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EXHIBIT 4.1
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
VORNADO REALTY L.P.
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Dated as of: April 15, 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
Act...............................................................................................................1
Additional Limited Partner........................................................................................1
Adjusted Capital Account..........................................................................................2
Adjusted Capital Account Deficit..................................................................................2
Adjusted Property.................................................................................................2
Adjustment Date...................................................................................................2
Affiliate.........................................................................................................2
Affiliated Transferee.............................................................................................2
Agreed Value......................................................................................................2
Agreement.........................................................................................................2
Assignee..........................................................................................................2
Bankruptcy........................................................................................................3
Book-Tax Disparities..............................................................................................3
Business Day......................................................................................................3
Capital Account...................................................................................................3
Capital Contribution..............................................................................................3
Carrying Value....................................................................................................3
Cash Amount.......................................................................................................3
Certificate.......................................................................................................3
Charter Documents.................................................................................................4
Class A Unit......................................................................................................4
Class B Unit......................................................................................................4
Class C Accumulated Amount........................................................................................4
Class C Preferential Distribution.................................................................................4
Class C Unit......................................................................................................4
Class D/E Accumulated Amount......................................................................................4
Class D/E Preferential Distribution...............................................................................4
Class D Unit......................................................................................................4
Class E Unit......................................................................................................4
Code..............................................................................................................4
Common Partnership Unit...........................................................................................4
Consent...........................................................................................................4
Consent of Certain Limited Partners...............................................................................4
Consent of the Outside Limited Partners...........................................................................5
Consolidation.....................................................................................................5
Consolidation Transaction.........................................................................................5
Contributed Property..............................................................................................5
Conversion Factor.................................................................................................5
Convertible Funding Debt..........................................................................................6
Debt..............................................................................................................6
Declaration of Trust..............................................................................................6
Deemed Partnership Interest Value.................................................................................6
Deemed Value of the Partnership Interest..........................................................................6
Depreciation......................................................................................................6
▇▇▇ ▇.▇. ▇▇▇▇▇ Associates.........................................................................................7
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866 U.N. Plaza Property...........................................................................................7
866 U.N. Plaza Units..............................................................................................7
Effective Date....................................................................................................7
Eleven Penn Partnerships..........................................................................................7
Eleven Penn Plaza Property........................................................................................7
Eleven Penn Plaza Units...........................................................................................7
Equity Merger.....................................................................................................7
ERISA.............................................................................................................7
Exchange Act......................................................................................................7
Exchanged Property................................................................................................7
Funding Debt......................................................................................................7
Funds From Operations.............................................................................................7
FW/Mendik LLC.....................................................................................................7
General Partner...................................................................................................7
General Partner Entity............................................................................................7
General Partner Payment...........................................................................................8
General Partnership Interest......................................................................................8
Immediate Family..................................................................................................8
Incapacity........................................................................................................8
Incapacitated.....................................................................................................8
Indemnitee........................................................................................................8
IRS...............................................................................................................8
Limited Partner...................................................................................................8
Limited Partnership Interest......................................................................................8
Liquidating Event.................................................................................................8
Liquidating Transaction...........................................................................................8
Liquidator........................................................................................................9
Majority in Interest..............................................................................................9
Mendik Owner......................................................................................................9
Net Income........................................................................................................9
Net Loss..........................................................................................................9
New Securities....................................................................................................9
Non-Class D/E Units...............................................................................................9
Nonrecourse Built-in Gain.........................................................................................9
Nonrecourse Deductions............................................................................................9
Nonrecourse Liability.............................................................................................9
Notice of Redemption..............................................................................................9
Partner...........................................................................................................9
Partner Minimum Gain.............................................................................................10
Partner Nonrecourse Debt.........................................................................................10
Partner Nonrecourse Deductions...................................................................................10
Partnership......................................................................................................10
Partnership Interest.............................................................................................10
Partnership Minimum Gain.........................................................................................10
Partnership Record Date..........................................................................................10
Partnership Unit.................................................................................................10
Partnership Year.................................................................................................10
Percentage Interest..............................................................................................10
Person...........................................................................................................11
Predecessor Entity...............................................................................................11
Preference Units.................................................................................................11
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Publicly Traded..................................................................................................11
Qualified REIT Subsidiary........................................................................................11
Recapture Income.................................................................................................11
Redeeming Partner................................................................................................11
Redemption Amount................................................................................................11
Redemption Right.................................................................................................11
Regulations......................................................................................................11
REIT.............................................................................................................11
REIT Expenses....................................................................................................11
REIT Requirements................................................................................................12
Replacement Property.............................................................................................12
Residual Gain....................................................................................................12
Residual Loss....................................................................................................12
Restricted Partner...............................................................................................12
Safe Harbors.....................................................................................................12
Securities Act...................................................................................................12
704(c) Value.....................................................................................................12
Share............................................................................................................12
Shares Amount....................................................................................................12
Specified Redemption Date........................................................................................13
Stock Option Plan................................................................................................13
Subsidiary.......................................................................................................13
Substituted Limited Partner......................................................................................13
Successor Entity.................................................................................................13
Successor Partnership............................................................................................13
Tenant...........................................................................................................13
Terminating Capital Transaction..................................................................................13
Termination Transaction..........................................................................................13
Title 8..........................................................................................................13
Transferred Property.............................................................................................13
Two Penn Plaza Associates........................................................................................13
Two Penn Plaza Property..........................................................................................13
Two Penn Plaza Units.............................................................................................13
Unrealized Gain..................................................................................................13
Unrealized Loss..................................................................................................14
Valuation Date...................................................................................................14
Value............................................................................................................14
Vornado Sub......................................................................................................14
ARTICLE II
ORGANIZATIONAL MATTERS
Section 2.1 Organization...................................................................................14
Section 2.2 Name...........................................................................................15
Section 2.3 Registered Office and Agent; Principal Office..................................................15
