AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
▇▇▇▇▇▇/▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
THE LIMITED PARTNERSHIP INTERESTS IN ▇▇▇▇▇▇/DREVER OPERATING
PARTNERSHIP, L.P. ARE SUBJECT TO THE RESTRICTIONS ON TRANSFER AND
OTHER TERMS AND CONDITIONS SET FORTH IN ARTICLE 8 OF THIS AGREEMENT
AND MAY NOT BE OFFERED FOR SALE, PLEDGED, HYPOTHECATED, SOLD,
ASSIGNED OR TRANSFERRED AT ANY TIME EXCEPT IN COMPLIANCE WITH THE
TERMS AND CONDITIONS THEREOF.
IN ADDITION, THE INTERESTS HAVE NOT BEEN REGISTERED (i) UNDER ANY
STATE SECURITIES LAWS (THE "STATE ACTS"), OR (ii) UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "FEDERAL SECURITIES
ACT"), IN RELIANCE UPON EXEMPTIONS PROVIDED THEREIN, AND NEITHER
THE INTERESTS NOR ANY PART THEREOF MAY BE OFFERED FOR SALE,
PLEDGED, HYPOTHECATED, SOLD, ASSIGNED, OR TRANSFERRED AT ANY TIME
EXCEPT (1) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
ANY APPLICABLE STATE ACTS OR IN A TRANSACTION THAT IS EXEMPT FROM
REGISTRATION UNDER SUCH STATE ACTS OR THAT IS OTHERWISE IN
COMPLIANCE WITH SUCH STATE ACTS, AND (2) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE FEDERAL SECURITIES ACT OR IN A
TRANSACTION THAT IS EXEMPT FROM REGISTRATION UNDER THE FEDERAL
SECURITIES ACT OR THAT IS OTHERWISE IN COMPLIANCE WITH THE FEDERAL
SECURITIES ACT.
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
▇▇▇▇▇▇/▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS
[TO BE INSERTED LATER]
AMENDED AND RESTATED
LIMITED PARTNERSHIP AGREEMENT
OF
▇▇▇▇▇▇/DREVER OPERATING PARTNERSHIP, L.P.
This Amended and Restated Limited Partnership Agreement (this
"Agreement") of ▇▇▇▇▇▇/▇▇▇▇▇▇ OPERATING PARTNERSHIP, L.P., a
limited partnership formed under the Delaware Revised Uniform
Limited Partnership Act (the "Partnership"), is made and entered
into as of this 12th day of August, 1997, by and among (i) ▇▇▇▇▇▇
RESIDENTIAL PROPERTIES, INC., a Maryland corporation, as the
General Partner (as defined below) and (ii) WDN PROPERTIES, INC.,
a New York corporation ("WDN Properties") and a direct wholly owned
subsidiary of the General Partner, as the Limited Partner (as
defined below).
WITNESSETH:
WHEREAS, the General Partner and the Limited Partner formed
the Partnership with ▇▇▇▇▇▇ Residential Properties, Inc. as the
general partner and WDN Properties, Inc. as the limited partner
under the provisions of the Delaware Revised Uniform Limited
Partnership Act; and
WHEREAS, a certificate of limited partnership for the
Partnership was filed with the Office of the Secretary of State of
Delaware on February 6, 1997 and a certificate of amendment to such
certificate of limited partnership was filed on April 3, 1997; and
WHEREAS, the General Partner and the Limited Partner
previously entered into that certain Limited Partnership Agreement
of ▇▇▇▇▇▇/Drever Operating Partnership. L.P. dated as of May 21,
1997; and
WHEREAS, pursuant to the Exchange Documents and the
Contribution Agreement (each as defined below), certain persons
shall exchange on the Effective Date (as defined below) their
direct or indirect interests in the Drever Partnerships (as defined
below) for Partnership Interests (as defined below) in a manner
that is intended to be a tax-free, or partially tax-free,
contribution to capital of the Partnership under Section 721 of the
Code; and
WHEREAS, on the Effective Date, the Partnership shall enter
into the Agreement of General Partnership of ▇▇▇▇▇▇-WDOP Partners
in the form attached hereto as Exhibit B; and
WHEREAS, the General Partner and the Limited Partner wish to
amend and restate the Limited Partnership Agreement in its
entirety;
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 do agree as follows:
ARTICLE 1
DEFINED TERMS
1.1 Definitions. When used in this Agreement, the following
terms will have the meanings set forth below.
"Act" means the Delaware Revised Uniform Limited
Partnership Act, as amended from time to time.
"Additional Common Shares" has the meaning set forth in
Section 11.3(b) hereof.
"Additional Limited Partner" means a Person admitted to
the Partnership as a Limited Partner pursuant to Section 3.3 hereof
and who is shown as such on the books and records of the
Partnership.
"Additional Preferred Shares" has the meaning set forth
in Section 11.3(c) hereof.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Fiscal Year (i)
increased by any amounts that 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), (ii)
increased by such Partner's allocable share (as determined under
Section 752 of the Code) of any nonrecourse indebtedness of the
Partnership to the extent that such indebtedness could not be
repaid out of the Partnership's assets if all of the Partnership's
assets were sold at their respective Gross Asset Values as of the
end of the Fiscal Year and the proceeds from the sales were used to
pay the Partnership's liabilities, and (iii) 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 Fiscal Year.
"Affiliate" or "Affiliated" means, as to any Person, any
other Person that directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common
control with such specified Person. For the 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 "affiliated,"
"controlling" and "controlled" have the meanings correlative to the
foregoing. In the case of an individual, the term "Affiliate"
shall include (i) any lineal descendants of such individual and the
spouse of such individual or of such descendants, (ii) any trusts
controlled by, or established and maintained for the benefit of,
individuals included in (i) above, and (iii) the estate of any of
the foregoing. In the case of an estate, trust, or partnership,
the term "Affiliate" shall include any beneficiary or partner
thereof.
"Aggregate Common Units" means a numeric value equal to
the total outstanding Class B Common Units as of the Effective
Date. The amount of Aggregate Common Units shall be appropriately
reduced, from time to time, to reflect any reduction in the amount
of Class B Common Units that occurs as a result of (i) any
acquisition of a Class B Common Unit by the Company, WDN
Properties, or any of their Affiliates or (ii) any exchange of a
Class B Common Unit pursuant to Article 11 hereof.
"Aggregate Preferred Units" means a numeric value equal
to the total outstanding Class B Preferred Units as of the
Effective Date. The amount of Aggregate Preferred Units shall be
appropriately reduced, from time to time, to reflect any reduction
in the amount of Class B Preferred Units that occurs as a result of
(i) any acquisition of a Class B Preferred Unit by the Company, WDN
Properties, or any of their Affiliates, (ii) any redemption of a
Class B Preferred Unit pursuant to Section 8.8 hereof, or (iii) any
exchange of a Class B Preferred Unit pursuant to Article 11 hereof.
"Aggregate Preferred Value" means a numeric value equal
to the product of the Aggregate Preferred Units and $25.00.
"Agreement" has the meaning assigned to such term in the
first paragraph hereof.
"Applicable Portion of the Preferred Exchange
Consideration" has the meaning set forth in Section 11.10 hereof.
"Applicable Portion of the REIT Common Shares" has the
meaning set forth in Section 11.10 hereof.
"Approval" and "Approve" means approval in writing.
"Approval of the Special Committee" means the written or
verbal approval of at least three of the four members of the
Special Committee.
"Assignee" means a Person to whom one or more Partnership
Interests have been transferred in a manner permitted under this
Agreement, but who has not become a Substituted Partner.
"Available Cash" means the cash funds derived by the
Partnership from the operation of the Partnership's business and
from any other source whatsoever (including Capital Contributions
and loan proceeds) before any deduction for depreciation or
amortization and after deduction of:
(i) all operating expenses including property taxes;
(ii) all scheduled payments of principal, interest
and other charges due during any relevant period in respect of
any Partnership indebtedness;
(iii) all expenditures for capital improvements to the
Partnership assets or property;
(iv) all current liabilities (including, but not
limited to, trade payables and other accounts payable,
security deposits and property taxes payable); and
(v) a working capital reserve in such amounts as the
General Partner may deem reasonably necessary or advisable.
"Bankruptcy" means, with respect to any Partner, the
first to occur of (i) the entry of a decree or order for relief
against the Partner by a court of competent jurisdiction in any
involuntary case brought against the Partner under any bankruptcy,
insolvency or other similar law (collectively, "Debtor Relief
Laws") generally affecting the rights of creditors and relief of
debtors now or hereafter in effect; (ii) the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator or
other similar agent under applicable Debtor Relief Laws for the
Partner or for any substantial part of its assets or property;
(iii) the ordering of the winding up or liquidation of the
Partner's affairs; (iv) the filing of a petition in any such
involuntary bankruptcy case, which petition remains undismissed for
a period of 180 days or which is not dismissed or suspended
pursuant to Section 305 of the Federal Bankruptcy Code (or any
corresponding provision of any future United States bankruptcy
law); (v) the commencement by the Partner of a voluntary case under
any applicable Debtor Relief Law now or hereafter in effect; (vi)
the consent by the Partner to the entry of an order for relief in
an involuntary case under any such law or to the appointment of or
the taking of possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator or other similar agent under any
applicable Debtor Relief Laws for the Partner or for any
substantial part of its assets or property; (vii) the making by the
Partner of any general assignment for the benefit of its creditors;
or (viii) the failure by the Partner generally to pay its debts as
such debts become due.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York are authorized or
required by law to close.
"Capital Account" means, with respect to any Partner, the
capital account maintained for such Partner in accordance with the
rules of Section 1.704-1(b)(2)(iv) of the Regulations. Subject to
Section 1.704-1(b)(2)(iv) of the Regulations:
(i) To each Partner's Capital Account there shall be
credited such Partner's Capital Contribution (net of
liabilities that the Partnership is considered to assume or to
take subject to under Code Section 752) and such Partner's
distributive share of Profits and any items in the nature of
income or gain that are specially allocated pursuant to
Section 5.4 or Section 5.5 hereof.
(ii) To each Partner's Capital Account there shall be
debited the amount of cash and the Gross Asset Value of any
property distributed to such Partner pursuant to any provision
of this Agreement (net of liabilities that such Partner is
considered to assume or to take subject to under Code Section
752) and such Partner's distributive share of Losses and any
items in the nature of expenses or losses that are specially
allocated pursuant to Section 5.4 or Section 5.5 hereof.
(iii) In the event all or a portion of a Partnership
Interest is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account
of the transferor to the extent it relates to the transferred
Partnership Interest.
The provisions of this Agreement relating to the maintenance of
Capital Accounts are intended to comply with Section 1.704-1(b) of
the Regulations, and they shall be interpreted and applied in a
manner consistent with such Regulations.
"Capital Contribution" means, with respect to any
Partner, the total amount of cash or the Gross Asset Value of other
property contributed (or deemed to have been contributed) to the
Partnership with respect to the Partnership Interest held by such
Partner. Any reference to the Capital Contribution of a Partner
shall include the Capital Contribution made by a predecessor holder
of the Partnership Interest of such Partner and if the Company, WDN
Properties or any of their Affiliates acquires a Class B Common
Unit or a Class B Preferred Unit, whether pursuant to Article 11
hereof, by purchase, or otherwise, the Capital Contribution of the
Person who acquired such Class B Common Unit or Class B Preferred
Unit shall, upon and by virtue of such acquisition, include the
amount of the Capital Contribution attributable to the Class B
Common Unit or Class B Preferred Unit acquired.
"Carryover Amount" has the meaning set forth in Section
5.4(e) hereof.
"Certificate" means the Certificate of Limited
Partnership filed in the office of the Delaware Secretary of State
to form the Partnership, as amended from time to time in accordance
with the terms hereof and the Act.
"Class" means a class of Partnership Interests
distinguished by a specific alphabetical or other designation.
"Class A Limited Partner" means WDN Properties or any
other Person admitted pursuant to this Agreement as a Class A
Limited Partner either in connection with the issuance of a newly-created
Class A Limited Partner Interest or as a substitute with
respect to any transferred Class A Limited Partner Interest (or any
portion thereof), each for only so long as such Person remains as
a Class A Limited Partner in accordance with this Agreement and the
Act.
"Class A Limited Partner Interest" means a Partnership
Interest of a Class A Limited Partner.
"Class B Common Distribution" means, with respect to each
Partnership Common Record Date, the product of (x) the Aggregate
Common Units, (y) the Conversion Factor and (z) the REIT Common
Dividend which has a record date which is the same as the
Partnership Common Record Date; provided, however, that with
respect to the Fiscal Quarter that includes the Effective Date, the
numeric amount described in clause (z) immediately above shall be
multiplied by a fraction, the numerator of which is the number of
days from the day after the Effective Date to the end of such
Fiscal Quarter and the denominator of which is 90.
"Class B Common Limited Partner" means, as of the
Effective Date, each Person contributing a Drever Interest to the
Partnership in exchange for a Class B Common Unit pursuant to the
Transaction or any other Person admitted pursuant to this Agreement
as a Class B Common Limited Partner either in connection with the
issuance of a newly-created Class B Common Unit or as a substitute
with respect to any transferred Class B Common Unit, each for only
so long as such Person remains as a Class B Common Limited Partner
in accordance with this Agreement and the Act.
"Class B-TE Common Limited Partner" means, as of the
Effective Date, each Class B Common Limited Partner who is subject
to the unrelated business taxable income rules set forth under
Section 511 et seq. of the Code for only so long as such Person
remains as a Class B Common Limited Partner in accordance with this
Agreement and the Act.
"Class B Common Unit" means a Partnership Interest of a
Class B Common Limited Partner. The number of Class B Common Units
owned by each Class B Common Limited Partner on the Effective Date
shall be the number set forth opposite its name in the Ownership
Schedule under the column captioned "Common Units." The number of
Common Units held by any particular Class B Common Limited Partner
shall be appropriately reduced, from time to time, to reflect any
(i) acquisition of such Partner's Class B Common Units by the
Company, WDN Properties, or any of their Affiliates or (ii) any
exchange of such Class B Common Units pursuant to Article 11
hereof; provided, however, that if the Company, WDN Properties or
any of their Affiliates acquires a Class B Common Unit, whether
pursuant to Article 11 hereof, by purchase, or otherwise, such
Partnership Interest shall, upon and by virtue of such acquisition
and without any further action by the Partnership or any Partner,
automatically convert into a Class A Limited Partner Interest.
"Class B Group" means the Class B Common Limited Partners
other than the Class B-TE Common Limited Partners.
"Class B Group Tax Controversy Representative" means tax
counsel, a certified public accounting firm, or other
representative appointed by a Majority in Interest of the Class B
Group (determined on the basis of their Class B Common Limited
Partner Percentage Interests).
"Class B Limited Partner Interests" means the Class B
Common Units and the Class B Preferred Units.
"Class B Limited Partners" means the Class B Common
Limited Partners and the Class B Preferred Limited Partners.
"Class B Preferred Distribution" means, (i) with respect
to each Fiscal Quarter during which there was not at least one REIT
Preferred Share issued and outstanding on each day of such Fiscal
Quarter, the product of (x) the Aggregate Preferred Units and (y)
$.5625; provided, however, that with respect to the Fiscal Quarter
that includes the Effective Date, the numeric amount described in
clause (y) immediately above shall be multiplied by a fraction, the
numerator of which is the number of days from the day after the
Effective Date to the end of such Fiscal Quarter and the
denominator of which is 90 and (ii) with respect to each Fiscal
Quarter during which there was at least one REIT Preferred Share
issued and outstanding on each day of such Fiscal Quarter, the
product of (a) the Aggregate Preferred Units and (b) the REIT
Preferred Dividend which has a record date which is the same as the
Partnership Preferred Record Date.
"Class B Preferred Limited Partner" means, as of the
Effective Date, each Person contributing a Drever Interest to the
Partnership in exchange for a Class B Preferred Unit pursuant to
the Transaction or any other Person admitted pursuant to this
Agreement as a Class B Preferred Limited Partner either in
connection with the issuance of a newly-created Class B Preferred
Unit or as a substitute with respect to any transferred Class B
Preferred Unit, each for only so long as such Person remains as a
Class B Preferred Limited Partner in accordance with this Agreement
and the Act.
"Class B-TE Preferred Limited Partner" means, as of the
Effective Date, each Class B Preferred Limited Partner who is
subject to the unrelated business taxable income rules set forth
under Section 511 et seq. of the Code for only so long as such
Person remains as a Class B Preferred Limited Partner in accordance
with this Agreement and the Act.
"Class B Preferred Unit" means a Partnership Interest of
a Class B Preferred Limited Partner. The number of Class B
Preferred Units owned by each Class B Preferred Limited Partner on
the Effective Date shall be the number set forth opposite its name
in the Ownership Schedule under the column captioned "Preferred
Units." The number of Preferred Units held by any particular Class
B Preferred Limited Partner shall be appropriately reduced, from
time to time, to reflect any (i) acquisition of such Partner's
Class B Preferred Units by the Company, WDN Properties, or any of
their Affiliates or (ii) any exchange of such Class B Preferred
Units pursuant to Article 11 hereof; provided, however, that if the
Company, WDN Properties or any of their Affiliates acquires a Class
B Preferred Unit, whether pursuant to Article 11 hereof, by
purchase, or otherwise, such Class B Preferred Unit shall, upon and
by virtue of such acquisition and without any further action by the
Partnership or any Partner, automatically convert into a Class A
Limited Partner Interest.
