In final agreement, total Class D Units covered by this Section will be .
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of any such class at such time as the Partnership Units of that class issued in
connection with the Consolidation are no longer outstanding, whether as a result
of redemption, conversion to another class or otherwise.
Section 4.3 No Preemptive Rights
Except to the extent expressly granted by the General Partner
(on behalf of the Partnership) pursuant to another agreement, no Person shall
have any preemptive, preferential or other similar right with respect to (i)
additional Capital Contributions or loans to the Partnership or (ii) issuance or
sale of any Partnership Units or other Partnership Interests.
Section 4.4 Other Contribution Provisions
In the event that any Partner is admitted to the Partnership
and is given a Capital Account in exchange for services rendered to the
Partnership, such transaction shall be treated by the Partnership and the
affected Partner as if the Partnership had compensated such Partner in cash for
the fair market value of such services, and the Partner had contributed such
cash to the capital of the Partnership.
Section 4.5 No Interest on Capital
No Partner shall be entitled to interest on its Capital
Contributions or its Capital Account.
ARTICLE V
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
A. General. Subject to Section 5.1.C, the General Partner
shall have the exclusive right and authority to declare and cause the
Partnership to make distributions as and when the General Partner deems
appropriate or desirable in its sole discretion. Notwithstanding anything to the
contrary contained herein, in no event may a Partner receive a distribution with
respect to a Partnership Unit for a quarter or shorter period if such Partner is
entitled to receive a distribution for such quarter or shorter period with
respect to a Share for which such Partnership Unit has been redeemed or
exchanged. Unless otherwise expressly provided for herein or in an agreement at
the time a new class of Partnership Interests is created in accordance with
Article IV hereof, no Partnership Interest shall be entitled to a distribution
in preference to any other Partnership Interest. For so long as the General
Partner elects to qualify as a REIT, the General Partner shall make such
reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with the qualification of the General Partner Entity or the General
Partner (as applicable) as a REIT, to make distributions to the Partners in
amounts such that the General Partner will receive amounts sufficient to enable
the General Partner Entity or the General Partner (as applicable) to pay
shareholder dividends that will (1) satisfy the requirements for qualification
as a REIT under the Code and the Regulations (the "REIT Requirements") and (2)
avoid any federal income or excise tax liability for the General Partner Entity
or the General Partner (as applicable).
B. Method. When, as and if declared by the General Partner,
the Partnership will make distributions to the General Partner in any amount
necessary to enable the General Partner to pay REIT Expenses, and thereafter:
(i) first, to holders of Preference Units in an amount
equal to preferential distributions accumulated and unpaid on
such Preference Units in accordance with their terms;
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(ii) second, to holders of Class D Units and Class E
Units (pro rata based on the ratio of the total number of
Class D Units or Class E Units, as applicable, to the
aggregate number of Class D Units and Class E Units taken
together on the Partnership Record Date) in an amount equal to
any accumulated and unpaid Class D/E Preferential
Distributions;
(iii) third, to holders of Class D Units and Class E
Units (pro rata based on the ratio of the total number of
Class D Units or Class E Units, as applicable, to the
aggregate number of Class D Units and Class E Units taken
together on the Partnership Record Date) until such holders
have received with respect to the quarter for which such
distribution is made an amount per Class D Unit and Class E
Unit, respectively, determined based on a distribution rate of
$1.0075 per quarter (the "Class D/E Preferential
Distribution") pro rated to take into account the actual
number of days in such period and the number of days in the
period that such Class D Units or
Class E Units, as applicable, were outstanding; provided,
however, that if the General Partner does not distribute
sufficient cash to pay the Class D/E Preferential
Distribution, then the Class D/E Preferential Distribution
will cumulate, without interest, and be payable by the
Partnership in the future pursuant to clause (ii) above;
(iv) fourth, to holders of Class C Units in an amount
equal to any accumulated and unpaid Class C Preferential
Distributions;
(v) fifth, to holders of Class C Units until such
holders have received with respect to the quarter for which
such distribution is made an amount per Class C Unit to be
determined based on a distribution rate of $.845 per quarter
(the "Class C Preferential Distribution") pro rated to take
into account the actual number of days in such period and the
number of days in the period that such Class C Units were
outstanding; provided, however, that if the General Partner
does not distribute sufficient cash to pay the Class C
Preferential Distribution, then the Class C Preferential
Distribution will cumulate, without interest, and be payable
by the Partnership in the future pursuant to clause (iv)
above;
(vi) sixth, to the holders of Units other than Class
C Units, Class D Units and Class E Units (the "Other Units")
until the holders of such Other Units have received with
respect to the quarter for which such distribution is made an
amount per Partnership Unit equal to the amount that would
have been payable to such holders under clause (v) above if
the Partnership Units held by them had been Class C Units;
provided that with respect to the distribution, if any, for
the first quarter or portion thereof ending following the
Effective Date, if the Partnership elects to distribute
sufficient cash the General Partner shall be entitled to
receive a distribution at the foregoing rate for the entire
fiscal quarter to which such period relates notwithstanding
that the General Partner did not hold Class A Units for the
entire quarter;
(vii) seventh, to the holders of Partnership Units
other than Class D Units and Class E Units (the "Non-Class D/E
Units") until the holders of such Non-Class D/E Units have
received with respect to the quarter for which such
distribution is made a total amount per Partnership Unit equal
(taking into account distributions made to such holders of
Non-Class D/E Units with respect to such quarter under clause
(v) or clause (vi) above as applicable) equal to the amount
paid per Class D Unit at such time pursuant to clause (iii)
above; provided that with respect to the distribution for the
first quarter or portion thereof ending following the
Effective Date, if the Partnership elects to distribute
sufficient cash the General Partner shall be entitled to
receive a
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distribution at the foregoing rate for the entire fiscal
quarter to which such period relates notwithstanding that the
General Partner did not hold Class A Units for the entire
quarter;
(viii) eighth, to holders of Class A Units as
described in Subsection 4.2.D(i);
(ix) ninth, to holders of Class A Units as described
in Subsection 4.2.D(ii);
(x) tenth, to all holders of Partnership Units (of
all classes), pro rata in proportion to their respective
Percentage Interest, in an amount sufficient to permit to the
General Partner to satisfy the REIT Requirements and to avoid
any federal income or excise tax liability for the General
Partner Entity (or the General Partner, as applicable);
(xi) eleventh, to the extent of remaining
distribution amount, to holders of Partnership Units in
proportion to their respective Percentage Interests.
Each holder of Partnership Interests that are entitled to any preference in
distribution shall be entitled to a distribution in accordance with the rights
of any such class of Partnership Interests (and, within such class, pro rata in
proportion to the respective Percentage Interests on such Partnership Record
Date).
C. Minimum Distributions if General Partner Not a REIT or Not
Publicly Traded. In addition, if the General Partner Entity is not a REIT or the
common shares of beneficial interest (or other comparable equity interests) of
the General Partner Entity are not Publicly Traded, the General Partner shall
use commercially reasonable efforts (including, if appropriate, incurring
indebtedness), as determined by the General Partner in its sole discretion
exercised in good faith, to make cash distributions pursuant to Section 5.1.B
above at least annually for each taxable year of the Partnership beginning prior
to the twentieth (20th) anniversary of the Effective Date in an aggregate amount
with respect to each such taxable year at least equal to 95% of the
Partnership's taxable income for such year other than gain subject to Section
704(c) of the Code allocable to the Class A Units, with such distributions to be
made not later than 60 days after the end of such year; provided, the foregoing
shall not create any obligation on the part of the General Partner to contribute
or loan funds to the Partnership or dispose of assets. Notwithstanding Section
14.1.D.(iv), this Section 5.1.C may be amended with the Consent of Certain
Limited Partners.
Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of
any state or local tax law and Section 10.5 hereof with respect to any
allocation, payment or distribution to the General Partner, the Limited Partners
or Assignees shall be treated as amounts distributed to the General Partner,
Limited Partners or Assignees pursuant to Section 5.1 above for all purposes
under this Agreement.
Section 5.3 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction shall be
distributed to the Partners in accordance with Section 13.2 hereof.
Section 5.4 Revisions to Reflect Issuance of Additional Partnership
Interests
In the event that the Partnership issues additional
Partnership Interests to the General Partner or any Additional Limited Partner
pursuant to Article IV hereof, the General Partner shall make such revisions to
this Article V as it deems necessary to reflect the issuance of such additional
Partnership Interests.
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ARTICLE VI
ALLOCATIONS
Section 6.1 Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the Partnership's items
of income, gain, loss and deduction (computed in accordance with Exhibit B
hereto) shall be allocated among the Partners in each taxable year (or portion
thereof) as provided herein below.
A. Net Income. After giving effect to the special allocations
set forth in Section 1 of Exhibit C hereto and Section 6.1.E below, Net Income
shall be allocated (i) first, to the General Partner to the extent that Net
Losses previously allocated to the General Partner pursuant to the last sentence
of Section 6.1.B below exceed Net Income previously allocated to the General
Partner pursuant to this clause (i) of Section 6.1.A, (ii) second, to holders of
Class D Units and Class E Units until their aggregate allocations of Net Income
under this clause (ii) equal the sum of (x) the aggregate Net Losses allocated
to them under clause (ix) of Section 6.1.B and (ii) all distributions made
pursuant to clause (ii) of Section 5.1.B; (iii) third, to holders of Class D
Units until their aggregate allocations of Net Income under this clause (iii)
equal the sum of (x) the aggregate Net Losses allocated to them under clause
(viii) of Section 6.1.B and (y) all distributions made pursuant to clause (iii)
of Section 5.1.B with respect to which there was not a corresponding
distribution to holders of Units other than Class D Units and Class E Units
pursuant to clauses (vi) or (vii) of Section 5.1.B; (iv) fourth, to holders of
Class C Units until their aggregate allocations of Net Income under this clause
(iv) equal the sum of (x) the aggregate Net Losses allocated to them under
clause (vii) of Section 6.1.B and (ii) all distributions made pursuant to clause
(iv) of Section 5.1.B; (v) fifth, to holders of Class C Units until their
aggregate allocations of Net Income under this clause (v) equal the sum of (x)
the aggregate Net Losses allocated to them under clause (vi) of Section 6.1.B
and (y) all distributions made pursuant to clause (v) of Section 5.1.B with
respect to which there was not a corresponding distribution to holders of Units
other than Class C or D Units pursuant to clause (vi) of Section 5.1.B; (vi)
sixth, to all holders of Units until the aggregate allocations of Net Income
under this clause (vi) equal the sum of (x) aggregate Net Losses allocated under
clause (v) of Section 6.1.B, (y) all distributions made pursuant to clauses (vi)
or (vii) of Section 5.1.B, and (z) all distributions made pursuant to clauses
(iii) or (v) of Section 5.1.B that were not taken into account in clauses (iii)
or (v) of this Section 6.1.A as a result of distributions pursuant to clauses
(vi) and (vii) of Section 5.1.B; (vii) seventh, to holders of Class A Units
until their aggregate allocations of Net Income under this clause (vii) equal
the sum of (x) the aggregate Net Losses allocated to them under clause (iv) of
Section 6.1.B and (y) all distributions made pursuant to clause (viii) of
Section 5.1.B, with such Net Income to be allocated only to those holders of
Class A Units who received distributions under said clause (viii); (viii)
eighth, to holders of Class A Units until their aggregate allocations of Net
Income under this clause (viii) equal the sum of (x) the aggregate Net Losses
allocated to them under clause (iii) of Section 6.1.B and (y) all distributions
made pursuant to clause (ix) of Section 5.1.B, with such Net Income to be
allocated only to those holders of Class A Units who received distributions
under said clause (ix) of Section 5.1.B; (ix) ninth, to all holders of Units pro
rata in accordance with their Percentage Interests until the aggregate
allocations of Net Income under this clause (ix) equal the sum of (x) aggregate
Net Losses allocated under clause (ii) of Section 6.1.B and (y) all
distributions made pursuant to clause (xi) of Section 5.1.B.; and (x) tenth, to
all holders of Units in proportion to their respective Percentage Interests.
B. Net Losses. After giving effect to the special allocations
set forth in Section 1 of Exhibit C hereto and Section 6.1.E below, Net Losses
shall be allocated (i) first, to all holders of Units in proportion to their
respective Percentage Interests until the aggregate allocations of Net Losses
pursuant to this clause (i) equal the aggregate amount of allocations of Net
Income pursuant to clause (x) of Section 6.1.A; (ii) second, to all holders of
Units pro rata in accordance with their Percentage Interests until the aggregate
allocations of Net Losses under this clause (ii) equal the aggregate amount of
Net Income allocated pursuant to clause (ix)
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of Section 6.1.A; (iii) third, to holders of Class A Units until the aggregate
allocations of Net Losses pursuant to this clause (iii) equal the aggregate
amount of allocations of Net Income pursuant to clause (viii) of Section 6.1.A.;
(iv) fourth to holders of Class A Units until the aggregate allocations of Net
Losses pursuant to this clause (iii) equal the aggregate amount of allocations
of Net Income pursuant to clause (vii) of Section 6.1.A.; (v) fifth, to all
holders of Units until the aggregate allocation of Net Losses pursuant to this
clause (v) equal the aggregate amount of Net Income allocated pursuant to clause
(vi) of Section 6.1.A; (vi) sixth, to holders of Class C Units until the
aggregate allocations of Net Losses under this clause (vi) equal the aggregate
amount of Net Income allocated pursuant to clause (v) of Section 6.1.A; (vii)
seventh, to holders of Class C Units until the aggregate allocations of Net
Losses under this clause (vii) equal the aggregate amount of Net Income
allocated pursuant to clause (iv) of Section 6.1.A; (viii) eighth, to holders of
Class D Units and Class E Units until the aggregate allocations of Net Losses
under this clause (viii) equal the aggregate amount of Net Income allocated
pursuant to clause (iii) of Section 6.1.A; (ix) ninth, to holders of Class D
Units and Class E Units until the aggregate allocations of Net Losses under this
clause (ix) equal the aggregate amount of Net Income allocated pursuant to
clause (ii) of Section 6.1.A; and (x) thereafter, to holders of all Units in
proportion to their Percentage Interests; provided that, Net Losses shall not be
allocated to any Limited Partner pursuant to this Section 6.1.B to the extent
that such allocation would cause such Limited Partner to have an Adjusted
Capital Account Deficit (or increase any existing Adjusted Capital Account
Deficit) at the end of such taxable year (or portion thereof). All Net Losses in
excess of the limitations set forth in this Section 6.1.B shall be allocated to
the General Partner.
C. Allocation of Nonrecourse Debt. For purposes of Regulations
Section 1.752-3(a), the Partners agree that Nonrecourse Liabilities of the
Partnership in excess of the sum of (i) the amount of Partnership Minimum Gain
and (ii) the total amount of Nonrecourse Built-in Gain shall be allocated among
the Partners in accordance with their respective Percentage Interests.
D. Recapture Income. Any gain allocated to the Partners upon
the sale or other taxable disposition of any Partnership asset shall, to the
extent possible after taking into account other required allocations of gain
pursuant to Exhibit C hereto, be characterized as Recapture Income in the same
proportions and to the same extent as such Partners have been allocated any
deductions directly or indirectly giving rise to the treatment of such gains as
Recapture Income.
E. Cancellation of Indebtedness Income. Any cancellation of
indebtedness income required to be recognized by the Partnership with respect to
the Two Penn Plaza Property in connection with the acquisition of the Two Penn
Plaza Property by the Partnership and the restructuring of the outstanding
indebtedness with respect thereto shall be allocated solely to holders of Two
Penn Plaza Units. In the event that cancellation of indebtedness income is
recognized with respect to the property at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ as a result of
resolving the dispute with the lender under the loan outstanding upon
consummation of the Consolidation that is secured by a mortgage on such
property, holders of the Partnership Units issued with respect to M 330
Associates, a New York limited partnership, shall be specially allocated
cancellation of indebtedness income in an amount equal to their proportionate
share of the dollar amount of the discount as a result of the settlement
resulting in the recognition of such cancellation of indebtedness income.
Section 6.2 Revisions to Allocations to Reflect Issuance of Additional
Partnership Interests
In the event that the Partnership issues additional
Partnership Interests to the General Partner or any Additional Limited Partner
pursuant to Article IV hereof, the General Partner shall make such revisions to
this Article VI as it deems necessary to reflect the terms of the issuance of
such additional Partnership Interests, including making preferential allocations
to classes of Partnership Interests that are entitled thereto.
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ARTICLE VII
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
▇. ▇▇▇▇▇▇ of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business and affairs
of the Partnership are and shall be exclusively vested in the General Partner,
and no Limited Partner shall have any right to participate in or exercise
control or management power over the business and affairs of the Partnership.