Section 2.4 Term...........................................................................................15
ARTICLE III
PURPOSE
Section 3.1 Purpose and Business...........................................................................15
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Section 3.2 Powers.........................................................................................16
Section 3.3 Partnership Only for Purposes Specified........................................................16
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ISSUANCES
OF PARTNERSHIP INTERESTS
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
Section 5.1 Requirement and Characterization of Distributions..............................................20
Section 5.2 Amounts Withheld...............................................................................23
Section 5.3 Distributions Upon Liquidation.................................................................23
Section 5.4 Revisions to Reflect Issuance of Additional Partnership Interests..............................23
ARTICLE VI
ALLOCATIONS
Section 6.1 Allocations For Capital Account Purposes.......................................................23
Section 6.2 Revisions to Allocations to Reflect Issuance of Additional Partnership Interests...............25
ARTICLE VII
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management.....................................................................................26
Section 7.2 Certificate of Limited Partnership.............................................................29
Section 7.3 Title to Partnership Assets....................................................................29
Section 7.4 Reimbursement of the General Partner...........................................................30
Section 7.5 Outside Activities of the General Partner......................................................31
Section 7.6 Transactions with Affiliates...................................................................33
Section 7.7 Indemnification................................................................................33
Section 7.8 Liability of the General Partner...............................................................35
Section 7.9 Other Matters Concerning the General Partner...................................................34
Section 7.10 Reliance by Third Parties......................................................................36
Section 7.11 Restrictions on General Partner's Authority....................................................36
Section 7.12 Loans by Third Parties.........................................................................44
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability........................................................................44
Section 8.2 Management of Business.........................................................................44
Section 8.3 Outside Activities of Limited Partners.........................................................45
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Section 8.4 Return of Capital..............................................................................45
Section 8.5 Rights of Limited Partners Relating to the Partnership.........................................45
Section 8.6 Redemption Right...............................................................................46
Section 8.7 Right of Offset................................................................................49
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting.........................................................................50
Section 9.2 Fiscal Year....................................................................................50
Section 9.3 Reports........................................................................................50
ARTICLE X
TAX MATTERS
Section 10.1 Preparation of Tax Returns.....................................................................51
Section 10.2 Tax Elections..................................................................................51
Section 10.3 Tax Matters Partner............................................................................51
Section 10.4 Organizational Expenses........................................................................52
Section 10.5 Withholding....................................................................................52
ARTICLE XI
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer.......................................................................................53
Section 11.2 Transfers of Partnership Interests of General Partner..........................................53
Section 11.3 Limited Partners' Rights to Transfer...........................................................54
Section 11.4 Substituted Limited Partners...................................................................55
Section 11.5 Assignees......................................................................................56
Section 11.6 General Provisions.............................................................................56
Section 11.7 Payment of Incremental Tax.....................................................................57
ARTICLE XII
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner.........................................................58
Section 12.2 Admission of Additional Limited Partners.......................................................58
Section 12.3 Amendment of Agreement and Certificate of Limited Partnership..................................58
ARTICLE XIII
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution....................................................................................59
Section 13.2 Winding Up.....................................................................................59
Section 13.3 Compliance with Timing Requirements of Regulations.............................................60
Section 13.4 Deemed Distribution and Recontribution.........................................................61
Section 13.5 Rights of Limited Partners.....................................................................61
Section 13.6 Notice of Dissolution..........................................................................61
Section 13.7 Cancellation of Certificate of Limited Partnership............................................61
Section 13.8 Reasonable Time for Winding Up.................................................................61
Section 13.9 Waiver of Partition............................................................................61
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Section 13.10 Liability of Liquidator........................................................................62
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments.....................................................................................62
Section 14.2 Meetings of the Partners.......................................................................63
ARTICLE XV
GENERAL PROVISIONS
Section 15.1 Addresses and Notice...........................................................................64
Section 15.2 Titles and Captions............................................................................64
Section 15.3 Pronouns and Plurals...........................................................................64
Section 15.4 Further Action.................................................................................64
Section 15.5 Binding Effect.................................................................................64
Section 15.7 Waiver.........................................................................................65
Section 15.8 Counterparts...................................................................................65
Section 15.9 Applicable Law.................................................................................65
Section 15.10 Invalidity of Provisions.......................................................................65
Section 15.11 Power of Attorney..............................................................................65
Section 15.12 Entire Agreement...............................................................................66
Section 15.13 No Rights as ▇▇▇▇▇▇▇▇▇▇▇▇......................................................................▇▇
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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
EXHIBIT G
DESIGNATION OF THE PREFERENCES, CONVERSION
AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS,
LIMITATIONS AS TO DISTRIBUTIONS, QUALIFICATIONS AND TERMS
AND CONDITIONS OF REDEMPTION
OF THE
SERIES A PREFERRED UNITS
EXHIBIT H
EXCLUDED UNITS
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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 April 15, 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;
WHEREAS, the Partnership proposes to acquire certain property and, in
connection therewith, to admit Vornado Realty Trust as an Additional Limited
Partner in the Partnership and immediately thereafter to convert the General
Partnership Interest held by The Mendik Company, Inc. to a Limited Partnership
Interest in the Partnership; and
WHEREAS, 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, directly or indirectly 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, directly or indirectly 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 or any Affiliated
Transferee of such Persons.
"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.
"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.
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"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.
"Common Partnership Unit" means any Class A, Class B, Class C, Class D
and Class E Unit and any other Partnership Unit that is not a Preference Unit.
"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 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
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(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 12, 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 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
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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 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.
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"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 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
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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.
"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.
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"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).
"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.
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"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.
"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.
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"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
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.
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20
"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.
"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.
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"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.
"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
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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
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.
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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 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.
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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
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 and concurrently with
the execution of this Agreement: (i) the General Partner and certain other
Persons are making additional Capital Contributions to the Partnership in
connection with the Consolidation; (ii) the General Partner is being admitted to
the Partnership as a general partner; and immediately thereafter the General
Partnership Interest held by The Mendik Company, Inc. is being converted to 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 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
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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 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 five classes of
Common Partnership Units entitled "Class A Units", "Class B Units", "Class C
Units", "Class D Units" and "Class E Units" and one class of Preference Units
entitled "Series A Preferred 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 will receive Class A Units and Series A
Preferred Units in respect of 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.
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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 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)
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(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
Mendik/FW, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. ▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇▇▇▇▇ or any
Mendik Owner with respect to either of ▇▇. ▇▇▇▇▇▇ or ▇▇. ▇▇▇▇▇▇▇▇▇ 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 (any such senior Partnership
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 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.
F. Issuance of Series A Preferred Units. In consideration of the
contribution to the Partnership on the Effective Date of the entire net proceeds
received by the General Partner from the issuance of the Series A Preferred
Shares, the General Partner shall be deemed to have made a Capital Contribution
to the Partnership in the amount of the gross proceeds of such issuance, which
is $287,500,000, and the Partnership shall be deemed simultaneously to have
distributed to the General Partner, as REIT Expenses, the amount of the
underwriters' discount and other costs incurred by the General Partner in
connection with such issuance. On the Effective Date, in consideration of the
contribution to the Partnership made by the General Partner pursuant to this
Section 4.2.F, the Partnership will issue to the General Partner, in respect of
its Limited Partnership Interest and in addition to the Class A Units issued to
the General Partner pursuant to this Section 4.2, 5,750,000 of a series of
Preference Units designated as the "Series A Preferred Units" (as defined in
Exhibit G hereto). The terms of the Series A Preferred Units are set forth in
Exhibit G attached hereto.
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
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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 Series A Preferred Units and any
other Preference Units in an amount equal to preferential distributions
accumulated and unpaid on such Preference Units in accordance with
their respective terms;
(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
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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 (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 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.
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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). Notwithstanding anything to the contrary contained herein, in no event
shall any partner receive a distribution with respect to any Common Partnership
Unit with respect to any quarter until such time as the Partnership has
distributed to the holders of the Preference Units all distributions payable
with respect to such Preference Units through the last day of such quarter, in
accordance with the instruments designating such Preference Units.
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.