"Class B Special Committee Member" means an individual
appointed pursuant to Section 7.4 hereof to serve as a member of
the Special Committee for the purpose of representing the interests
of the Class B Limited Partners.
"Closing" has the meaning set forth in Section 11.7
hereof.
"Closing Date" has the meaning set forth in Section 11.7
hereof.
"Code" means the Internal Revenue Code of 1986, as
amended and in effect from time to time, and any successor
statutory provisions thereto.
"Common Exchange Consideration" has the meaning set forth
in Section 11.1(a) hereof.
"Common Exchange Shares" has the meaning set forth in
Section 11.5(a) hereof.
"Company" means ▇▇▇▇▇▇ Residential Properties, Inc., a
Maryland corporation.
"Contribution Agreement" means that certain Contribution
Agreement dated May 21, 1997 and entered into by and among the
Company, the Partnership, each of the shareholders of Drever
Partners, Inc., AOF II, Inc., and AOF, Inc., and each of the equity
participants in Drever Partners, Inc.
"Conversion Factor" means 1.0 until changed in accordance
with this definition; provided, however, that in the event that the
Company, at any time after the Effective Date, (i) declares a
dividend or other distribution on the REIT Common Shares payable in
REIT Common Shares, (ii) subdivides (by reclassification or
otherwise) the outstanding REIT Common Shares, or (iii) combines
(by reclassification or otherwise) the outstanding REIT Common
Shares into a smaller number of shares, the Conversion Factor shall
be adjusted by multiplying the Conversion Factor then in effect by
a fraction, the numerator of which shall be the number of REIT
Common Shares issued and outstanding on the record date for such
dividend or on the effective date of such subdivision or
combination (assuming for such purposes that such dividend,
subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Common
Shares (determined without the above assumption) issued and
outstanding on the record date for such dividend, subdivision or
combination before giving effect thereto; and provided, further,
that in the event that the Company takes any action described in
Section 11.5(b), the Conversion Factor shall be adjusted by
multiplying the Conversion Factor then in effect by the fraction
described in Section 11.5(b), as applicable. Any adjustment to the
Conversion Factor shall become effective immediately after any
event listed above shall occur.
"Debtor Relief Laws" has the meaning assigned to such
term in the definition of "Bankruptcy" set forth in this Article 1.
"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 Gross Asset 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 that bears the same ratio to such beginning Gross Asset
Value as the federal income tax depreciation, amortization, or
other cost recovery deduction for such year bears to such beginning
adjusted 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 Gross Asset Value using any reasonable method
selected by the General Partner.
"Determination Year" has the meaning set forth in Section
5.4(e) hereof.
"Drever Interests" means (i) the partnership interests in
the Drever Partnerships which the Class B Limited Partners
contributed to the Partnership pursuant to the Exchange Documents
and (ii) the Shares, the Equity Rights, the General Partner Rights,
the CRF Shares and the CMC Shares (as each such term is defined in
the Contribution Agreement) which the Class B Limited Partners
contributed to the Partnership pursuant to the Contribution
Agreement.
"Drever Partnerships" means the partnerships identified
as the "Drever Partnerships" on Exhibit A attached hereto.
"Effective Date" means the date on which the Transaction
is consummated, as determined in accordance with the Exchange
Documents and the Contribution Agreement.
"Exchange Agreement" means that certain Exchange
Agreement dated May 21, 1997 and entered into by and among the
Company, the Partnership, Drever Partners, Inc., AOF II, Inc., and
AOF, Inc.
"Exchange Documents" means the "Exchange Offer Documents"
as such term is defined in the Exchange Agreement.
"Federal Securities Act" means the Securities Act of
1933, as amended.
"Fiscal Quarter" means (i) the period commencing on the
Effective Date and ending on December 31, 1997, (ii) any subsequent
three-month period commencing on each January 1, April 1, July 1
and October 1, and (iii) any portion of a period described in
clause (ii) that ends on the date the liquidation of the
Partnership is completed.
"Fiscal Year" means (i) the period commencing on the
Effective Date and ending on December 31, 1997, (ii) any subsequent
twelve-month period commencing on January 1 and ending on December
31, or (iii) any portion of a period described in clause (ii) that
is considered a short taxable year of the Partnership for federal
income tax purposes.
"General Partner" means, ▇▇▇▇▇▇ Residential Properties,
Inc., a Maryland corporation, and any other Person admitted
pursuant to this Agreement in the capacity of general partner of
the Partnership, each for only so long as such Person remains as a
general partner in accordance with this Agreement and the Act.
"General Partner Interest" means a Partnership Interest
of a General Partner.
"Gross Asset Value" means, with respect to any asset, the
asset's adjusted basis for federal income tax purposes, except as
follows:
(i) The Gross Asset Value of the assets acquired by
the Partnership on the Effective Date shall be the gross fair
market values of such assets as determined on a basis
consistent with the Transaction.
(ii) The initial Gross Asset Value of any asset
contributed (or deemed to have been contributed) by a Partner
to the Partnership, other than the assets of the Partnership
described in (i) immediately above, shall be the gross fair
market value of such asset, as determined by the contributing
Partner and the General Partner; provided, however, that if
the contributing Partner is the General Partner, WDN
Properties, or any of their Affiliates, the determination of
the fair market value of any contributed asset shall require
the Approval of the Special Committee.
(iii) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair market
values, as determined by the General Partner and subject to
the Approval of the Special Committee, as of the following
times: (A) the acquisition of an additional Partnership
Interest by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (B) the distribution
by the Partnership to a Partner of more than a de minimis
amount of property as consideration for an Partnership
Interest; and (C) the liquidation of the Partnership within
the meaning of Section 1.704-1(b)(2)(ii)(g) of the
Regulations.
(iv) The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the
gross fair market value of such asset on the date of the
distribution as determined by the General Partner and the
Partner receiving such distributed asset; provided, however,
that if the distributee Partner is the General Partner, WDN
Properties, or any of their Affiliates, the determination of
the fair market value of any distributed asset shall require
the Approval of the Special Committee.
(v) The Gross Asset Values of Partnership assets shall
be increased (or decreased) to reflect any adjustments to the
adjusted basis of such assets pursuant to Code Section 732(d),
Code Section 734(b) or Code Section 743(b), but only to the
extent that (x) such adjustments are taken into account in
determining Capital Accounts pursuant to clause (vi) of the
definition of "Profits" or "Losses" and (y) an adjustment
pursuant to clause (iii) immediately above is not required in
connection with the transaction.
"Incapacity" or "Incapacitated" means, (i) as to any
Partner who is a natural Person, death, total physical disability
or entry by a court of competent jurisdiction adjudicating such
Partner incompetent to manage such Partner's estate; (ii) as to any
corporation that is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or revocation
of its charter; (iii) as to any partnership that is a Partner, the
dissolution of such partnership; (iv) as to any estate that is a
Partner, the distribution by the fiduciary of the estate's entire
Partnership Interest in the Partnership; (v) as to any trustee of
a trust that 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 by reason of such Person's status as (A) a Partner, (B)
a director, officer, shareholder or employee of a Partner, (C) a
Class B Special Committee Member, or (D) any Affiliate of any
Person described in (A), (B) or (C) hereof, and (ii) such other
Persons (including Affiliates of the General 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).
"IRS" means the United States Internal Revenue Service or
any successor thereto.
"Limited Partner" means any Class A Limited Partner or
Class B Limited Partner. To the extent a General Partner is also
a Limited Partner, the General Partner shall be entitled to
exercise all rights associated with its Limited Partner Interest
without regard to any duties or obligations imposed on the General
Partner in its capacity as a General Partner.
"Limited Partner Interest" means a Partnership Interest
of a Limited Partner.
"Liquidating Event" has the meaning set forth in Section
9.1(b) hereof.
"Liquidator" has the meaning set forth in Section 9.2
hereof.
"Losses" has the meaning assigned to such term in the
definition of "Profits" and "Losses" as set forth in this Article
1.
"Major Action" has the meaning set forth in Section
7.3(b) hereof.
"Majority Approval" means, with respect to any group of
Partners and with respect to any matter submitted to such group for
its Approval, a situation in which Partners holding at least two-thirds
(2/3) of the Percentage Interests of the group have cast a
vote with respect to the matter and the Percentage Interests of the
Partners voting in favor of such matter exceed the Percentage
Interests of the Partners voting against such matter.
"Majority in Interest" means, with respect to any group
of Partners, one or more Partners of that group owning more than
50% of the Percentage Interests owned by all Partners of that
group.
"NASD" has the meaning set forth in Section 11.5(e)
hereof.
"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse
Deductions for a Fiscal 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).
"Opinion" has the meaning set forth in Section 11.10
hereof.
"Original Properties" means (i) the Drever Interests;
(ii) any real property interests owned by the Drever Partnerships
on the Effective Date; (iii) all properties received in
transactions described in Section 7.3(c)(ii) hereof; and (iv) all
interests received in transactions described in Sections
7.3(c)(iii) and (iv) hereof.
"Ownership Schedule" has the meaning set forth in Section
3.1 hereof.
"Partner" means any General Partner or Limited Partner.
If a Partner transfers its Partnership Interest, such Person shall
remain a Partner in respect of such Partnership Interest until the
transferee is admitted as a Partner in respect of such Partnership
Interest in accordance with this Agreement and the Act, if ever.
"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 Fiscal Year shall be determined in
accordance the rules of Regulations Section 1.704-2(i)(2).
"Partnership" has the meaning assigned to such term in
the first paragraph of this Agreement.
"Partnership Common Record Date" means the record date
established by the General Partner for the distribution of
Available Cash pursuant to Section 5.1(a)(ii) hereof, which record
date shall be the same as the record date established by the
Company for a REIT Common Dividend.
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution by a Partner and
includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement
and the Act, together with all obligations of such Person to comply
with the terms and provisions of this Agreement.
"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 Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(d).
"Partnership Preferred Record Date" means the record date
established by the General Partner for the distribution of
Available Cash pursuant to Section 5.1(a)(i) hereof, which record
date shall be (i) the same as the record date established by the
Company for a REIT Preferred Dividend or, (ii) if the Company did
not establish a record date for a REIT Preferred Dividend, the
Partnership Common Record Date.
"Percentage Interest" means, with respect to any Partner,
as of any date, the ratio (expressed as a percentage) of such
Partner's Capital Contributions as of such date to the aggregate
Capital Contributions of all Partners as of such date. As of the
Effective Date, each Partner's Percentage Interest is the
percentage set forth opposite its name in the Ownership Schedule
under the column captioned "Percentage Interest."
"Person" means an individual or a corporation,
partnership, limited liability company, trust, unincorporated
organization, joint stock company, joint venture, association or
other entity, or any government, or any agency or political
subdivision thereof.
"Preferred Exchange Consideration" has the meaning set
forth in Section 11.1(b) hereof.
"Preferred Exchange Shares" has the meaning set forth in
Section 11.5(c) hereof.
"Prime Rate" means a rate per annum that from day to day
is equal to the base commercial rate of interest established by the
First National Bank of Boston or its successor from time to time
for short-term, unsecured loans to substantial and responsible
borrowers.
"Profits" and "Losses" means, for each Fiscal Year, an
amount equal to the Partnership's taxable income or loss as
reported on the Partnership's U.S. Partnership Return of Income
(Form 1065) for such Fiscal Year, determined in accordance with
Code Section 703(a) (for this purpose, all items of income, gain,
loss, or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or
loss), with the following adjustments:
(i) Any income of the Partnership that is exempt
from federal income tax and not otherwise taken into account
in computing Profits or Losses pursuant to this definition of
"Profits" and "Losses" shall be added to such taxable income
or loss;
(ii) Any expenditures of the Partnership described in
Code Section 705(a)(2)(B) or treated as Code Section
705(a)(2)(B) expenditures pursuant to Section 1.704-1(b)(2)(iv)(i)
of the Regulations, and not otherwise taken
into account in computing Profits and Losses shall be
subtracted from such taxable income or loss;
(iii) In the event the Gross Asset Value of any
Partnership asset is adjusted pursuant to clauses (iii) or
(iv) of the definition of Gross Asset Value, the amount of
such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing
Profits or Losses;
(iv) Gain or loss resulting from any disposition of
Partnership property with respect to which gain or loss is
recognized for federal income tax purposes shall be computed
by reference to the Gross Asset Value of the property disposed
of, notwithstanding that the adjusted tax basis of such
property differs from its Gross Asset Value;
(v) The depreciation, amortization, and other cost
recovery deductions taken into account in computing such
taxable income or loss shall be taken into account for such
Fiscal year in accordance with Section 1.704-1(b)(2)(iv)(g) of
the Regulations;
(vi) To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b)
is required, pursuant to Section 1.704-1(b)(2)(iv)(m)(4) of
the Regulations, to be taken into account in determining
Capital Accounts as a result of a distribution other than in
liquidation of a Partner's Partnership Interest, the amount of
such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis) from the disposition of such
asset and shall be taken into account for purposes of
computing Profits or Losses; and
(vii) Notwithstanding any other provisions of this
definition, any items which are specially allocated pursuant
to Section 5.4 or Section 5.5 hereof shall not be taken into
account in computing Profits or Losses.
The amounts of the items of Partnership income, gain, loss or
deduction available to be specially allocated pursuant to Section
5.4 or Section 5.5 hereof shall be determined by applying rules
analogous to those set forth in clauses (i) through (vi) above.
"Proportionate Current Unpaid Class B Common
Distributions" has the meaning set forth in Section 11.3(d) hereof.
"Proportionate Current Unpaid Class B Preferred
Distributions" has the meaning set forth in Section 11.3(e) hereof.
"Proportionate Prior Unpaid Class B Common Distributions"
has the meaning set forth in Section 11.3(b) hereof.
"Proportionate Prior Unpaid Class B Preferred
Distributions" has the meaning set forth in Section 11.3(c) hereof.
"Recapture Income" means any gain recognized by the
Partnership 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.
"Redemption Closing" has the meaning set forth in Section
8.8 hereof.
"Redemption Closing Date" has the meaning set forth in
Section 8.8 hereof.
"Redemption Price" has the meaning set forth in Section
8.8 hereof.
"Regulations" means the Income Tax Regulations
promulgated by the United States Department of the Treasury, as
such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in
Section 5.5 hereof.
"REIT" means a "real estate investment trust" under
Section 856 of the Code.
"REIT Common Dividend" means any distribution of cash or
property (other than a property distribution that would cause an
adjustment under Section 11.5 hereof of the number of REIT Common
Shares to be acquired upon an exchange of a REIT Common Unit
pursuant to Article 11 hereof) per share declared payable on the
REIT Common Shares.
"REIT Common Share" means a share of common stock, par
value $.01 per share, of the Company.
"REIT Preferred Dividend" means any distribution of cash
or property (other than a property distribution that would cause an
adjustment under Section 11.5 hereof of the number of REIT
Preferred Shares to be acquired upon an exchange of a REIT
Preferred Unit pursuant to Article 11 hereof) per share declared
payable on the REIT Preferred Shares.
"REIT Preferred Share" means a share of 9.00% Redeemable
Preferred Stock (Liquidation Preference $25.00 Per Share) of the
Company as described in the Articles Supplementary of the Company
dated as of the Effective Date.
"REIT Shares" means a share of any outstanding capital
stock of the Company.
"Series B Warrant" means a warrant to purchase one-third
of a REIT Common Share at a price of $26.875 per share as more
fully described in that certain Series B Warrant Agreement between
the Company and The First National Bank of Boston dated as of the
Effective Date.
"Special Committee" means a committee established by the
Partnership and consisting of four, but not more than four,
individuals, no less than two of which individuals shall consist of
Class B Special Committee Members.
"State Acts" has the meaning set forth on the cover page
hereof.
"Substituted Partner" means a Person who is admitted as
a Partner to the Partnership pursuant to Section 8.4 hereof.
"Supermajority Approval" means, with respect to any group
of Partners and with respect to any matter submitted to such group
for its Approval, a situation in which Partners holding at least
two-thirds (2/3) of the Percentage Interests of the group have cast
a vote with respect to the matter and Partners holding more than
two-thirds (2/3) of the Percentage Interests of those Partners
casting votes have voted in favor of such matter.
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the
Partnership 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.
"Transaction" means the transfer to the Partnership of
the Drever Interests as contemplated by the Exchange Documents and
the Contribution Agreement.
"Unpaid Common Distribution Account" means an account to
be maintained by the Partnership for the Class B Common Limited
Partners and to which will be credited (i) the amount of the Class
B Common Distributions not paid on the date the same is payable in
accordance with Section 5.1(a)(ii)(A) hereof, and (ii) an amount
calculated like interest thereon from such due date to the date of
payment, compounded annually, at a rate equal to the Prime Rate
plus 8%; (provided, however, that to the extent the amount
described in clause (i) above is attributable to a REIT Common
Dividend that was a distribution of property other than cash, the
rate referred to in clause (ii) above shall be equal to the Prime
Rate rather than the Prime Rate plus 8%), and from which will be
debited (x) the amount of any Available Cash which is distributed
pursuant to Section 5.1(a)(ii)(B) or Section 5.1(b) hereof and (y)
the amount of any payment or deemed payment made pursuant to
Section 11.3(b) hereof.