The General Partner may not be removed by the Limited Partners with or without
cause. In addition to the powers now or hereafter granted a general partner of a
limited partnership under applicable law or which are granted to the General
Partner under any other provision of this Agreement, the General Partner,
subject to Sections 7.6.A, 7.6.D and 7.11 below, shall have full power and
authority to do all things deemed necessary or desirable by it, on such terms
and conditions as the General Partner in its sole discretion deems appropriate,
to conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(1) the making of any expenditures, the lending, subject
to Section 7.6.D, or borrowing of money (including,
without limitation, making prepayments on loans and
borrowing money to permit the Partnership to make
distributions to its Partners in such amounts as are
required under Section 5.1.C hereof or will permit
the General Partner Entity or the General Partner (as
applicable) (as long as the General Partner Entity or
the General Partner qualifies as a REIT) to avoid the
payment of any federal income tax (including, for
this purpose, any excise tax pursuant to Section 4981
of the Code) and to make distributions to its
shareholders sufficient to permit the General Partner
Entity or the General Partner (as applicable) to
satisfy the REIT Requirements), the assumption or
guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of
indebtedness (including the securing of same by
mortgage, deed of trust or other lien or encumbrance
on the Partnership's assets) and the incurring of any
obligations the General Partner deems necessary or
desirable for the conduct of the activities of the
Partnership;
(2) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to
governmental or other agencies having jurisdiction
over the business or assets of the Partnership;
(3) the acquisition, disposition, sale, mortgage, pledge,
encumbrance, hypothecation or exchange of any or all
of the assets of the Partnership (including the
exercise or grant of any conversion, option,
privilege or subscription right or other right
available in connection with any assets at any time
held by the Partnership) or the merger or other
combination of the Partnership with or into another
entity, on such terms as the General Partner deems
proper in its sole and absolute discretion;
(4) the use of the assets of the Partnership (including,
without limitation, cash on hand) for any purpose
consistent with the terms of this Agreement,
including, without limitation, the financing of the
conduct of the operations of the Partnership or any
of the Partnership's Subsidiaries, the lending of
funds to other Persons, subject to Section 7.6.D, and
the repayment of obligations of the Partnership and
its Subsidiaries and any other Person in which the
Partnership has an equity investment and the making
of capital contributions to its Subsidiaries;
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(5) the management, operation, leasing, landscaping,
repair, alteration, demolition or improvement of any
real property or improvements owned by the
Partnership or any Subsidiary of the Partnership or
any other Person in which the Partnership has made a
direct or indirect equity investment;
(6) the negotiation, execution, and performance of any
contracts, conveyances or other instruments that the
General Partner considers useful or necessary to the
conduct of the Partnership's operations or the
implementation of the General Partner's powers under
this Agreement, including contracting with
contractors, developers, consultants, accountants,
legal counsel, other professional advisors and other
agents and the payment of their expenses and
compensation out of the Partnership's assets;
(7) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(8) the holding, managing, investing and reinvesting of
cash and other assets of the Partnership and, in
connection therewith, the opening, maintaining and
closing of bank and brokerage accounts and the
drawing of checks or other orders for the payment of
moneys;
(9) the collection and receipt of revenues and income of
the Partnership;
(10) the selection and dismissal of employees of the
Partnership (including, without limitation, employees
having titles such as "president," "vice president,"
"secretary" and "treasurer") and agents, outside
attorneys, accountants, consultants and contractors
of the Partnership, and the determination of their
compensation and other terms of employment or hiring;
(11) the maintenance of such insurance for the benefit of
the Partnership and the Partners;
(12) the formation of, or acquisition of an interest in,
and the contribution of property to, any further
limited or general partnerships, joint ventures,
limited liability companies or other relationships
that it deems desirable (including, without
limitation, the acquisition of interests in, and the
contributions of property to its Subsidiaries and any
other Person in which it has an equity investment
from time to time);
(13) the control of any matters affecting the rights and
obligations of the Partnership, including the
settlement, compromise, submission to arbitration or
any other form of dispute resolution or abandonment
of any claim, cause of action, liability, debt or
damages due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings,
administrative proceedings, arbitrations or other
forms of dispute resolution, the representation of
the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other
forms of dispute resolution, the incurring of legal
expense and the indemnification of any Person against
liabilities and contingencies to the extent permitted
by law;
(14) the determination of the fair market value of any
Partnership property distributed in kind, using such
reasonable method of valuation as the General Partner
may adopt;
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(15) the exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited
power of attorney, of any right, including the right
to vote, appurtenant to any assets or investment held
by the Partnership;
(16) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of or
in connection with any Subsidiary of the Partnership
or any other Person in which the Partnership has a
direct or indirect interest, individually or jointly
with any such Subsidiary or other Person;
(17) the exercise of any of the powers of the General
Partner enumerated in this Agreement on behalf of any
Person in which the Partnership does not have any
interest pursuant to contractual or other
arrangements with such Person;
(18) the making, executing and delivering of any and all
deeds, leases, notes, deeds to secure debt,
mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or other legal
instruments or agreements in writing necessary or
appropriate in the judgment of the General Partner
for the accomplishment of any of the powers of the
General Partner under this Agreement;
(19) the distribution of cash to acquire Partnership Units
held by a Limited Partner in connection with a
Limited Partner's exercise of its Redemption Right
under Section 8.6 hereof;
(20) the amendment and restatement of Exhibit A hereto to
reflect accurately at all times the Capital
Contributions and Percentage Interests of the
Partners as the same are adjusted from time to time
to the extent necessary to reflect redemptions,
Capital Contributions, the issuance of Partnership
Units, the admission of any Additional Limited
Partner or any Substituted Limited Partner or
otherwise, which amendment and restatement,
notwithstanding anything in this Agreement to the
contrary, shall not be deemed an amendment of this
Agreement, as long as the matter or event being
reflected in Exhibit A hereto otherwise is
authorized by this Agreement;
(21) the approval and/or implementation of any merger
(including a triangular merger), consolidation or
other combination between the Partnership and another
person that is not prohibited under this Agreement,
whether with or without Consent, the terms of Section
17-211(g) of the Act shall be applicable such that
the General Partner shall have the right to effect
any amendment to this Agreement or effect the
adoption of a new partnership agreement for a limited
partnership if it is the surviving or resulting
limited partnership on the merger or consolidation
(except as may be expressly prohibited under Section
7.11.D., Section 14.1.C, Section 14.1.D or Section
14.1.F); and
(22) the taking of any and all actions necessary or
desirable in furtherance of, in connection with or
incidental to the foregoing.
B. No Approval by Limited Partners. Except as provided
in Section 7.11 below, each of the Limited Partners agrees that the General
Partner is authorized to execute, deliver and perform the above- mentioned
agreements and transactions on behalf of the Partnership without any further
act, approval or vote of the Partners, notwithstanding any other provision of
this Agreement, the Act or any applicable law, rule or regulation, to the full
extent permitted under the Act or other applicable law. The execution, delivery
or
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performance by the General Partner or the Partnership of any agreement
authorized or permitted under this Agreement shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the Partnership
or the Limited Partners or any other Persons under this Agreement or of any duty
stated or implied by law or equity.
C. Insurance. At all times from and after the date hereof, the
General Partner may cause the Partnership to obtain and maintain (i) casualty,
liability and other insurance on the properties of the Partnership, (ii)
liability insurance for the Indemnitees hereunder and (iii) such other insurance
as the General Partner, in its sole and absolute discretion, determines to be
necessary.
D. Working Capital and Other Reserves. At all times from and
after the date hereof, the General Partner may cause the Partnership to
establish and maintain working capital reserves in such amounts as the General
Partner, in its sole and absolute discretion, deems appropriate and reasonable
(both in purpose and amount) from time to time, including upon liquidation of
the Partnership pursuant to Section 13.2 hereof.
E. No Obligations to Consider Tax Consequences of Limited
Partners. In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner (including the General Partner) of any action taken (or not
taken) by it. The General Partner and the Partnership shall not have liability
to a Limited Partner for monetary damages or otherwise for losses sustained,
liabilities incurred or benefits not derived by such Limited Partner in
connection with such decisions, provided that the General Partner has acted in
good faith and not beyond its authority under this Agreement.
Section 7.2 Certificate of Limited Partnership
The Partnership has caused the Certificate to be filed with
the Secretary of State of Delaware. To the extent that such action is determined
by the General Partner to be reasonable and necessary or appropriate, the
General Partner shall file amendments to and restatements of the Certificate and
do all the things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the laws
of the State of Delaware and each other state, the District of Columbia or other
jurisdiction in which the Partnership may elect to do business or own property.
Subject to the terms of Section 8.5.A(4) hereof, the General Partner shall not
be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner. The General Partner
shall use all reasonable efforts to cause to be filed such other certificates or
documents as may be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware and any other state, the District of Columbia or other jurisdiction
in which the Partnership may elect to do business or own property.
Section 7.3 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the
Partnership as an entity, and no Partners, individually or collectively, shall
have any ownership interest in such Partnership assets or any portion thereof.
Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner
may determine, including Affiliates of the General Partner. The General Partner
hereby declares and warrants that any Partnership assets for which legal title
is held in the name of the General Partner or any nominee or Affiliate of the
General Partner shall be held by the General Partner for the use and benefit of
the Partnership in accordance with the provisions of this Agreement. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.
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Section 7.4 Reimbursement of the General Partner
A. No Compensation. Except as provided in this Section 7.4 and
elsewhere in this Agreement (including the provisions of Articles V and VI
hereof regarding distributions, payments and allocations to which it may be
entitled), the General Partner shall not be compensated for its services as
general partner of the Partnership.
B. Responsibility for Partnership Expenses. The Partnership
shall be responsible for and shall pay all expenses relating to the
Partnership's organization, the ownership of its assets and its operations. The
General Partner shall be reimbursed on a monthly basis, or such other basis as
the General Partner may determine in its sole and absolute discretion, for all
expenses it incurs relating to the ownership and operation of, or for the
benefit of, the Partnership (including, without limitation, expenses related to
the management and administration of any Subsidiaries of the General Partner or
the Partnership or Affiliates of the Partnership such as auditing expenses and
filing fees); provided that (x), the amount of any such reimbursement shall be
reduced by (i) any interest earned by the General Partner with respect to bank
accounts or other instruments or accounts held by it as permitted in Section
7.5.A below and (ii) any amount derived by the General Partner from any
investments permitted in Section 7.5.A below and (y) REIT Expenses shall not be
treated as Partnership expenses for purposes of this Section 7.4.B. The General
Partner shall determine in good faith the amount of expenses incurred by it
related to the ownership and operation of, or for the benefit of, the
Partnership. In the event that certain expenses are incurred for the benefit of
the Partnership and other entities (including the General Partner), such
expenses will be allocated to the Partnership and such other entities in such a
manner as the General Partner in its sole and absolute discretion deems fair and
reasonable. Such reimbursements shall be in addition to any reimbursement to the
General Partner pursuant to Section 10.3.C hereof and as a result of
indemnification pursuant to Section 7.7 below. All payments and reimbursements
hereunder shall be characterized for federal income tax purposes as expenses of
the Partnership incurred on its behalf, and not as expenses of the General
Partner.
C. Partnership Interest Issuance Expenses. The General Partner
shall also be reimbursed for all expenses it incurs relating to any issuance of
additional Partnership Interests, Debt of the Partnership or rights, options,
warrants or convertible or exchangeable securities pursuant to Article IV hereof
(including, without limitation, all costs, expenses, damages and other payments
resulting from or arising in connection with litigation related to any of the
foregoing), all of which expenses are considered by the Partners to constitute
expenses of, and for the benefit of, the Partnership.
D. Purchases of Shares by the General Partner. In the event
that the General Partner exercises its rights under the Declaration of Trust to
purchase shares or otherwise elects to purchase from its shareholders Shares in
connection with a share repurchase or similar program or for the purpose of
delivering such Shares to satisfy an obligation under any dividend reinvestment
or share purchase program adopted by the General Partner, any employee share
purchase plan adopted by the General Partner or any similar obligation or
arrangement undertaken by the General Partner in the future, the purchase price
paid by the General Partner for such Shares and any other expenses incurred by
the General Partner in connection with such purchase shall be considered REIT
Expenses, and the Partnership shall distribute cash to the General Partner to
offset such expenses pursuant to Section 5.1, subject to the conditions that:
(i) if such Shares subsequently are to be sold by the General Partner, the
General Partner pays to the Partnership any proceeds received by the General
Partner for such Shares (provided that a transfer of Shares for Partnership
Units pursuant to Section 8.6 hereof would not be considered a sale for such
purposes); and (ii) if such Shares are not retransferred by the General Partner
within thirty (30) days after the purchase thereof, the General Partner shall
cause the Partnership to cancel a number of Partnership Units of the appropriate
class (rounded to the nearest whole Partnership Unit) held by the General
Partner equal to the product attained by multiplying the number of such Shares
by a fraction, the numerator of which is one and the denominator of which is the
Conversion Factor.
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E. Tax Treatment of Certain Reimbursements. If and to the
extent that any reimbursement made pursuant to this Section 7.4 is determined
for federal income tax purposes not to constitute a payment of expenses of the
Partnership, then such reimbursement shall be treated as a distribution pursuant
to clause (i) of Section 5.1.B. hereof.
Section 7.5 Outside Activities of the General Partner
A. General. Without the Consent of the Outside Limited
Partners, except as set forth in this Section 7.5.A, the General Partner shall
not, directly or indirectly, enter into or conduct any business other than in
connection with the ownership, acquisition and disposition of Partnership
Interests as a General Partner or Limited Partner and the management of the
business of the Partnership and such activities as are incidental to any of the
foregoing. Without the Consent of the Outside Limited Partners, the assets of
the General Partner shall be limited to Partnership Interests and permitted debt
obligations of the Partnership (as contemplated by Section 7.5.F below), so that
Shares and Partnership Units are completely fungible except as otherwise
specifically provided herein; provided, that the General Partner shall be
permitted to hold (i) interests in entities, including Qualified REIT
Subsidiaries, that hold no material assets; (ii) interests in Qualified REIT
Subsidiaries (or other entities that are not taxed as corporations for federal
income tax purposes) that own only interests in the Partnership and/or interests
in other Qualified REIT Subsidiaries (or other entities that are not taxed as
corporations for federal income tax purposes) that either hold no assets or hold
only interests in the Partnership; (iii) assets and/or interests in entities,
including Qualified REIT Subsidiaries, that hold assets, having an aggregate
value not greater than five percent (5%) of the total market value of the
General Partner Entity (determined by reference to the value of all outstanding
equity securities of the General Partner Entity), provided that (X) the General
Partner Entity will apply the net income from such assets (other than net income
derived as a result of a Qualified REIT Subsidiary's ownership of an interest in
the Partnership) to offset REIT Expenses before utilizing the distribution
provisions of Section 5.1.B(i), (Y) the General Partner will contribute all net
income generated by such assets and/or interests (other than net income derived
as a result of a Qualified REIT Subsidiary's ownership of an interest in the
Partnership) to the Operating Partnership (after taking into account REIT
Expenses as described in clause (X) above), and (Z) the General Partner will use
commercially reasonable efforts to transfer such assets and interests (other
than interests in Qualified REIT Subsidiaries and the Partnership) to the
Operating Partnership or an entity controlled by the Operating Partnership as
soon as such a transfer can be made without causing the REIT or the Operating
Partnership to incur any material expenses in connection therewith; and (iv)
such bank accounts or similar instruments or account in its own name as it deems
necessary to carry out its responsibilities and purposes as contemplated under
this Agreement and its organizational documents; and, provided, further, that
the General Partner shall be permitted to acquire, directly or through a
Qualified REIT Subsidiary (or other entities that are not taxed as corporations
for federal income tax purposes), up to a one percent (1%) interest in any
partnership or limited liability company at least ninety-nine percent (99%) of
the equity of which is owned directly or indirectly by the Partnership. The
General Partner and any of its Affiliates may acquire Limited Partnership
Interests and shall be entitled to exercise all rights of a Limited Partner
relating to such Limited Partnership Interests.
B. Repurchase of Shares. In the event the General Partner
exercises its rights under the Declaration of Trust to purchase Shares or
otherwise elects to purchase from its shareholders Shares in connection with a
share repurchase or similar program or for the purpose of delivering such Shares
to satisfy an obligation under any dividend reinvestment or share purchase
program adopted by the General Partner, any employee share purchase plan adopted
by the General Partner or any similar obligation or arrangement undertaken by
the General Partner in the future, and the General Partner does not resell said
Shares within thirty (30) days after the purchase thereof as contemplated in
Section 7.4.D(i), then the General Partner shall cause the Partnership to
purchase from the General Partner (and eliminate) that number of Partnership
Units of the appropriate class equal to the product obtained by multiplying the
number of Shares purchased by the General Partner times a fraction,
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the numerator of which is one and the denominator of which is the Conversion
Factor, on the same terms and for the same aggregate price that the General
Partner purchased such Shares.
C. Forfeiture of Shares. In the event the Partnership or the
General Partner acquires Shares as a result of the forfeiture of such Shares
under a restricted or similar share plan, then the General Partner shall cause
the Partnership to cancel that number of Partnership Units of the appropriate
class equal to the number of Shares so acquired, and, if the Partnership
acquired such Shares, it shall transfer such Shares to the General Partner for
cancellation.
D. Issuances of Shares. After the Effective Date, the General
Partner shall not grant, award, or issue any additional Shares (other than
Shares issued pursuant to Section 8.6 hereof or pursuant to a dividend or
distribution (including any share split) of Shares to all of its shareholders),
other equity securities of the General Partner, New Securities or Convertible
Funding Debt unless (i) the General Partner shall cause, pursuant to Section
4.2.A hereof, the Partnership to issue to the General Partner Partnership
Interests or rights, options, warrants or convertible or exchangeable securities
of the Partnership having designations, preferences and other rights, all such
that the economic interests are substantially the same as those of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, and (ii) the General Partner transfers to the
Partnership, as an additional Capital Contribution, the proceeds from the grant,
award, or issuance of such additional Shares, other equity securities, New
Securities or Convertible Funding Debt, as the case may be, or from the exercise
of rights contained in such additional Shares, other equity securities, New
Securities or Convertible Funding Debt, as the case may be. Without limiting the
foregoing, the General Partner is expressly authorized to issue additional
Shares, other equity securities, New Securities or Convertible Funding Debt, as
the case may be, for less than fair market value, and the General Partner is
expressly authorized, pursuant to Section 4.2.A hereof, to cause the Partnership
to issue to the General Partner corresponding Partnership Interests, as long as
(a) 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 and corresponding Partnership Units
pursuant to a share purchase plan providing for purchases of Shares, either by
employees or shareholders, at a discount from fair market value or pursuant to
employee share options that have an exercise price that is less than the fair
market value of the Shares, either at the time of issuance or at the time of
exercise) and (b) the General Partner transfers all proceeds from any such
issuance or exercise to the Partnership as an additional Capital Contribution.
E. Stock Option Plan. If at any time or from time to time, the
General Partner sells Shares pursuant to any Stock Option Plan, the General
Partner shall transfer the net proceeds of the sale of such Shares to the
Partnership as an additional Capital Contribution in exchange for an amount of
additional Partnership Units equal to the number of Shares so sold divided by
the Conversion Factor.
F. Funding Debt. The General Partner may incur a Funding Debt,
including, without limitation, a Funding Debt that is convertible into Shares or
otherwise constitutes a class of New Securities ("Convertible Funding Debt"),
subject to the condition that the General Partner lends to the Partnership the
net proceeds of such Funding Debt; provided, that Convertible Funding Debt shall
be issued pursuant to Section 7.5.D above; and, provided, further, that the
General Partner shall not be obligated to lend the net proceeds of any Funding
Debt to the Partnership in a manner that would be inconsistent with the General
Partner's ability to remain qualified as a REIT. If the General Partner enters
into any Funding Debt, the loan to the Partnership shall be on comparable terms
and conditions, including interest rate, repayment schedule and costs and
expenses, as are applicable with respect to or incurred in connection with such
Funding Debt.