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
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Income previously allocated to the General Partner pursuant to this clause (i)
of Section 6.1.A,; (ii) second, to holders of Preference 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 (x) of Section 6.1.B and
(y) all distributions made pursuant to clause (i) of Section 5.1.B (provided
that the allocation provided for in this clause (ii) shall not apply to the
extent that distributions made pursuant to clause (i) of Section 5.1.B are
treated as or determined to be guaranteed payments under Section 707(c) of the
Code); (iii) third, to holders of Class D Units and Class E 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 (ix) of Section 6.1.B
and (y) all distributions made pursuant to clause (ii) of Section 5.1.B; (iv)
fourth, to holders of Class D Units and Class E 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 (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; (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 (vii) of Section 6.1.B and
(y) all distributions made pursuant to clause (iv) of Section 5.1.B; (vi) sixth,
to holders of Class C Units until their aggregate allocations of Net Income
under this clause (vi) 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, D or E Units
pursuant to clause (vi) of Section 5.1.B; (vii) seventh, to all holders of Units
(other than Preference Units)until the aggregate allocations of Net Income under
this clause (vii) 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 (iv)
or (vi) of this Section 6.1.A as a result of distributions pursuant to clauses
(vi) and (vii) of Section 5.1.B; (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 (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); (ix) ninth,
to holders of Class A Units until their aggregate allocations of Net Income
under this clause (ix) 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; (x) tenth, to all holders of Units (other than
Preference Units)pro rata in accordance with their Percentage Interests until
the aggregate allocations of Net Income under this clause (x) 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 (xi)
eleventh, to all holders of Units (other than Preference 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 (other than Preference 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 (xi) of Section 6.1.A; (ii)
second, to all holders of Units (other than Preference 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 (x) 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 (ix) 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 (viii) of
Section 6.1.A.; (v) fifth, to all holders of Units (other than Preference Units)
until the aggregate allocation of Net Losses pursuant to this clause (v) equal
the aggregate amount of Net Income allocated pursuant to clause (vii) 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 (vi) 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 (v)
of Section 6.1.A; (viii) eighth, to holders of Class D Units and Class E Units
until the aggregate allocations of Net
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Losses under this clause (viii) equal the aggregate amount of Net Income
allocated pursuant to clause (iv) 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 (iii) of Section 6.1.A; (x) tenth, to holders of the
Preference Units until their aggregate allocations of Net Losses pursuant to
this clause (x) equal the aggregate amount of allocations of Net Income pursuant
to clause (ii) of Section 6.1.A (provided that the allocation provided for in
this clause (x) shall not apply to the extent that distributions made pursuant
to clause (i) of Section 5.1.B are treated as or determined to be guaranteed
payments for purposes of Section 707(c) of the Code); and (xi) thereafter, to
holders of all Units (other than Preference 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;
(5) the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or
improvements owned by the Partnership or any
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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;
(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
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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 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.
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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.
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);
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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.
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
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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, (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 General Partner 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, 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
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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.
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.
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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 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.
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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 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.
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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 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
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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.
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 (including, without limitation, any
interest of the Partnership in Two Penn Plaza REIT, Inc., and
any interest of Two Penn Plaza REIT, Inc., in Vornado Two Penn
Plaza L.L.C., whether, in either case, by liquidation, merger
or otherwise) 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 Partnership Units, if
any, held by (I) the General Partner or the General Partner
Entity or any Subsidiary of either the General Partner or the
General Partner Entity and (II) the estate of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ following his death) (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 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-
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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
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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 Partnership Units, if any, held by (I) General
Partner or the General Partner Entity or any Subsidiary of
either the General Partner or the General Partner Entity and
(II) the estate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ following his death)
(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 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)
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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
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
Partnership Units, if any, held by (I) the General Partner or
the General Partner Entity or any Subsidiary of either the
General Partner or the General Partner Entity and (II) the
estate of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ following his death) (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
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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 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
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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 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
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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 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
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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:
(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
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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, 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
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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
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 (subject to the terms of
the parenthetical and the proviso in Section 11.3.A(y))) 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 shall be
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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" 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
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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 A 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).
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
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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. 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
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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.
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.
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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;
(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
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(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 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.
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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 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
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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 or, in the case of ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇ or ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ only, such earlier date, if any, on which such
individual's employment with the Partnership shall be terminated without Cause,
due to a Disability or for Good Reason (as such terms are defined in the case of
▇▇. ▇▇▇▇▇▇ in Exhibit B to the Noncompetition Agreement dated as of April 15,
1997 by and among Vornado Realty Trust, The Mendik Company, L.P. and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, and in the case of ▇▇. ▇▇▇▇▇▇▇▇▇ in Section 4(b), Section 4(c), and
Section 4(d) of the Employment Agreement dated as of April 15, 1997 by and among
Vornado Realty Trust, The Mendik Company, L.P. and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇)) 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; provided,
however, that the Partnership Units identified on Exhibit H hereto (which
Partnership Units are beneficially owned, directly or indirectly, through a
Restricted Partner by the Persons named opposite such Partnership Units on
Exhibit H) shall not be deemed to be held by a Restricted Partner for purposes
of Section 8.6.A and this Section 11.3.A), 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 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.
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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.
F. Certain Pledged Interests. Concurrently with the execution and
delivery of this Agreement, (i) to secure its obligations under the
Indemnification Agreement, dated as of April 15, 1997, among the Partnership,
FW/Mendik REIT, L.L.C. and others, FW/Mendik, L.L.C., a Limited Partner, is
pledging a portion of its limited partnership interest pursuant to a Pledge and
Security Agreement, dated as of April 15, 1997, namely, 360,577 Class C Units
represented by "Certificate Evidencing Partnership Interests in Vornado Realty
L.P., Certificate No. R - C _______"; (ii) to secure its obligations under the
letter agreement relating to certain management agreements, dated as of April
15, 1997, between FW/Mendik REIT, L.L.C. and the Partnership, FW/Mendik REIT,
L.L.C. is pledging a portion of its limited partnership interest pursuant to a
Pledge and Security Agreement, dated as of the date hereof, namely, 40,386 Class
C Units represented by "Certificate Evidencing Partnership Interests in Vornado
Realty L.P., Certificate No. R - C _____"; and (iii) to secure its obligations
under the Agreement for Contribution of Interests in Eleven Penn Plaza Company,
dated as of March 11, 1997, by and among The Mendik Company, L.P., Nicardo
Corporation, N.V., Rcay, S.A. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Nicardo Corporation, N.V.
and Rcay, S.A. are pledging a portion of their limited partnership interests,
namely 147,576 Class E Units represented by "Certificate Evidencing
Partnership Interests in Vornado Realty L.P., Certificate Nos. R - E1 and R -
E3."
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
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hereof. An Assignee shall be entitled to all the rights of an assignee of a
limited partnership interest 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 (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
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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.
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, 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
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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.
ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments
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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 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
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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 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.
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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.
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.
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71
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
(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
-63-
72
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 and all Exhibits attached hereto (which Exhibits
are incorporated herein by reference as if fully set forth herein) 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:
(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
-64-
73
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.
-65-
74
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
VORNADO REALTY TRUST
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
LIMITED PARTNERS:
THE MENDIK COMPANY, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
FW/MENDIK REIT, L.L.C.
By: Mendik Holdings LLC, member
By: Mendik Holdings, Inc., managing member
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: President
EACH OF THE PERSONS LISTED ON EXHIBIT A HERETO
(not set forth above)
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
-----------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Attorney-in-Fact
-66-
75
EXHIBIT A
VORNADO REALTY L.P.