"Unpaid Preferred Distribution Account" means an account
to be maintained by the Partnership for the Class B Preferred
Limited Partners and to which will be credited (i) the amount of
the Class B Preferred Distributions not paid on the date the same
is payable in accordance with Section 5.1(a)(i)(A) hereof, and (ii)
an amount calculated like interest thereon from such due date to
the date of payment, compounded annually, at a rate equal to the
Prime Rate plus 8%; (provided, however, that to the extent the
amount described in clause (i) above is attributable to a REIT
Preferred Dividend that was a distribution of property other than
cash, the rate referred to in clause (ii) above shall be equal to
the Prime Rate rather than the Prime Rate plus 8%), and from which
will be debited (x) the amount of any Available Cash which is
distributed pursuant to Section 5.1(a)(i)(B) or Section 5.1(b)
hereof and (y) the amount of any payment or deemed payment made
pursuant to Section 11.3(c) hereof.
"WDN Properties" has the meaning assigned to such term in
the first paragraph of this Agreement.
1.2 Construction. As used herein, the singular shall
include the plural and the masculine gender shall include the
feminine and neuter, and vice versa, as the context requires; words
such as "herein," "hereinafter," "hereof," "hereto," "hereby" and
"hereunder," when used with reference to this Agreement, refer to
this Agreement as a whole, unless the context otherwise requires.
ARTICLE 2
GENERAL PROVISIONS
2.1 Investment Representations by the Limited Partners;
Nature of Investment, Legend, Etc.
(a) Each Limited Partner does hereby represent and
warrant to the Partnership and to the General Partner that it
acquired its Partnership Interest for investment solely for such
Limited Partner's own account, without any intention of
participating directly or indirectly in any distribution of any
portion of such interest, and without the financial participation
of any other Person in acquiring its Partnership Interest.
(b) Each Limited Partner does hereby acknowledge that it
is aware that its Partnership Interest has not been registered (i)
under the Federal Securities Act in reliance upon exemptions
contained therein, or (ii) under any State Act in reliance upon
exemptions contained therein. Each Limited Partner further
understands and acknowledges that its representations and
warranties contained in this Section 2.1 are being relied upon by
the Partnership and by the General Partner as the basis for the
exemption of such interest in the Partnership from the registration
requirements of the Federal Securities Act and the State Acts.
Each Limited Partner further acknowledges that the Partnership will
not and has no obligation to recognize any sale, transfer, or
assignment of all or any part of such Limited Partner's Partnership
Interest to any Person unless and until the provisions of Article
8 hereof have been fully satisfied.
(c) Each Limited Partner does hereby acknowledge that
prior to its execution of this Agreement, such Limited Partner has
(i) received a copy of this Agreement, together with various other
information and disclosures and (ii) examined such material or
caused such material to be examined by such Limited Partner's
representative or attorney. Each Limited Partner does hereby
further acknowledge that it or its representative or attorney is
familiar with all such material and with the Partnership's plans to
acquire, finance, manage, and operate the assets and liabilities of
the Partnership and that such Limited Partner does not desire any
further information or data relating to the Partnership, the
General Partner, or the assets and liabilities of the Partnership.
Each existing and future Limited Partner does hereby acknowledge
that it understands that the holding of its Partnership Interest is
a speculative investment involving a high degree of risk and does
hereby represent that it has a net worth sufficient to bear the
economic risk of its investment in the Partnership and to justify
its investing in a highly speculative venture of this type.
(d) Each Limited Partner does hereby acknowledge and
agree that a legend reflecting the restrictions imposed upon the
transfer of its Partnership Interest under Article 8 hereof, under
the Federal Securities Act, and under any applicable State Act
shall be placed on the cover page of this Agreement and on any
certificate representing its Partnership Interest.
2.2 Purpose. The purpose and nature of the business of the
Partnership is to invest in (either directly or through the
acquisition of interests in partnerships or other entities),
purchase (either directly or through the acquisition of interests
in partnerships or other entities), develop, own, manage, lease,
finance and dispose of multi-family real estate properties and any
improvements thereon, enter into any partnership, joint venture, or
similar arrangement to engage in any of the foregoing, or to own
interests in any entity engaged in any of the foregoing, as well as
any other activity as all of the Partners shall from time to time
approve, and to do anything necessary or appropriate to accomplish
the foregoing; provided, however, that such business and any
activities conducted in connection therewith shall be limited, and
conducted in such a manner as, to permit the Company at all times
to be classified as a REIT unless the Company ceases to qualify as
a REIT for reasons other than the conduct of the business of the
Partnership.
2.3 Powers. The Partnership shall be empowered to do any and
all acts 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; provided, however, that the Partnership
shall not take, and shall refrain from taking, any action which, in
the judgment of the General Partner, in its sole and absolute
discretion (i) could preclude the Partnership from qualifying for
the passive-type income exception under Section 7704(c) of the
Code, or (ii)(A) could adversely affect the ability of the Company
to continue to qualify as a REIT, (B) could subject the Company to
any taxes under Section 857 or Section 4981 of the Code, or (C)
could violate any law or regulation of any governmental body or
agency having jurisdiction over the Company or its securities,
unless such action (or inaction) shall have been specifically
consented to by the Company in writing.
2.4 Name. The name of the Partnership shall be
"▇▇▇▇▇▇/▇▇▇▇▇▇ Operating Partnership, L.P." The Partnership's
business may be conducted under any other name or names approved by
the General Partner, including the name of the General Partner or
any Affiliate thereof; provided, however, that the name of a
Limited Partner or any derivative thereof may not be used by the
Partnership without the prior written consent of that Limited
Partner and each Class B Limited Partner hereby consents to the use
of the name "▇▇▇▇▇▇/Drever Operating Partnership, L.P." 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 furnish written notification to the Limited Partners
no later than 90 days after making any such change.
2.5 Names and Addresses of Partners. The names and addresses
of the Partners are set forth in the books and records of the
Partnership.
2.6 Place of Business. The principal place of business of
the Partnership shall be at One Lincoln Centre, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇. The General Partner may change the
place of business at any time and from time to time by providing
prompt notice to the Limited Partners. The Partnership also may
have such other offices or places of business as the General
Partner determines to be appropriate.
2.7 Additional Filings. On or before the Effective Date, or
as promptly thereafter as is reasonably possible, the Partnership
shall make any filings or disclosures required by the laws of any
other state with respect to the qualification of the Partnership as
a foreign limited partnership under the internal laws of each such
state.
2.8 Ownership. Unless otherwise required by applicable law,
the Partnership Interest of each Partner shall be treated as
personal property for all purposes.
2.9 No Partner Responsible for Other Partner's Commitments.
The Partnership shall not be responsible or liable for any
indebtedness or obligation of any Partner incurred, either before
or after the execution of this Agreement, in good faith in carrying
out the purpose of the Partnership, or hereafter undertaken or
incurred on behalf of the Partnership under or pursuant to the
terms of this Agreement, or assumed in writing by the Partnership,
and the Partnership hereby indemnifies and agrees to hold the
Partners harmless from all such obligations and indebtedness.
2.10 Term. The Partnership shall continue until the first to
occur of the following:
(a) December 31, 2017; or
(b) The dissolution of the Partnership pursuant to the
express provisions of Article 9 hereto or as otherwise provided by
law.
2.11 Registered Office; Registered Agent. The initial
registered office and registered agent of the Partnership in the
State of Delaware shall be as set forth in the Certificate. The
General Partner may from time to time change the registered office
and the registered agent. If the General Partner changes the
Partnership's registered office or agent (or if the General Partner
is notified of a change in the registered agent's office address),
the General Partner shall promptly notify each Limited Partner of
any such change.
ARTICLE 3
CAPITAL CONTRIBUTIONS
3.1 Capital Contributions. The Company and WDN Properties
have previously made Capital Contributions to the Partnership in
the amounts of $1 and $99, respectively. On the Effective Date,
(a) the Company and WDN Properties collectively shall make a
Capital Contribution in cash to the Partnership in an amount equal
to the amount necessary for the Partnership to fulfill its
obligations, as of the Effective Date, pursuant to the Transaction
and (b) each Person contributing its Drever Interests to the
Partnership pursuant to the Transaction shall (i) be admitted as a
Class B Limited Partner and (ii) make a Capital Contribution to the
Partnership of its Drever Interests. The Partners shall treat the
Capital Contributions described in clauses (a) and (b) immediately
above as tax-free, or partially tax-free, contributions to the
capital of the Partnership under Section 721 of the Code and for
all other income tax purposes. On a basis consistent with that
certain schedule described in section 10 of the Proration Mechanism
(as such term is defined in the Exchange Agreement), the General
Partner shall prepare, as soon as practicable following the
Effective Date, a schedule (the "Ownership Schedule") which shall
be included in the books and records of the Partnership maintained
by the General Partner and which shall reflect, as of the Effective
Date, (A) the number of Class B Common Units owned by each Class B
Common Limited Partner, (B) the number of Class B Preferred Units
owned by each Class B Preferred Limited Partner, (C) the Capital
Account of each Partner, and (D) the Percentage Interest of each
Partner, which Percentage Interest shall be adjusted in the
Ownership Schedule from time to time by the General Partner to the
extent necessary to reflect accurately redemptions, Capital
Contributions, the issuance of additional Partnership Interests,
the transfer of Partnership Interests or similar events having an
effect on a Partner's Percentage Interest. The Partners shall have
no obligation to make any additional Capital Contributions or loans
to the Partnership.
3.2 Issuances of Additional Partnership Interests. The
General Partner is hereby authorized to cause the Partnership from
time to time to issue to Persons, other than the Company, WDN
Properties, or any of their Affiliates, additional Partnership
Interests in one or more classes, or one or more series of any of
such classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
but not including rights, powers and duties senior to Class B
Preferred Units or Class B Common Units, all as shall be determined
by the General Partner in its sole and absolute discretion and
without the approval of any of the Limited Partners, subject to
provisions of the Act, 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, however,
that the General Partner, at all times during the existence of the
Partnership, shall maintain a 1% interest in all income, gain,
loss, deduction, or credit of the Partnership. The General Partner
is hereby authorized to cause the Partnership, from time to time,
to issue to the Company, WDN Properties, or any of their
Affiliates, additional Class A Limited Partner Interests. The
General Partner will provide prompt notice to all Limited Partners
of any additional Partnership Interests issued pursuant to this
Section 3.2.
3.3 Admission of Additional Limited Partners.
(a) After the Effective Date, a Person who makes a
Capital Contribution to the Partnership in accordance with this
Agreement shall be admitted to the Partnership as an "Additional
Limited Partner" only upon furnishing to the General Partner (i) a
written agreement in form satisfactory to the General Partner
accepting all of the terms and conditions of this Agreement,
including, without limitation, the power of attorney granted in
Section 10.2 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 General Partner shall provide prompt notice to all Limited
Partners of the admission to the Partnership of an Additional
Limited Partner.
(b) Notwithstanding anything to the contrary in this
Section 3.3, no Person shall be admitted as an Additional Limited
Partner without the consent of the General Partner, which consent
may be given or withheld in the General Partner's sole and absolute
discretion. 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
as being a Partner, following the consent of the General Partner to
such admission.
(c) If any Additional Limited Partner is admitted to the
Partnership on any day other than the first day of a Fiscal Year,
then Profits, Losses, each item thereof and all other items
allocable among Partners and Assignees for such Fiscal Year shall
be allocated among such Additional Limited Partner and all other
Partners and Assignees by taking into account their varying
interests during the Fiscal Year in accordance with Section 706(d)
of the Code, using any permissible method selected by the General
Partner in its sole discretion. 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 Partners and Assignees including such
Additional Limited Partner. All distributions of Available Cash
with respect to which the Partnership Common Record Date or the
Partnership Preferred 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 of Available
Cash thereafter shall be made to all the Partners and Assignees
including such Additional Limited Partners in accordance with, and
subject to the limitations of, this Agreement.
3.4 Return of Capital. No Partner shall have the right to
demand or receive the return of such Partner's Capital
Contributions to the Partnership.
3.5 Interest on Capital Contributions. Except as otherwise
expressly provided in the definition of Unpaid Common Distribution
Account and Unpaid Preferred Distribution Account, no Partner shall
receive any interest or amount computed like interest on such
Partner's Capital Contributions to the Partnership or such
Partner's Capital Account, notwithstanding any disproportion
therein as between or among the Partners.
3.6 No Preemptive Rights. 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) the issuance or sale of any Partnership Interests.
ARTICLE 4
ACCOUNTING; BOOKS AND RECORDS; TAX MATTERS
4.1 Books and Records. The books and records of the
Partnership shall, at the cost and expense of the Partnership, be
kept or caused to be kept on the accrual method of accounting for
financial and tax reporting purposes by the General Partner (or
such other Person as the General Partner may from time to time
designate) at the principal place of business of the Partnership.
Such books and records shall be kept on the basis of the
Partnership's Fiscal Year. Each Partner, at his own expense upon
not less than five Business Days prior written notice, shall have
the right to inspect the books and records of the Partnership
during business hours at the principal place of business of the
Partnership for any purpose.
4.2 Bank Accounts. All funds of the Partnership shall be
deposited in its name in an account or accounts maintained with
such bank as is determined by the General Partner. The funds of
the Partnership shall not be commingled with the funds of any other
Person except to the extent that the General Partner utilizes sweep
accounts with respect to the properties and other real property
owned or managed by affiliates of the General Partner. Checks
shall be drawn upon the Partnership account or accounts only for
the purposes of the Partnership and shall be signed by the General
Partner or such Person or Persons as are authorized by the General
Partner.
4.3 Reports.
(a) As soon as practicable, but in no event later than
90 days after the close of each calendar year, the General Partner
shall cause to be mailed to each Limited Partner as of the close of
the calendar year summary financial statements of the Partnership
for such calendar year, presented in accordance with generally
accepted accounting principles.
(b) The General Partner also may from time to time cause
to be prepared such reports and/or information as may be necessary
for the General Partner to determine the Company's continuing
compliance with the requirements for qualification as a REIT.
4.4 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 to each
Limited Partner, within 90 days of the close of each taxable year,
IRS Form K-1, comparable state forms for the jurisdictions in which
income-producing property of the Partnership is located and any
other tax information reasonably required by Limited Partners for
federal and state income tax reporting purposes.
4.5 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. The General Partner shall have the right to seek to revoke
any such election upon the General Partner's determination in its
sole and absolute discretion that such revocation is in the best
interests of the Partners.
4.6 Tax Matters Partner.
(a) The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes. The
General Partner will timely notify the IRS as required of its
designation as Tax Matters Partner. Pursuant to Section 6230 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
and profits interest of each of the Limited Partners and the
Assignees; provided, however, that such information is provided to
the Partnership by the Limited Partners and the Assignees.
(b) Except as required by applicable law, the tax
matters partner shall not take any positions for federal income tax
purposes contrary to the intended federal income tax treatment of
transactions, allocations, and distributions described in, or made
pursuant to, this Agreement. Upon the receipt of notice from the
IRS of the beginning of an administrative proceeding, the tax
matters partner shall (i) provide each Class B Limited Partner with
prompt written notice describing the nature, scope, and taxable
years to which such audit or controversy pertains and (ii) permit
the Class B Group Tax Controversy Representative to participate in
any proceedings related to such audit or controversy at the sole
expense of the Class B Group. In the event that the tax matters
partner determines to settle any particular tax issue and the Class
B Group Tax Controversy Representative objects in writing to such
settlement, the tax matters partner must first offer to the Class
B Group Tax Controversy Representative the opportunity to continue
to contest such tax audit or controversy at the sole expense of the
Class B Group and the Class B Group shall reimburse the tax matters
partner for its expenses (including legal and accounting fees and
expenses) of participating in and monitoring the group's contest of
such audit or controversy. The tax matters partner must approve
any settlement of a controversy contested by the Class B Group,
which approval shall not be unreasonably withheld. To the extent
not inconsistent with the foregoing provisions, the tax matters
partner is authorized, but not required:
(i) 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, to seek judicial review of such
final adjustment, including the filing of
a petition for readjustment with the Tax
Court or the United States Claims Court,
or the filing of a complaint of for
refund with the District Court of the
United States for the district in which
the Partnership's principal place of
business is located;
(ii) 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 United States Claims Court,
or the filing of a complaint for refund
with the District Court of the United
States for the district in which the
Partnership's principal place of business
is located;
(iii)to intervene in any action brought by any
other Partner for judicial review of a
final adjustment;
(iv) to file a request or an administrative
adjustment with the IRS at any time and
it 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;
(v) 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
(vi) 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
law.
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) 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, so long as the compensation paid by the Partnership for
such services is reasonable.
4.7 Certain Elections. The Partnership shall elect to deduct
expenses, if any, incurred by it in organizing the Partnership
ratably over a sixty-month period as provided in Section 709 of the
Code. In connection with the first transfer of a Partnership
Interest permitted under this Agreement, the General Partner shall
cause the Partnership, on behalf of the Partnership and at the time
and in the manner provided in Section 1.754-1(b) of the
Regulations, to make an election to adjust the basis of the
Partnership's property in the manner provided in Sections 734(b)
and 743(b) of the Code.