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Section 7.6 Transactions with Affiliates
A. Transactions with Certain Affiliates. Except as expressly
permitted by this Agreement (other than Section 7.1.A hereof, which shall not be
considered authority for a transaction that otherwise would be prohibited by
this Section 7.6.A), the Partnership shall not, directly or indirectly, sell,
transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership or
the General Partner or the General Partner Entity that is not also a Subsidiary
of the Partnership, except pursuant to a transaction that has been approved by a
majority of the disinterested trustees (or directors) of the General Partner or
General Partner Entity (as applicable), taking into account the fiduciary duties
of the General Partner or General Partner Entity (as applicable) to the Limited
Partners.
B. Benefit Plans. The General Partner, in its sole and
absolute discretion and without the approval of the Limited Partners, may
propose and adopt on behalf of the Partnership employee benefit plans funded by
the Partnership for the benefit of employees of the General Partner, the
Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in
respect of services performed, directly or indirectly, for the benefit of the
Partnership, the General Partner, or any of the Partnership's Subsidiaries.
C. Conflict Avoidance. The General Partner is expressly
authorized to enter into, in the name and on behalf of the Partnership, a right
of first opportunity arrangement and other conflict avoidance agreements with
various Affiliates of the Partnership and General Partner on such terms as the
General Partner, in its sole and absolute discretion, believes are advisable.
D. Limitation on Loans to the General Partner. Except with the
Consent of the Outside Limited Partners, the General Partner may not cause the
Partnership to loan money to the General Partner or to any Subsidiary or
Affiliate of the General Partner which is not also a Subsidiary or an entity in
which the Partnership owns an equity interest.
Section 7.7 Indemnification
A. General. To the maximum extent permitted by applicable law
at the time, the Partnership, without requiring a preliminary determination of
the ultimate entitlement to indemnification, shall indemnify each Indemnitee
from and against any and all losses, claims, damages, liabilities, joint or
several, expenses (including, without limitation, attorneys fees and other legal
fees and expenses), judgments, fines, settlements and other amounts arising from
or in connection with any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative incurred by the
Indemnitee and relating to the Partnership or the General Partner or the
formation or the current (and, in the case of the General Partner's right to
indemnification from the Partnership, prior) operations of, or the current (and,
in the case of the General Partner's right to indemnification from the
Partnership, prior) ownership of property by, either of them as set forth in
this Agreement in which any such Indemnitee may be involved, or is threatened to
be involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the Indemnitee actually received an improper personal benefit
in money, property or services or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The obligations of the Partnership under this Section 7.7 shall
include reimbursement of the General Partner for any indemnification or advance
of expenses by the General Partner pursuant to Title 8, the Declaration of Trust
or its Bylaws. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligations for any indebtedness or other obligations or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any
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Subsidiary of the Partnership has assumed or taken subject to). The General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements not inconsistent with the provisions
of this Section 7.7 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.7.A.
Any indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership and any insurance proceeds from the liability policy
covering the General Partner and any Indemnitees, and neither the General
Partner nor any Limited Partner shall have any obligation to contribute to the
capital of the Partnership or otherwise provide funds to enable the Partnership
to fund its obligations under this Section 7.7.
B. Advancement of Expenses. Reasonable expenses expected to be
incurred by an Indemnitee shall be paid or reimbursed by the Partnership in
advance of the final disposition of any and all claims, demands, actions, suits
or proceedings, civil, criminal, administrative or investigative made or
threatened against an Indemnitee, in the case of any trustee/director or officer
who is an Indemnitee upon receipt by the Partnership of (i) a written
affirmation by the Indemnitee of the Indemnitee's good faith belief that the
standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 7.7.A has been met and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
C. No Limitation of Rights. The indemnification provided by
this Section 7.7 shall be in addition to any other rights to which an Indemnitee
or any other Person may be entitled under any agreement, pursuant to any vote of
the Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.
D. Insurance. The Partnership may purchase and maintain
insurance on behalf of the Indemnitees and such other Persons as the General
Partner shall determine against any liability that may be asserted against or
expenses that may be incurred by such Person in connection with the
Partnership's activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Agreement.
E. Benefit Plan Fiduciary. For purposes of this Section 7.7,
(i) the Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services
by, it to the plan or participants or beneficiaries of the plan, (ii) excise
taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute fines within the meaning of this
Section 7.7 and (iii) actions taken or omitted by the Indemnitee with respect to
an employee benefit plan in the performance of its duties for a purpose
reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be related to the Partnership.
F. No Personal Liability for Limited Partners. In no event may
an Indemnitee subject any of the Partners to liability by reason of the
indemnification provisions set forth in this Agreement.
G. Interested Transactions. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 7.7 because the
Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms
of this Agreement.
H. Benefit. The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other
Persons. Any amendment, modification or repeal of this Section 7.7, or any
provision hereof, shall be
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prospective only and shall not in any way affect the obligation of the
Partnership to any Indemnitee under this Section 7.7 as in effect immediately
prior to such amendment, modification or repeal with respect to claims arising
from or related to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may arise or
be asserted.
I. Indemnification Payments Not Distributions. If and to the
extent any payments to the General Partner pursuant to this Section 7.7
constitute gross income to the General Partner (as opposed to the repayment of
advances made on behalf of the Partnership), such amounts shall constitute
guaranteed payments within the meaning of Section 707(c) of the Code, shall be
treated consistently therewith by the Partnership and all Partners, and shall
not be treated as distributions for purposes of computing the Partners' Capital
Accounts.
Section 7.8 Liability of the General Partner
A. General. Notwithstanding anything to the contrary set forth
in this Agreement, the General Partner and its directors and officers shall not
be liable for monetary damages to the Partnership, any Partners or any Assignees
for losses sustained, liabilities incurred or benefits not derived as a result
of errors in judgment or mistakes of fact or law or of any act or omission if
the General Partner acted in good faith.
B. No Obligation to Consider Separate Interests of Limited
Partners or Shareholders. The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the General Partner's
shareholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or Assignees or to such
shareholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions and that the General Partner shall not be liable for
monetary damages or otherwise for losses sustained, liabilities incurred or
benefits not derived by Limited Partners in connection with such decisions,
provided that the General Partner has acted in good faith.
C. Actions of Agents. Subject to its obligations and duties as
General Partner set forth in Section 7.1.A above, the General Partner may
exercise any of the powers granted to it by this Agreement and perform any of
the duties imposed upon it hereunder either directly or by or through its
agents. The General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by the General Partner in
good faith.
D. Effect of Amendment. Any amendment, modification or repeal
of this Section 7.8 or any provision hereof shall be prospective only and shall
not in any way affect the limitations on the General Partner's liability to the
Partnership and the Limited Partners under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
Section 7.9 Other Matters Concerning the General Partner
A. Reliance on Documents. The General Partner may rely and
shall be protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture or other paper or document believed by it in good faith
to be genuine and to have been signed or presented by the proper party or
parties.
B. Reliance on Advisors. The General Partner may consult with
legal counsel, accountants, appraisers, management consultants, investment
bankers and other consultants and advisors selected by it, and any act taken or
omitted to be taken in reliance upon the opinion of such Persons as to matters
which the General
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Partner reasonably believes to be within such Person's professional or expert
competence shall be conclusively presumed to have been done or omitted in good
faith and in accordance with such opinion.
C. Action Through Agents. The General Partner shall have the
right, in respect of any of its powers or obligations hereunder, to act through
any of its duly authorized officers and a duly appointed attorney or
attorneys-in-fact. Each such attorney shall, to the extent provided by the
General Partner in the power of attorney, have full power and authority to do
and perform all and every act and duty which is permitted or required to be done
by the General Partner hereunder.
D. Actions to Maintain REIT Status or Avoid Taxation of the
General Partner Entity or the General Partner (as applicable). Notwithstanding
any other provisions of this Agreement (other than the limitations on the
General Partner's authority set forth in Sections 7.5, 7.6.A, 7.6.D, and 7.11)
or the Act, any action of the General Partner on behalf of the Partnership or
any decision of the General Partner to refrain from acting on behalf of the
Partnership undertaken in the good faith belief that such action or omission is
necessary or advisable in order (i) to protect the ability of the General
Partner Entity or the General Partner (as applicable) to continue to satisfy the
REIT Requirements or (ii) to allow the General Partner Entity or the General
Partner (as applicable) to avoid incurring any liability for taxes under Section
857 or 4981 of the Code, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners.
Section 7.10 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement
(other than the limitations on the General Partner's authority set forth in
Sections 7.5, 7.6.A, 7.6.D, and 7.11), any Person dealing with the Partnership
shall be entitled to assume that the General Partner has full power and
authority, without consent or approval of any other Partner or Person, to
encumber, sell or otherwise use in any manner any and all assets of the
Partnership, to enter into any contracts on behalf of the Partnership and to
take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if the General Partner were the
Partnership's sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of
the General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expedience of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full
force and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership, and (iii) such certificate, document or instrument
was duly executed and delivered in accordance with the terms and provisions of
this Agreement and is binding upon the Partnership.
Section 7.11 Restrictions on General Partner's Authority
A. Consent Required. The General Partner may not take any
action in contravention of an express prohibition or limitation of this
Agreement without the written Consent of (i) all Partners adversely affected or
(ii) such lower percentage of the Limited Partnership Interests as may be
specifically provided for under a provision of this Agreement or the Act.
B. Intentionally Omitted.
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C. Required Consent of Certain Partners. (i) The
General Partner may not, directly or indirectly,
cause the Partnership to take any action prohibited
by this Section 7.11.C without the requisite approval
as provided in this Section 7.11.C.
(1) For a period of twenty (20) years following the
Effective Date, the General Partner may not, directly
or indirectly, cause the Partnership to sell,
exchange or otherwise dispose of the property located
at Two Penn Plaza, New York, New York or any indirect
interest therein (collectively, the "Two Penn Plaza
Property") (other than an involuntary sale pursuant
to foreclosure of the mortgage secured by the Two
Penn Plaza Property or otherwise, including pursuant
to (x) an event described in Section 1033 of the Code
(as determined without reference to the property, if
any, into which the Two Penn Plaza Property is
converted), other than a disposition resulting from
the mere threat or imminence of a requisition or
condemnation and (y) a deed in lieu of foreclosure
(provided that the General Partner may not execute
any deed in lieu of foreclosure unless the maturity
of the indebtedness secured by the Two Penn Plaza
Property has occurred, whether by reason of
acceleration or otherwise, or a proceeding in
connection with a Bankruptcy of the Partnership, the
fee owning entity or any intermediate Person between
them) to any Person without the Consent of the
Partners at the time of the proposed sale, exchange
or other disposition (other than the General Partner
or the General Partner Entity or any Subsidiary of
either the General Partner or the General Partner
Entity) who hold seventy-five percent (75%) of the
Partnership Units which were issued with respect to
Two Penn Plaza Associates in the Consolidation and
which remain outstanding (whether held by the
original recipient of such Partnership Units or by a
successor or transferee of the original recipient,
but not including the General Partner or the General
Partner Entity or any Subsidiary of either the
General Partner or the General Partner Entity)
(referred to as "Two Penn Plaza Units"). In addition,
during such twenty-year period, the General Partner
may not, directly or indirectly, cause the
Partnership to repay, earlier than one year prior to
its stated maturity, any indebtedness secured by the
Two Penn Plaza Property without the Consent of
Partners holding seventy-five percent (75%) of the
Two Penn Plaza Units, unless such repayment (a) is
made in connection with the refinancing (on a basis
such that the new debt would be considered a
Nonrecourse Liability, or, as contemplated and only
to the extent required by clause (2) below, a Partner
Nonrecourse Debt) of such indebtedness for an amount
not less than the principal amount of such
indebtedness on the date of such refinancing, with
such refinancing indebtedness (1) providing for the
least amount of principal amortization as is
available on commercially reasonable terms and (2)
permitting (but not requiring) a guarantee of such
indebtedness by the holders of the Two Penn Plaza
Units who elect to join in such guarantee in a form
and on terms consistent with the guarantees by the
holders of the Two Penn Plaza Units in effect
immediately prior to such refinancing, provided that
the opportunity to provide such guarantee is
obtainable on commercially reasonable terms, or (b)
is made in connection with an involuntary sale
pursuant to foreclosure of the mortgage secured by
the Two Penn Plaza Property or otherwise, including
pursuant to a deed in lieu of foreclosure (provided
that the General Partner may not execute any deed in
lieu of foreclosure unless the maturity of the
indebtedness secured by the Two Penn Plaza Property
has been accelerated) or a proceeding in connection
with a Bankruptcy of the Partnership, the fee-owning
entity or any intermediate Person between them.
During such twenty-year period, the General Partner
shall use commercially reasonable efforts during
the one-year period prior to the stated maturity
of such indebtedness to cause the Partnership to
refinance (on a basis such that the new
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debt would be considered a Nonrecourse Liability, or,
as contemplated and only to the extent required by
clause (2) below, a Partner Nonrecourse Debt) the
indebtedness for an amount not less than the
principal amount of such indebtedness on the date of
such refinancing, provided such refinancing can be
obtained on commercially reasonable terms, with such
refinancing indebtedness (1) providing for the least
amount of principal amortization as is available on
commercially reasonable terms and (2) permitting (but
not requiring) a guarantee of such indebtedness by
the holders of the Two Penn Plaza Units who elect to
join in such guarantee in a form and on terms
consistent with the guarantees by the holders of the
Two Penn Plaza Units in effect immediately prior to
such refinancing, provided that the opportunity to
provide such guarantee is obtainable on commercially
reasonable terms. Finally, during such twenty-year
period, the General Partner shall not, without the
Consent of Partners holding seventy-five percent
(75%) of the Two Penn Plaza Units, incur indebtedness
secured by the Two Penn Plaza Property if, at the
time such indebtedness is incurred, the aggregate
amount of the indebtedness secured by the Two Penn
Plaza Property would exceed the greater of (i)
seventy percent (70%) of the fair market value of the
Two Penn Plaza Property (or the interest therein)
securing such indebtedness or (ii) the then
outstanding indebtedness being refinanced plus all
costs (including prepayment fees, "breakage" payments
and similar costs) incurred in connection with such
refinancing. All references in this Section 7.11.C to
"commercially reasonable terms" shall be as
determined by the General Partner in its sole
discretion, exercised in good faith.
(2) For a period of twenty (20) years following the
Effective Date, the General Partner may not, directly
or indirectly, cause the Partnership to sell,
exchange or otherwise dispose of the property located
at Eleven Penn Plaza, New York, New York or any
indirect interest therein (collectively, the "Eleven
Penn Plaza Property") (other than an involuntary sale
pursuant to foreclosure of the mortgage secured by
the Eleven Penn Plaza Property or otherwise,
including pursuant to (x) an event described in
Section 1033 of the Code (as determined without
reference to the property, if any, into which the
Eleven Penn Plaza Property is converted), other than
a disposition resulting from the mere threat or
imminence of a requisition or condemnation and (y) a
deed in lieu of foreclosure (provided that the
General Partner may not execute any deed in lieu of
foreclosure unless the maturity of the indebtedness
secured by the Eleven Penn Plaza Property has
occurred, whether by reason of acceleration or
otherwise, or a proceeding in connection with a
Bankruptcy of the Partnership, the fee-owning entity
or any intermediate Person between them) to any
Person without the Consent of the Partners at the
time of the proposed sale, exchange or other
disposition who hold seventy-five percent (75%) of
the Partnership Units which were issued with respect
to the Eleven Penn Partnerships in the Consolidation
and which remain outstanding (whether held by the
original recipient of such Partnership Units or by a
successor or transferee of the original recipient,
but not including the General Partner or the General
Partner Entity or any Subsidiary of either the
General Partner or the General Partner Entity)
(referred to as "Eleven Penn Plaza Units"). In
addition, during such twenty-year period, the General
Partner may not, directly or indirectly, cause the
Partnership to repay, earlier than one year prior to
its stated maturity, any indebtedness secured by the
Eleven Penn Plaza Property without the Consent of
Partners who hold seventy-five percent (75%) of the
Eleven Penn Plaza Units, unless such repayment (a) is
made in connection with the refinancing (on a basis
such that the new debt would be considered a
Nonrecourse Liability, or, as contemplated and only
to the extent required by clause (2) below, a
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Partner Nonrecourse Debt) of such indebtedness for an
amount not less than the principal amount of such
indebtedness on the date of such refinancing, with
such refinancing indebtedness (1) providing for the
least amount of principal amortization as is
available on commercially reasonable terms and (2)
permitting (but not requiring) a guarantee of such
indebtedness by the holders of the Eleven Penn Plaza
Units who elect to join in such guarantee in a form
and on terms consistent with the guarantees by the
holders of the Eleven Penn Plaza Units in effect
immediately prior to such refinancing, provided that
the opportunity to provide such guarantee is
obtainable on commercially reasonable terms, or (b)
is made in connection with an involuntary sale
pursuant to foreclosure of the mortgage secured by
the Eleven Penn Plaza Property or otherwise,
including pursuant to a deed in lieu of foreclosure
(provided that the General Partner may not execute
any deed in lieu of foreclosure unless the maturity
of the indebtedness secured by the Eleven Penn Plaza
Property has been accelerated) or a proceeding in
connection with a Bankruptcy of the Partnership, the
fee-owning entity or any intermediate Person between
them. During such twenty-year period, the General
Partner shall use commercially reasonable efforts
during the one-year period prior to the stated
maturity of such indebtedness to cause the
Partnership to refinance (on a basis such that the
new debt would be considered a Nonrecourse Liability,
or, as contemplated and only to the extent required
by clause (2) below, a Partner Nonrecourse Debt) the
indebtedness for an amount not less than the
principal amount of such indebtedness on the date of
such refinancing, provided such refinancing can be
obtained on commercially reasonable terms, with such
refinancing indebtedness (1) providing for the least
amount of principal amortization as is available on
commercially reasonable terms and (2) permitting (but
not requiring) a guarantee of such indebtedness by
the holders of the Eleven Penn Plaza Units who elect
to join in such guarantee in a form and on terms
consistent with the guarantees by the holders of the
Eleven Penn Plaza Units in effect immediately prior
to such refinancing, provided that the opportunity to
provide such guarantee is obtainable on commercially
reasonable terms. Finally, during such twenty-year
period, the General Partner shall not, without the
Consent of Partners holding seventy-five percent
(75%) of the Eleven Penn Plaza Units, incur
indebtedness secured by the Eleven Penn Plaza
Property if, at the time such indebtedness is
incurred, the aggregate amount of the indebtedness
secured by the Eleven Penn Plaza Property would
exceed the greater of (i) seventy percent (70%) of
the fair market value of the Eleven Penn Plaza
Property (or the interest therein) securing such
indebtedness or (ii) the then outstanding
indebtedness being refinanced plus all costs
(including prepayment fees, "breakage" payments and
similar costs) incurred in connection with such
refinancing.