PARTNERS AND PARTNERSHIP INTERESTS*
(as of 4/24/97)
Class of Units
-----------------------------------------------------------------------------------------------
Series A Agreed Initial Percentage
Preferred Units A C D E Total Capital Account Interest
===============================================================================================
Vornado Realty Trust** 5,750,000 26,547,680 32,297,680 2,039,646,880 91.5821%
The Mendik Partnership, L.P. 1,274,891 1,274,891 84,142,806 3.7781%
F/W Mendik REIT, L.L.C. 400,963 400,963 26,463,558 1.1882%
Mendik RELP Corp. 423 423 27,918 0.0013%
2750 Associates 1,273 1,273 84,018 0.0038%
▇▇▇▇▇▇, Trust U/W/O ▇▇▇▇▇ 3,622 3,622 239,052 0.0107%
▇▇▇▇▇, ▇▇▇▇▇▇ 1,248 1,248 82,368 0.0037%
▇▇▇▇▇▇, ▇▇▇▇▇ 2,614 2,614 172,524 0.0077%
Ambassador Construction Company, Inc. 18,211 18,211 1,201,926 0.0540%
▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇, ▇▇▇▇▇ 855 855 56,430 0.0025%
▇▇▇, ▇▇▇▇▇▇▇ 77 77 5,082 0.0002%
Aubert, Trust FBO Lysa (▇▇▇▇▇▇▇▇) 2,267 2,267 149,622 0.0067%
▇▇▇▇, ▇▇▇▇▇▇ 922 922 60,852 0.0027%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 481 481 31,746 0.0014%
▇▇▇▇▇▇, Estate of ▇▇▇▇ 4,474 4,474 295,284 0.0133%
▇▇▇▇▇▇, ▇▇▇▇ Trust 931 931 61,446 0.0028%
▇▇▇▇▇▇, ▇▇▇▇▇ 466 466 30,756 0.0014%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 517 517 34,122 0.0015%
▇▇▇▇▇▇▇▇, ▇▇▇▇ 691 691 45,606 0.0020%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 421 421 27,786 0.0012%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 881 881 58,146 0.0026%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 5,604 5,604 369,864 0.0166%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 2,688 2,688 177,408 0.0080%
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ 77 77 5,082 0.0002%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 17,516 17,516 1,156,056 0.0519%
Carb, ▇▇▇▇▇ 1,052 1,052 69,432 0.0031%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 678 678 44,748 0.0020%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 3,709 3,709 244,794 0.0110%
CHO Enterprises 2,682 2,682 177,012 0.0079%
--------------------------
* Address of Partners are maintained in the Partnership's
records.
** Directly and through the following subsidiaries: Vornado
Finance Corp., Vornado Lending Corp., Vornado Investments
Corporation, 40 East 14 Realty Associates General Partnership,
Menands Holding Corporation, National Hydrant Corporation, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Holding Corporation and Two Guys from Harrison,
N.Y. Inc.
A -1
76
VORNADO REALTY L.P.
PARTNERS AND PARTNERSHIP INTERESTS
(as of 4/24/97)
Class of Units
-------------------------------------------------------------------------------------
Series A Agreed Initial Percentage
Preferred Units A C D E Total Capital Account Interest
=====================================================================================
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 39 39 2,574 0.0001%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ UGMA for ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,731 1,731 114,246 0.0051%
▇▇▇▇▇, ▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 427 427 28,182 0.0013%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ 481 481 31,746 0.0014%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 1,152 1,152 76,032 0.0034%
▇▇▇▇▇, ▇▇▇ 52 52 3,432 0.0002%
Field, ▇▇▇▇▇▇ ▇. 840 840 55,440 0.0025%
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & Co. 1,786 1,786 117,876 0.0053%
▇▇▇▇▇▇▇, ▇▇▇▇ ▇. 1,682 1,682 111,012 0.0050%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 2,885 2,885 190,410 0.0085%
Gershon, Estate of ▇▇▇▇▇▇ 5,247 5,247 346,302 0.0155%
▇▇▇▇, ▇▇▇▇▇▇ 135 135 8,910 0.0004%
▇▇▇▇, ▇▇▇▇▇▇ 3,522 3,522 232,452 0.0104%
▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ 374 374 24,684 0.0011%
Gold, Frederica 207 207 13,662 0.0006%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 466 466 30,756 0.0014%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 458 458 30,228 0.0014%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 5,377 5,377 354,882 0.0159%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 10,865 10,865 717,090 0.0322%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 5,376 5,376 354,816 0.0159%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 6,421 6,421 423,786 0.0190%
▇▇▇▇▇▇▇▇▇▇▇, C. Trust U/A/D 7/11/90 4,037 4,037 266,442 0.0120%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 60,361 60,361 3,983,826 0.1789%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 332 332 21,912 0.0010%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 1,915 1,915 126,390 0.0057%
▇▇▇▇▇, ▇▇▇▇▇▇▇ 8,547 8,547 564,102 0.0253%
▇▇▇▇▇, ▇▇▇▇▇▇ 3,362 3,362 221,892 0.0100%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 328 328 21,648 0.0010%
▇ ▇ ▇▇▇▇▇▇▇ trustee U/W of ▇ ▇ ▇▇▇▇▇▇▇ 8,097 8,097 534,402 0.0240%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 6,637 6,637 438,042 0.0197%
Harteveldt, ▇▇▇▇▇▇ ▇. 2,564 2,564 169,224 0.0076%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. 169 169 11,154 0.0005%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 169 169 11,154 0.0005%
A-2
77
VORNADO REALTY L.P.
PARTNERS AND PARTNERSHIP INTERESTS
(as of 4/24/97)
Class of Units
------------------------------------------------------------------------------------------
Series A Agreed Initial Percentage
Preferred Units A C D E Total Capital Account Interest
==========================================================================================
Hrusha, ▇▇▇▇ 922 922 60,852 0.0027%
▇▇▇▇▇▇, ▇▇▇▇ Trust F/B/O 2,305 2,305 152,130 0.0068%
▇▇▇▇▇▇, Estate of ▇▇▇▇▇ 5,667 5,667 374,022 0.0168%
INS Realty Associates 134,758 134,758 8,894,028 0.3994%
▇▇▇▇▇▇▇▇▇ Co. 13,735 13,735 906,510 0.0407%
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ 38 38 2,508 0.0001%
▇▇▇▇▇, ▇▇▇▇▇ 1,248 1,248 82,368 0.0037%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 169 169 11,154 0.0005%
▇▇▇▇▇, ▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
Knatten Inc. 59,024 59,024 3,895,584 0.1749%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 5,121 5,121 337,986 0.0152%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 288 288 19,008 0.0009%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 39 39 2,574 0.0001%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ UGMA for ▇▇▇▇ ▇▇▇▇▇▇▇ 1,058 1,058 69,828 0.0031%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ UGMA for ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 1,058 1,058 69,828 0.0031%
▇▇▇▇▇, ▇▇▇▇▇▇ 5,604 5,604 369,864 0.0166%
▇▇▇▇▇, ▇▇▇▇▇ 374 374 24,684 0.0011%
▇▇▇▇▇▇, ▇▇▇▇ 326 326 21,516 0.0010%
▇▇▇▇, ▇▇▇▇▇ ▇. 68,712 68,712 4,534,992 0.2036%
▇▇▇▇, ▇▇▇ 451 451 29,766 0.0013%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 1,248 1,248 82,368 0.0037%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 2,330 2,330 153,780 0.0069%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 2,330 2,330 153,780 0.0069%
▇▇▇▇, ▇▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇, ▇▇▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 207 207 13,662 0.0006%
▇▇▇▇▇ Partners 4,274 4,274 282,084 0.0127%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 6,004 6,004 396,264 0.0178%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 766 766 50,556 0.0023%
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 832 832 54,912 0.0025%
▇▇▇▇▇▇, ▇▇▇▇▇ 1,122 1,122 74,052 0.0033%
Maayan Partners 4,808 4,808 317,328 0.0142%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 457 457 30,162 0.0014%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 38 38 2,508 0.0001%
A -3
78
VORNADO REALTY L.P.