ARTICLE 5
DISTRIBUTIONS; ALLOCATIONS
5.1 Requirement and Characterization of Distributions.
(a) The General Partner shall cause the Partnership to
distribute within 60 days after the end of each Fiscal Quarter an
amount equal to 100% of the Available Cash of the Partnership in
the following order of priority:
(i) first, to the Class B Preferred Limited
Partners who are, and to any former Class
B Preferred Limited Partners who were,
Partners on the Partnership Preferred
Record Date with respect to such Fiscal
Quarter in accordance with their
respective Percentage Interests on such
Partnership Preferred Record Date until
the Class B Preferred Limited Partners
have received an amount pursuant to this
clause equal to the sum of (A) the Class
B Preferred Distribution in respect of
such Fiscal Quarter and (B) the balance
in the Unpaid Preferred Distribution
Account; provided, however, that the
allocation between the Class B Preferred
Limited Partners of amounts relating to
the Unpaid Preferred Distribution Account
shall take into account the effect of any
distribution pursuant to Section 5.1(b)
hereof; and
(ii) second, to the Class B Common Limited
Partners who are, and to any former Class
B Common Limited Partners who were,
Partners on the Partnership Common Record
Date with respect to such Fiscal Quarter
in accordance with their respective
Percentage Interests on such Partnership
Common Record Date until the Class B
Common Limited Partners have received an
amount pursuant to this clause equal to
the sum of (A) the Class B Common
Distribution in respect of such Fiscal
Quarter and (B) the balance in the Unpaid
Common Distribution Account; provided,
however, that the allocation between the
Class B Common Limited Partners of
amounts relating to the Unpaid Common
Distribution Account shall take into
account the effect of any distribution
pursuant to Section 5.1(b) hereof; and
(iii)thereafter, 1% to the General Partner and
99% to the Class A Limited Partners in
accordance with their respective
Percentage Interests.
(b) Following the receipt of a written notice of an
intention to exchange Class B Common Units or Class B Preferred
Units pursuant to the terms of Article 11 hereof, the General
Partner shall cause the Partnership to distribute, immediately
prior to the consummation of such exchange, to any Limited Partner
whose Partnership Interest is being exchanged an amount of
Available Cash at such time equal to the balance, if any, of the
Unpaid Common Distribution Account or the Unpaid Preferred
Distribution Account corresponding to the Class B Common Units or
Class B Preferred Units being exchanged.
(c) Subject to the Approval of the Special Committee,
the General Partner shall have the power to determine any
alternative minimum tax, adjustments and tax preference items in
such manner and in such amounts as the General Partner may
determine in the General Partner's discretion.
(d) If, pursuant to (i) any provision of the Code or the
Regulations or (ii) any comparable state law, the Partnership is
required to withhold any tax with respect to a Partner's
distributive share of partnership income, gain, loss, deduction or
credit, the Partnership shall withhold the required amount and pay
the same over to the taxing authorities as required by the Code,
the Regulations or state law. The amount withheld will be deducted
from the amount that would otherwise be distributed to that
Partner, but will be treated as though it had been distributed to
the Partner with respect to which the Partnership is required to
withhold. If at any time the amount required to be withheld by the
Partnership exceeds the amount of money that would otherwise be
distributed to the Partner with respect to which the withholding
requirement applies on the following Partnership Common Record Date
and Partnership Preferred Record Date (the "Excess Withholding
Amount"), then the Partnership shall provide notice and a brief
explanation to such Partner of the Excess Withholding Amount and if
such amount is not paid within 30 days from the date of such notice
the Excess Withholding Amount shall be considered a loan from the
Partnership to such Partner. Such loan shall bear interest at the
Prime Rate plus 8% until discharged by such Partner by repayment.
Any amounts otherwise distributable to such Partner on each
Partnership Record Date following the Record Dates referred to in
determining the Excess Withholding Amount will be treated as a
repayment of such loan.
5.2 Distributions Upon Liquidation. Proceeds from a
Terminating Capital Transaction, and any other cash received or
reductions in reserves made after commencement of the liquidation
of the Partnership, shall be distributed to the Partners in
accordance with Section 9.2 hereof.
5.3 Allocations of Profits and Losses. After giving effect
to the special allocations set forth in Sections 5.4 and 5.5
hereof, Profits and Losses for a Fiscal Year or other period shall
be allocated for both tax and Capital Account purposes, in the
following manner:
(a) Except as otherwise provided in Section 5.8(f),
Profits shall be allocated in the following order and priority:
(i) first, to the Class B Preferred Limited
Partners in proportion to their
respective Percentage Interests until the
amount of Profits allocated to the Class
B Preferred Limited Partners pursuant to
this clause (i) for the current Fiscal
Year equals the excess of (A) the sum of
(I) the cumulative amount of the Class B
Preferred Distribution for each Fiscal
Quarter of the current Fiscal Year and
all prior Fiscal Years and (II) the
cumulative amount of the interest
component of the Unpaid Preferred
Distribution Account described in clause
(ii) of the definition of Unpaid
Preferred Distribution Account in Article
1 hereof (but, in the case of both (I)
and (II) above, only to the extent that
such distributions or interest component
have been previously paid to the Class B
Preferred Limited Partners pursuant to
Sections 5.1(a)(i) or 5.1(b) hereof) over
(B) the cumulative amount of Profits
allocated to the Class B Preferred
Limited Partners pursuant to this clause
(i) for all prior Fiscal Years;
(ii) second, to the Class B Common Limited
Partners in proportion to their
respective Percentage Interests until the
amount of Profits allocated to the Class
B Common Limited Partners pursuant to
this clause (ii) for the current Fiscal
Year equals the excess of (A) the sum of
(I) the cumulative amount of the Class B
Common Distribution for each Fiscal
Quarter of the current Fiscal Year and
all prior Fiscal Years and (II) the
cumulative amount of the interest
component of the Unpaid Common
Distribution Account described in clause
(ii) of the definition of Unpaid Common
Distribution Account in Article 1 hereof
(but, in the case of both (I) and (II)
above, only to the extent that such
distributions or interest component have
been previously paid to the Class B
Common Limited Partners pursuant to
Sections 5.1(a)(ii) or 5.1(b) hereof)
over (B) the cumulative amount of Profits
allocated to the Class B Common Limited
Partners pursuant to this clause (ii) for
all prior Fiscal Years;
(iii) third, to the General Partner, in
proportion to and to the extent of an
amount equal to the excess, if any, of
(A) the cumulative Losses allocated to
such General Partner pursuant to the last
sentence of Section 5.6 hereof for all
prior Fiscal Years, over (B) the
cumulative Profits allocated to such
General Partner pursuant to this Section
5.3(a)(iii) for all prior Fiscal Years;
(iv) fourth, to the Partners (other than the
Class B Limited Partners), in proportion
to and to the extent of an amount equal
to the excess, if any, of (A) the
cumulative Losses allocated to such
Partners pursuant to Section 5.3(b)(iv)
hereof for all prior Fiscal Years, over
(B) the cumulative Profits allocated to
such Partners pursuant to this Section
5.3(a)(iv) for all prior Fiscal Years;
(v) fifth, to the Class B Preferred Limited
Partners, in proportion to and to the
extent of an amount equal to the excess,
if any, of (A) the cumulative Losses
allocated to each such Partner pursuant
to Section 5.3(b)(iii) hereof for all
prior Fiscal Years, over (B) the
cumulative Profits allocated to such
Partner pursuant to this Section
5.3(a)(v) for all prior Fiscal Years;
(vi) sixth, to the Class B Common Limited
Partners, in proportion to and to the
extent of an amount equal to the excess,
if any, of (A) the cumulative Losses
allocated to each such Partner pursuant
to Section 5.3(b)(ii) hereof for all
prior Fiscal Years, over (B) the
cumulative Profits allocated to such
Partner pursuant to this Section
5.3(a)(vi) for all prior Fiscal Years;
(vii) thereafter, to the
General Partner and
the Class A Limited
Partner in
accordance with
their respective
Percentage
Interests.
(b) Except as otherwise provided in Section 5.8(e),
Losses shall be allocated in the following order and priority:
(i) first, to the General Partner and the
Class A Limited Partners in proportion to
and until the amount of Losses allocated
pursuant to this clause (i) for the
current Fiscal Year equals the excess, if
any, of (A) the sum of (I) their
respective Capital Account balances on
the Effective Date, (II) the Capital
Contributions made by such Partners
subsequent to the Effective Date and
(III) the cumulative amount of Profits
allocated to such Partners pursuant to
Section 5.3(a)(vii) hereof over (B) the
sum of (I) cumulative amount of Losses
allocated to such Partners pursuant to
this clause (i) for all prior Fiscal
Years and (II) the cumulative amount of
distributions made to them pursuant to
Section 5.1(a)(iii) hereof;
(ii) second, to the Class B Common Limited
Partners, in proportion to their
respective Percentage Interests until the
amount of Losses allocated pursuant to
this clause (ii) for the current Fiscal
Year equals the excess, if any, of (A)
the sum of (I) the aggregate amount of
the portion of their Capital Account
balances on the Effective Date
attributable to Class B Common Units,
(II) the aggregate Capital Contributions
made by such Partners subsequent to the
Effective Date in respect of their Class
B Common Units, and (III) the cumulative
amount of Profits allocated to them
pursuant to Section 5.3(a)(ii) hereof
over (B) the sum of (I) cumulative amount
of Losses allocated to such Partners
pursuant to this clause (ii) for all
prior Fiscal Years and (II) the
cumulative amount of distributions made
to them pursuant to Section 5.1(a)(ii)
hereof;
(iii) third, to the Class B Preferred Limited
Partners, in proportion to their
respective Percentage Interests until the
amount of Losses allocated pursuant to
this clause (iii) for the current Fiscal
Year equals the excess, if any, of (A)
the sum of (I) the aggregate amount of
the portion of their Capital Account
balances on the Effective Date
attributable to Class B Preferred Units,
(II) the aggregate Capital Contributions
made by such Partners subsequent to the
Effective Date in respect of their Class
B Preferred Units, and (III) the
cumulative amount of Profits allocated to
them pursuant to Section 5.3(a)(i) hereof
over (B) the sum of (I) cumulative amount
of Losses allocated to such Partners
pursuant to this clause (iii) for all
prior Fiscal Years and (II) the
cumulative amount of distributions made
to them pursuant to Section 5.1(a)(i)
hereof; and
(iv) thereafter, 1% to the General Partner and
99% to the Limited Partners (other than
the Class B Limited Partners) in
accordance with their Percentage
Interests.
5.4 Special Allocations. The following special allocations
shall be made in the following order:
(a) Notwithstanding any other provision of this
Agreement to the contrary, if in any Fiscal Year there is a net
decrease in Partnership Minimum Gain, then each Partner shall first
be allocated items of Partnership income for such Fiscal Year (and,
if necessary, subsequent Fiscal Years) in an amount equal to the
portion of such Partner's share of the net decrease in Partnership
Minimum Gain, determined in accordance with the provisions of
Regulations Section 1.704-2(g). As provided in Regulations Section
1.704-2(j), income of the Partnership allocated for any Fiscal Year
under this subsection shall consist first of items of book gain
recognized from the disposition of Partnership property subject to
Nonrecourse Liabilities to the extent of the decrease in
Partnership Minimum Gain that is attributable to such disposition,
with any remaining allocated income deemed to be made up of a pro
rata portion of the Partnership's other items of gross income for
such taxable year.
(b) Notwithstanding any other provision of this
Agreement to the contrary, except as specified in Section 5.4(a),
if in any Fiscal Year there is a net decrease in Partner Minimum
Gain, then each Partner shall first be allocated items of
Partnership income for such Fiscal Year (and, if necessary,
subsequent Fiscal Years) in an amount equal to the portion of such
Partner's share of the net decrease in such Partner Minimum Gain,
determined in accordance with the provisions of Regulations Section
1.704-2(i). As provided in Regulations Section 1.704-2(j), income
of the Partnership allocated for any taxable year under this
subsection shall consist first of items of book gain recognized
from the disposition of Partnership property subject to Partner
Nonrecourse Debt to the extent of the decrease in Partner Minimum
Gain that is attributable to such disposition, with any remaining
allocated income deemed to be made up of a pro rata portion of the
Partnership's other items of gross income for such taxable year.
(c) In the event any Partner unexpectedly receives any
adjustments, allocations, or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6)
of the Regulations, items of Partnership income
and gain shall be specially allocated to such Partner in an amount
and manner sufficient to eliminate, to the extent required by the
Regulations, the Adjusted Capital Account Deficit, if any, of such
Partner as quickly as possible, provided that an allocation
pursuant to this Section 5.4(c) shall be made only if and to the
extent that such Partner would have an Adjusted Capital Account
Deficit after all other allocations provided for in this Article 5
have been tentatively made as if this Section 5.4(c) were not in
the Agreement.
(d) In the event a Limited Partner (who is not also a
General Partner) has a deficit Capital Account at the end of any
Fiscal Year that is in excess of the sum of (i) the amount the
Limited Partner is obligated to restore pursuant to any provision
of this Agreement, and (ii) the amount the Limited Partner is
deemed to be obligated to restore pursuant to Section 1.704-1(b)(2)(ii)(c)
of the Regulations, the Limited Partner shall be
specially allocated items of Partnership income and gain in the
amount of such excess as quickly as possible, provided that an
allocation pursuant to this Section 5.4(d) shall be made only if
and to the extent that the Limited Partner would have a deficit
Capital Account in excess of such sum after all other allocations
provided for in this Article 5 have been made as if Section 5.4(c)
hereof and this Section 5.4(d) were not in the Agreement.
(e) Commencing on the first day of the month following
the first anniversary of the Effective Date, a special allocation
of Depreciation to the Class B Common Limited Partners, who
continue to be Class B Common Limited Partners on December 31 of
the taxable year in respect of which the special allocation of
depreciation pursuant to this Section 5.4(e) is to be made (the
"Determination Year") provided, however, that for the taxable year
which includes the first anniversary of the Effective Date, the
Determination Year shall begin on the first day of the month
following the first anniversary of the Effective Date, in
proportion to their respective Class B Common Limited Partner
Percentage Interests as determined on December 31 of the
Determination Year, in an aggregate amount equal to the lesser of
(I) the sum of (A) the product of (i) the amount of Depreciation
(determined in accordance with Section 1.704-1(b)(2)(iv)(g) of the
Regulations) that corresponds to $7,000,000 of tax depreciation and
(ii) a fraction (x) the numerator of which is the aggregate Class
B Common Limited Partner Percentage Interests of such Partners as
determined on December 31 of the Determination Year and (y) the
denominator of which is the aggregate Class B Common Limited
Partner Percentage Interests of the Class B Common Limited Partners
on the Effective Date and (B) the Carryover Amount and (II) the
aggregate amount of Profits allocated to such Partners for the
Determination Year pursuant to Section 5.3(a)(ii) hereof. For
purposes of this Agreement for any particular Determination Year,
the Carryover Amount shall be an amount equal to the excess, if
any, of (i) the amount described in (I) of the immediately
preceding sentence for the taxable year immediately preceding the
Determination Year over (ii) the amount described in (II) of the
immediately preceding sentence for the taxable year immediately
preceding the Determination Year; provided, however, that for the
Determination Year following the taxable year that includes the
first anniversary of the Effective Date the Carryover Amount shall
also include the excess, if any, of (x) the amount described in (i)
of the immediately preceding sentence for the taxable year
immediately preceding the Determination Year over (y) the amount
specially allocated pursuant to this Section 5.4(e) for the taxable
year immediately preceding the Determination Year.
(f) A special allocation of gross income shall be made
(i) to each Class B Common Limited Partner who has an obligation to
restore a portion of its deficit Capital Account pursuant to
Section 9.3 hereof and who, during the taxable year or during the
first 60 days of the following taxable year, exchanges all of his
Class B Common Units pursuant to the provisions of Article 11
hereof, in an amount equal to the lesser of (A) the aggregate
amount specially allocated to such Partner pursuant to Section
5.4(e) hereof for the current Fiscal Year and all prior Fiscal
Years and (B) the amount of the deficit balance in such Partner's
Capital Account (calculated as if all other allocations provided
for in this Article 5 had been made other than the allocation
pursuant to this Section 5.4(f)), (ii) to each Class B Limited
Partner who, during the taxable year, exchanges all or any portion
of his Class B Common Units or Class B Preferred Units, pursuant to
the provisions of Article 11 hereof, an amount, if any, equal to
the aggregate of the Proportionate Prior Unpaid Class B Common
Distributions, the Proportionate Prior Unpaid Class B Preferred
Distributions, the Proportionate Current Unpaid Class B Common
Distributions, and the Proportionate Current Unpaid Class B
Preferred Distributions paid to such Partner pursuant to Section
11.3 hereof, and (iii) to each Class B Limited Partner receiving or
entitled to receive distributions during such Fiscal Year pursuant
to Section 9.2(a)(iii) hereof, an amount, if any, equal to the
aggregate of the Proportionate Prior Unpaid Class B Common
Distributions, the Proportionate Prior Unpaid Class B Preferred
Distributions, the Proportionate Current Unpaid Class B Common
Distributions, and the Proportionate Current Unpaid Class B
Preferred Distributions that would have been paid to such Partner
pursuant to Section 11.3 hereof if such Partner had exercised the
rights set forth in Article 11 hereof.
(g) Nonrecourse Deductions related to any Original
Property for any Fiscal Year shall be allocated among the Partners
in accordance with their respective Percentage Interests.
(h) Notwithstanding anything to the contrary in this
Agreement, any Partner Nonrecourse Deductions for any Fiscal Year
or other period shall be 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.
(i) To the extent an adjustment to the adjusted tax
basis of any Partnership asset is required pursuant to Code Section
732(d), Code Section 734(b) or Code Section 743(b), the Capital
Accounts of the Partners shall be adjusted pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations.
(j) During the Fiscal Years ending prior to or on
December 31, 1998, all allocations under this Agreement will be
made only to the extent that, and will be adjusted insofar as may
be required so that, the Partnership's allocations satisfy the
requirements of Code Section 514(c)(9)(E), applicable Regulations
promulgated thereunder and any other administrative guidelines or
pronouncements thereunder.
5.5 Curative Allocations. The allocations set forth in
Sections 5.4 and 5.6 hereof (the "Regulatory Allocations") are
intended to comply with certain requirements of the Regulations.