(3) For a period of twenty (20) years following the
Effective Date, the General Partner may not, directly
or indirectly, cause the Partnership to sell,
exchange, or otherwise dispose of the property
located at ▇▇▇ ▇.▇. ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or any
indirect interest therein (collectively, the "866
U.N. Plaza Property") (other than an involuntary sale
pursuant to foreclosure of the mortgage secured by
the 866 U.N. Plaza Property or otherwise, including
pursuant to (x) an event described in Section 1033 of
the Code (as determined without reference to the
property, if any, into which the 866 U.N. Plaza
Property is converted), other than a disposition
resulting from the mere threat or imminence of a
requisition or condemnation and (y) a deed in lieu of
foreclosure (provided that the General Partner may
not execute any deed in lieu of foreclosure unless
the maturity of the indebtedness secured by the 866
U.N. Plaza Property has occurred, whether by reason
of acceleration or otherwise, or a proceeding in
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connection with a Bankruptcy of the Partnership, the
fee-owning entity or any intermediate Person between
them) to any Person without the Consent of the
Partners at the time of the proposed sale, exchange
or other disposition (other than the General Partner
or the General Partner Entity or any Subsidiary of
either of the General Partner of the General Partner
or the General Partner Entity) who hold seventy-five
percent (75%) of the Partnership Units which were
issued with respect to 866 U.N. Plaza Associates in
the Consolidation and which remain outstanding
(whether held by the original recipient of such
Partnership Units or by a successor or transferee of
the original recipient, but not including the General
Partner or the General Partner Entity or any
Subsidiary of either the General Partner or the
General Partner Entity) (referred to as "866 U.N.
Plaza Units"). In addition, during such twenty-year
period, the General Partner may not, directly or
indirectly, cause the Partnership to repay, earlier
than one year prior to its stated maturity, any
indebtedness secured by the 866 U.N. Plaza Property
without the Consent of Partners holding seventy-five
percent (75%) of the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, unless
such repayment (a) is made in connection with the
refinancing (on a basis such that the new debt would
be considered a Nonrecourse Liability or, as
contemplated and only to the extent required by
clause (2) below, a Partner Nonrecourse Debt) of such
indebtedness for an amount not less than the
principal amount of such indebtedness on the date of
such refinancing, with such refinancing indebtedness
(1) providing for the least amount of principal
amortization as is available on commercially
reasonable terms and (2) permitting (but not
requiring) a guarantee of such indebtedness by the
holders of the 866 U.N. Plaza Units who elect to join
in such guarantee in a form and on terms consistent
with the guarantees by the holders of the 866 U.N.
Plaza Units in effect immediately prior to such
refinancing, provided that the opportunity to provide
such guarantee is obtainable on commercially
reasonable terms, or (b) is made in connection with
an involuntary sale pursuant to foreclosure of the
mortgage secured by the 866 U.N. Plaza Property or
otherwise, including pursuant to a deed in lieu of
foreclosure (provided that the General Partner may
not execute any deed in lieu of foreclosure unless
the maturity of the indebtedness secured by the 866
U.N. Plaza Property has been accelerated) or a
proceeding in connection with a Bankruptcy of the
Partnership, of the fee-owning entity or any
intermediate Person between them. During such
twenty-year period, the General Partner shall use
commercially reasonable efforts during the one-year
period prior to the stated maturity of such
indebtedness to cause the Partnership to refinance
(on a basis such that the new debt would be
considered a Nonrecourse Liability, or, as
contemplated and only to the extent required by
clause (2) below, a Partner Nonrecourse Debt) the
indebtedness for an amount not less than the
principal amount of such indebtedness on the date of
such refinancing, provided such refinancing can be
obtained on commercially reasonable terms, with such
refinancing indebtedness (1) providing for the least
amount of principal amortization as is available on
commercially reasonable terms and (2) permitting (but
not requiring) a guarantee of such indebtedness by
the holders of the 866 U.N. Plaza Units who elect to
join in such guarantee in a form and on terms
consistent with the guarantees by the holders of the
866 U.N. Plaza Units in effect immediately prior to
such refinancing, provided that the opportunity to
provide such guarantee is obtainable on commercially
reasonable terms. Finally, during such twenty-year
period, the General Partner shall not, without the
Consent of Partners holding seventy-five percent
(75%) of the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, incur indebtedness
secured by the 866 U.N. Plaza Property if, at the
time such indebtedness is incurred, the aggregate
amount of the indebtedness secured by the 866 U.N.
Plaza Property would exceed the greater of (i)
seventy percent (70%) of the fair market value of the
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866 U.N. Plaza Property (or the interest therein)
securing such indebtedness or (ii) the then
outstanding indebtedness being refinanced plus all
costs (including prepayment fees, "breakage" payments
and similar costs) incurred in connection with such
refinancing.
(4) Subparagraphs (1), (2), and (3) shall not apply to
any transaction that involves the Two Penn Plaza
Property, the Eleven Penn Plaza Property or the 866
U.N. Plaza Property, as the case may be (which
Property is referred to as the "Exchanged Property"),
if such transaction qualifies as a like-kind exchange
under Section 1031 of the Code or an involuntary
conversion under Section 1033 of the Code (other than
an involuntary conversion under Section 1033 of the
Code that is described in the second parenthetical to
subparagraphs (1), (2) or (3), as the case may be) in
which no gain is recognized by the Partnership as
long as the following conditions are satisfied: (x)
in the case of a Section 1031 like-kind exchange,
such exchange is not with a "related party" within
the meaning of Section 1031(f)(3) of the Code; (y)
the property received in exchange for the Exchanged
Property (referred to as the "Replacement Property")
is acquired in the same taxable year of the
Partnership in which the disposition of the Exchanged
Property occurs and is secured by nonrecourse
indebtedness in an amount not less than the
outstanding principal amount of the nonrecourse
indebtedness secured by the Exchanged Property at the
time of the exchange, nor greater than the amount
that would be permitted under Sections 7.11.C(1),
(2), or (3), as the case may be (except that 70% of
fair market value shall be determined by reference to
the Replacement Property and not the Exchanged
Property, with a maturity not earlier than, and a
principal amortization rate not more rapid than, the
maturity and principal amortization rate of such
indebtedness secured by the Exchanged Property, which
indebtedness permits (but does not require) a
guarantee of such indebtedness by the holders of the
Two Penn Plaza Units, the Eleven Penn Plaza Units or
the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case may be, who
elect to join in such guarantee in a form and on
terms consistent with the guarantees by the holders
of the Two Penn Plaza Units, the Eleven Penn Plaza
Units or the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case may
be, in effect immediately prior to the time of the
exchange, and (z) the Replacement Property is
thereafter treated for all purposes of the
restrictions in this Section 7.11.C as the Exchanged
Property and the indebtedness secured by such
Replacement Property is subject to the same
restrictions and agreements as apply with respect to
the indebtedness secured by the Exchanged Property.
(5) Subparagraphs (1), (2), and (3) shall not apply to
any transaction that involves the Two Penn Plaza
Property, the Eleven Penn Plaza Property or the 866
U.N. Plaza Property, as the case may be (which
Property is referred to as the "Transferred
Property"), if (x) such transaction is one in which
no gain is recognized with respect to the Two Penn
Plaza Property, the Eleven Penn Plaza Property or the
866 U.N. Plaza Property by the Partnership or the
holders of the Two Penn Plaza Units, the Eleven Penn
Plaza Units, or the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case
may be (other than gain, if any, resulting solely
because the share, if any, of indebtedness allocable
to a Partnership Unit is reduced or eliminated),
provided that (i) the amount of indebtedness secured
by the Two Penn Plaza Property, the Eleven Penn Plaza
Property or the 866 U.N. Plaza Property, as
applicable, is not decreased as a result of the
transaction and the amount of indebtedness secured by
the Two Penn Plaza Property, the Eleven Penn Plaza
Property or the 866 U.N. Plaza Property, as
applicable, that is a Nonrecourse Liability or
Partner Nonrecourse Debt is not reduced, except as
permitted by the relevant provisions of
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Subparagraph (1), (2) or (3) of this Section 7.11.C,
and (ii) the indebtedness secured by the Two Penn
Plaza Property, the Eleven Penn Plaza Property or the
866 U.N. Plaza Property, as applicable, continues to
be taken into account in determining the Partners'
basis in their Partnership Interests under rules
similar to those provided in Section 752 of the Code
and (y) the entity to which such Transferred Property
is transferred agrees, for the benefit of the holders
of the Two Penn Plaza Units, the Eleven Penn Plaza
Units or the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case may
be, that all of the restrictions of this Section
7.11.C shall apply to the Transferred Property and
the indebtedness outstanding with respect thereto in
the same manner and to the extent set forth in this
Section 7.11.C and such agreement is reflected in the
partnership agreement (or other comparable governing
instrument) of the entity to which the Transferred
Property is transferred.
(6) Subparagraphs (1), (2), and (3) shall not apply to
any transaction that involves either a merger or
consolidation of the Partnership with or into another
entity that qualifies as a "partnership" for federal
income tax purposes (the "Successor Partnership") or
a transfer of all or substantially all of the assets
of the Partnership to a Successor Partnership and
dissolution of the Partnership in connection
therewith (in either case, a "Consolidation
Transaction") so long as (x) no gain is recognized
with respect to the Two Penn Plaza Property, the
Eleven Penn Plaza Property or the 866 U.N. Plaza
Property by the Partnership or the holders of the Two
Penn Plaza Units, the Eleven Penn Plaza Units or the
▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case may be, in
connection with such Consolidation Transaction (other
than gain, if any, resulting solely because the
share, if any, of indebtedness allocable to a
Partnership Unit is reduced or eliminated, provided
that the amount of indebtedness secured by the Two
Penn Plaza Property, the Eleven Penn Plaza Property
or the 866 U.N. Plaza Property, as applicable, is not
decreased as a result of the transaction and the
amount of indebtedness secured by the Two Penn Plaza
Property, the Eleven Penn Plaza Property or the 866
U.N. Plaza Property, as applicable, that is a
Nonrecourse Liability or Partner Nonrecourse Debt is
not reduced, except as permitted by the relevant
provisions of Subparagraph (1), (2) or (3) of this
Section 7.11.C, and (y) the Successor Partnership
agrees in writing, for the benefit of the holders of
the Two Penn Plaza Units, the Eleven Penn Plaza Units
or the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as the case may be, that
all of the restrictions of this Section 7.11.C shall
apply to the Two Penn Plaza Property, the Eleven Penn
Plaza Property and the 866 U.N. Plaza Property and
the indebtedness outstanding with respect thereto in
the same manner and to the extent set forth in this
Section 7.11.C.
(7) Subparagraphs (1), (2) and (3) shall not apply to any
transaction not otherwise described in Subparagraph
(4), (5) or (6) involving the Two Penn Plaza
Property, the Eleven Penn Plaza Property and/or the
866 U.N. Plaza Property if, concurrently with the
consummation of such transaction, the Partnership
pays to the holders of the Two Penn Plaza Units, the
Eleven Penn Plaza Units and/or the ▇▇▇ ▇.▇. ▇▇▇▇▇
▇▇▇▇▇, as applicable, in addition to any amounts
otherwise distributable under Article V hereof, an
amount equal to the lesser of (x) the aggregate
federal, state and local income taxes payable by each
holder of Two Penn Plaza Units, as applicable, as a
result of or in connection with such transactions, or
(y) the aggregate federal, state and local income
taxes that would have been payable by such holder (or
its predecessor in interest) if the relevant property
had been sold on the Effective Date for its 704(c)
Value; provided that the amount referred to in clause
(y) shall be reduced to reflect (I) reductions in the
Book/Tax Disparity with respect to the Two Penn Plaza
Property, the Eleven Penn Plaza
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Property and/or the 866 U.N. Plaza Property, as
applicable, and (II) with respect to a holder who
acquired Two Penn Plaza Units, Eleven Penn Plaza
Units and/or 866 U.N. Plaza Units, as applicable,
subsequent to the Effective Date, the reduction in
gain that results from such holder's having a special
inside basis under Section 743 of the Code in the Two
Penn Plaza Property, the Eleven Penn Plaza Property
or the 866 U.N. Plaza Property, as applicable (by
treating the special inside basis as the basis for
determining gain on the deemed sale described in
clause (y)), but, in either (I) or (II), the gain
with respect to which the tax is computed may not be
so reduced beneath the "negative basis" associated,
as of the Effective Time, with the Two Penn Plaza
Units, the Eleven Penn Plaza Units or the ▇▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇, as appropriate, plus in the case of
either (x) or (y), an amount equal to the aggregate
federal, state and local income taxes payable by the
recipient thereof as the result of the receipt of the
payments provided for in this subparagraph (7)
(including for this purpose all taxes on payments
hereunder intended to compensate the recipient
thereof for taxes owed by the recipient). For
purposes of the preceding sentence, (x) all income
arising from the transaction that is treated as
ordinary income under the applicable provisions of
the Code and is allocated to the holders of the Two
Penn Plaza Units, the Eleven Penn Plaza Units and/or
the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, as applicable, shall be
treated as subject to federal, state and local income
tax at the effective tax rate imposed on ordinary
income of New York City residents, determined using
the maximum federal, New York State and New York City
rates on ordinary income then in effect and (y) all
other income arising from the transaction and all
payments provided for in this subparagraph (7) shall
be treated as subject to federal, state and local
income tax at the effective tax rate imposed on
long-term capital gains of New York City residents,
determined using the maximum federal, New York State
and New York City rates on long-term capital gains
then in effect.
If at any time prior to the twentieth (20th) anniversary of
the Effective Date, the Partnership pays the amounts described in subparagraph
(7) above in respect of any Partnership Units entitled to the benefits of
Section 7.11.C(1), (2) or (3), and the amount of such payment is, at the time
that it is made, equal to the full amount that would be payable under such
Sections with respect to such Partnership Units if the Two Penn Plaza Property,
the Eleven Penn Plaza Property, or the 866 U.N. Plaza Property, as applicable,
were to have been sold on such date for its market value, then the provisions of
Section 7.11.C shall thereafter cease to apply to those Partnership Units.
(ii) Nothing herein shall be deemed to require that the
Partnership or the General Partner take any action to avoid or prevent an
involuntary disposition of any property, whether pursuant to foreclosure of a
mortgage secured by such property or otherwise, including pursuant to a deed in
lieu of foreclosure or a proceeding in connection with a Bankruptcy.
(iii) Nothing herein shall prevent the sale, exchange,
transfer or other disposition of any property pursuant to the dissolution and
liquidation of the Partnership in accordance with Article XIII hereof (other
than Section 13.1(v), which shall be subject to this Section 7.11.C).
D. Merger or Consolidation in Which the Partnership is Not the
Surviving Entity. In the event that the Partnership is to merge or consolidate
with or into any other entity in a transaction in which holders of Partnership
Units will receive consideration other than cash or equity securities that are
Publicly Traded (an "Equity Merger") and such Equity Merger would be prohibited
by Section 7.11.C but for the application of Section 7.11.C(6) (and not Section
7.1.C(4), (5) or (7)), then, unless the Consent of Certain Limited Partners is
obtained:
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(i) the partnership agreement, limited liability agreement or
other operative governing documents (the "Charter Documents")
of the entity that is the surviving entity in such Equity
Merger must contain provisions that are comparable in all
material respects to, or the entity that is the surviving
entity in such Equity Merger must otherwise agree in writing,
for the benefit of the holders of the Two Penn Plaza Units,
the Eleven Penn Plaza Units, and the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, to
restrictions that are comparable in all material respects to
the provisions of Section 4.2.A, Article V and Article VI
(except for differences that would be permitted pursuant to
Sections 4.2, 5.1.C, 5.4, 6.2 and 14.1.B(3) if such changes
were to be made to this Agreement), Section 7.6.A, Section
7.11.A, this Section 7.11.D, Section 8.6 (and all defined
terms set forth in Article I that relate to the Redemption
Right), Section 11.2, Section 13.1, Section 13.2.A(3) (except
as permitted pursuant to Sections 4.2, 5.4, 6.2 and
14.1.B(3)), Section 14.1.C, Section 14.1.D, and Section 14.2,
all as in effect immediately prior to the Equity Merger; and
(ii) the Equity Merger shall not cause a holder of a
Partnership Unit to be a general partner or to have liability
equivalent to that of a general partner in a partnership or
otherwise modify the limited liability of a Limited Partner
under this Agreement.
Section 7.12 Loans by Third Parties
The Partnership may incur Debt, or enter into similar credit,
guarantee, financing or refinancing arrangements for any purpose (including,
without limitation, in connection with any acquisition of property) with any
Person upon such terms as the General Partner determines appropriate; provided,
that the Partnership shall not incur any Debt that is recourse to the General
Partner unless, and then only to the extent that, the General Partner has
expressly agreed.
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this
Agreement except as expressly provided in this Agreement, including Section 10.5
hereof, or under the Act.
Section 8.2 Management of Business
No Limited Partner or Assignee (other than the General
Partner, any of its Affiliates or any officer, director, employee, partner,
agent or trustee of the General Partner, the Partnership or any of their
Affiliates, in their capacity as such) shall take part in the operation,
management or control (within the meaning of the Act) of the Partnership's
business, transact any business in the Partnership's name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall not
affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners
Subject to Section 7.5 hereof, and subject to any agreements
entered into pursuant to Section 7.6.C hereof and to any other agreements
entered into by a Limited Partner or its Affiliates with the Partnership or a
Subsidiary, any Limited Partner (other than the General Partner) and any
officer, director,
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employee, agent, trustee, Affiliate or shareholder of any Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct or indirect competition with the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners (other than the General Partner) nor any other Person shall
have any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner to the extent expressly provided herein), and such Person shall
have no obligation pursuant to this Agreement to offer any interest in any such
business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such
Person.