PARTNERS AND PARTNERSHIP INTERESTS
(as of 4/24/97)
Class of Units
--------------------------------------------------------------------------------------------
Series A Agreed Initial Percentage
Preferred Units A C D E Total Capital Account Interest
============================================================================================
▇▇▇▇▇▇▇, ▇▇▇▇ 1,152 1,152 76,032 0.0034%
▇▇▇▇▇, ▇▇▇▇▇ 3,362 3,362 221,892 0.0100%
▇▇▇▇▇, ▇▇▇▇▇▇▇ 3,362 3,362 221,892 0.0100%
▇▇▇▇▇▇, ▇▇▇▇▇ 488 488 32,208 0.0014%
▇▇▇▇▇▇, L. & ▇▇▇▇▇▇, E. Trustees u/w/▇
▇ ▇▇▇▇▇▇▇▇▇▇▇ 5,128 5,128 338,448 0.0152%
Mil Equities 6,667 6,667 440,022 0.0198%
Nicardo Corporation 297,629 297,629 19,643,514 0.8820%
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ 77 77 5,082 0.0002%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇. 19,404 19,404 1,280,664 0.0575%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. 19,401 19,401 1,280,466 0.0575%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ 2,305 2,305 152,130 0.0068%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 169 169 11,154 0.0005%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 169 169 11,154 0.0005%
▇▇▇▇▇▇▇▇, Family Trust UWO ▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇▇▇▇▇, Estate of ▇▇▇▇ ▇. 1,682 1,682 111,012 0.0050%
Plum Partners L.P. 4,808 4,808 317,328 0.0142%
Prentice Revocable Trust, 12/12/75 1,261 1,261 83,226 0.0037%
RCAY S.A. 129,385 129,385 8,539,410 0.3834%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 2,700 2,700 178,200 0.0080%
▇▇▇▇▇▇▇▇, ▇▇▇▇ 2,444 2,444 161,304 0.0072%
▇▇▇▇▇▇▇, ▇. ▇▇▇▇▇▇▇ 19,713 19,713 1,301,058 0.0584%
▇▇▇▇▇, ▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇▇, ▇▇▇▇▇▇ 922 922 60,852 0.0027%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ 288 288 19,008 0.0009%
Rosenheim Revocable Living Trust of ▇▇▇▇ 562 562 37,092 0.0017%
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 1,872 1,872 123,552 0.0055%
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 230 230 15,180 0.0007%
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1,682 1,682 111,012 0.0050%
▇▇▇▇▇, ▇▇▇▇▇▇ 922 922 60,852 0.0027%
▇▇▇▇▇▇▇▇, ▇▇▇▇ 922 922 60,852 0.0027%
▇▇▇▇, ▇▇▇▇▇▇ 10,098 10,098 666,468 0.0299%
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇ ▇▇ 2,508 0.0001%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 456 456 30,096 0.0014%
A -4
79
VORNADO REALTY L.P.
PARTNERS AND PARTNERSHIP INTERESTS
(as of 4/24/97)
Class of Units
---------------------------------------------------------------------------------------------------
Series A Agreed Initial Percentage
Preferred Units A C D E Total Capital Account Interest
===================================================================================================
▇▇▇▇▇▇▇▇, Trust FBO ▇▇▇▇▇▇ 2,267 2,267 149,622 0.0067%
▇▇▇▇▇▇▇▇, Trust FBO ▇▇▇▇▇▇▇▇ 2,267 2,267 149,622 0.0067%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 634 634 41,844 0.0019%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. 1,682 1,682 111,012 0.0050%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 2,885 2,885 190,410 0.0085%
Shasha, ▇▇▇▇▇▇ ▇. & Hanina 3,742 3,742 246,972 0.0111%
▇▇▇▇▇▇, ▇▇▇▇▇▇ & Hanina Trustees 6,838 6,838 451,308 0.0203%
Shasha, ▇▇▇▇▇▇ ▇. 855 855 56,430 0.0025%
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 1,709 1,709 112,794 0.0051%
Sheridan Family Partners, L.P. 7,972 7,972 526,152 0.0236%
▇▇▇▇▇, ▇▇▇▇▇▇▇ 1,383 1,383 91,278 0.0041%
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇. 2,136 2,136 140,976 0.0063%
Sillbert, ▇▇▇▇▇▇ ▇. 8,097 8,097 534,402 0.0240%
▇▇▇▇▇▇, ▇▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇, ▇▇▇▇▇ 427 427 28,182 0.0013%
Slaner, Estate of ▇▇▇▇▇▇ ▇. 17,479 17,479 1,153,614 0.0518%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇ 562 562 37,092 0.0017%
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 562 562 37,092 0.0017%
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ 494 494 32,604 0.0015%
▇▇▇▇▇▇▇▇▇ Living Trust 1,682 1,682 111,012 0.0050%
▇▇▇▇▇, Trust U/W/O ▇▇▇▇▇▇▇ 1,682 1,682 111,012 0.0050%
▇▇▇▇, ▇▇▇▇▇ 666 666 43,956 0.0020%
▇▇▇▇, ▇▇▇▇▇ 427 427 28,182 0.0013%
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ 332 332 21,912 0.0010%
▇▇▇▇▇▇▇▇, ▇▇▇▇ 1,122 1,122 74,052 0.0033%
===================================================================================================
TOTAL 5,750,000 26,547,680 1,754,015 659,533 427,014 35,138,242 2,227,123,972 100.0000%
===================================================================================================
A -5
80
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.
(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-l(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-
l(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.
B -1
81
(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 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 l.704-l(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 l.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.
B -2
82
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-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-
l(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 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.
C-1
83
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.
(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).
C-2
84
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
85
EXHIBIT E
VALUE OF CONTRIBUTED PROPERTY
[OMITTED]
▇-▇
▇▇
▇▇▇▇▇▇▇ ▇
RESTRICTED PARTNERS
FW/Mendik REIT, L.L.C.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Any ▇▇▇▇▇▇ Owner
Mendik Realty Co., Inc.
The Mendik Partnership, ▇.▇.
▇▇▇▇▇▇ 1740 Corp.
Mendik RELP Corp.
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Company
Mendik 570 Corp.
F-1
87
EXHIBIT G
DESIGNATION OF THE PREFERENCES, CONVERSION
AND OTHER RIGHTS, VOTING POWERS, RESTRICTIONS,
LIMITATIONS AS TO DISTRIBUTIONS, QUALIFICATIONS AND TERMS
AND CONDITIONS OF REDEMPTION
OF THE
SERIES A PREFERRED UNITS
1. Definitions.
In addition to those terms defined in the Agreement, the
following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in the Agreement and this
Exhibit G:
"Board of Trustees" shall mean the Board of Trustees of the
General Partner or any committee authorized by such Board of Trustees to perform
any of its responsibilities with respect to the Series A Preferred Shares.
"Unit Business Day" shall mean any day other than a Saturday,
Sunday or a day on which state or federally chartered banking institutions in
New York, New York are not required to be open.
"Common Shares" shall mean the common shares of beneficial
interest of the General Partner, par value $.04 per share.
"Conversion Price" shall mean the conversion price per Common
Share for which the Series A Preferred Shares are convertible, as such
Conversion Price may be adjusted pursuant to the terms of the Series A Preferred
Shares and the Declaration of Trust. The initial conversion price shall be
$72.75 (equivalent to a conversion rate of 0.68728 Common Shares for each Series
A Preferred Share).