It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory
Allocations or with special allocations of other items of
Partnership income, gain, loss or deduction pursuant to this
Section 5.5. Therefore, notwithstanding any other provision of
this Article 5 (other than the Regulatory Allocations), the General
Partner shall make such offsetting special allocations of
Partnership income, gain, loss or deduction in whatever manner it
determines appropriate so that, after such offsetting allocations
are made, each Partner's Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations were not part of the
Agreement and all Partnership items were allocated pursuant to
Section 5.3.
5.6 Loss Limitation. The Losses allocated to a Limited
Partner pursuant to Section 5.3(b) hereof shall not exceed the
maximum amount of Losses that can be so allocated without causing
a Limited Partner to have an Adjusted Capital Account Deficit at
the end of any Fiscal Year. All Losses in excess of the
limitations set forth in this Section 5.6 shall be allocated to the
General Partner.
5.7 Tax Allocations: Code Section 704(c). In accordance
with Code Section 704(c) and the Regulations promulgated
thereunder, income, gain, loss, and deduction with respect to any
property contributed to the capital of the Partnership shall,
solely for tax purposes, be allocated among the Partners so as to
take account of any variation between the adjusted basis of such
property to the Partnership for federal income tax purposes and its
initial Gross Asset Value (computed in accordance with the
definition of Gross Asset Value in Section 1.1). In the event the
Gross Asset Value of any Partnership asset is adjusted pursuant to
clause (v) of the definition of Gross Asset Value in Section 1.1,
subsequent allocations of income, gain, loss, and deduction with
respect to such asset shall take account of any variation between
the adjusted basis of such asset for federal income tax purposes
and its Gross Asset Value in the same manner as under Code Section
704(c) and the Regulations promulgated thereunder. Subject to the
Approval of the Special Committee, any elections or other decisions
relating to allocations pursuant to this Section 5.7 will be made
in any manner that the General Partner determines in its sole
discretion (including any manner that may benefit the General
Partner and its Affiliates).
5.8 Other Allocation Rules.
(a) Profits and Losses, each item thereof and all other
items allocable among Partners for the Fiscal Year that includes
the Effective Date shall be allocated among the Partners by taking
into account their varying interests during such Fiscal Year in
accordance with Section 706(d) of the Code, using any permissible
method selected by the General Partner in its sole discretion.
(b) 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 this Article 5, 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. For purposes of this Agreement, any Class B Limited
Partner's share of a Section 751 asset in respect of any Original
Properties, as determined immediately prior to the Effective Date
and as appropriately adjusted pursuant to the Transaction, shall
not be diminished and shall be specially allocated to such Partner
under the principles of Section 704(c) upon a subsequent sale or
disposition of such asset.
(c) If a Partnership Interest is transferred during any
Fiscal Year, the Profits or Losses attributable to such Partnership
Interest for such Fiscal Year shall be divided and allocated
proportionately between the transferor and the transferee in
accordance with Section 8.6(d) hereof.
(d) In accordance with Section 752 of the Code and
Regulations Section 1.752-3(a)(3), excess Nonrecourse Liabilities
relating to the Original Properties shall be allocated to the
Partners in accordance with their respective Percentage Interests.
(e) Losses for the Fiscal Year ending December 31, 1997
shall be allocated to the General Partner, the Class B-TE Common
Limited Partners and the Class A Limited Partners in accordance
with their relative Percentage Interests until the balances in
their Capital Accounts are reduced to zero and any remaining Losses
shall be allocated in accordance with the provisions of Section
5.3(b)(ii) - (iv). Losses for the Fiscal Year ending December 31,
1998 shall be allocated to the General Partner, the Class B-TE
Common Limited Partners and the Class A Limited Partners in
accordance with either (i) their respective 1997 Income Percentages
or (ii) their Percentage Interests, whichever results in the Class
B-TE Common Limited Partners receiving a larger share of such
Losses, until the balances in their Capital Accounts are reduced to
zero and any remaining Losses shall be allocated in accordance with
the provisions of Section 5.3(b)(ii) - (iv). For purposes of this
Section 5.8(e) hereof, the term "1997 Income Percentages" means the
ratio, expressed as a percentage, of (i) the Profits allocated to
each such Partner in the Fiscal Year ending December 31, 1997 to
(ii) the total Profits for such Fiscal Year.
(f) Profits for the Fiscal Year ending December 31, 1998
shall be allocated first in accordance with the provisions of
Section 5.3(a)(i) hereof, second, in accordance with the provisions
of Section 5.3(a)(ii) hereof but the amount of Profits allocated to
Class B-TE Common Limited Partners for such Fiscal Year shall be
limited to an amount equal to the product of (i) the Profits of the
Partnership for such Fiscal Year and (ii) the percentage of Losses
of the Partnership that the Class B-TE Common Limited Partners were
allocated pursuant to Section 5.8(e) above for the Fiscal Year
ending December 31, 1997, and any remaining Profits shall be
allocated in accordance with the provisions of Section 5.3(a)(iii)
- (vii).
ARTICLE 6
STATUS OF LIMITED PARTNERS
6.1 Participation in Management. The Limited Partners, as
such, shall not (i) participate in the management or control of the
Partnership's business, (ii) transact any business for the
Partnership, nor (iii) have the power to act for or bind the
Partnership, said powers being vested solely and exclusively in the
General Partner.
6.2 Limited Liability. No Limited Partner shall be bound by,
or personally liable for, the expenses, liabilities, or obligations
of the Partnership, except as provided in the Act.
6.3 Outside Activities of Limited Partners. Any Limited
Partner and any officer, director, employee, agent, trustee, family
member, partner, shareholder or Affiliate of any Limited Partner
shall be entitled to and may have business interests and activities
that are in direct competition with the Partnership or that are
enhanced by the activities that are in direct competition with the
Partnership or that are enhanced by the activities of 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 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 even if such opportunity is of a
character that, if presented to the Partnership, any Limited
Partner or such other Persons, could be taken by such Person.
6.4 Rights of Limited Partners Relating to the Partnership.
(a) In addition to other rights provided by this
Agreement or by the Act, each Limited Partner shall have the right,
upon five Business Days prior written notice, at such Limited
Partner's own expense (including reimbursement for actual third
party copying and administrative charges that the General Partner
may incur):
(i) to obtain a list of the name and last
known business, residence or mailing
address of each Partner; and
(ii) to obtain additional copies of this
Agreement and the Certificate and all
amendments thereto, together with
executed copies of all powers of attorney
pursuant to which this Agreement, the
Certificate and all amendments thereto
have been executed.
(b) The Partnership shall promptly notify any Limited
Partner, on request, of the then current Conversion Factor. In
addition, the Partnership shall notify each of the Partners of any
change made to the Conversion Factor at such time that notice in
respect of any adjustment pursuant to Section 11.5 hereof would be
required to be given pursuant to Section 11.6 hereof.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
7.1 Management.
(a) 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. 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
the Act and other applicable law or that are granted to the General
Partner under any other provision of this Agreement, the General
Partner, subject to Section 7.3 hereof, shall have full power and
authority to do all things deemed necessary or desirable by the
General Partner to conduct the business of the Partnership, to
exercise all powers set forth in Section 2.3 hereof and to
effectuate the purposes set forth in Section 2.2 hereof, including,
without limitation:
(i) the making of any expenditures, the
lending 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 will
permit the Company (so long as the
Company qualifies as a REIT) to
avoid liability for any federal
income tax (including, for this
purpose, any excise tax pursuant to
Section 4981 of the Code) and to
make distributions to its holders of
REIT Shares sufficient to permit the
Company to maintain REIT status),
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
deed to secure debt, mortgage, deed
of trust or other lien of
encumbrance on the Partnership's
properties) and the incurring of any
obligations it deems necessary for
the conduct of the activities of the
Partnership;
(ii) 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;
(iii) the acquisition, disposition,
mortgage, pledge, encumbrance,
hypothecation or exchange of any
properties of the Partnership
(including the exercise or grant of
any conversion, option, privilege,
or subscription right to any other
right available in connection with
any properties at any time held by
the Partnership);
(iv) the use of the assets of the
Partnership and Affiliates of the
Partnership controlled by the
Partnership (including, without
limitation, cash on hand) for any
purpose consistent with the terms of
this Agreement;
(v) either directly, or through one or
more contractors (as provided in
Section 7.1(a)(ix) hereof), the
management, operation, leasing,
landscaping, repair, alteration,
demolition or improvement of any
real property or improvements owned
by the Partnership;
(vi) the distribution of Partnership cash
or other Partnership properties in
accordance with this Agreement;
(vii) holding, managing, investing and
reinvesting cash and other assets of the
Partnership;
(viii) the collection and receipt of
revenues and income of the
Partnership;
(ix) the selection and dismissal of
employees, agents, outside
attorneys, accountants, consultants
and contractors of the Partnership
or the General Partner and the
determination of their compensation
and other terms of employment or
hiring;
(x) the maintenance of such insurance
for the benefit of the Partnership
and the Partners as it deems
necessary or appropriate;
(xi) the formation of, or acquisition of
an interest in, and the contribution
of property to, any further limited
or general partnerships, joint
venture or other relationships that
it deems desirable;
(xii) subject to Section 4.6 hereof, 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, and 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;
(xiii) the undertaking of any action in
connection with the Partnership's
direct or indirect investment in any
other Person (including, without
limitation, the contribution or loan
of funds by the Partnership to such
Persons);
(xiv) subject to Approval of the Special
Committee, if required, the determination
of the fair market value of any
Partnership property distributed in kind
using such reasonable method of valuation
as it may adopt;
(xv) 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 asset, property
or investment held by the Partnership;
(xvi) the exercise of any of the powers of the
General Partner enumerated in this
Agreement on behalf of or in connection
with any other Person in which the
Partnership has a direct or indirect
interest, or jointly with any other
Person;
(xvii) the making, execution and delivery
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 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 enumerated in
this Agreement;
(xviii) the merger, consolidation or other
combination of the Partnership with
any other Person; and
(xix) the undertaking of any action necessary
to admit any Person as an Additional
Limited Partner pursuant to Section 3.3
hereof and to admit a Substituted Limited
Partner pursuant to Section 8.4 hereof.
(b) Each of the Limited Partners agrees that the General
Partner is authorized to perform the above-mentioned powers and to
enter into agreements and transactions in connection therewith on
behalf of the Partnership without any further act, approval or vote
of the Partners, notwithstanding any other provision of this
Agreement (except as provided in Section 7.3) hereof, the Act or
any applicable law, rule or regulation, to the fullest 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 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) At all times from and after the date hereof, the
General Partner itself (subject to reimbursement by the
Partnership) may, or may cause the Partnership to, obtain and
maintain (i) casualty, liability and other insurance on the
properties of the Partnership and (ii) to the extent available,
liability insurance for the Indemnitees hereunder.
(d) At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain
any and all reserves, working capital accounts and other cash or
similar balances in such amounts as the General Partner, in its
sole and absolute discretion, deems appropriate and reasonable from
time to time.
(e) Except as otherwise expressly provided herein, 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 of any action taken by it. The General
Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances as a result of an income tax
liability incurred by such Limited Partner as a result of an action
(or inaction) by the General Partner pursuant to its authority
under this Agreement.
7.2 Amendment of Agreement and Certificate of Limited
Partnership.
(a) To the extent that such action is determined by the
General Partner to be reasonable and necessary or appropriate and
provided that such action is not inconsistent with any provision of
this Agreement, 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 or the District of Columbia
in which the Partnership may elect to do business or own property.
Subject to the terms of Section 6.4(a)(ii) hereof, the General
Partner shall not be required, before 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 to the extent provided by applicable law) in the State of
Delaware and any other state or the District of Columbia in which
the Partnership may elect to do business or own property.
(b) Following the admission to the Partnership of any
Partner in accordance with this Agreement, the General Partner
shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare
as soon as practical an amendment of this Agreement (including an
amendment of the Ownership Schedule) 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
10.1 hereof.
7.3 Restrictions on General Partner's Authority.
(a) The General Partner may not, without the Approval of
the requisite percentage of Limited Partners that would be required
to approve an amendment to authorize a particular action under
Section 12.1 hereof, take any such action in contravention of an
express prohibition contained in this Agreement.
(b) Without first obtaining the Majority Approval of (x)
in the case of any transaction described in clause (i) immediately
below, the Class B Limited Partners (excluding the Class B-TE
Common Limited Partners and the Class B-TE Preferred Limited
Partners) who would receive a special allocation of income as a
result of such transaction, and (y) in the case of the events
described in clauses (ii), (iii), (iv) and (v) immediately below,
the Class B Limited Partners, the General Partner shall not cause
or permit the Partnership to take any Major Action. Except as
provided in Section 7.3(c) hereof, the term "Major Action" means
any of the following actions or decisions:
(i) prior to the third anniversary of
the Effective Date, the sale,
exchange, transfer or other
disposition of any of the Original
Properties (including by way of
merger or consolidation with any
other Person); provided, however,
that for purposes of this Section
7.3(b)(i), the term "Major Action"
shall not include (A) any
disposition of the Original
Properties pursuant to Article 9
hereof, (B) a merger of the Drever
Partnerships into the Partnership or
any distribution in complete
liquidation of any or all of the
Drever Partnerships, in either case,
following the 15th Business Day
subsequent to the Effective Date and
(C) any other merger or
consolidation (I) which is subject
to treatment as a purchase
transaction for federal income tax
purposes or a contribution to the
capital of the Partnership under
Section 721 of the Code, (II) in
which the Partnership is the
surviving entity, for federal income
tax purposes, and continues to be
treated as a "partnership," and not,
as an association or a "publicly
traded partnership" taxable as a
corporation, for federal income tax
purposes, (III) where the terms of
such merger or consolidation do not
materially adversely affect the
interest of any Class B Limited
Partner, and (IV) the Class B
Limited Partners are given at least
15 Business Days prior written
notice of such merger or
consolidation and such notice
includes all documents that the
General Partner will execute in
connection with such merger or
consolidation;
(ii) the commencement by the Partnership
of a voluntary case under any
applicable Debtor Relief Law now or
hereafter in effect, the consent by
the Partnership to the entry of an
order for relief in an involuntary
case under any such law or to the
appointment of or the taking of
possession by a receiver,
liquidator, assignee, trustee,
custodian, sequestrator or other
similar agent under any applicable
Debtor Relief Laws for the
Partnership or for any substantial
part of its assets or property or
the making by the Partnership of any
general assignment for the benefit
of its creditors;
(iii) the taking of any action that makes
it impossible for the Partnership to
fulfill its stated purpose;
(iv) the General Partner withdraws from
the Partnership pursuant to Section 17-602
of the Act; provided, however, that
for purposes of this Agreement a
transfer of the General Partner's
Partnership Interest permitted by
Section 8.2 hereof shall not be
considered a withdrawal or cause the
General Partner to cease to be a
general partner under the Act; and
(v) prior to the tenth anniversary of
the Effective Date, effecting a
dissolution of the Partnership
pursuant to Section 9.1(b)(iv)
hereof.
(c) Provided that the Class B Limited Partners are given
at least 15 Business Days prior written notice and such notice
includes the then current drafts of all documents that the General
Partner will execute in connection therewith, the term "Major
Action" shall not include: (i) the sale, exchange, transfer or
other disposition (A) of an Original Property if no taxable income
or gain would be allocated to any Class B Limited Partners pursuant
to Section 704(c) of the Code, or (B) in the same Fiscal Year of
more than one of the Original Properties if such Original
Properties were held by the same Drever Partnership on the
Effective Date and if the taxable loss (which is not treated as a
loss from the sale or exchange of a capital asset) recognized upon
such sale, exchange, transfer or other disposition of any of such
properties and allocated (pursuant to Section 704(c) of the Code)
to each of the Class B Limited Partners who were formerly partners
in such Drever Partnership equals or exceeds the taxable income or
gain recognized upon such sale, exchange, transfer or other
disposition of such other Original Properties and allocated to each
of such Class B Limited Partners pursuant to Section 704(c) of the
Code; (ii) the exchange of one or more of the Original Properties
for other property or properties of like kind in which no taxable
gain is recognized to the Partnership by virtue of Section 1031 of
the Code; (iii) a contribution of one or more of the Original
Properties to an entity characterized for federal income tax
purposes as a partnership in which the Partnership holds an
interest and in which no taxable gain is recognized to the
Partnership by virtue of Section 721 of the Code; or (iv) a
contribution of one or more of the Original Properties to a
domestic entity if the Partnership is the single owner of such
entity and such entity would be disregarded as an entity separate
from its owner pursuant to Regulations Section 301.7701-3(b)(1).
(d) In the event that, after the third anniversary of
the Effective Date, the General Partner determines to sell,
exchange, transfer or otherwise dispose of any of the Original
Properties, including by way of merger, consolidation or other
combination with any Person (other than a merger, consolidation or
combination of any or all of the Drever Partnerships with the
Partnership), the General Partner shall provide to the Class B
Limited Partner who would receive a special allocation of income as
a result of such transaction 60 days written notice prior to the
consummation of any such transaction, which notice shall provide in
reasonable detail the nature of the transaction and a reasonable
estimate of the range of such anticipated, specially allocated
item(s) of income for each such Partner.
(e) The General Partner, in its capacity as General
Partner or otherwise, shall not, directly or indirectly through an
Affiliate or otherwise, cause or permit any Drever Partnership to
undertake any transaction or engage in any activity which, if such
transaction or activity were undertaken (or permitted to occur)
directly by the Partnership, would constitute a breach of this
Agreement.