Section 8.4 Return of Capital
Except pursuant to the right of redemption set forth in
Section 8.6 below, no Limited Partner shall be entitled to the withdrawal or
return of its Capital Contribution, except to the extent of distributions made
pursuant to this Agreement or upon termination of the Partnership as provided
herein. No Limited Partner or Assignee shall have priority over any other
Limited Partner or Assignee either as to the return of Capital Contributions
(except as permitted by Section 4.2.A hereof) or, except to the extent provided
by Exhibit C hereto or as permitted by Sections 4.2.A, 5.1.B(i) hereof or
otherwise expressly provided in this Agreement, as to profits, losses,
distributions or credits.
Section 8.5 Rights of Limited Partners Relating to the Partnership
A. General. In addition to other rights provided by
this Agreement or by the Act, and except as limited by Section 8.5.D below, each
Limited Partner shall have the right, for a purpose reasonably related to such
Limited Partner's interest as a limited partner in the Partnership, upon written
demand with a statement of the purpose of such demand and at such Limited
Partner's own expense:
(1) to obtain a copy of the most recent annual and
quarterly reports filed with the Securities and
Exchange Commission by the General Partner Entity
pursuant to the Exchange Act;
(2) to obtain a copy of the Partnership's federal, state
and local income tax returns for each Partnership
Year;
(3) to obtain a current list of the name and last known
business, residence or mailing address of each
Partner; and
(4) to obtain a copy of this Agreement and the
Certificate and all amendments thereto, together with
copies of all powers of attorney pursuant to which
this Agreement, the Certificate and all amendments
thereto have been executed.
B. Notice of Conversion Factor. The Partnership shall
notify each Limited Partner upon request of the then current Conversion Factor
and any changes that have been made thereto.
C. Notice of Extraordinary Transaction of the General
Partner Entity. The General Partner Entity shall not make any extraordinary
distributions of cash or property to its shareholders or effect a merger
(including, without limitation, a triangular merger), a sale of all or
substantially all of its assets or any other similar extraordinary transaction
without notifying the Limited Partners of its intention to make such
distribution or effect such merger, sale or other extraordinary transaction at
least twenty (20) days prior to the record date to determine shareholders
eligible to receive such distribution or to vote upon the approval of such
merger, sale or other
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extraordinary transaction (or, if no such record date is applicable, at least
twenty (20) days before consummation of such merger, sale or other extraordinary
transaction). This provision for such notice shall not be deemed (i) to permit
any transaction that otherwise is prohibited by this Agreement or requires a
Consent of the Partners or (ii) to require a Consent of the Limited Partners to
a transaction that does not otherwise require Consent under this Agreement. Each
Limited Partner agrees, as a condition to the receipt of the notice pursuant
hereto, to keep confidential the information set forth therein until such time
as the General Partner Entity has made public disclosure thereof and to use such
information during such period of confidentiality solely for purposes of
determining whether or not to exercise the Redemption Right; provided, however,
that a Limited Partner may disclose such information to its attorney, accountant
and/or financial advisor for purposes of obtaining advice with respect to such
exercise so long as such attorney, accountant and/or financial advisor agrees to
receive and hold such information subject to this confidentiality requirement.
D. Confidentiality. Notwithstanding any other provision of
this Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its sole
and absolute discretion to be reasonable, any information that (i) the General
Partner reasonably believes to be in the nature of trade secrets or other
information the disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or could damage the Partnership
or its business or (ii) the Partnership is required by law or by agreements with
unaffiliated third parties to keep confidential.
Section 8.6 Redemption Right
A. General. (i) Subject to Section 8.6.C below, on or after
the date one (1) year (or, in the case of Partnership Units owned by a
Restricted Partner on or before the Effective Date, two (2) years) after the
Effective Date (or, if later, the date of the issuance of a Partnership Unit to
a Limited Partner pursuant to Article IV hereof) which one-year (or two-year, if
applicable) period shall commence upon the issuance of such Partnership Unit
regardless of whether such Partnership Unit is designated upon issuance as a
Class A Unit, a Class B Unit, a Class C Unit, a Class D Unit, a Class E Unit or
otherwise and shall include any class A Unit issued in exchange for such
Partnership Unit pursuant to Section 4.2.D), or on or after such date prior to
the expiration of such one-year period or two-year period, as applicable, as the
General Partner, in its sole and absolute discretion, designates with respect to
any or all Partnership Units then outstanding, the holder of a Partnership Unit
(if other than the General Partner or the General Partner Entity or any
Subsidiary of either the General Partner or the General Partner Entity) shall
have the right (the "Redemption Right") to require the Partnership to redeem
such Partnership Unit on a Specified Redemption Date and at a redemption price
equal to and in the form of the Cash Amount to be paid by the Partnership. In
addition, at any time commencing on the ninety-first (91st) day after the
Effective Date and continuing until (but not after) the first anniversary of the
Effective Date, any holder of a Class E Unit shall have the right (which shall
also be deemed a Redemption Right hereunder) to require the Partnership to
redeem such Partnership Unit on a Specified Redemption Date and at a redemption
price equal to and in the form of ninety-four percent (94%) of the Cash Amount
to be paid by the Partnership. Any such 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"). A Limited Partner may not exercise the
Redemption Right for less than one thousand (1,000) Partnership Units or, if
such Redeeming Partner holds less than one thousand (1,000) Partnership Units,
for less than all of the Partnership Units held by such Redeeming Partner.
(ii) The Redeeming Partner shall have no right with respect to
any Partnership Units so redeemed to receive any distributions paid after the
Specified Redemption Date.
(iii) The Assignee of any Limited Partner may exercise the rights
of such Limited Partner pursuant to this Section 8.6, and such Limited Partner
shall be deemed to have assigned such rights to such Assignee and
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shall be bound by the exercise of such rights by such Limited Partner's
Assignee. In connection with any exercise of the such rights by such Assignee on
behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership
directly to such Assignee and not to such Limited Partner.
(iv) In the event that the General Partner provides notice to the
Limited Partners, pursuant to Section 8.5.C hereof, the Redemption Right shall
be exercisable, subject to the one-year limitation contained in Section
8.6(a)(i) (and, for purposes of this clause (iv), the two-year limitation
imposed on Restricted Partners under this Section 8.6 shall be shortened to one
year after the Effective Date beyond the first anniversary of the Effective
Date), during the period commencing on the date on which the General Partner
provides such notice and ending on the record date to determine shareholders
eligible to receive such distribution or to vote upon the approval of such
merger, sale or other extraordinary transaction (or, if no such record date is
applicable, the date that is twenty (20) days after the date the General Partner
provides such notice pursuant to Section 8.5.C hereof). In the event that this
subparagraph (iv) applies, the Specified Redemption Date shall be the sooner of
(1) the tenth (10th) Business Day after the Partnership receives the Redemption
Notice or (2) the Business Day immediately preceding the record date to
determine shareholders eligible to receive a distribution or vote on approval;
provided that if such time determined pursuant to clause (1) or (2) above occurs
in less than ten (10) Business Days and the Partnership elects to redeem the
subject Partnership Units for cash, the Partnership will have up to ten (10)
Business Days from receipt of the Redemption Notice to deliver payment in
respect of such Partnership Units.
(v) Notwithstanding the terms of Section 8.6.A(i) or anything
else in this Agreement to the contrary, if there shall have been a merger or
consolidation of the General Partner, or a sale or all or substantially all of
the assets of the General Partner as an entirety, and in either case, in
connection therewith, the shareholders of the General Partner are obligated to
accept cash and/or debt obligations in full or partial consideration for their
Shares, then the portion of the Redemption Amount per Partnership Unit that
corresponds to the portion of Value of the total consideration receivable for
one Share multiplied by the Conversion Factor (a "Unit Equivalent") that is
required to be accepted in cash and/or debt obligations shall thereafter be an
amount of cash equal to the sum of (i) the cash payable for a Unit Equivalent on
the date of the closing of such merger, consolidation or sale and (ii) the Value
on the date of the closing of such merger, consolidation, or sale of the debt
obligations to be received with respect to a Unit Equivalent, adjusted as set
forth below (this amount of cash is referred to as the "Required Cash Payment")
(the percentage that the Required Cash Payment represents of the total
Redemption Amount with respect to a Partnership Unit, determined as of such
closing date, is referred to as the "Pro Rata Portion"). The balance of the
Redemption Amount per Partnership Unit shall be determined as provided for in
the definitions of Conversion Factor, Redemption Amount, Shares Amount, Cash
Amount and Value. In the event that the merger, consolidation or sale giving
rise to the application of this clause (v) occurs at a time when there shall be
any Persons the consent of whom is required pursuant to the definition of
"Consent of Certain Limited Partners", then the Required Cash Payment shall be
increased by a cash payment to the extent required to provide such Limited
Partner, upon the exercise of its Redemption Right with respect to a Partnership
Unit, with an Internal Rate of Return on such Required Cash Payment for the
period from the date of such merger, consolidation or sale to the date of the
redemption of the Partnership Unit, when taken together with the Pro Rata
Portion of all distributions received by such Limited Partner with respect to
such Partnership Unit from and after the effective date of the merger,
consolidation or sale equal to the Treasury Constant Yield. As used herein, the
"Treasury Constant Yield" shall mean the arithmetic mean of the rates published
as "Treasury Constant Maturities" as of 5:00 p.m., New York time, for the five
business days preceding the effective date of the merger, consolidation or sale,
as shown on the USD screen of the Telerate service (or if such service is not
available, under Section 504 in the weekly statistical release designated
H.15(519) (or any successor publication) published by the Board of Governors of
the Federal Reserve System, for "On the Run" U.S. Treasury obligations
corresponding to the twentieth anniversary of the date hereof). If no such
maturity shall so exactly correspond, yields for the two most closely
corresponding published maturities shall be calculated pursuant to the foregoing
sentence and the Treasury Constant Yield shall be interpolated or extrapolated
(as applicable) from such yields on a straight-line basis (rounding, in the case
of relevant periods, to the nearest month). As used herein, "Internal Rate of
Return"
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shall mean, with respect to a rate of return of the Constant Treasury Yield,
commencing on the effective date of the merger, consolidation or sale,
compounded quarterly to the extent not paid on a current basis, taking into
account the timing and amounts of this Pro Rata Portion of all distributions by
the Partnership to such Partner with respect to such Partnership Unit; for
purposes of computing the Internal Rate of Return, distributions to a Partner at
any time during a month shall be deemed to be made and received on the day
actually made.
B. General Partner Assumption of Right. (i) If a Limited
Partner has delivered a Notice of Redemption (other than a Notice of Redemption
relating to a Class E Unit given prior to the first anniversary of the Effective
Date), the General Partner may, in its sole and absolute discretion (subject to
any limitations on ownership and transfer of Shares set forth in the Declaration
of Trust), elect to assume directly and satisfy a Redemption Right by paying to
the Redeeming Partner either the Cash Amount or the Shares Amount, as the
General Partner determines in its sole and absolute discretion (provided that
payment of the Redemption Amount in the form of Shares shall be in Shares
registered under Section 12 of the Exchange Act and listed for trading on the
exchange or national market on which the Shares are Publicly Traded, and
provided, further, that in the event that the Shares are not Publicly Traded at
the time a Redeeming Partner exercises its Redemption Right, the Redemption
Amount shall be paid only in the form of the Cash Amount unless the Redeeming
Partner, in its sole and absolute discretion, consents to payment of the
Redemption Amount in the form of the Shares Amount), on the Specified Redemption
Date, whereupon the General Partner shall acquire the Partnership Units offered
for redemption by the Redeeming Partner and shall be treated for all purposes of
this Agreement as the owner of such Partnership Units and such Partnership Units
shall automatically convert to Class D Units upon acquisition by the General
Partner. Unless the General Partner, in its sole and absolute discretion, shall
exercise its right to assume directly and satisfy the Redemption Right, the
General Partner shall not have any obligation to the Redeeming Partner or to the
Partnership with respect to the Redeeming Partner's exercise of the Redemption
Right. In the event the General Partner shall exercise its right to satisfy the
Redemption Right in the manner described in the first sentence of this Section
8.6.B and shall fully perform its obligations in connection therewith, the
Partnership shall have no right or obligation to pay any amount to the Redeeming
Partner with respect to such Redeeming Partner's exercise of the Redemption
Right, and each of the Redeeming Partner, the Partnership and the General
Partner shall, for federal income tax purposes, treat the transaction between
the General Partner and the Redeeming Partner as a sale of the Redeeming
Partner's Partnership Units to the General Partner. Nothing contained in this
Section 8.6.B shall imply any right of the General Partner to require any
Limited Partner to exercise the Redemption Right afforded to such Limited
Partner pursuant to Section 8.6.A above.
(ii) In the event that the General Partner determines to pay
the Redeeming Partner the Redemption Amount in the form of Shares, the total
number of Shares to be paid to the Redeeming Partner in exchange for the
Redeeming Partner's Partnership Units shall be the applicable Shares Amount. In
the event this amount is not a whole number of Shares, the Redeeming Partner
shall be paid (i) that number of Shares which equals the nearest whole number
less than such amount plus (ii) an amount of cash which the General Partner
determines, in its reasonable discretion, to represent the fair value of the
remaining fractional Share which would otherwise be payable to the Redeeming
Partner.
(iii) Each Redeeming Partner agrees to execute such documents
as the General Partner may reasonably require in connection with the issuance of
Shares upon exercise of the Redemption Right.
C. Exceptions to Exercise of Redemption Right. Notwithstanding
the provisions of Sections 8.6.A and 8.6.B above, a Partner shall not be
entitled to exercise the Redemption Right pursuant to Section 8.6.A above if
(but only as long as) the delivery of Shares to such Partner on the Specified
Redemption Date (i) would be prohibited under the Declaration of Trust, or (ii)
as long as the Shares are Publicly Traded, would be prohibited under applicable
federal or state securities laws or regulations (assuming the General Partner
would in fact assume and satisfy the Redemption Right).
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D. No Liens on Partnership Units Delivered for Redemption.
Each Limited Partner covenants and agrees with the General Partner that all
Partnership Units delivered for redemption shall be delivered to the Partnership
or the General Partner, as the case may be, free and clear of all liens, and,
notwithstanding anything contained herein to the contrary, neither the General
Partner nor the Partnership shall be under any obligation to acquire Partnership
Units which are or may be subject to any liens. Each Limited Partner further
agrees that, in the event any state or local property transfer tax is payable as
a result of the transfer of its Partnership Units to the Partnership or the
General Partner, such Limited Partner shall assume and pay such transfer tax.
E. Additional Partnership Interests. In the event that the
Partnership issues Partnership Interests to any Additional Limited Partner
pursuant to Article IV hereof, the General Partner shall make such amendments to
this Section 8.6 as it determines are necessary to reflect the issuance of such
Partnership Interests (including setting forth any restrictions on the exercise
of the Redemption Right with respect to such Partnership Interests).
F. Transfer Tax Limitations. Notwithstanding anything herein
to the contrary, until the first business day following the second anniversary
of the Effective Date, the Partnership and the General Partner shall have the
right, in connection with a Limited Partner's exercise of its Redemption Right:
(1) to condition the payment of the redemption price
under Section 8.6(A)(i) upon the General Partner's
sole satisfaction that any New York Real Estate
Transfer Tax and New York City Real Property Transfer
Tax payable by reason of such Limited Partner's
redemption prior to the expiration of two years
following the Effective Date shall have been paid in
full or that adequate provision has been made
therefor (as determined by the General Partner in its
sole discretion); and
(2) if the General Partner elects under Section 8.6.B to
pay the Shares Amount, then such Limited Partner
shall be obligated, as a condition to the effective
exercise of the Redemption Right, to escrow with the
General Partner an amount equal to the New York Real
Estate Transfer Tax and New York City Real Property
Transfer Tax that would have been payable as of the
exercise of the Redemption Right, assuming such
Limited Partner transferred the Share Amount received
on such date prior to the expiration of two years
following the Effective Date. Such escrow may be used
by the General Partner or the Limited Partner who
provided such escrow for the payment of the taxes
described in this subparagraph (2) above, provided,
in the latter event, the General Partner shall have
determined, in its good faith discretion, that such
tax will be paid. Such escrow shall be released to
the Limited Partner, to the extent not used, after
the expiration of the 2-year period if the General
Partner shall determine in its sole discretion
exercised in good faith that no such transfer tax
shall have been due and payable.
Section 8.7 Right of Offset
The General Partner shall have the right to offset any amounts
owed to the Partnership or the General Partner by any Limited Partner pursuant
to (i) any written agreement between such Limited Partner and the Partnership,
the General Partner or an Affiliate of either of them pursuant to which such
Limited Partner acquired Partnership Units or (ii) the provisions of Section
5.2, Section 8.6.F or Section 11.7 of this Agreement, against any amounts owed
to such Limited Partner by the Partnership or the General Partner hereunder,
including the right to cancel or acquire, as applicable, the Units held by such
Limited Partner, based on the Cash Amount that would be payable therefor,
assuming a redemption as of the date of cancellation or acquisition, as
applicable.
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In exercising the foregoing offset rights, the General partner shall be required
to give a Limited Partner, in the case of an offset against a distribution, five
(5) days prior written notice (provided, however, that if a distribution is to
be made at any time during such five day period the General Partner may retain
the distribution payable to any Limited Partner to whom such a written notice
has been given to the extent of the amount owed by such limited Partner pending
the passage of such period and upon the passage of such period without payment
of all amounts owed by the applicable Limited Partner, the General Partner shall
be entitled to the right of offset described above, it being understood that if
the Limited Partner pays in full the amount owed the General Partner shall
promptly release the retained distribution to such Limited Partner) and, in the
case of an offset against Partnership Units (through cancellation or
acquisition), ten (10) days' prior written notice, in each case of the amount
owed (determined as of a date reasonably close to the date of such notice) and
the proposed offset and the Limited Partner has not paid the amount owed within
such period.