"Current Market Price" of publicly traded Common Shares or any
other class of shares of beneficial interest or other security of the General
Partner or any other issuer for any day shall mean the last reported sales
price, regular way, on such day, or, if no sale takes place on such day, the
average of the reported closing bid and asked prices on such day, regular way,
in either case as reported on the New York Stock Exchange ("NYSE") or, if such
security is not listed or admitted for trading on the NYSE, on the principal
national securities exchange on which such security is listed or admitted for
trading or, if not listed or admitted for trading on any national securities
exchange, on the NASDAQ National Market or, if such security is not quoted on
such NASDAQ National Market, the average of the closing bid and asked prices on
such day in the over-the-counter market as reported by NASDAQ or, if bid and
asked prices for such security on such day shall not have been reported through
NASDAQ, the average of the bid and asked prices on such day as furnished by any
NYSE member firm regularly making a market in such security selected for such
purpose by the Chief Executive Officer of the General Partner or the Board of
Trustees.
"Distribution Payment Date" shall mean the first calendar day
of January, April, July and October, in each year, commencing on July 1, 1997;
provided, however, that if any Distribution Payment Date falls on any day other
than a Unit Business Day, the dividend payment due on such Distribution Payment
Date shall be paid on the first Unit Business Day immediately following such
Distribution Payment Date.
"Distribution Periods" shall mean quarterly distribution
periods commencing on January 1, April 1, July 1 and October 1 of each year and
ending on and including the day preceding the first day of the next succeeding
Distribution Period (other than the initial Distribution Period, which shall
commence on April 9, 1997 and end on and include June 30, 1997).
"Dividend Payment Date" shall mean a dividend payment date
with respect to the Series A Preferred Shares.
"Dividend Periods" shall mean the quarterly dividend periods
with respect to the Series A Preferred Shares.
"Fair Market Value" shall mean the average of the daily
Current Market Prices per Common Share during the five (5) consecutive Trading
Days selected by the General Partner commencing not more than 20 Trading Days
before, and ending not later than, the earlier of the day in question and the
day before the "ex" date with respect to the issuance or distribution requiring
such computation. The term "'ex' date," when used with respect to any issuance
or distribution, means the first day on which the Common Shares trade regular
way, without the right to receive such issuance or distribution, on the exchange
or in the market, as the case may be, used to determine that day's Current
Market Price.
"Series A Preferred Shares" means the $3.25 Series A
Convertible Preferred Shares of Beneficial Interest (liquidation preference
$50.00 per share), no par value, issued by the General Partner.
"Series A Preferred Unit" means a Partnership Unit issued by
the Partnership to the General Partner in consideration of the contribution by
the General Partner to the Partnership of the entire net proceeds received by
the General Partner from the issuance of the Series A Preferred
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Shares. The Series A Partnership Units shall constitute a series of Preference
Units. The Series A Preferred Units shall have the preferences, conversion and
other rights, voting powers, restrictions, limitations as to distributions,
qualifications and terms and conditions of redemption as are set forth in this
Exhibit G. It is the intention of the General Partner, in establishing the
Series A Preferred Units, that each Series A Preferred Unit shall be
substantially the economic equivalent of a Series A Preferred Share.
"set apart for payment" shall be deemed to include, without
any action other than the following, the recording by the Partnership or the
General Partner on behalf of the Partnership in its accounting ledgers of any
accounting or bookkeeping entry which indicates, pursuant to a declaration of a
distribution by the General Partner, the allocation of funds to be so paid on
any series or class of Partnership Units; provided, however, that if any funds
for any class or series of Junior Units or any class or series of Partnership
Units ranking on a parity with the Series A Preferred Units as to the payment of
distributions are placed in a separate account of the Partnership or delivered
to a disbursing, paying or other similar agent, then "set apart for payment"
with respect to the Series A Preferred Units shall mean placing such funds in a
separate account or delivering such funds to a disbursing, paying or other
similar agent.
"Trading Day" shall mean any day on which the securities in
question are traded on the NYSE, or if such securities are not listed or
admitted for trading on the NYSE, on the principal national securities exchange
on which such securities are listed or admitted, or if not listed or admitted
for trading on any national securities exchange, on the NASDAQ National Market,
or if such securities are not quoted on such NASDAQ National Market, in the
applicable securities market in which the securities are traded.
2. Terms of the Series A Preferred Units.
A. Number. The maximum number of authorized Series A Preferred
Units shall be 5,750,000.
B. Distributions. (i) The General Partner, in its capacity as
the holder of the then outstanding Series A Preferred Units, shall be entitled
to receive, when, as and if declared by the General Partner, distributions
payable in cash at the rate per annum of $3.25 per Series A Preferred Unit (the
"Annual Distribution Rate"). Such distributions shall be cumulative from the
Effective Date and shall be payable quarterly, when, as and if authorized and
declared by the General Partner, in arrears on Distribution Payment Dates,
commencing on the first Distribution Payment Date after the Effective Date.
Distributions are cumulative from the most recent Distribution Payment Date to
which distributions have been paid. Accrued and unpaid distribution for any past
Distribution Periods may be declared and paid at any time, without reference to
any regular Distribution Payment Date.
(ii) The amount of dividends payable for each full
Distribution Period for the Series A Preferred Units shall be computed by
dividing the Annual Distribution Rate by four. The amount of distributions
payable for the initial Distribution Period, or any other period shorter or
longer than a full Distribution Period, on the Series A Preferred Units shall be
computed on the basis of twelve 30-day months and a 360-day year. The General
Partner, in its capacity as the holder of the then outstanding Series A
Preferred Units, shall not be entitled to any distributions, whether payable in
cash, property or securities, in excess of cumulative distributions, as herein
provided, on the Series A Preferred Units. No interest, or sum of money in lieu
of interest, shall be payable in respect of any distribution payment or payments
on the Series A Preferred Units that may be in arrears.
(iii) So long as any Series A Preferred Units are outstanding,
no distributions, except as described in the immediately following sentence,
shall be declared or paid or set apart for payment on any series or class or
classes of Parity Units for any period unless full cumulative distributions have
been or contemporaneously are declared and paid or declared and a sum sufficient
for the payment thereof set apart for such payment on the Series A Preferred
Units for all Distribution Periods terminating on or prior to the distribution
payment date on such class or series of Parity Units. When distributions are not
paid in full or a sum sufficient for such payment is not set apart, as
aforesaid, all distributions declared upon Series A Preferred Units and all
distributions declared upon any other series or class or classes of Parity Units
shall be declared ratably in proportion to the respective amounts of
distributions accumulated and unpaid on the Series A Preferred Units and such
Parity Units.