7.4 Special Committee.
(a) The Partnership shall establish the Special
Committee on the Effective Date. The Special Committee shall
terminate and all references in this Agreement to the Special
Committee shall be rendered inoperative on the first date on which
the Percentage Interest of the Class B Limited Partners is reduced
below 33.33%.
(b) The General Partner hereby appoints ▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ to serve on the Special Committee
commencing with the Effective Date. The General Partner shall
appoint Special Committee members, from time to time, to fill any
Special Committee member vacancy other than a Class B Special
Committee Member vacancy. The General Partner may from time to
time remove, with or without cause and in its sole and absolute
discretion, any Special Committee member, other than a Class B
Special Committee Member which such Class B Special Committee
Member may only be removed in accordance with Section 7.4(c)
hereof.
(c) The initial Class B Special Committee Members shall
be ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇. A Class B Special
Committee Member shall serve on the Special Committee until such
member (i) suffers an Incapacity, (ii) determines to resign from
the Special Committee, or (iii) is removed by a vote of a Majority
in Interest of the Class B Limited Partners. Any Class B Special
Committee Member vacancy shall be filled by a vote of a Majority in
Interest of the Class B Limited Partners.
(d) No member of the Special Committee shall receive any
compensation for serving on the Special Committee.
(e) The Special Committee shall meet, from time to time,
as deemed necessary or advisable by its members, in person or
telephonically, to Approve or disapprove of any matter subject to
the review of the Special Committee as specified in this Agreement.
For purposes of the Approval of the Special Committee required by
Section 7.6 hereof, within the 60 days preceding or following the
first day of a Fiscal Year, the Special Committee shall meet, the
General Partner shall orally describe the Partnership's plans with
respect to the matters described in Sections 7.6(a) and (b) hereof,
and the members shall review and Approve such matters. With
respect to any other matter that requires the Approval of the
Special Committee, the verbal or written approval of the Class B
Special Committee Members shall not be unreasonably withheld. A
meeting of the Special Committee may be called by the delivery of
notice by any two Special Committee members to the other two
Special Committee members.
(f) The General Partner shall furnish, on a timely
basis, the Special Committee members with copies of all relevant
documents, schedules, reports, analyses, or any other information
that the members may deem necessary or advisable to consider in
connection with rendering a competent review of any matter subject
to the review of the Special Committee.
7.5 Reimbursement of the General Partner.
(a) Except for the reimbursement of expenses pursuant to
this Section 7.5 and Section 7.8 hereof, the General Partner shall
not be compensated for its services as general partner of the
Partnership.
(b) 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
directly relating solely to the ownership and operation of, or for
the benefit of, the Partnership, including, without limitation,
Federal and State securities law and other legal and accounting
compliance of the Partnership, and Federal and State and any other
applicable tax and regulatory compliance of the Partnership. Such
reimbursements shall be in addition to any reimbursement to the
General Partner as a result of any indemnification pursuant to
Section 7.7 hereof.
7.6 Contracts with Affiliates.
(a) Subject to the Approval of the Special Committee,
the Partnership may lend or contribute funds or other assets to the
Persons in which it has an equity investment and such Persons may
borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General
Partner. The foregoing authority shall not create any right or
benefit in favor of any Person.
(b) Subject to the Approval of the Special Committee,
the Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it
is or thereby becomes a participant upon such terms and subject to
such conditions consistent with this Agreement, the Act and
applicable law as the General Partner, in its sole and absolute
discretion, believes are advisable.
(c) Contracts between Affiliates of the Partnership and
the Partnership shall be on the same terms and conditions as
contracts between the Partnership and third parties.
(d) The General Partner is authorized to enter into and
comply with the provisions of the Agreement of General Partnership
of ▇▇▇▇▇▇-WDOP Partners of even date herewith. The granting of
consent or approval of any matter that requires the consent or
approval of the Partnership in its capacity as a partner of the
Agreement of General Partnership of ▇▇▇▇▇▇-WDOP Partners shall be
subject to the review and Approval of the Special Committee.
7.7 Indemnification.
(a) The Partnership 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 any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership as
set forth in this Agreement in which such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise;
provided, however, that the Partnership shall not indemnify an
Indemnitee (i) for fraud, intentional misconduct, knowing violation
of the law or gross negligence, or (ii) for any transaction for
which such Indemnitee received a personal benefit in violation or
breach of any provision of this Agreement. It is the intention of
this Section 7.7(a) that the Partnership indemnify each Indemnitee
to the fullest extent permitted under the Act. 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). The termination of
any proceeding by conviction of an Indemnitee or upon a plea of
nolo contendere or its equivalent by an Indemnitee, or an entry of
an order of probation against Indemnitee prior to judgment, creates
a rebuttable presumption that such Indemnitee acted in a manner
contrary to that specified in this Section 7.7(a) with respect to
the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets
of the Partnership, 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) Reasonable expenses incurred by an Indemnitee who is
a party to a proceeding may be paid or reimbursed by the
Partnership in advance of the final disposition of the proceeding
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) 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 with such
Indemnitee or in the writing pursuant to which such Indemnitee is
indemnified.
(d) Any liabilities that an Indemnitee incurs as a
result of acting on behalf of the Partnership or the General
Partner (whether as a fiduciary or otherwise) in connection with
the operation, administration or maintenance of an employee benefit
plan or any related trust or funding mechanism (whether such
liabilities are in the form of excise taxes assessed by the IRS,
penalties assessed by the Department of Labor, restitutions to such
a plan or trust or other funding mechanism or to a participant or
beneficiary of such plan, trust or other funding mechanism, or
otherwise) shall be treated as liabilities or judgments or fines
under this Section 7.7 unless such liabilities arise as a result of
(i) such Indemnitee's fraud, intentional misconduct, knowing
violation of the law or gross negligence, or (ii) any transaction
in which such Indemnitee received a personal benefit in violation
or breach of any provision of this Agreement or applicable law.
(e) In no event shall any Partner be liable to any
Indemnitee by reason of the indemnification provisions set forth in
this Agreement.
(f) 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.
(g) 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 rights of 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 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.
7.8 Liability of the General Partner.
(a) Notwithstanding anything to the contrary set forth
in this Agreement, the General Partner shall not be liable for
damages to the Partnership, any Partners or any Assignees for
losses sustained or liabilities incurred or benefits not derived as
a result of errors in judgment or of any act or omission if the
General Partner acted in good faith and without gross negligence.
(b) The Limited Partners expressly acknowledge that the
General Partner is acting on behalf of the Partnership and the
Partners, that, except as expressly provided herein, the General
Partner is under no obligation to consider the separate interests
of the Limited Partners alone 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 damages to the Partnership
or any Partner for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such
decisions, so long as the General Partner has acted in good faith
and with fair dealing and without gross negligence.
(c) 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
it in good faith and without gross negligence.
(d) 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.
7.9 Other Matters Concerning the General Partner.
(a) 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) The General Partner may consult with legal counsel,
accountants, appraisers, management consults, investment bankers,
architects, engineers, environmental consultants and other
consultants and advisers selected by it and any act taken or
omitted to be taken in reliance upon the opinion of such Persons as
to matters that the General Partner reasonably believes to be
within such Person's professional or expert competence shall be
presumed to have been done or omitted in good faith and in
accordance with such opinion.
(c) 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) Notwithstanding any other provisions of this
Agreement 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 Company to
continue to qualify as a REIT or (ii) to allow the Company to avoid
incurring any liability for taxes under Section 857 or Section 4981
of the Code, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners.
ARTICLE 8
TRANSFERS OF INTERESTS IN AND
WITHDRAWALS FROM THE PARTNERSHIP
8.1 Transfer.
(a) The term "transfer," when used in this Article 8
with respect to a Partnership Interest, shall be deemed to refer to
a transaction by which a Partner purports to assign all or any part
of its 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 8 does not include any
disposition of a Class B Limited Partner Interest pursuant to
Article 11 hereof.
(b) No Partnership Interest shall be transferred, in
whole or in part, except in accordance with the terms and
conditions set forth in this Article 8. Any transfer or purported
transfer of a Partnership Interest not made in accordance with this
Article 8 shall be null and void.
8.2 Transfer of General Partner's Partnership Interest. The
General Partner shall not transfer all or any part of its General
Partner Interest, whether now owned or hereafter acquired, except
in accordance with the terms of this Section 8.2. The General
Partner may transfer its General Partner Interest (a) without the
Approval of any other Partner if such transfer is made to (i) an
Affiliate of the General Partner, (ii) any Person with which the
General Partner merges or consolidates or effects some other
business combination, or (iii) any Person that acquires all or
substantially all of the assets of the General Partner or (b) with
the Approval of a Majority in Interest of the Limited Partners of
each Class, which the Limited Partners may, in their sole
discretion, grant or deny. To the extent that both the General
Partner that transfers its General Partner Interest in compliance
with this Section 8.2 and the transferee of such interest express
their intent in writing that the transferee become a Substituted
Partner in respect of the transferred General Partner Interest,
each Limited Partner hereby consents to such substitution.
8.3 Limited Partners' Rights to Transfer.
(a) The transfer of all or any portion of a Partnership
Interest by a Limited Partner shall not require the consent of any
other Limited Partner. No Limited Partner shall have the right to
transfer all or any portion of its Partnership Interest without the
prior written consent of the General Partner; provided, however,
that a Limited Partner (other than Class B-TE Common Limited
Partners and Class B-TE Preferred Limited Partners) shall have the
right to transfer (i) all or any portion of its Partnership
Interest to an Affiliate of such Limited Partner without the
consent of the General Partner and (ii) all or a portion of its
Partnership Interest with a value equal to at least $50,000 (as
determined on a basis consistent with the principles set forth in
Section 11.5(e) hereof) to any other Person with the prior written
consent of the General Partner, which consent may not be
unreasonably withheld.
(b) 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 no 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 Partnership Interest.
The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.
(c) Notwithstanding any provision herein to the
contrary, no transfer by a Limited Partner of such Partner's
Partnership Interest may be made to any Person if in the opinion of
legal counsel for the Partnership, it would result in (i) the
Partnership being treated, for federal income tax purposes, as an
association taxable as a corporation or a "publicly traded
partnership" within the meaning of Section 7704(b) of the Code or
(ii) the violation of any applicable law.
8.4 Substituted Limited Partners.
(a) Upon the transfer of a Limited Partner Interest
permitted by this Article 8, the transferee shall not become a
Substituted Partner unless and until (i) the transferee on or prior
to the date of the transfer agrees in writing to become a Partner
in the Partnership bound by all of the terms and conditions of this
Agreement, (ii) the transferee pays all reasonable expenses of the
Partnership incurred in connection with such substitution and
assumes all obligations of the transferring Partner under this
Agreement, (iii) the transferring Partner and its transferee
execute and deliver such instruments and agreements as counsel for
the Partnership deems reasonably necessary or desirable to effect
such substitution, and (iv) the General Partner consents to such
substitution which consent shall not be unreasonably withheld.
(b) A transferee who has been admitted as a Substituted
Partner in accordance with this Article 8 shall have all the rights
and powers and be subject to all the restrictions and liabilities
of a Limited Partner under this Agreement.
(c) Upon the admission of a Substituted Partner, the
General Partner shall amend the Ownership Schedule to reflect the
Capital Account and Percentage Interest of such Substituted
Partner and to eliminate or adjust, if necessary, the name, address
and interest of the predecessor of such Substituted Partner.
8.5 Assignees. If the transferee of a Partnership Interest
has not become a Substituted Partner pursuant to the terms of this
Article 8, such transferee shall be considered an Assignee for
purposes of this Agreement. To the extent so assigned, an Assignee
shall be entitled to receive distributions from the Partnership and
the share of Profits, Losses, Recapture Income, and any other items
of income, gain, loss, deduction and credit of the Partnership
attributable to the Partnership Interest assigned to such
transferee but shall not be deemed to be a holder of a Partnership
Interest for any other purpose under this Agreement, and shall not
be entitled to vote such Partnership Interest or Approve any matter
presented to the Partners for a vote or Approval (and the Partner
who assigned the Partnership Interest to the Assignee shall remain
entitled to vote such Partnership Interest or Approve but shall not
have any other rights under this Agreement with respect to such
Partnership Interest). In the event any such transferee desires to
make a further assignment of any such Partnership Interest, such
transferee shall be subject to all the provisions of this Article
8 to the same extent and in the same manner as any Partner desiring
to make an assignment of Partnership Interests.
8.6 General Provisions.
(a) 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 Interest in accordance with this
Article 8.
(b) Any Limited Partner who shall transfer all of his
Partnership Interest in a transfer permitted pursuant to this
Article 8 shall cease to be a Limited Partner upon the admission of
all Assignees of such Partnership Interest as Substituted Limited
Partners.
(c) Other than with respect to Assignees under Section
8.5 hereof, transfers pursuant to this Article 8 may only be made
on the first or last day of a calendar month, unless the General
Partner otherwise agrees.
(d) If any Partnership Interest is transferred or
assigned in compliance with the provisions of this Article 8 or
transferred pursuant to Article 11 hereof, on any day other than
the first day of a Fiscal Year, then Profits, Losses, each item
thereof and all other items attributable to such Partnership
Interest for such Fiscal Year shall be allocated to the transferor
Partner and to the transferee Partner, by taking into account their
varying interests during the Fiscal Year in accordance with Section
706(d) of the Code, using any permissible method selected by the
General Partner, in its sole discretion. Solely for purposes of
making such allocations, for assignments that occur on or prior to
the 15th day of a calendar month each of such items for the
calendar month in which the assignment occurs shall be allocated to
the assignor, and for assignments that occur after the 15th day of
a calendar month each of such items for the calendar month in which
the assignment occurs shall be allocated to the Assignee. All
distributions of Available Cash attributable to such Partnership
Interest with respect to which the Partnership Record Date is
before the date of such transfer or assignment shall be made to the
transferor Partner and all distributions of Available Cash
thereafter attributable to such Partnership Interest shall be made
to the transferee Partner.
8.7 Admission of Successor General Partner. A successor to
all of the General Partner Interest pursuant to Section 8.2 hereof
shall be admitted to the Partnership as the Substituted General
Partner, effective as of the date of, and immediately prior to the
time of, such transfer. The successor General Partner shall carry
on the business of the Partnership without dissolution. The
admission of the successor General Partner shall be subject to such
successor's execution and delivery of a written agreement accepting
all of the terms and conditions of this Agreement, together with
such other documents or instruments as may be required by the Act
to effect the admission of the new General Partner to the
Partnership, including a certificate of amendment to this Agreement
and/or an amended Certificate. In the event that an admission
occurs on any day other than the first day of a Fiscal Year, all
items attributable to the General Partner Interest for such Fiscal
Year shall be allocated between the transferring General Partner
and such successor as provided in Section 8.6(d) hereof.
8.8 Optional Redemption Right. At any time following the
tenth anniversary of the Effective Date, the Partnership shall have
the right to redeem, on any Partnership Preferred Record Date, all
or any portion of the Class B Preferred Units (the "Redemption
Interest") for cash equal to the sum of (a) the product of (i) the
number of Preferred Units and (ii) $25.00 and (b) the portion of
the Unpaid Preferred Distribution Account relating to such
Redemption Interest (the "Redemption Price"). Any redemptions
pursuant to this Section shall be proportionate to all Class B
Preferred Limited Partners. If the Partnership desires to exercise
its redemption right under this Section, the Partnership shall send
a written notice to all Class B Preferred Limited Partners
specifying the Redemption Interest, the Redemption Price and the
Partnership Preferred Record Date, which is not earlier than 20
Business Days from the date of such notice (the "Redemption Closing
Date"), for the closing of such Redemption (the "Redemption
Closing") and providing each Class B Preferred Limited Partner with
an option to elect to receive, in lieu of the Redemption Price and
in accordance with the terms of Article 11 hereof, the Preferred
Exchange Consideration that such Partner would be entitled to
receive pursuant to Section 11.1(b) if the Closing Date was the
same day as the Redemption Closing Date. The Redemption Closing
shall occur on the Redemption Closing Date at the Partnership's
principal office or at such other place as may be agreed. At the
Redemption Closing, each Class B Preferred Limited Partner shall
(i) convey the Redemption Interest to the Partnership, and (ii)
warrant that it is the owner of the Redemption Interest conveyed,
free and clear of any liens, and that it has the power and
authority to convey such Redemption Interest, and the Partnership
shall pay the Redemption Price. Upon payment in full of such
amounts the Redemption Interest shall be deemed to have been
redeemed and canceled.
ARTICLE 9
DISSOLUTION
9.1 Dissolution Events.
(a) Except as set forth in this Article 9, no Partner
shall have the right to dissolve the Partnership. The Partnership
shall not be dissolved by the admission of Substituted Limited
Partners or Additional Limited Partners, by the admission of a
successor General Partner in accordance with the terms of this
Agreement. Upon the transfer of the Partnership Interest of the
General Partner under Section 8.2 hereof, any successor General
Partner shall continue the business of the Partnership.