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership appropriate books and records with respect
to the Partnership's business, including, without limitation, all books and
records necessary to provide to the Limited Partners any information, lists and
copies of documents required to be provided pursuant to Section 9.3 below. Any
records maintained by or on behalf of the Partnership in the regular course of
its business may be kept on, or be in the form of, punch cards, magnetic tape,
computer disk, photographs, micrographics or any other information storage
device, provided that the records so maintained are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained, for financial and tax reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
Section 9.3 Reports
A. Annual Reports. As soon as practicable, but in no
event later than the date on which the General Partner Entity mails its annual
report to its shareholders, the General Partner shall cause to be mailed to each
Limited Partner an annual report, as of the close of the most recently ended
Partnership Year, containing financial statements of the Partnership, or of the
General Partner Entity if such statements are prepared solely on a consolidated
basis with the Partnership, for such Partnership Year, presented in accordance
with generally accepted accounting principles, such statements to be audited by
a nationally recognized firm of independent public accountants selected by the
General Partner Entity.
B. Quarterly Reports. If and to the extent that the
General Partner Entity mails quarterly reports to its shareholders, as soon as
practicable, but in no event later than the date on which such reports are
mailed, the General Partner shall cause to be mailed to each Limited Partner a
report containing unaudited financial statements, as of the last day of such
quarter, of the Partnership, or of the General Partner Entity if such statements
are prepared solely on a consolidated basis with the Partnership, and such other
information as may be required by applicable law or regulation, or as the
General Partner determines to be appropriate.
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ARTICLE X
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and
timely filing of all returns of Partnership income, gains, deductions, losses
and other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code; provided, that the General Partner
shall make the election under Section 754 of the Code in accordance with
applicable regulations thereunder. The General Partner shall have the right to
seek to revoke any such election (including, without limitation, the election
under Section 754 of the Code) upon the General Partner's determination in its
sole and absolute discretion that such revocation is in the best interests of
the Partners.
Section 10.3 Tax Matters Partner
A. General. The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes. Pursuant to Section
6223(c)(3) of the Code, upon receipt of notice from the IRS of the beginning of
an administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, taxpayer identification
number and profit interest of each of the Limited Partners and any Assignees;
provided, that such information is provided to the Partnership by the Limited
Partners.
▇. ▇▇▇▇▇▇. The tax matters partner is authorized, but
not required:
(1) to enter into any settlement with the IRS
with respect to any administrative or
judicial proceedings for the adjustment of
Partnership items required to be taken into
account by a Partner for income tax purposes
(such administrative proceedings being
referred to as a "tax audit" and such
judicial proceedings being referred to as
"judicial review"), and in the settlement
agreement the tax matters partner may
expressly state that such agreement shall
bind all Partners, except that such
settlement agreement shall not bind any
Partner (i) who (within the time prescribed
pursuant to the Code and Regulations) files
a statement with the IRS providing that the
tax matters partner shall not have the
authority to enter into a settlement
agreement on behalf of such Partner or (ii)
who is a "notice partner" (as defined in
Section 6231(a)(8) of the Code) or a member
of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(2) in the event that a notice of a final
administrative adjustment at the Partnership
level of any item required to be taken into
account by a Partner for tax purposes (a
"final adjustment") is mailed to the tax
matters partner, to seek judicial review of
such final adjustment, including the filing
of a petition for readjustment with the Tax
Court or the filing of a complaint for
refund with the United States Claims Court
or the District Court of the United States
for the district in which the Partnership's
principal place of business is located;
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(3) to intervene in any action brought by any
other Partner for judicial review of a final
adjustment;
(4) to file a request for an administrative
adjustment with the IRS at any time and, if
any part of such request is not allowed by
the IRS, to file an appropriate pleading
(petition or complaint) for judicial review
with respect to such request;
(5) to enter into an agreement with the IRS to
extend the period for assessing any tax
which is attributable to any item required
to be taken into account by a Partner for
tax purposes, or an item affected by such
item; and
(6) to take any other action on behalf of the
Partners of the Partnership in connection
with any tax audit or judicial review
proceeding to the extent permitted by
applicable law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such proceeding, except to the
extent required by law, is a matter in the sole and absolute discretion of the
tax matters partner and the provisions relating to indemnification of the
General Partner set forth in Section 7.7 hereof shall be fully applicable to the
tax matters partner in its capacity as such.
C. Reimbursement. The tax matters partner shall receive no
compensation for its services. All third party costs and expenses incurred by
the tax matters partner in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Partnership. Nothing herein
shall be construed to restrict the Partnership from engaging an accounting firm
or a law firm to assist the tax matters partner in discharging its duties
hereunder, as long as the compensation paid by the Partnership for such services
is reasonable.
Section 10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any,
incurred by it in organizing the Partnership ratably over a sixty (60) month
period as provided in Section 709 of the Code.
Section 10.5 Withholding
Each Limited Partner hereby authorizes the Partnership to
withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local, or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the
Code. Any amount paid on behalf of or with respect to a Limited Partner shall
constitute a recourse loan by the Partnership to such Limited Partner, which
loan shall be repaid by such Limited Partner within fifteen (15) days after
notice from the General Partner that such payment must be made unless (i) the
Partnership withholds such payment from a distribution which would otherwise be
made to the Limited Partner or (ii) the General Partner determines, in its sole
and absolute discretion, that such payment may be satisfied out of the available
funds of the Partnership which would, but for such payment, be distributed to
the Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i)
or (ii) shall be treated as having been distributed to such Limited Partner.
Each Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner's Partnership Interest
to secure such Limited Partner's obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5. In the event that a
Limited Partner fails to pay any amounts
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owed to the Partnership pursuant to this Section 10.5 when due, the General
Partner may, in its sole and absolute discretion, elect to make the payment to
the Partnership on behalf of such defaulting Limited Partner, and in such event
shall be deemed to have loaned such amount to such defaulting Limited Partner
and shall succeed to all rights and remedies of the Partnership as against such
defaulting Limited Partner (including, without limitation, the right to receive
distributions). Any amounts payable by a Limited Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the Wall Street Journal,
plus four (4) percentage points (but not higher than the maximum lawful rate)
from the date such amount is due (i.e., fifteen (15) days after demand) until
such amount is paid in full. Each Limited Partner shall take such actions as the
Partnership or the General Partner shall request in order to perfect or enforce
the security interest created hereunder.
ARTICLE XI
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. Definition. The term "transfer," when used in this Article
XI with respect to a Partnership Interest or a Partnership Unit, shall be deemed
to refer to a transaction by which the General Partner purports to assign all or
any part of its General Partnership Interest to another Person or by which a
Limited Partner purports to assign all or any part of its Limited Partnership
Interest to another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other disposition by law
or otherwise. The term "transfer" when used in this Article XI does not include
any redemption or repurchase of Partnership Units by the Partnership from a
Partner (including the General Partner) or acquisition of Partnership Units from
a Limited Partner by the General Partner pursuant to Section 8.6 hereof or
otherwise. 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,
and no part of the interest of a Limited Partner may be voluntarily or
involuntarily alienated or encumbered except as may be specifically provided for
in this Agreement.
B. General. No Partnership Interest shall be transferred, in
whole or in part, except in accordance with the terms and conditions set forth
in this Article XI. Any transfer or purported transfer of a Partnership Interest
not made in accordance with this Article XI shall be null and void.
Section 11.2 Transfers of Partnership Interests of General Partner
A. Except for transfers of Partnership Units to the
Partnership as provided in Section 7.5 or Section 8.6 hereof, the General
Partner may not transfer any of its Partnership Interest (including both its
General Partnership Interest and its Limited Partnership Interest) except in
connection with a transaction described in Section 11.2.B below or as otherwise
expressly permitted under this Agreement), nor shall the General Partner
withdraw as General Partner except in connection with a transaction described in
Section 11.2.B below.
B. The General Partner shall not engage in any merger
(including a triangular merger), consolidation or other combination with or into
another person, sale of all or substantially all of its assets or any
reclassification, recapitalization or change of the terms of any outstanding
Common Shares (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") ("Termination Transaction"), unless , in
connection therewith, all Limited Partners (other than the General Partner, the
General Partner Entity and any entities controlled by either of them) will have
the right to elect to receive, or, subject to Section 7.11.C., will receive, for
each Partnership Unit an amount of cash, securities, or other property equal to
the product of the Conversion Factor and the greatest amount of cash, securities
or other property paid to a holder of Shares, if any, corresponding to such
Partnership
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Unit in consideration of one such Share; provided, that if, in connection with
the Termination Transaction, a purchase, tender or exchange offer shall have
first been made to and accepted by the holders of more than fifty percent (50%)
of the outstanding Shares and a holder of Partnership Units did not receive
advance written notice (whether from the General Partner, the offeror or
otherwise) of the offer and an opportunity to redeem its Partnership Units
substantially in accordance with the provisions in Section 8.6, then such holder
of Partnership Units shall receive, or shall have the right to elect to receive,
the greatest amount of cash, securities, or other property which such holder
would have received had it exercised the Redemption Right and received Shares in
exchange for its Partnership Units immediately prior to such purchase, tender or
exchange offer and had thereupon accepted such purchase, tender or exchange
offer and to the extent required by the terms thereof applicable to all other
holders of Shares participating in the purchase, tender or exchange offer,
participated in all other phases of such Termination Transaction as well.
Section 11.3 Limited Partners' Rights to Transfer
A. General. Subject to the provisions of Sections 11.3.C,
11.3.D, 11.3.E, 11.4 and 11.6 below, prior to the first anniversary (or, in the
case of a Restricted Partner, the second anniversary, subject, in the case of
▇▇. ▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, to any shorter period that may apply as a result of
Section _____ of his employment agreement with the Partnership) of the Effective
Date, the Limited Partnership Interest of any Partner may not be transferred in
whole or in part, directly, indirectly or beneficially, without the prior
written consent of the General Partner, which consent the General Partner may
withhold in its sole discretion; provided, however, that it is expressly
understood that subject to the provisions of Sections 11.3.C, 11.3.D, 11.3.E,
11.4 and 11.6 below each Limited Partner will be permitted to make one or more
transfers to any Affiliated Transferee of such Limited Partner. Commencing on
the first anniversary after the Effective Date (or (x) in the case of a holder
of Class E Units but only with respect to such Class E Units, the ninety-first
(91st) day after the Effective Date, and (y) in the case of a Restricted
Partner, the second anniversary after the Effective Date, subject, in the case
of ▇▇. ▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇, to any shorter period that may apply as a result
of Section _____ of his employment agreement with the Partnership but in no
event less than one (1) year), and subject to the provisions of Sections 11.3.C,
11.3.D, 11.3.E, 11.4 and 11.6 below, a Limited Partner (other than the General
Partner or the General Partner Entity or any Subsidiary of either of them) may
transfer all or any portion of its Limited Partnership Interest to any person,
provided such Limited Partner obtains the prior written consent of the General
Partner, which consent may be withheld only if the General Partner determines in
its sole discretion exercised in good faith that such a transfer would cause the
Partnership or any or all of the Partners other than the Limited Partner seeking
to transfer its rights as a Limited Partner to be subject to tax liability as a
result of such transfer. Any purported transfer attempted in violation of the
foregoing sentence shall be deemed void ab initio and shall have no force or
effect.
B. Incapacitated Limited Partners. If a Limited Partner is
subject to Incapacity, the executor, administrator, trustee, committee,
guardian, conservator or receiver of such Limited Partner's estate shall have
all the rights of a Limited Partner, but not more rights than those enjoyed by
other Limited Partners for the purpose of settling or managing the estate and
such power as the Incapacitated Limited Partner possessed to transfer all or any
part of its interest in the Partnership. The Incapacity of a Limited Partner, in
and of itself, shall not dissolve or terminate the Partnership.
C. No Transfers Violating Securities Laws. The General Partner
may prohibit any transfer of Partnership Units by a Limited Partner if, in the
opinion of legal counsel to the Partnership, such transfer would require filing
of a registration statement under the Securities Act or would otherwise violate
any federal, or state securities laws or regulations applicable to the
Partnership or the Partnership Unit.
D. No Transfers Affecting Tax Status of Partnership. No
transfer of Partnership Units by a Limited Partner (including a redemption or
exchange pursuant to Section 8.6 hereof) may be made to any
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Person if (i) in the opinion of legal counsel for the Partnership, it would
result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes or would result in a termination of
the Partnership for federal income tax purposes (except as a result of the
redemption or exchange for Shares of all Partnership Units held by all Limited
Partners other than the General Partner or the General Partner Entity or any
Subsidiary of either the General Partner or the General Partner Entity or
pursuant to a transaction not prohibited under Section 11.2 hereof), (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the General Partner Entity or the General Partner (as applicable) to
continue to qualify as a REIT or would subject the General Partner Entity or the
General Partner (as applicable) to any additional taxes under Section 857 or
Section 4981 of the Code or (iii) such transfer is effectuated through an
"established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code.
E. No Transfers to Holders of Nonrecourse Liabilities. No
pledge or transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Section
1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
constitutes a Nonrecourse Liability without the consent of the General Partner,
in its sole and absolute discretion; provided, that as a condition to such
consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the Redemption
Amount any Partnership Units in which a security interest is held simultaneously
with the time at which such lender would be deemed to be a partner in the
Partnership for purposes of allocating liabilities to such lender under Section
752 of the Code.
Section 11.4 Substituted Limited Partners
A. Consent of General Partner. No Limited Partner shall have
the right to substitute a transferee as a Limited Partner in its place without
the consent of the General Partner to the admission of a transferee of the
interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion. The General Partner's failure or refusal to
permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
any Partner.
B. Rights of Substituted Limited Partner. A transferee who has
been admitted as a Substituted Limited Partner in accordance with this Article
XI shall have all the rights and powers and be subject to all the restrictions
and liabilities of a Limited Partner under this Agreement. The admission of any
transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the
terms and conditions of this Agreement (including, without limitation, the
provisions of Section 15.11 hereof and such other documents or instruments as
may be required to effect the admission).
C. Amendment and Restatement of Exhibit A. Upon the admission
of a Substituted Limited Partner, the General Partner shall amend and restate
Exhibit A hereto to reflect the name, address, Capital Account, number of
Partnership Units, and Percentage Interest of such Substituted Limited Partner
and to eliminate or adjust, if necessary, the name, address, Capital Account and
Percentage Interest of the predecessor of such Substituted Limited Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section 11.3
above as a Substituted Limited Partner, as described in Section 11.4 above, such
transferee shall be considered an Assignee for purposes of this Agreement,
subject, however, to Section 11.7 hereof. An Assignee shall be entitled to all
the rights of an assignee of a limited partnership interest
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under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, and shall
have the rights granted to the Limited Partners under Section 8.6 hereof, but
shall not be deemed to be a holder of Partnership Units for any other purpose
under this Agreement, and shall not be entitled to vote such Partnership Units
in any matter presented to the Limited Partners for a vote (such Partnership
Units being deemed to have been voted on such matter in the same proportion as
all other Partnership Units held by Limited Partners are voted). In the event
any such transferee desires to make a further assignment of any such Partnership
Units, such transferee shall be subject to all the provisions of this Article XI
to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of Partnership Units.
Section 11.6 General Provisions
A. Withdrawal of Limited Partner. No Limited Partner
may withdraw from the Partnership other than as a result of a permitted transfer
of all of such Limited Partner's Partnership Units in accordance with this
Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.6 hereof.
B. Termination of Status as Limited Partner. Any
Limited Partner who shall transfer all of its Partnership Units in a transfer
permitted pursuant to this Article XI or pursuant to redemption of all of its
Partnership Units under Section 8.6 hereof shall cease to be a Limited Partner.
C. Timing of Transfers. Transfers pursuant to this
Article XI may only be made on the first day of a fiscal quarter of the
Partnership, unless the General Partner otherwise agrees.
D. Allocations. If any Partnership Interest is
transferred during any quarterly segment of the Partnership's fiscal year in
compliance with the provisions of this Article XI or redeemed or transferred
pursuant to Section 8.6 hereof, Net Income, Net Losses, each item thereof and
all other items attributable to such interest for such fiscal year shall be
divided and allocated between the transferor Partner and the transferee Partner
by taking into account their varying interests during the fiscal year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method (unless the General Partner, in its sole and absolute discretion,
elects to adopt a daily, weekly, or a monthly proration period, in which event
Net Income, Net Losses, each item thereof and all other items attributable to
such interest for such fiscal year shall be prorated based upon the applicable
method selected by the General Partner). Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
redemption occurs shall be allocated to the Person who is a Partner as of
midnight on the last day of said month. All distributions attributable to any
Partnership Unit with respect to which the Partnership Record Date is before the
date of such transfer, assignment or redemption shall be made to the transferor
Partner or the Redeeming Partner, as the case may be, and, in the case of a
transfer or assignment other than a redemption, all distributions thereafter
attributable to such Partnership Unit shall be made to the transferee Partner.
E. Additional Restrictions. In addition to any other
restrictions on transfer herein contained, including without limitation the
provisions of this Article XI, in no event may any transfer or assignment of a
Partnership Interest by any Partner (including pursuant to Section 8.6 hereof)
be made without the express consent of the General Partner, in its sole and
absolute discretion, (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of applicable
law; (iii) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest; (iv) if in the opinion of legal counsel to
the Partnership such transfer would cause a termination of the Partnership for
federal or state income tax purposes (except as a result of the redemption or
exchange for Shares of all Partnership Units held by all Limited Partners or
pursuant to a transaction not prohibited under Section 11.2 hereof); (v) if in
the opinion of counsel to the Partnership, such transfer would cause the
Partnership to cease to be classified as a partnership for federal income tax
purposes
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(except as a result of the redemption or exchange for Shares of all Partnership
Units held by all Limited Partners or pursuant to a transaction not prohibited
under Section 11.2 hereof); (vi) if such transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA, a
"party-in-interest" (as defined in Section 3(14) of ERISA) or a "disqualified
person" (as defined in Section 4975(c) of the Code); (vii) if such transfer
would, in the opinion of counsel to the Partnership, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan
pursuant to Department of Labor Regulations Section 2510.1-101; (viii) if such
transfer requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (ix) if such transfer is
effectuated through an "established securities market" or a "secondary market"
(or the substantial equivalent thereof) within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a "publicly traded
partnership," as such term is defined in Section 469(k)(2) or Section 7704(b) of
the Code; (x) if such transfer subjects the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or the
Employee Retirement Income Security Act of 1974, each as amended; (xi) if the
transferee or assignee of such Partnership Interest is unable to make the
representations set forth in Section 15.15 hereof or such transfer could
otherwise adversely affect the ability of the General Partner Entity or the
General Partner (as applicable) to remain qualified as a REIT; or (xii) if in
the opinion of legal counsel for the Partnership, such transfer would adversely
affect the ability of the General Partner Entity or the General Partner (as
applicable) to continue to qualify as a REIT or subject the General Partner
Entity or the General Partner (as applicable) to any additional taxes under
Section 857 or Section 4981 of the Code.