(iv) So long as any Series A Preferred Units are outstanding,
no distributions (other than distributions paid solely in Junior Units or
options, warrants or rights to subscribe for or purchase Junior Units) shall be
declared or paid or set apart for payment or other distribution declared or made
upon Junior Units, nor shall any Junior Units be redeemed, purchased or
otherwise acquired (other than a redemption, purchase or other acquisition of
Junior Units made in respect of a redemption, purchase or other acquisition of
Common Shares made for purposes of and in compliance with requirements of an
employee incentive or benefit plan of the General Partner or any subsidiary, or
as permitted under Article VI of the Declaration of Trust of the General
Partner), for any consideration (or any moneys to be paid to or made available
for a sinking fund for the redemption of any such Junior Units) by the General
Partner, directly or indirectly (except by conversion into or exchange for
Junior Units), unless in each case (a) the full cumulative distributions on all
outstanding Series A Preferred Units and any other Parity Units of the
Partnership shall have been paid or set apart for payment for all past
Distribution Periods with respect to the Series A Preferred Units and all past
distribution periods with respect to such Parity Units and (b) sufficient funds
shall have been paid or set apart for the payment of the distribution for the
current Distribution Period with respect to the Series A Preferred Units and any
Parity Units.
C. Liquidation Preference. (i) In the event of any
liquidation, dissolution or winding up of the Partnership or the General
Partner, whether voluntary or involuntary, before any payment or distribution of
the assets of the Partnership shall be made to or set apart for the holders of
Junior Units, the General Partner, in its capacity as the holder of the Series A
Preferred Units shall be entitled to receive Fifty Dollars ($50.00) per Series A
Preferred Unit (the "Liquidation Preference") plus an amount equal to all
distributions (whether or not earned or declared) accrued and unpaid thereon to
the date of final distribution to the General Partner, in its capacity as such
holder; but the General Partner, in its capacity as the holder of Series A
Preferred Units shall not be entitled to any further payment. If, upon any such
liquidation, dissolution or winding up of the Partnership or the General
Partner, the assets of the Partnership, or proceeds thereof, distributable to
the General Partner, in its capacity as the holder of Series A Preferred Units,
shall be insufficient to pay in full the preferential amount aforesaid and
liquidating payments on any other Parity Units, then such assets, or the
proceeds thereof, shall be distributed among the General Partner, in its
capacity as the holder of such Series A Preferred Units, and the holders of any
such other Parity Units ratably in accordance with the respective amounts that
would be payable on such Series A Preferred Units and any such other Parity
Units if all amounts payable thereon were paid in full. For the purposes of this
Section C, (i) a consolidation or merger of the Partnership or the General
Partner with one or more entities, (ii) a statutory share exchange by [the
Partnership or] the General Partner and (iii) a sale or transfer of all or
substantially all of the
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Partnership's or the General Partner's assets, shall not be deemed to be a
liquidation, dissolution or winding up, voluntary or involuntary, of the General
Partner.
(ii) Subject to the rights of the holders of Partnership Units
of any series or class or classes of shares ranking on a parity with or prior to
the Series A Preferred Units upon any liquidation, dissolution or winding up of
the General Partner or the Partnership, after payment shall have been made in
full to the General Partner, in its capacity as the holder of the Series A
Preferred Units, as provided in this Section, any series or class or classes of
Junior Units shall, subject to any respective terms and provisions applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the General Partner, in its capacity as the holder of the
Series A Preferred Units, shall not be entitled to share therein.
D. Redemption of the Series A Preferred Units. (i)
Except in connection with the redemption of the Series A Preferred Shares by the
General Partner as permitted by Article VI of the Declaration of Trust, the
Series A Preferred Units shall not be redeemable prior to April 1, 2001. On and
after April 1, 2001, the General Partner may, at its option, cause the
Partnership to redeem the Series A Preferred Units for Class A Units, in whole
or in part, as set forth herein, subject to the provisions described below.
(ii) The Series A Preferred Units may be redeemed, in whole or
in part, at the option of the General Partner, in its capacity as the holder of
the Series A Preferred Units, at any time, provided that the General Partner
shall redeem an equivalent number of Series A Preferred Shares. Such redemption
of Series A Preferred Units shall occur substantially concurrently with the
redemption by the General Partner of such Series A Preferred Shares (the
"Redemption Date").
(iii) Upon redemption of Series A Preferred Units by the
General Partner on the Redemption Date, each Series A Preferred Unit so redeemed
shall be converted into a number of Class A Units equal to the aggregate
Liquidation Preference of the Series A Preferred Units being redeemed divided by
the Conversion Price as of the opening of business on the Redemption Date.
Upon any redemption of Series A Preferred Units, the
Partnership shall pay any accrued and unpaid distributions in arrears for any
Distribution Period ending on or prior to the Redemption Date. If the Redemption
Date falls after a Dividend Payment Record Date and prior to the corresponding
Dividend Payment Date, then the General Partner, in its capacity as the holder
of Series A Preferred Units, shall be entitled to distributions payable on the
equivalent number of Series A Preferred Units as the number of the Series A
Preferred Shares with respect to which the General Partner shall be required,
pursuant to the terms of the Declaration of Trust, to pay to the holders of
Series A Preferred Shares at the close of business on such Dividend Payment
Record Date for the Series A Preferred Shares who, pursuant to such Declaration
of Trust, are entitled to the dividend payable on such Series A Preferred Shares
on the corresponding Dividend Payment Date notwithstanding the redemption of
such Series A Preferred Shares before such Dividend Payment Date. Except as
provided above, the Partnership shall make no payment or allowance for unpaid
distributions, whether or not in arrears, on Series A Preferred Units called for
redemption or on the Class A Units issued upon such redemption.
(iv) If full cumulative distributions on the Series A
Preferred Units and any other series or class or classes of Parity Units of the
Partnership have not been paid or declared and set apart for payment, except in
connection with a purchase, redemption or other acquisition of Series A
Preferred Shares or shares of beneficial interest ranking on a parity with such
Series A Preferred Shares as permitted under Article VI of the Declaration of
Trust, the Series A Preferred Units may not be redeemed in part and the
Partnership may not purchase, redeem or otherwise acquire Series A Preferred
Units or any Parity Units other than in exchange for Junior Units.
As promptly as practicable after the surrender of the
certificates for any such Series A Preferred Units so redeemed, such Series A
Preferred Units shall be exchanged for certificates of Class A Units and any
cash (without interest thereon) for which such Series A Preferred Units have
been redeemed. If fewer than all the Series A Preferred Units represented by any
certificate are redeemed, then new certificates representing the unredeemed
Series A Preferred Units shall be issued without cost to the holder thereof.
(vi) No fractional Partnership Unit shall be issued upon
redemption of a Series A Preferred Unit. Instead of any fractional interest in a
Class A Unit that would otherwise be deliverable upon the redemption of a Series
A Preferred Unit, the Partnership shall pay to the General Partner, in its
capacity as the holder of such Series A Preferred Units, an amount in cash
(computed to the nearest cent) based upon the Current Market Price of Common
Shares of the General Partner on the Trading Day immediately preceding the
Redemption Date.
(vii) The Partnership covenants that any Class A Unit issued
upon redemption of the Series A Preferred Units shall be validly issued, fully
paid and non-assessable.
E. Conversion.
The General Partner, in its capacity as the holder of Series A
Preferred Units, shall have the right to convert all or a portion of such Series
A Preferred Units into Class A Units, provided that an equivalent number of
Series A Preferred Shares are substantially concurrently therewith being
converted into Common Shares, as follows:
(i) Subject to and upon compliance with the provisions of this
Section E, the General Partner, in its capacity as the holder of Series A
Preferred Units shall have the right, at its option, at any time to convert such
shares into the number of fully paid and non-assessable Class A Units obtained
by dividing the aggregate Liquidation Preference of such Series A Preferred
Units by the Conversion Price (as in effect at the time and on the date provided
for in the last paragraph of paragraph (ii) of this Section E) by surrendering
such Series A Preferred Units to the Partnership to be converted, such surrender
to be made in the manner provided in paragraph (ii) of this Section E; provided,
however, that the right to convert Series A Preferred Units called for
redemption pursuant to Section D hereof shall terminate at the close of business
on the Redemption Date fixed for such redemption, unless the Partnership shall
default in making payment of the Class A Units and any cash payable upon such
redemption under Section D hereof.