(b) The Partnership shall dissolve, and its affairs
shall be wound up, upon the first to occur of any of the following
("Liquidating Event"):
(i) the expiration of its stated term as
provided in Section 2.10(a) hereof;
(ii) an event of withdrawal of the
General Partner, as defined in the
Act;
(iii) an election to dissolve the
Partnership is made by the General
Partner with the Approval of all
Limited Partners;
(iv) on or after the tenth anniversary of
the Effective Date and 20 Business
Days after the General Partner has
given the Limited Partners a notice
of intent to dissolve, an election
to dissolve the Partnership is made
by the General Partner, in its sole
and absolute discretion;
(v) the entry of a decree of judicial
dissolution of the Partnership
pursuant to Section 17-802 of the Act or
any successor provision;
(vi) the sale or disposition of all or
substantially all of the assets and
properties of the Partnership
pursuant to the terms of this
Agreement;
(vii) the Bankruptcy of the General Partner; or
(viii) a change in the Code, Regulations
and/or administrative rulings of the
IRS to the effect that ownership of
Partnership Interests by the General
Partner, WDN Properties or any
Affiliates thereof cause or likely
will cause the Company to fail to
qualify as a REIT.
(c) Election to Continue the Partnership. Following a
Liquidating Event described in Section 9.1(b)(ii) or (vii) hereof,
the business of the Partnership shall be continued with the
Partnership properties and assets, and such properties and assets
shall not be liquidated, provided the Partnership is continued as
set forth in this Section 9.1(c). If the Partnership is so
dissolved, the Partnership and its business shall be continued
pursuant to this Section 9.1(c) if, within 90 days after the
occurrence of such Liquidating Event, a Majority in Interest of the
remaining Partners elect to continue the Partnership and elect a
person or legal entity to be admitted to the Partnership as
successor General Partner. Upon the satisfaction of all conditions
necessary to the continuation of the Partnership, including the
admission of a successor General Partner and the amendment of the
Partnership's Certificate (if required by applicable law), the
Partnership shall be continued without any further Approval of any
Partner, in which case the Partnership shall continue to conduct
the business of the Partnership with the Partnership's properties
and assets in accordance with, and the Partnership and interests of
the Partners shall continue to be governed by, the terms and
provisions of this Agreement.
9.2 Winding Up.
(a) Upon the occurrence of a Liquidating Event (other
than those described in Section 9.1(b)(ii) or (vii) hereof) or upon
the expiration of the ninety (90) day period for continuation of
the Partnership set forth in Section 9.1(c) hereof with respect to
Liquidating Events described in Section 9.1(b)(ii) or (vii) hereof
if no election to continue the Partnership has occurred, 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 General Partner or such other
Person being referred to herein as 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 shall be applied and
distributed in the following order:
(i) First, to the payment and discharge
of all of the Partnership's debts
and liabilities to creditors other
than the Partners;
(ii) Second, to the payment and discharge
of all of the Partnership's debts
and liabilities to the Partners; and
(iii) The balance, if any, to and among
the Partners pro rata in accordance
with the positive balances of their
Capital Accounts, after giving
effect to all contributions,
distributions, and allocations for
all periods (including, if
applicable, the allocation of Profit
and Loss realized from or in
connection with the Liquidating
Event and the winding up of the
Partnership under this Section 9.2).
The General Partner shall not receive any compensation for any
services performed pursuant to this Article 9.
(b) Notwithstanding the provisions of Section 9.2(a)
hereof that 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) and/or, with the Approval of a
Majority in Interest of the Partners, distribute to the Partners in
lieu of cash, as tenants in common and in accordance with the
provisions of Section 9.2(a) hereof, undivided interests in such
Partnership assets as the Liquidator deems not suitable for
liquidation. Any such distributions in kind shall be made only if
a Majority in Interest of all Classes of the Partners Approve that
distribution. The Liquidator shall determine the fair market value
of any property distributed in kind using such reasonable method of
valuation as it may adopt. In the event that assets of the
Partnership are distributed in kind to the Partners, adjustments to
the Partners' Capital Accounts for purposes of determining the
amount of such assets distributable to each of the Partners shall
be made by taking into account the hypothetical gain or loss that
would have been recognized had the assets been sold for their fair
market value on the date of the distribution in kind.
(c) In the discretion of the Liquidator, a pro rata
portion of the distributions that would otherwise be made to the
General Partner and Limited Partners pursuant to this Article 9 may
be:
(i) distributed to a trust established
for the benefit of the 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 the Partners arising
out of or in connection with the
Partnership. The assets of any such
trust shall be distributed to its
beneficiaries as soon as
practicable, in the reasonable
discretion of the Liquidator, in the
same proportions as the amount
distributed to such trust by the
Partnership would otherwise have
been distributed to the Partners who
are such beneficiaries or from whom
the beneficiaries derived such
status pursuant to this Agreement;
or
(ii) withheld or escrowed 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 or escrowed amounts shall
be distributed to the Partners in
the manner and order of priority set
forth in Section 9.2(a) as soon as
practicable.
9.3 Timing; Negative Capital Accounts. In the event that the
Partnership is "liquidated" upon the occurrence of Liquidating
Event within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),
distributions shall be made pursuant to this
Article 9 to the General Partner and Limited Partners who have
positive balances in their Capital Accounts in compliance with
Regulations Section 1.704-1(b)(2)(ii)(b)(2). No Partner shall be
liable to the Partnership or to any other Partner for any negative
balance outstanding in each such Partner's Capital Account, whether
such negative Capital Account results from the allocation of Losses
or other items of deduction and loss to such Partner or from
distributions to such Partner, and such Partner shall not have any
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, except as required
by the Act with respect to a deficit of the General Partner, to any
other Person for any purpose whatsoever; provided, however, in the
case of a Class B Common Limited Partner who has agreed in writing
on the Effective Date to be expressly subject to the provisions of
this Section 9.3, if such Partner has a deficit balance in his
Capital Account following the liquidation of his interest in the
Partnership, as determined after taking into account all Capital
Account adjustments for the Partnership taxable year during which
such liquidation occurs, such Partner shall be unconditionally
required to restore the amount of such deficit balance to the
Partnership, but only to the extent of the aggregate amount of
depreciation specially allocated to such Partner pursuant to
Section 5.4(e) hereof, no later than the later of (i) the taxable
year during which such liquidation occurs or (ii) the 90th day
following such liquidation.
9.4 Deemed Distribution and Recontribution. Notwithstanding
any other provision of this Article 9, in the event the Partnership
is 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 this Agreement, the Partnership shall be deemed to have
distributed the property in kind to the General Partner and Limited
Partners, who shall be deemed to have assumed and taken such
property 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 property in kind to the Partnership,
which shall be deemed to have assumed and taken such property
subject to all such liabilities.
9.5 Rights of Partners. Except as otherwise provided in this
Agreement, each Partner shall look solely to the assets of the
Partnership for the return of his Capital Contributions and shall
have no right or power to demand or receive property other than
cash from the Partnership. Except as otherwise provided in this
Agreement, no Partner shall have priority over any other Partner as
to the return of his Capital Contributions, distributions, or
allocations.
9.6 Notice of Dissolution. In the event a Liquidating Event
occurs or an event occurs that would, but for an election or vote
by one or more Partners required pursuant to Section 9.1 hereof,
result in a dissolution of the Partnership, the General Partner
shall, within 30 days thereafter, provide written notice thereof to
each of the Partners.
9.7 Termination of Partnership and Cancellation of
Certificate of Limited Partnership. Upon the completion of the
liquidation of the Partnership cash and property as provided in
Section 9.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed, 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.
9.8 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 9.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this
Agreement shall remain in effect between the Partners during the
period of liquidation.
9.9 Waiver of Partition. Each Partner hereby waives any
right to partition of the Partnership property.
ARTICLE 10
POWER OF ATTORNEY
10.1 Power of Attorney.
(a) Each Limited Partner and each Assignee hereby
constitutes and appoints 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, and provided that
any action taken pursuant to the power granted to any such Person
pursuant to this Section 10.1 is not inconsistent with any other
provision of this Agreement,:
(i) execute, swear to, seal,
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
the 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 to
the extent provided by applicable
law) in the State of Delaware and in
all other jurisdictions in which the
Partnership may or plans to conduct
business or own property; (B) all
instruments that the General Partner
or Liquidator deems appropriate or
necessary to reflect any amendment,
change, modification or restatement
of this Agreement as permitted in
and in accordance with this
Agreement; (C) all conveyances and
other instruments or documents that
the General Partner 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, Articles 8 or 9
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
(ii) execute, swear to, seal, 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
Liquidator, to evidence, 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 Liquidator, to effectuate
the terms or intent of this
Agreement.
(b) Nothing contained herein shall be construed as
authorizing the General Partner or Liquidator to amend this
Agreement except in accordance with the terms of Section 12.1
hereof or as may be otherwise expressly provided for in this
Agreement.
10.2 Duration of Power. The power of attorney granted herein
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 Liquidator to
act as contemplated by this Agreement in any filing or other action
by it on behalf of the Partnership, and it shall survive and not be
affected by the subsequent Incapacity of any Limited Partner or
Assignee and the transfer of all or any portion of such Limited
Partner's or Assignee's Partnership Interest, shall survive the
Incapacity of the Limited Partner, 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 action taken by the General Partner or
Liquidator, acting in good faith pursuant to such power of
attorney; and each such Limited Partner or Assignee hereby waives
any and all defenses that may be available to contest, negate or
disaffirm the action of the General Partner or 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 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, reasonably deems necessary to
effectuate this Agreement and the purposes of the Partnership.
ARTICLE 11
EXCHANGE OF CLASS B COMMON AND PREFERRED UNITS
11.1 Right of the Class B Limited Partners to Exchange Units.
(a) At any time, and from time to time, from and after
the first anniversary of the Effective Date, upon the terms and
subject to the conditions set forth in this Article, each Class B
Common Limited Partner shall have the right to exchange with the
Company (or with any Person that the Company may designate,
including, without limitation, WDN Properties) all or any of its
Class B Common Units for the number of REIT Common Shares
determined in accordance with Section 11.3 below (the "Common
Exchange Consideration").
(b) At any time, and from time to time, from and after
the first anniversary of the Effective Date, upon the terms and
subject to the conditions set forth in this Article, each Class B
Preferred Limited Partner shall have the right to exchange with the
Company (or with any Person that the Company may designate,
including, without limitation, WDN Properties) all or any of its
Class B Preferred Units for (i) the number of REIT Preferred Shares
determined in accordance with Section 11.3 below and (ii) three and
one-third (3 ) Series B Warrants (the "Preferred Exchange
Consideration").
(c) If any Class B Limited Partner elects to exchange
less than all of its respective Class B Common Units or its Class
B Preferred Units, such Class B Limited Partner must exchange at
least 100 Class B Common Units or 100 Class B Preferred Units. In
the event that a Class B Limited Partner shall exercise its option
to cause such exchange, the Company shall issue and deliver to the
Class B Limited Partner in exchange for its Class B Common Units or
Class B Preferred Units such number of REIT Common Shares or REIT
Preferred Shares and Series B Warrants, as applicable, as
determined in accordance with Section 11.3 hereof registered in
such names as such Class B Limited Partner may designate in
accordance with Section 11.8.
11.2 Exchange of Units Held By Class B-TE Limited Partners.
(a) No more than 90 days and not less than 30 days
preceding the first anniversary of the Effective Date, the General
Partner shall give notice that upon the first anniversary of the
Effective Date the General Partner shall take such actions as may
be necessary the effectuate the exchange of, (i) all Class B Common
Units held by Class B-TE Common Limited Partners into the right to
receive the Common Exchange Consideration registered in such names
as such Class B-TE Common Limited Partner may designate in
accordance with Section 11.8, and (ii) all Class B Preferred Units
held by Class B-TE Preferred Limited Partners into the right to
receive the Preferred Exchange Consideration registered in such
names as such Class B-TE Preferred Limited Partner may designate in
accordance with Section 11.8.
(b) Upon the occurrence of a Liquidating Event (other
than those described in Section 9.1(b)(ii) or (vii) hereof) or upon
the expiration of the ninety (90) day period for continuation of
the Partnership set forth in Section 9.1(c) hereof with respect to
Liquidating Events described in Section 9.1(b)(ii) or (vii) hereof
if no election to continue the Partnership has occurred, upon the
terms and subject to the conditions set forth in this Article, each
Class B Limited Partner shall be required to exchange all of its
Class B Common Units and all of its Class B Preferred Units on the
Closing Date (as hereinafter defined) for Common Exchange
Consideration or Preferred Exchange Consideration registered in
such names as such Class B Limited Partner may designate in
accordance with Section 11.8.
11.3 REIT Shares Issuable Upon Exchange.
(a) As of the Effective Date, (i) the Class B Common
Units shall be exchangeable for REIT Common Shares on the basis of
one Class B Common Unit for one REIT Common Share (subject to
adjustment as provided in Section 11.5 hereof) and (ii) the Class
B Preferred Units shall be exchangeable for (A) REIT Preferred
Shares on the basis of one Class B Preferred Unit for one REIT
Preferred Share (subject to adjustment as provided in Section 11.5
hereof) and (B) Series B Warrants on the basis of one Class B
Preferred Unit for three and one-third (3 ) Series B Warrants.
(b) In addition to Section 11.3(a), upon the exchange of
any Class B Common Unit pursuant to Sections 11.1 or 11.2 above, to
the extent that an amount equal to any Unpaid Common Distribution
Account existing as of the Closing Date of such exchange and
attributable to the Class B Common Unit being exchanged is not
distributed by the Partnership as required by Section 5.1(b), any
such unpaid amount (the "Proportionate Prior Unpaid Class B Common
Distributions") shall be purchased by the Company from the holder
of such Unit as follows: (i) to the extent a registration statement
with respect to the REIT Common Shares acquired (or which may be
acquired) upon exchange of the Class B Common Unit has been filed
by the Company with the Securities and Exchange Commission and is
effective on the Closing Date of such exchange of Class B Common
Unit, the Company may, at its sole option, elect to pay such
purchase price in cash or by the issuance by the Company of
additional REIT Common Shares (the "Additional Common Shares") to
the Class B Common Limited Partner in an amount equal to the
quotient of (x) the Proportionate Prior Unpaid Class B Common
Distributions divided by (y) the current market price of a REIT
Common Share (as determined pursuant to Section 11.5(e) hereof) as
of the Closing Date of such exchange, or (ii) if no such
registration statement has been declared and remains effective on
the Closing Date of such exchange, the Company shall pay such
purchase price in cash on the Closing Date of such exchange.
(c) In addition to Section 11.3(a), upon the exchange of
any Class B Preferred Unit pursuant to Sections 11.1 or 11.2 above,
to the extent that an amount equal to any Unpaid Preferred
Distribution Account existing as of the Closing Date of such
exchange and attributable to the Class B Preferred Unit being
exchanged is not distributed by the Partnership as required by
Section 5.1(b), any such unpaid amount (the "Proportionate Prior
Unpaid Class B Preferred Distributions") shall be purchased by the
Company from the holder of such Unit as follows: (i) to the extent
a registration statement with respect to the REIT Preferred Shares
acquired (or which may be acquired) upon exchange of the Class B
Preferred Unit has been filed by the Company with the Securities
and Exchange Commission and is effective on the Closing Date of
such exchange of Class B Preferred Unit, the Company may, at its
sole option, elect to pay such purchase price in cash or by the
issuance by the Company of additional REIT Preferred Shares (the
"Additional Preferred Shares") to the Class B Preferred Limited
Partner in an amount equal to the quotient of (x) the Proportionate
Prior Unpaid Class B Preferred Distributions divided by (y) the
current market price of a REIT Preferred Share (as determined
pursuant to Section 11.5(e) hereof) as of the Closing Date of such
exchange, or (ii) if no such registration statement has been
declared and remains effective on the Closing Date of such
exchange, the Company shall pay such purchase price in cash on the
Closing Date of such exchange.
(d) In addition to Section 11.3(a), following the
exchange of any Class B Common Unit pursuant to Sections 11.1 or
11.2 above, to the extent that any amount described in Section
5.1(a)(ii) attributable to the Class B Common Unit being exchanged
is not distributed by the Partnership as required by Section
5.1(a)(ii) any such unpaid amounts (collectively, the
"Proportionate Current Unpaid Class B Common Distributions") shall
be purchased by the Company from the holder of such Unit as
follows: (i) to the extent a registration statement with respect to
the REIT Common Shares acquired (or which may be acquired) upon
exchange of the Class B Common Unit has been filed by the Company
with the Securities and Exchange Commission and is effective on the
date any Proportionate Current Unpaid Class B Common Distribution
becomes purchasable by the Company (as hereinafter provided), the
Company may, at its sole option, elect to pay the purchase price
thereof in cash or by the issuance by the Company of Additional
Common Shares to the Class B Common Limited Partner in an amount
equal to the quotient of (x) the Proportionate Current Unpaid Class
B Common Distributions divided by (y) the current market price of
a REIT Common Share (as determined pursuant to Section 11.5(e)
hereof) as of the acquisition date, or (ii) if no such registration
statement has been declared and remains effective on the date any
Proportionate Current Unpaid Class B Common Distribution is to be
purchased by the Company, the Company shall pay such purchase price
in cash on the acquisition date. All Proportionate Current Unpaid
Class B Common Distributions shall be purchased by the Company
within five Business Days following the date on which such amounts
were required to be distributed by the Partnership.