F. Avoidance of "Publicly Traded Partnership" Status. The
General Partner shall (a) use commercially reasonable efforts (as determined by
it in its sole discretion exercised in good faith) to monitor the transfers of
interests in the Partnership to determine (i) if such interests are being traded
on an "established securities market" or a "secondary market (or the substantial
equivalent thereof)" within the meaning of Section 7704 of the Code and (ii)
whether additional transfers of interests would result in the Partnership being
unable to qualify for at least one of the "safe harbors" set forth in
Regulations Section 1.7704-1 (or such other guidance subsequently published by
the IRS setting forth safe harbors under which interests will not be treated as
"readily tradable on a secondary market (or the substantial equivalent thereof)"
within the meaning of Section 7704 of the Code) (the "Safe Harbors") and (b)
take such steps as it believes are commercially reasonable and appropriate (as
determined by it in its sole discretion exercised in good faith) to prevent any
trading of interests or any recognition by the Partnership of transfers made on
such markets and, except as otherwise provided herein, to insure that at least
one of the Safe Harbors is met.
Section 11.7 Payment of Incremental Tax
Notwithstanding anything herein to the contrary, until the
business day immediately following the second anniversary of the Effective Date,
no Person shall be admitted as a Substitute Limited Partner and no person shall
be considered an Assignee for purposes of this Agreement, and any transaction or
other form of conveyance or disposition of any sort whatsoever purporting to
transfer an interest in this Agreement or in the Partnership or substitute a
limited partner shall be null and void and of no force and effect unless
concurrently with such purported transfer the transferor shall establish to the
sole satisfaction of the General Partner exercised in good faith that any New
York State Transfer Tax and/or New York City Real Estate Transfer Tax payable in
connection with the purported transfer by reason of the transferor's failure to
hold for a two-year period the Partnership Units issued as of the Effective Date
shall have been paid. A Limited Partner shall be obligated to pay the transfer
taxes described above in this Section 11.7.
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ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner
A successor to all of the General Partner's General
Partnership Interest pursuant to Section 11.2 hereof who is proposed to be
admitted as a successor General Partner shall be admitted to the Partnership as
the General Partner, effective upon such transfer. Any such transferee shall
carry on the business of the Partnership without dissolution. In each case, the
admission shall be subject to the successor General Partner's executing and
delivering to the Partnership an acceptance of all of the terms and conditions
of this Agreement and such other documents or instruments as may be required to
effect the admission.
Section 12.2 Admission of Additional Limited Partners
A. General. No Person shall be admitted as an Additional
Limited Partner without the consent of the General Partner, which consent shall
be given or withheld in the General Partner's sole and absolute discretion. A
Person who makes a Capital Contribution to the Partnership in accordance with
this Agreement, including, without limitation, pursuant to Section 4.1.C hereof,
or who exercises an option to receive Partnership Units shall be admitted to the
Partnership as an Additional Limited Partner only with the consent of the
General Partner and only upon furnishing to the General Partner (i) evidence of
acceptance in form satisfactory to the General Partner of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 15.11 hereof and (ii) such other documents or
instruments as may be required in the discretion of the General Partner in order
to effect such Person's admission as an Additional Limited Partner. The
admission of any Person as an Additional Limited Partner shall become effective
on the date upon which the name of such Person is recorded on the books and
records of the Partnership, following the consent of the General Partner to such
admission.
B. Allocations to Additional Limited Partners. If any
Additional Limited Partner is admitted to the Partnership on any day other than
the first day of a Partnership Year, then Net Income, Net Losses, each item
thereof and all other items allocable among Partners and Assignees for such
Partnership Year shall be allocated among such Additional Limited Partner and
all other Partners and Assignees by taking into account their varying interests
during the Partnership Year in accordance with Section 706(d) of the Code, using
the interim closing of the books method (unless the General Partner, in its sole
and absolute discretion, elects to adopt a daily, weekly or monthly proration
method, in which event Net Income, Net Losses, and each item thereof would be
prorated based upon the applicable period selected by the General Partner).
Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all the Partners and Assignees including such
Additional Limited Partner. All distributions with respect to which the
Partnership Record Date is before the date of such admission shall be made
solely to Partners and Assignees other than the Additional Limited Partner, and
all distributions thereafter shall be made to all the Partners and Assignees
including such Additional Limited Partner.
Section 12.3 Amendment of Agreement and Certificate of Limited Partnership
For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership (including an amendment and restatement of
Exhibit A hereto) and, if necessary, to prepare as soon as practical an
amendment of this Agreement and, if required by law, shall prepare and file an
amendment to the Certificate and may for this purpose exercise the power of
attorney granted pursuant to Section 15.11 hereof.
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ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the admission
of a successor General Partner in accordance with the terms of this Agreement.
Upon the withdrawal of the General Partner, any successor General Partner shall
continue the business of the Partnership. The Partnership shall dissolve, and
its affairs shall be wound up, upon the first to occur of any of the following
(each a "Liquidating Event") :
(i) the expiration of its term as provided in
Section 2.4 hereof;
(ii) an event of withdrawal of the General
Partner, as defined in the Act (other than an event of Bankruptcy), unless,
within ninety (90) days after the withdrawal a Majority in Interest of the
remaining Partners Consent in writing to continue the business of the
Partnership and to the appointment, effective as of the date of withdrawal, of a
substitute General Partner;
(iii) an election to dissolve the Partnership made
by the General Partner, in its sole and absolute discretion, after December 31,
2046;
(iv) entry of a decree of judicial dissolution of
the Partnership pursuant to the provisions of the Act;
(v) the sale of all or substantially all of the
assets and properties of the Partnership for cash or for marketable securities
(subject to Section 7.11.C); or
(vi) a final and nonappealable judgment is
entered by a court of competent jurisdiction ruling that the General Partner is
bankrupt or insolvent, or a final and nonappealable order for relief is entered
by a court with appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect, unless prior to or within ninety days after of the entry of
such order or judgment a Majority in Interest of the remaining Partners Consent
in writing to continue the business of the Partnership and to the appointment,
effective as of a date prior to the date of such order or judgment, of a
substitute General Partner.
Section 13.2 Winding Up
A. General. Upon the occurrence of a Liquidating Event, the
Partnership shall continue solely for the purposes of winding up its affairs in
an orderly manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is inconsistent
with, or not necessary to or appropriate for, the winding up of the
Partnership's business and affairs. The General Partner (or, in the event there
is no remaining General Partner, any Person elected by a Majority in Interest of
the Limited Partners (the "Liquidator")) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership property shall be
liquidated as promptly as is consistent with obtaining the fair value thereof,
and the proceeds therefrom (which may, to the extent determined by the General
Partner, include equity or other securities of the General Partner or any other
entity) shall be applied and distributed in the following order:
(1) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors
other than the Partners;
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(2) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the Partners;
and
(3) The balance, if any, to the Partners in accordance
with their Capital Accounts, after giving effect to
all contributions, distributions, and allocations for
all periods. [Consider incorporating old 14.1.B(3)
here]
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article XIII.
B. Deferred Liquidation. Notwithstanding the provisions of
Section 13.2.A above which require liquidation of the assets of the Partnership,
but subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership's assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its sole and absolute
discretion, defer for a reasonable time the liquidation of any assets except
those necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) or distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of Section 13.2.A above,
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such distributions in kind shall be made only if,
in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Partners, and shall be subject to such conditions
relating to the disposition and management of such properties as the Liquidator
deems reasonable and equitable and to any agreements governing the operation of
such properties at such time. The Liquidator shall determine the fair market
value of any property distributed in kind using such reasonable method of
valuation as it may adopt.
Section 13.3 Compliance with Timing Requirements of Regulations
Subject to Section 13.4 below, in the event the Partnership is
"liquidated" within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),
distributions shall be made pursuant to this Article XIII to the General Partner
and Limited Partners who have positive Capital Accounts in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit
balance in its Capital Account (after giving effect to all contributions,
distributions and allocations for all taxable years, including the year during
which such liquidation occurs), such Partner shall have no obligation to make
any contribution to the capital of the Partnership with respect to such deficit,
and such deficit shall not be considered a debt owed to the Partnership or to
any other Person for any purpose whatsoever. In the discretion of the General
Partner, a pro rata portion of the distributions that would otherwise be made to
the General Partner and Limited Partners pursuant to this Article XIII may be:
(A) distributed to a trust established for the benefit of the General Partner
and Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership (in which case the
assets of any such trust shall be distributed to the General Partner and Limited
Partners from time to time, in the reasonable discretion of the General Partner,
in the same proportions as the amount distributed to such trust by the
Partnership would otherwise have been distributed to the General Partner and
Limited Partners pursuant to this Agreement); or (B) withheld to provide a
reasonable reserve for Partnership liabilities (contingent or otherwise) and to
reflect the unrealized portion of any installment obligations owed to the
Partnership, provided, that such withheld amounts shall be distributed to the
General Partner and Limited Partners as soon as practicable.
Section 13.4 Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article XIII, in
the event the Partnership is deemed liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred,
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the Partnership's property shall not be liquidated, the Partnership's
liabilities shall not be paid or discharged and the Partnership's affairs shall
not be wound up. Instead, for federal income tax purposes and for purposes of
maintaining Capital Accounts pursuant to Exhibit B hereto, the Partnership shall
be deemed to have distributed its assets in kind to the General Partner and
Limited Partners, who shall be deemed to have assumed and taken such assets
subject to all Partnership liabilities, all in accordance with their respective
Capital Accounts. Immediately thereafter, the General Partner and Limited
Partners shall be deemed to have recontributed the Partnership assets in kind to
the Partnership, which shall be deemed to have assumed and taken such assets
subject to all such liabilities.
Section 13.5 Rights of Limited Partners
Except as otherwise provided in this Agreement, each Limited
Partner shall look solely to the assets of the Partnership for the return of its
Capital Contributions and shall have no right or power to demand or receive
property other than cash from the Partnership. Except as otherwise expressly
provided in this Agreement, no Limited Partner shall have priority over any
other Limited Partner as to the return of its Capital Contributions,
distributions, or allocations.
Section 13.6 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs
that would, but for provisions of an election or objection by one or more
Partners pursuant to Section 13.1 above, result in a dissolution of the
Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners and to all other parties
with whom the Partnership regularly conducts business (as determined in the
discretion of the General Partner) and shall publish notice thereof in a
newspaper of general circulation in each place in which the Partnership
regularly conducts business (as determined in the discretion of the General
Partner).
Section 13.7 Cancellation of Certificate of Limited Partnership
Upon the completion of the liquidation of the Partnership cash
and property as provided in Section 13.2 above, the Partnership shall be
terminated and the Certificate and all qualifications of the Partnership as a
foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 13.8 Reasonable Time for Winding Up
A reasonable time shall be allowed for the orderly winding up
of the business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 above, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect among the Partners during the period of liquidation.
Section 13.9 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
Section 13.10 Liability of Liquidator
The Liquidator shall be indemnified and held harmless by the
Partnership in the same manner and to the same degree as an Indemnitee may be
indemnified pursuant to Section 7.11 hereof.
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ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
A. General. Amendments to this Agreement may be proposed only
by the General Partner. Following such proposal (except an amendment pursuant to
Section 14.1.B below), the General Partner shall submit any proposed amendment
to the Limited Partners and shall seek the written vote of the Partners on the
proposed amendment or shall call a meeting to vote thereon and to transact any
other business that it may deem appropriate. For purposes of obtaining a written
vote, the General Partner may require a response within a reasonable specified
time, but not less than fifteen (15) days, and failure to respond in such time
period shall constitute a vote which is consistent with the General Partner's
recommendation with respect to the proposal; provided, however, that in the case
of any Consent required under Section 7.11.C or 7.11.D, the General Partner
shall be required to give the Limited Partners (other than ▇▇. ▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇▇▇ or any Mendik Owners with respect thereto) entitled to vote thereon
two (2) written requests for a response and in determining the votes cast for or
against such Consent the Partnership Units of Limited Partners (other than ▇▇.
▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇ or any Mendik Owners with respect thereto) entitled to
vote thereon who do not respond in writing to either such request within the
time period established by the General Partner shall be deemed to have been
voted for or against the proposed Consent in the same proportion as the votes
actually received.
B. Amendments Not Requiring Limited Partner Approval. Subject
to Section 14.1.C and 14.1.D, the General Partner shall have the power, without
the Consent of the Limited Partners, to amend this Agreement as may be required
to reflect any changes to this Agreement that the General Partner deems
necessary or appropriate in its sole discretion, provided that such change does
not adversely affect or eliminate any right granted to a Limited Partner
pursuant to any of the provisions of this Agreement specified in Section 14.1.C
or Section 14.1.D as requiring a particular minimum vote. The General Partner
shall notify the Limited Partners when any action under this Section 14.1.B is
taken in the next regular communication to the Limited Partners.
C. Amendments Requiring Limited Partner Approval (Excluding
General Partner). Without the Consent of the Outside Limited Partners, the
General Partner shall not amend Section 4.2.A, Section 5.1.C, Section 7.5,
Section 7.6, Section 7.8, Section 11.2, Section 13.1, this Section 14.1.C or
Section 14.2.
D. Other Amendments Requiring Certain Limited Partner
Approval. Notwithstanding anything in this Section 14.1 to the contrary, this
Agreement shall not be amended with respect to any Partner adversely affected
without the Consent of such Partner adversely affected if such amendment would
(i) convert a Limited Partner's interest in the Partnership into a general
partner's interest, (ii) modify the limited liability of a Limited Partner,
(iii) amend Section 7.11.A, (iv) amend Article V, Article VI, or Section
13.2.A(3) (except as permitted pursuant to Sections 4.2, 5.1.C, 5.4 and 6.2, (v)
amend Section 8.6 or any defined terms set forth in Article I that relate to the
Redemption Right (except as permitted in Section 8.6.E), or (vi) amend this
Section 14.1.D. In addition, any amendment to Section 7.11.C of this Agreement
shall require the following consent:
(i) In the event that the amendment to Section 7.11.C affects
the Two Penn Plaza Property or the rights of holders of Two
Penn Plaza Units, such amendment shall require the Consent of
Partners (other than the General Partner or the General
Partner Entity or any Subsidiary of either the General Partner
or the General Partner Entity) who hold seventy-five percent
(75%) of the Two Penn Plaza Units;
(ii) In the event that the amendment to Section 7.11.C affects
the Eleven Penn Plaza Property or the rights of holders of
Eleven Penn Plaza Units, such amendment shall require the
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Consent of Partners (other than the General Partner or the
General Partner Entity or any Subsidiary of either the General
Partner or the General Partner Entity) who hold seventy-five
percent (75%) of the Eleven Penn Plaza Units; and
(iii) In the event that the amendment to Section 7.11.C
affects the 866 U.N. Plaza Property or the rights of holders
of ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇, such amendment shall require the
Consent of Partners (other than the General Partner or the
General Partner Entity or any Subsidiary of either the General
Partner or the General Partner Entity) who hold seventy-five
percent (75%) of the ▇▇▇ ▇.▇. ▇▇▇▇▇ ▇▇▇▇▇.
▇. Amendment and Restatement of Exhibit A Not An Amendment.
Notwithstanding anything in this Article XIV or elsewhere in this Agreement to
the contrary, any amendment and restatement of Exhibit A hereto by the General
Partner to reflect events or changes otherwise authorized or permitted by this
Agreement, whether pursuant to Section 7.1.A(20) hereof or otherwise, shall not
be deemed an amendment of this Agreement and may be done at any time and from
time to time, as necessary by the General Partner without the Consent of the
Limited Partners.
F. Amendment by Merger. In the event that the Partnership
participates in any merger (including a triangular merger), consolidation or
combination with another entity in a transaction not otherwise prohibited by
this Agreement and as a result of such merger, consolidation or combination this
Agreement is to be amended (or a new agreement for a limited partnership or
limited liability company, as applicable, is to be adopted for the surviving
entity) and any of the Outside Limited Partners (as defined herein in "Consent
of Outside Limited Partners") will hold equity interests in the continuing or
surviving entity, then any such amendments to this Agreement (or changes from
this Agreement reflected in the new agreement for the surviving entity) shall
require the consents provided in Section 14.1.C and Section 14.1.D.
Section 14.2 Meetings of the Partners
A. General. Meetings of the Partners may be called only by the
General Partner. The call shall state the nature of the business to be
transacted. Notice of any such meeting shall be given to all Partners not less
than seven (7) days nor more than thirty (30) days prior to the date of such
meeting; provided that a Partner's attendance at any meeting of Partners shall
be deemed a waiver of the foregoing notice requirement with respect to such
Partner. Partners may vote in person or by proxy at such meeting. Whenever the
vote or Consent of Partners is permitted or required under this Agreement, such
vote or Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.1.A above. Except as
otherwise expressly provided in this Agreement, the Consent of holders of a
majority of the Percentage Interests held by Limited Partners (including Limited
Partnership Interests held by the General Partner) shall control.
B. Actions Without a Meeting. Any action required or permitted
to be taken at a meeting of the Partners may be taken without a meeting if a
written consent setting forth the action so taken is signed by a majority of the
Percentage Interests of the Partners (or such other percentage as is expressly
required by this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of
the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.
C. Proxy. Each Limited Partner may authorize any Person or
Persons to act for such Limited Partner by proxy on all matters in which a
Limited Partner is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. Every proxy must be signed by
the Limited Partner or its attorney-in-fact. No proxy shall be valid after the
expiration of eleven (11) months from the date thereof unless
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otherwise provided in the proxy. Every proxy shall be revocable at the pleasure
of the Limited Partner executing it, such revocation to be effective upon the
Partnership's receipt of notice thereof in writing.
D. Conduct of Meeting. Each meeting of Partners shall be
conducted by the General Partner or such other Person as the General Partner may
appoint pursuant to such rules for the conduct of the meeting as the General
Partner or such other Person deems appropriate.