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90
(ii) In order to exercise the conversion right, the General
Partner, in its capacity as the holder of each Series A Preferred Unit to be
converted shall surrender the certificate representing such Series A Preferred
Unit to the Partnership.
The General Partner, in its capacity as the holder of Series A
Preferred Units, shall be entitled to receive the distribution payable on such
Series A Preferred Units on a Distribution Payment Date notwithstanding the
conversion thereof following such Dividend Payment Record Date and prior to such
Dividend Payment Date. However, Series A Preferred Units surrendered for
conversion during the period between the close of business on any Dividend
Payment Record Date and the opening of business on the corresponding Dividend
Payment Date (except Series A Preferred Units converted after the issuance of a
notice of redemption of the Common Shares with respect to a Redemption Date
during such period or coinciding with such Dividend Payment Date, such Series A
Preferred Units being entitled to a distribution on the corresponding
Distribution Payment Date) must be accompanied by payment of an amount equal to
the distribution payable on such Series A Preferred Units on such Distribution
Payment Date. No such amount need be included upon surrender of Seris A
Preferred Units in respect of the equivalent number of Series A Preferred Shares
as to which a holder of Series A Preferred Shares on a Dividend Payment Record
Date who (or whose transferees) tenders any such Series A Preferred Shares to
the General Partner for conversion into Common Shares on such Dividend Payment
Date, but the distribution payable on such date on Series A Preferred Units will
be made with respect to such Series A Preferred Units. Except as provided above,
the Partnership shall make no payment or allowance for unpaid distributions,
whether or not in arrears, on converted Series A Preferred Units or for
distributions on the Class A Units issued upon such conversion.
As promptly as practicable after the surrender of certificates
for Series A Preferred Units as aforesaid, the General Partner shall receive a
certificate or certificates for the number of full Class A Units issuable upon
the conversion of such Series A Preferred Units in accordance with the
provisions of this Section E, and any fractional interest in respect of a Class
A Unit arising upon such conversion shall be settled as provided in paragraph
(iii) of this Section E.
Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which the certificates
for Series A Preferred Units shall have been surrendered (and if applicable,
payment of an amount equal to the distribution payable on such Series A
Preferred Units) and received by the Partnership as aforesaid, and the General
Partner shall be deemed to have become the holder or holders of record of the
Class A Units represented thereby at such time on such date, and such conversion
shall be at the Conversion Price in effect at such time and on such date unless
the stock transfer books of the Partnership shall be closed on that date, in
which event such person or persons shall be deemed to have become such holder or
holders of record at the close of business on the next succeeding day on which
such partnership transfer books are open, but such conversion shall be at the
Conversion Price in effect on the date on which such Series A Preferred Units
shall have been surrendered and received by the General Partner.
(iii) No fractional Partnership Unit shall be issued upon
conversion of the Series A Preferred Units. Instead of any fractional interest
in a Class A Unit that would otherwise be deliverable upon the conversion of a
Series A Preferred Unit, the Partnerships shall pay to the holder of such Series
A Preferred Unit an amount in cash based upon the Current Market Price of Common
Shares of the General Partner on the Trading Day immediately preceding the date
of conversion.
(iv) The Conversion Price shall be adjusted from time to time
at the same time and in a like manner as set forth in the Declaration of Trust.
F. Ranking. Any class or series of Partnership Units
shall be deemed to rank:
(a) prior to the Series A Preferred Units, as to the payment
of distributions and as to distribution of assets upon liquidation, dissolution
or winding up of the General Partner or the Partnership, if the holders of such
class or series of Preferred Units shall be entitled to the receipt of
distributions or of amounts distributable upon liquidation, dissolution or
winding up, as the case may be, in preference or priority to the holders of
Series A Preferred Units;
(b) on a parity with the Series A Preferred Units, as to the
payment of distributions and as to the distribution of assets upon liquidation,
dissolution or winding up of the General Partner or the Partnership, whether or
not the distribution rates, distribution payment dates or redemption or
liquidation prices per Partnership Unit be different from those of the Series A
Preferred Units, if the holders of such Partnership Units of such class or
series and the Series A Preferred Units shall be entitled to the receipt of
distributions and of amounts distributable upon liquidation, dissolution or
winding up in proportion to their respective amounts of accrued and unpaid
distributions per Partnership Unit or liquidation preferences, without
preference or priority one over the other ("Parity Units"); and
(c) junior to the Series A Preferred Units, as to the payment
of distributions or as to the distribution of assets upon liquidation,
dissolution or winding up of the General Partner or the Partnership, if such
class or series of Partnership Units shall be Common Partnership Units or if the
General Partner, in its capacity as the holder of Series A Preferred Units,
shall be entitled to receipt of distribution or of amounts distributable upon
liquidation, dissolution or winding up, as the case may be, in preference or
priority to the holders of Partnership Units of such class or series, and such
class or series of Partnership Units shall not in either case rank prior to the
Series A Preferred Units ("Junior Units").
G. Voting. Except as required by law, the General
Partner, in its capacity as the holder of the Series A Preferred Units, shall
not be entitled to vote at any meeting of the Partners or for any other purpose
or otherwise to participate in any action taken by the Partnership or the
Partners, or to receive notice of any meeting of the Partners.
So long as any Series A Preferred Units are outstanding, the General
Partner shall not authorize the creation of Partnership Units of any class or
series or any interest in the Partnership convertible into Partnership Units of
any class or series ranking prior to the Series A Preferred Units in the
distribution of assets on any liquidation, dissolution or winding up of the
General Partner or the Partnership or in the payment of distributions unless
such Partnership Units are issued to the General Partner and the distribution
and redemption (but not voting) rights of such Partnership Units are
substantially
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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
or are concurrently with such issuance contributed to the Partnership.
H. Restrictions on Ownership and Transfer. The Series A
Preferred Units shall be owned and held solely by the General Partner.
I. General. (I) The rights of the General Partner, in
its capacity as the holder of the Series A Preferred Units, are in addition to
and not in limitation on any other rights or authority of the General Partner,
in any other capacity, under the Agreement. In addition, nothing contained in
this Exhibit G shall be deemed to limit or otherwise restrict any rights or
authority of the General Partner under the Agreement, other than in its capacity
as the holder of the Series A Preferred Units.
(ii) Anything herein contained to the contrary
notwithstanding, the General Partner shall take all steps that it determines are
necessary or appropriate (including modifying the foregoing terms of the Series
A Preferred Units) to ensure that the Series A Preferred Units (including,
without limitation the redemption and conversion terms thereof) permit the
General Partner to satisfy its obligations (including, without limitation, its
obligations to make dividends payments on, and to issue Common Shares upon
redemption or conversion of, the Series A Preferred Shares) with respect to the
Series A Preferred Shares, it being the intention that the terms of the Series A
Preferred Units shall be substantially similar to the terms of the Series A
Preferred Shares.
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EXHIBIT H
EXCLUDED UNITS
[OMITTED]
H-1