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Addresses and Notice
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication to
the Partner or Assignee at the address set forth in Exhibit A hereto or such
other address as the Partners shall notify the General Partner in writing.
Section 15.2 Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns, pronouns and verbs shall include the plural and
vice versa.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
Section 15.6 Creditors; Other Third Parties
Other than as expressly set forth herein with regard to any
Indemnitee, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor or other third party having
dealings with the Partnership.
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Section 15.7 Waiver
No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver of
any such breach or any other covenant, duty, agreement or condition.
Section 15.8 Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.9 Applicable Law
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
Section 15.10 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not be
affected thereby.
Section 15.11 Power of Attorney
A. General. Each Limited Partner and each Assignee who accepts
Partnership Units (or any rights, benefits or privileges associated therewith)
is deemed to irrevocably constitute and appoint the General Partner, any
Liquidator and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to:
(1) execute, swear to, acknowledge, deliver, file and
record in the appropriate public offices (a) all
certificates, documents and other instruments
(including, without limitation, this Agreement and
the Certificate and all amendments or restatements
thereof) that the General Partner or any Liquidator
deems appropriate or necessary to form, qualify or
continue the existence or qualification of the
Partnership as a limited partnership (or a
partnership in which the limited partners have
limited liability) in the State of Delaware and in
all other jurisdictions in which the Partnership may
conduct business or own property, (b) all instruments
that the General Partner or any Liquidator deems
appropriate or necessary to reflect any amendment,
change, modification or restatement of this Agreement
in accordance with its terms, (c) all conveyances and
other instruments or documents that the General
Partner or any Liquidator deems appropriate or
necessary to reflect the dissolution and liquidation
of the Partnership pursuant to the terms of this
Agreement, including, without limitation, a
certificate of cancellation, (d) all instruments
relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to, or other
events described in, Article XI, XII or XIII hereof
or the Capital Contribution of any Partner and (e)
all certificates, documents and other instruments
relating to the determination of the rights,
preferences and privileges of Partnership Interests;
and
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(2) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other
instruments appropriate or necessary, in the sole and
absolute discretion of the General Partner or any
Liquidator, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or
other action which is made or given by the Partners
hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole
discretion of the General Partner or any Liquidator,
to effectuate the terms or intent of this Agreement.
Nothing contained in this Section 15.11 shall be construed as
authorizing the General Partner or any Liquidator to amend this Agreement except
in accordance with Article XIV hereof or as may be otherwise expressly provided
for in this Agreement.
B. Irrevocable Nature. The foregoing power of attorney is
hereby declared to be irrevocable and a power coupled with an interest, in
recognition of the fact that each of the Partners will be relying upon the power
of the General Partner or any Liquidator to act as contemplated by this
Agreement in any filing or other action by it on behalf of the Partnership, and
it shall survive and not be affected by the subsequent Incapacity of any Limited
Partner or Assignee and the transfer of all or any portion of such Limited
Partner's or Assignee's Partnership Units and shall extend to such Limited
Partner's or Assignee's heirs, successors, assigns and personal representatives.
Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner or any Liquidator, acting in good
faith pursuant to such power of attorney; and each such Limited Partner or
Assignee hereby waives any and all defenses which may be available to contest,
negate or disaffirm the action of the General Partner or any Liquidator, taken
in good faith under such power of attorney. Each Limited Partner or Assignee
shall execute and deliver to the General Partner or the Liquidator, within
fifteen (15) days after receipt of the General Partner's or Liquidator's request
therefor, such further designation, powers of attorney and other instruments as
the General Partner or the Liquidator, as the case may be, deems necessary to
effectuate this Agreement and the purposes of the Partnership.
Section 15.12 Entire Agreement
This Agreement contains the entire understanding and agreement
among the Partners with respect to the subject matter hereof and supersedes any
prior written oral understandings or agreements among them with respect thereto.
Section 15.13 No Rights as Shareholders
Nothing contained in this Agreement shall be construed as
conferring upon the holders of the Partnership Units any rights whatsoever as
shareholders of the General Partner Entity or the General Partner (if
different), including, without limitation, any right to receive dividends or
other distributions made to shareholders of the General Partner Entity or the
General Partner (if different) or to vote or to consent or receive notice as
shareholders in respect to any meeting of shareholders for the election of
directors of the General Partner Entity or the General Partner (if different) or
any other matter.
Section 15.14 Limitation to Preserve REIT Status
To the extent that any amount paid or credited to the General
Partner or its officers, directors, employees or agents pursuant to Section 7.4
or Section 7.7 hereof would constitute gross income to the General Partner
Entity or the General Partner (if it is to be qualified as a REIT) for purposes
of Section 856(c)(2) or 856(c)(3) of the Code (a "General Partner Payment")
then, notwithstanding any other provision of this Agreement, the amount of such
General Partner Payments for any fiscal year shall not exceed the lesser of:
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(i) an amount equal to the excess, if any, of (a) 5% of the
General Partner Entity's or the General Partner's (if it is to be qualified as a
REIT) total gross income (but not including the amount of any General Partner
Payments) for the fiscal year over (b) the amount of gross income (within the
meaning of Section 856(c)(2) of the Code) derived by the General Partner Entity
or the General Partner (if it is to be qualified as a REIT) from sources other
than those described in subsections (A) through (H) of Section 856(c)(2) of the
Code (but not including the amount of any General Partner Payments); or
(ii) an amount equal to the excess, if any of (a) 25% of the
General Partner Entity's or the General Partner's (if it is to be qualified as a
REIT) total gross income (but not including the amount of any General Partner
Payments) for the fiscal year over (b) the amount of gross income (within the
meaning of Section 856(c)(3) of the Code) derived by the General Partner Entity
or the General Partner (if it is to be qualified as a REIT) from sources other
than those described in subsections (A) through (I) of Section 856(c)(3) of the
Code (but not including the amount of any General Partner Payments);
provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the General Partner
Entity or the General Partner (if it is to be qualified as a REIT), as a
condition precedent, obtains an opinion of tax counsel that the receipt of such
excess amounts would not adversely affect the General Partner Entity's or the
General Partner's (if it is to be qualified as a REIT) ability to qualify as a
REIT. To the extent General Partner Payments may not be made in a year due to
the foregoing limitations, such General Partner Payments shall carry over and be
treated as arising in the following year, provided, however, that such amounts
shall not carry over for more than five years, and if not paid within such five
year period, shall expire; provided, further, that (i) as General Partner
Payments are made, such payments shall be applied first to carry over amounts
outstanding, if any, and (ii) with respect to carry over amounts for more than
one Partnership Year, such payments shall be applied to the earliest Partnership
Year first.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
GENERAL PARTNER:
VORNADO REALTY TRUST
By: _______________________________
Name: _______________________________
Title: _______________________________
LIMITED PARTNERS:
THE MENDIK COMPANY, INC.
By: _______________________________
Name: _______________________________
Title: _______________________________
FW/MENDIK REIT, L.L.C.
By: Mendik Holdings LLC, member
By: Mendik Holdings, Inc., managing member
By: _______________________________
Name: _______________________________
Title: _______________________________
[ADD OTHER LIMITED PARTNERS]
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EXHIBIT A
PARTNERS AND PARTNERSHIP INTERESTS
Agreed
Preferred Class A Class B Class C Class D Class E Initial
Partnership Partnership Partnership Partnership Partnership Partnership Capital Percentage
Name and Address of Partner Units Units* Units Units Units Units Account Interest
--------------------------- ------- -------- ------- ------- ------- ------ --------- --------
GENERAL PARTNER:
Vornado Trust
Park ▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇
LIMITED PARTNERS:
Vornado Trust
Park 80 West, Plaza Two
Saddle Brook, New Jersey
The Mendik Company, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
FW/Mendik REIT, L.L.C.
[Address]
[List Other Partners]
100.00%
TOTAL ========
======= ======== ======= ======= ======= ====== =========
----------
* [NOTE: AT THE EFFECTIVE DATE THE GENERAL PARTNER'S TOTAL CLASS A UNITS MUST
EQUAL THE NUMBER OF OUTSTANDING COMMON SHARES]
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74
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section
l.704-l(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions and any other deemed contributions made by such
Partner to the Partnership pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 1.B hereof and allocated to such Partner pursuant to
Section 6.1 of the Agreement and Exhibit C hereof, and decreased by (x) the
amount of cash or Agreed Value of all actual and deemed distributions of cash or
property made to such Partner pursuant to this Agreement and (y) all items of
Partnership deduction and loss computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1 of the Agreement and
Exhibit C hereof.
B. For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Partners' Capital Accounts,
unless otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(1) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of
income, gain, loss and deduction shall be made
without regard to any election under Section 754 of
the Code which may be made by the Partnership,
provided that the amounts of any adjustments to the
adjusted bases of the assets of the Partnership made
pursuant to Section 734 of the Code as a result of
the distribution of property by the Partnership to a
Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital
Accounts) shall be reflected in the Capital Accounts
of the Partners in the manner and subject to the
limitations prescribed in Regulations Section
l.704-1(b)(2)(iv)(m)(4).
(2) The computation of all items of income, gain, and
deduction shall be made without regard to the fact
that items described in Sections 705(a)(l)(B) or
705(a)(2)(B) of the Code are not includable in gross
income or are neither currently deductible nor
capitalized for federal income tax purposes.
(3) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be
determined as if the adjusted basis of such property
as of such date of disposition were equal in amount
to the Partnership's Carrying Value with respect to
such property as of such date.
(4) 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.
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75
(5) In the event the Carrying Value of any Partnership
Asset is adjusted pursuant to Section 1.D hereof, the
amount of any such adjustment shall be taken into
account as gain or loss from the disposition of such
asset.
(6) Any items specially allocated under Section 2 of
Exhibit C hereof shall not be taken into account.
C. Generally, a transferee (including any Assignee) of a
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor. The Capital Accounts of such reconstituted Partnership shall be
maintained in accordance with the principles of this Exhibit B.
D. (1) Consistent with the provisions of Regulations
Section 1.704-1(b)(2)(iv)(f), and as provided in
Section 1.D(2), the Carrying Values of all
Partnership assets shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized
Loss attributable to such Partnership property, as of
the times of the adjustments provided in Section
1.D(2) hereof, as if such Unrealized Gain or
Unrealized Loss had been recognized on an actual sale
of each such property and allocated pursuant to
Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the following
times: (a) immediately prior to the acquisition of an
additional interest in the Partnership by any new or
existing Partner in exchange for more than a de
minimis Capital Contribution; (b) immediately prior
to the distribution by the Partnership to a Partner
of more than a de minimis amount of property as
consideration for an interest in the Partnership; and
(c) immediately prior to the liquidation of the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), provided, however, that
adjustments pursuant to clauses (a) and (b) above
shall be made only if the General Partner determines
that such adjustments are necessary or appropriate to
reflect the relative economic interests of the
Partners in the Partnership.
(3) In accordance with Regulations Section 1.704-
1(b)(2)(iv)(e), the Carrying Value of Partnership
assets distributed in kind shall be adjusted upward
or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership
property, as of the time any such asset is
distributed.
(4) In determining Unrealized Gain or Unrealized Loss for
purposes of this Exhibit B, the aggregate cash amount
and fair market value of all Partnership assets
(including cash or cash equivalents) shall be
determined by the General Partner using such
reasonable method of valuation as it may adopt, or in
the case of a liquidating distribution pursuant to
Article XIII of the Agreement, shall be determined
and allocated by the Liquidator using such reasonable
methods of valuation as it may adopt. The General
Partner, or the Liquidator, as the case may be, shall
allocate such aggregate fair market value among the
assets of the Partnership in such manner as it
determines in its sole and absolute discretion to
arrive at a fair market value for individual
properties.
E. The provisions of the Agreement (including this
Exhibit B and the other Exhibits to the Agreement) relating to the maintenance
of Capital Accounts are intended to comply with 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, debits or credits relating to
liabilities which are
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76
secured by contributed or distributed property or which are assumed by the
Partnership, the General Partner, or the Limited Partners) are computed in order
to comply with such Regulations, the General Partner may make such modification
without regard to Article XIV of the Agreement, provided that it is not likely
to have a material effect on the amounts distributable to any Person pursuant to
Article XIII of the Agreement upon the dissolution of the Partnership. The
General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership's balance
sheet, as computed for book purposes, in accordance with Regulations Section
1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b).
2. No Interest
No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
3. No Withdrawal
No Partner shall be entitled to withdraw any part of its
Capital Contribution or Capital Account or to receive any distribution from the
Partnership, except as provided in Articles IV, V, VII and XIII of the
Agreement.
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EXHIBIT C
SPECIAL ALLOCATION RULES
1. Special Allocation Rules.
Notwithstanding any other provision of the Agreement or this
Exhibit C, the following special allocations shall be made in the following
order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this Section 1.A only, each
Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of this Agreement or any other provisions of this
Exhibit C (except Section 1.A hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to
such Partner's share of the net decrease in Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General
Partner and Limited Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(i)(4). This
Section 1.B is intended to comply with the minimum gain chargeback requirement
in such Section of the Regulations and shall be interpreted consistently
therewith. Solely for purposes of this Section 1.B, each Partner's Adjusted
Capital Account Deficit shall be determined prior to any other allocations
pursuant to Section 6.1 of the Agreement or this Exhibit with respect to such
Partnership Year, other than allocations pursuant to Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.A and 1.B hereof with respect to such Partnership Year, such
Partner has an Adjusted Capital Account Deficit, items of Partnership income and
gain (consisting of a pro rata portion of each item of Partnership income,
including gross income and gain for the Partnership Year) shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, its Adjusted Capital Account Deficit
created by such adjustments, allocations or distributions as quickly as
possible. This Section 1.C is intended to constitute a "qualified income offset"
under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
▇. ▇▇▇▇▇ Income Allocation. In the event that any Partner has
an Adjusted Capital Account Deficit at the end of any Partnership Year (after
taking into account allocations to be made under the preceding paragraphs hereof
with respect to such Partnership Year), each such Partner shall be specially
allocated items of
C-1
78
Partnership income and gain (consisting of a pro rata portion of each item of
Partnership income, including gross income and gain for the Partnership Year) in
an amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit.
E. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that the Partnership's Nonrecourse Deductions must be allocated
in a different ratio to satisfy the safe harbor requirements of the Regulations
promulgated under Section 704(b) of the Code, the General Partner is authorized,
upon notice to the Limited Partners, to revise the prescribed ratio for such
Partnership Year to the numerically closest ratio which would satisfy such
requirements.
F. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership 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 Sections 1.704-2(b)(4) and 1.704-2(i).
G. Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-l(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.
B. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss, and deduction shall be allocated for federal income tax purposes
among the Partners as follows:
(1) (a) In the case of a Contributed Property,
such items attributable thereto shall be
allocated among the Partners consistent with
the principles of Section 704(c) of the Code
to take into account the variation between
the 704(c) Value of such property and its
adjusted basis at the time of contribution
(taking into account Section 2.C of this
Exhibit C); and
(b) any item of Residual Gain or Residual Loss
attributable to a Contributed Property shall
be allocated among the Partners in the same
manner as its correlative item of "book"
gain or loss is allocated pursuant to
Section 6.1 of the Agreement and Section 1
of this Exhibit C.
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79
(2) (a) In the case of an Adjusted Property, such
items shall
(i) first, be allocated among the Partners in a
manner consistent with the principles of Section
704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to
such property and the allocations thereof pursuant to
Exhibit B;
(ii) second, in the event such property was
originally a Contributed Property, be allocated among
the Partners in a manner consistent with Section
2.B(1) of this Exhibit C; and
(b) any item of Residual Gain or Residual Loss
attributable to an Adjusted Property shall
be allocated among the Partners in the same
manner its correlative item of "book" gain
or loss is allocated pursuant to Section 6.1
of the Agreement and Section 1 of this
Exhibit C.
C. To the extent Regulations promulgated pursuant to
Section 704(c) of the Code permit a Partnership to utilize alternative methods
to eliminate the disparities between the Carrying Value of property and its
adjusted basis, the General Partner shall, subject to the following, have the
authority to elect the method to be used by the Partnership and such election
shall be binding on all Partners. With respect to the Contributed Properties
transferred to the Partnership in connection with the Consolidation, the
Partnership shall elect to use the "traditional method" set forth in Treasury
Regulation Section 1.704-3(b).
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EXHIBIT D
NOTICE OF REDEMPTION
The undersigned hereby irrevocably (i) elects to redeem
_________ Partnership Units in Vornado Realty L.P. in accordance with the terms
of the First Amended and Restated Agreement of Limited Partnership of Vornado
Realty L.P., as amended (the "Partnership Agreement"), and the Redemption Right
referred to therein, (ii) surrenders such Partnership Units and all right, title
and interest therein and (iii) directs that promptly after the Specified
Redemption Date the Cash Amount or Shares Amount (as determined by the General
Partner) deliverable upon exercise of the Redemption Right be delivered to the
address specified below, and if Shares are to be delivered, such Shares be
registered or placed in the name(s) and at the address(es) specified below. The
undersigned hereby represents, warrants, and certifies that the undersigned (a)
has marketable and unencumbered title to such Partnership Units, free and clear
of the rights of or interests of any other person or entity, (b) has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consult or approve such redemption and
surrender. Capitalized terms used herein have the meanings assigned to them in
the Partnership Agreement.
Dated:____________ Name of Limited Partner:___________________________________
_________________________________
(Signature of Limited Partner)
_________________________________
(Street Address)
_________________________________
(City) (State) (Zip Code)
Signature Guaranteed by:___________________________
IF SHARES ARE TO BE ISSUED, ISSUE TO:
Name:
Please insert social security or identifying number:
D-1
81
EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
UNDERLYING PROPERTY 704(c) VALUE AGREED VALUE
------------------- ------------ ------------
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
RESTRICTED PARTNERS
FW/Mendik, L.L.C.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Any ▇▇▇▇▇▇ Owner
Mendik Realty Co., Inc.
The Mendik Partnership, L.P.
[2750 Associates]
Mil Equities
Mendik 1740 Corp.
Mendik RELP Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Company
[Mendik 570 Corp.]
[any other Mendik affiliates (other than certain employees) who take Partnership
Units as a result of the Consolidation]
F-1