(e) In addition to Section 11.3(b), following the
exchange of any Class B Preferred Unit pursuant to Sections 11.1 or
11.2 above, to the extent that any amount described in Section
5.1(a)(i) attributable to the Class B Preferred Unit being
exchanged is not distributed by the Partnership as required by
Section 5.1(a)(i) any such unpaid amounts (collectively, the
"Proportionate Current Unpaid Class B Preferred Distributions")
shall be purchased by the Company from the holder of such Unit as
follows: (i) to the extent a registration statement with respect to
the REIT Preferred Shares acquired (or which may be acquired) upon
exchange of the Class B Preferred Unit has been filed by the
Company with the Securities and Exchange Commission and is
effective on the date any Proportionate Current Unpaid Class B
Preferred Distribution becomes purchasable by the Company (as
hereinafter provided), the Company may, at its sole option, elect
to pay the purchase price thereof in cash or by the issuance by the
Company of Additional Preferred Shares to the Class B Preferred
Limited Partner in an amount equal to the quotient of (x) the
Proportionate Current Unpaid Class B Preferred Distributions
divided by (y) the current market price of a REIT Preferred Share
(as determined pursuant to Section 11.5(e) hereof) as of the
acquisition date, or (ii) if no such registration statement has
been declared and remains effective on the date any Proportionate
Current Unpaid Class B Preferred Distribution is to be purchased by
the Company, the Company shall pay such purchase price in cash on
the acquisition date. All Proportionate Current Unpaid Class B
Preferred Distributions shall be distributed by the Company within
five Business Days following the date on which such amounts were
required to be distributed by the Partnership.
(f) Notwithstanding the foregoing, the Company shall not
be required to issue fractional REIT Common Shares or REIT
Preferred Shares upon exchange of the Class B Common Units or the
Class B Preferred Units or to distribute certificates evidencing
fractional shares. In lieu of fractional REIT Common Shares or
REIT Preferred Shares, there shall be paid to the registered
holders of the Class B Common Unit(s) or the Class B Preferred
Unit(s) on the Closing Date of such exchange as herein provided an
amount in cash equal to the same fraction of the current market
price of a REIT Common Share or REIT Preferred Share (as determined
pursuant to Section 11.5(e) hereof).
11.4 Method of Exchange. The Class B Common Units and the
Class B Preferred Units may be exchanged by the Class B Common
Limited Partner(s) and the Class B Preferred Limited Partner(s)
pursuant to Section 11.1 by delivery, during normal business hours
on any Business Day, of a written notice to the General Partner and
the Company, in accordance with the provisions of Section 12.13
hereof, stating such Class B Limited Partner's intent to exchange
its Class B Common Unit or Class B Preferred Unit and specifying
the number of such units being exchanged if less than all. Each
exchange of Class B Common Units or Class B Preferred Units shall
be deemed to have been effected immediately prior to the close of
business on the Closing Date.
11.5 Adjustment of Number of REIT Shares. The number of REIT
Common Shares to be acquired upon the exchange of the Class B
Common Units and the number of REIT Preferred Shares to be acquired
upon the exchange of the Class B Preferred Units is subject to
adjustment from time to time upon the occurrence of the events
enumerated in this Section 11.5.
(a) In case the Company shall at any time after the
Effective Date (i) declare a dividend or other distribution on the
REIT Common Shares payable in REIT Common Shares, (ii) subdivide
the outstanding REIT Common Shares, (iii) combine the outstanding
REIT Common Shares into a smaller number of shares, or (iv) issue
any shares of its capital stock in a reclassification of the REIT
Common Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the
continuing corporation), the number of REIT Common Shares for which
each outstanding Class B Common Unit are exchangeable (the "Common
Exchange Shares") at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and/or the number and kind of shares of capital
stock issuable on such date shall be proportionately adjusted so
that the Class B Common Limited Partner holding any Class B Common
Unit exercised after such time shall be entitled to receive the
aggregate number and kind of shares of capital stock which, if such
Class B Common Unit had been exercised immediately prior to such
date, it would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. Such adjustment shall be made successively
whenever any event listed above shall occur.
(b) In case the Company shall fix a record date for the
making of a distribution to all holders of REIT Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in REIT Common
Shares) or options, subscription rights or warrants (excluding
those issued to (i) employees, independent contractors or directors
of the Company or its Affiliates pursuant to any existing or future
employee benefit, stock option, stock purchase or stock bonus plan
or (ii) any existing stockholder pursuant to the Company's dividend
reinvestment and share purchase plan), the number of Common
Exchange Shares after such record date shall be determined by
multiplying such number of Common Exchange Shares immediately prior
to such record date by a fraction, of which the numerator shall be
the current market price per REIT Common Share (as determined
pursuant to Section 11.5(e) hereof) on such record date and of
which the denominator shall be such current market price less the
fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive) of the portion of
the assets or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one REIT Common
Share. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such distribution is
not so made, the number of Common Exchange Shares shall again be
adjusted to be such number of shares which would then be in effect
if such record date had not been fixed, but such adjustment shall
not affect the number of shares issued upon any exchange of Class
B Common Units prior to the date such adjustment is made.
(c) In case the Company shall at any time after the
Effective Date (i) declare a dividend or other distribution on the
REIT Preferred Shares payable in REIT Preferred Shares, (ii)
subdivide the outstanding REIT Preferred Shares, (iii) combine the
outstanding REIT Preferred Shares into a smaller number of shares,
or (iv) issue any shares of its capital stock in a reclassification
of the REIT Preferred Shares (including any such reclassification
in connection with a consolidation or merger in which the Company
is the continuing corporation), the number of REIT Preferred Shares
for which the each outstanding Class B Preferred Unit are
exchangeable (the "Preferred Exchange Shares") at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and/or the number and
kind of shares of capital stock issuable on such date shall be
proportionately adjusted so that the Class B Preferred Limited
Partner holding any Class B Preferred Units exercised after such
time shall be entitled to receive the aggregate number and kind of
shares of capital stock which, if such Class B Preferred Unit had
been exercised immediately prior to such date, it would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. Such
adjustment shall be made successively whenever any event listed
above shall occur.
(d) In case the Company shall fix a record date for the
making of a distribution to all holders of REIT Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing
corporation) of evidences of indebtedness or assets (other than
cash dividends or cash distributions payable out of consolidated
earnings or earned surplus or dividends payable in REIT Preferred
Shares) or options, subscription rights or warrants (excluding
those issued to (i) employees, independent contractors or directors
of the Company or its Affiliates pursuant to any existing or future
employee benefit, stock option, stock purchase or stock bonus plan
or (ii) any existing stockholder pursuant to the Company's dividend
reinvestment and share purchase plan), the number of Preferred
Exchange Shares after such record date shall be determined by
multiplying such number of Preferred Exchange Shares immediately
prior to such record date by a fraction, of which the numerator
shall be the current market price per REIT Preferred Share (as
determined pursuant to Section 11.5(e) hereof) on such record date
and of which the denominator shall be such current market price
less the fair market value (as determined by the Board of Directors
of the Company, whose determination shall be conclusive) of the
portion of the assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to one REIT Preferred Share. Such adjustment shall be made
successively whenever such a record date is fixed; and in the event
that such distribution is not so made, the number of Preferred
Exchange Shares shall again be adjusted to be such number of shares
which would then be in effect if such record date had not been
fixed, but such adjustment shall not affect the number of shares
issued upon any exchange of Class B Preferred Units prior to the
date such adjustment is made.
(e) For the purposes of this Article, the current market
price per REIT Common Share or REIT Preferred Share on any date
shall be deemed to be the average of the daily closing prices for
the 30 consecutive trading days on the New York Stock Exchange
commencing 45 trading days before such date. If the REIT Common
Shares or the REIT Preferred Shares are not then listed or admitted
to trading on such exchange, then such closing price shall be the
closing price on the principal national securities exchange on
which the REIT Common Shares or the REIT Preferred Shares are
listed or admitted to trading, or if the REIT Common Shares or the
REIT Preferred Shares are not then listed or admitted to trading on
any national securities exchange, the average of the highest
reported bid and lowest reported asked prices as furnished by the
National Association of Securities Dealers, Inc. ("NASD") or
similar organization if the NASD is no longer reporting such
information. If the REIT Common Shares or the REIT Preferred
Shares are not listed on a national exchange and if bid and asked
prices for the REIT Common Shares or the REIT Preferred Shares are
not furnished by the NASD, the current market price per share shall
be established by the Board of Directors of the Company in its sole
discretion in good faith as of a date which is within 15 Business
Days of the date on which such determination is made.
(f) In any case in which this Section 11.5 shall require
that an adjustment in the number of Common Exchange Shares or
Preferred Exchange Shares be made effective as of a record date for
a specified event, the Company may elect to defer until the
occurrence of such event the issuing to the Class B Limited
Partner, in respect of any Class B Common Units or Class B
Preferred Units exchanged after such record date, the REIT Common
Shares or the REIT Preferred Shares and other capital stock of the
Company, if any, issuable upon such exchange over and above the
REIT Common Shares or the REIT Preferred Shares and other capital
stock of the Company, if any, issuable upon such exchange on the
basis of such number of Common Exchange Shares or Preferred
Exchange Shares in effect prior to such adjustment.
(g) Upon each adjustment of the number of Common
Exchange Shares or Preferred Exchange Shares as a result of the
calculations made in Section 11.5(a), (b), (c) or (d), each Class
B Common Unit outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to acquire that
number of REIT Common Shares determined in accordance with the
provisions of this Section 11.5 and each Class B Preferred Unit
outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to acquire that number of REIT
Preferred Shares determined in accordance with the provisions of
this Section 11.5.
(h) In case of any capital reorganization of the
Company, or of any reclassification of the REIT Common Shares or
the REIT Preferred Shares (other than a change in par value, or
from par value to no par value, or from no par value to par value,
or as a result of subdivision or combination), or in the case of
consolidation of the Company with or the merger of the Company into
any other entity (other than a consolidation or merger in which the
Company is the continuing corporation) or of the sale of all or
substantially all of the properties and assets of the Company to
any other entity, each Class B Common Unit and each Class B
Preferred Unit shall, after such reorganization, reclassification,
consolidation, merger or sale, be exchangeable, upon the terms and
conditions specified in this Article, for the number of shares of
stock or other securities or property to which a holder of the
number of shares which can be acquired (at the time of such
reorganization, reclassification, consolidation, merger or sale)
upon exchange of such Class B Common Unit or such Class B Preferred
Unit would have been entitled upon such reorganization,
reclassification, consolidation, merger or sale; and in any such
case, if necessary, the provisions set forth in this Section 11.5
with respect to the rights and interests thereafter of the Class B
Limited Partners shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any shares of stock
or other securities or property thereafter deliverable on the
exchange of the Class B Common Units and the Class B Preferred
Units. The subdivision or combination of REIT Common Shares or
REIT Preferred Shares at any time outstanding into a greater or
lesser number of shares shall not be deemed to be a
reclassification of the REIT Common Shares or the REIT Preferred
Shares for the purposes of this Section 11.5(h). The Company shall
not effect any such reorganization, reclassification, consolidation
or merger unless prior to or simultaneously with the consummation
thereof the successor entity (if other than the Company) resulting
from such reorganization, reclassification, consolidation or merger
shall assume, by written instrument executed and delivered to the
Class B Limited Partners, the obligation to deliver to the Class B
Limited Partners such shares of stock, securities or assets as, in
accordance with the foregoing provisions, such Class B Limited
Partners may be entitled to acquire and the other obligations under
this Article.
11.6 Notice to Class B Limited Partners. Upon any adjustment
pursuant to Section 11.5 hereof of the number of REIT Common Shares
or REIT Preferred Shares for which an outstanding Class B Common
Unit or Class B Preferred Units is exchangeable, the Company within
20 days thereafter shall cause to be mailed to (i) each Class B
Common Limited Partner a notice setting forth the adjusted number
of REIT Common Shares for which a Class B Common Unit is
exchangeable and setting forth in reasonable detail the method of
calculation and the facts upon which such calculations are based
and (ii) each Class B Preferred Limited Partner a notice setting
forth the adjusted number of REIT Preferred Shares for which a
Class B Preferred Unit is exchangeable and setting forth in
reasonable detail the method of calculation and the facts upon
which such calculations are based.
11.7 Closings. The closing of any exchange of Class B Common
Units or Class B Preferred Units as contemplated hereby (each a
"Closing") shall take place (i) in the event that the Class B
Limited Partners exercise their rights provided by Section 11.1
hereof, on the Business Day following the expiration of 30 days
from the date that the Company receives the notice of the exercise
of such right subject to Section 11.5(f) hereof, (ii) in the event
that the exchange of such Units is required by Section 11.2(a)
hereof on the first anniversary of the Effective Date, or (iii) in
the event that the exchange of such Units is effectuated pursuant
to Section 11.2(b) hereof on the 30th day following the delivery of
notice to the Class B Limited Partners pursuant to Section 11.2,
and in any such case as extended to give effect to any required
waiting period under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements
Act of 1976 or similar federal or state law. The date(s) of a
Closing, as determined in accordance with the immediately preceding
sentence with respect to the transaction in question, shall be
hereinafter referred to as the "Closing Date" for such transaction.
11.8 Deliveries at Closing. At a Closing, (i) Class B Limited
Partners exchanging Class B Common Units or Class B Preferred Units
shall deliver to the Company (a) a certificate, certificates or
other transfer instruments evidencing the Class B Common Units or
the Class B Preferred Units (or the transfer thereof) and any and
all rights associated therewith being transferred to the Company or
its designee in accordance herewith duly executed for transfer or
accompanied by appropriate transfer powers duly executed in blank,
and (b) a subscription agreement or such other document or
instrument reasonably satisfactory to the Company, containing
standard representations and warranties typically required in
connection with a private placement of securities exempt from the
registration requirements of the Federal Securities Act, and (ii)
the Company shall deliver to the Class B Limited Partners
exchanging Class B Common Units or Class B Preferred Units a
certificate or certificates evidencing the REIT Common Shares or
the Preferred Exchange Consideration, which REIT Common Shares or
Preferred Exchange Consideration shall be duly authorized, validly
issued, fully paid and non-assessable and free from any liens or
encumbrances, registered in such name or names as shall have been
requested by the Class B Limited Partners at least two Business
Days prior to the Closing Date.
11.9 Further Assurances. From and after the Closing Date (i)
the Class B Limited Partners, at the request of the Company or its
designee, shall take all such actions and deliver all such
documents as shall be reasonably necessary or appropriate to
confirm and vest title to the Class B Common Units or Class B
Preferred Units (and any and all rights associated therewith) in
the Company or its designee and otherwise enable the Company or its
designee to enjoy the benefits contemplated by this Agreement and
(ii) the Company, at the request of the Class B Limited Partners,
shall take all such actions and deliver all such documents as shall
be reasonably necessary or appropriate to affirm and vest title to
the REIT Common Shares or the Preferred Exchange Consideration in
the Class B Limited Partners and otherwise enable any thereof to
enjoy the benefits contemplated by this Agreement.
11.10 Conditions to Issuance of Securities. Notwithstanding
any provision contained herein to the contrary, prior to the
issuance of the REIT Common Shares, the REIT Preferred Shares, the
Series B Warrants, the Additional Common Shares or the Additional
Preferred Shares, the Company shall have received (i) a certificate
from the Class B Limited Partner holding any Class B Common Unit or
Class B Preferred Unit proposed to be exchanged for Common Exchange
Consideration or Preferred Exchange Consideration, containing
representations and warranties satisfactory to the Company to the
effect that such Class B Limited Partner is the record and
beneficial owner of the Class B Common Units or Class B Preferred
Units and has full power and authority to exchange them for REIT
Shares and (ii) an opinion from counsel to the Company (and at the
Company's expense) (the "Opinion") to the effect that (a) the
issuance and sale of the REIT Common Shares, the REIT Preferred
Shares, the Series B Warrants, the Additional Common Shares or the
Additional Preferred Shares has been registered under the Federal
Securities Act or is exempt from the registration requirements of
the Federal Securities Act, and (b) the issuance and sale of the
REIT Common Shares, the REIT Preferred Shares, the Series B
Warrants, the Additional Common Shares or the Additional Preferred
Shares to the Class B Limited Partners will not cause the Company
to fail to qualify as a real estate investment trust for federal
income tax purposes. In the event counsel to the Company is not
able to deliver the Opinion, the Company shall have no obligation
to issue the REIT Common Shares or the Additional Common Shares
(or, if applicable, the portion thereof which precludes counsel to
the Company from delivering the Opinion (such portion referred to
herein as the "Applicable Portion of the REIT Common Shares"))
pursuant to Sections 11.1, 11.2 or 11.3 above, but in lieu thereof,
the Company shall pay to Class B Common Limited Partner(s), cash in
an amount equal to the product of (a) the number of REIT Common
Shares (or the Applicable Portion of the REIT Common Shares)
issuable to each of the Class B Common Limited Partner(s) and (b)
the current market price of a REIT Common Share (as determined
pursuant to Section 11.5(e) hereof) on the date of such purported
issuance. In the event counsel to the Company is not able to
deliver the Opinion, the Company shall have no obligation to issue
the REIT Preferred Shares, the Series B Warrants or the Additional
Preferred Shares (or, if applicable, the portion thereof which
precludes counsel to the Company from delivering the Opinion (such
portion referred to herein as the "Applicable Portion of the
Preferred Exchange Consideration")) pursuant to Sections 11.1, 11.2
or 11.3 above, but in lieu thereof, the Company shall pay to Class
B Preferred Limited Partner(s), cash in an amount equal to the sum
of (a) the product of (i) the number of REIT Preferred Shares (or
the Applicable Portion of the Preferred Exchange Consideration)
issuable to each of the Class B Preferred Limited Partner(s) and
(ii) the current market price of a REIT Preferred Share (as
determined pursuant to Section 11.5(e) hereof) on the date of such
purported issuance plus (b) product of (i) the number of REIT
Common Shares that could be purchased upon the exercise of the
Series B Warrants (or the Applicable Portion of the Preferred
Exchange Consideration) and (ii) the difference between (a) the
current market price of a REIT Common Share (as determined pursuant
to Section 11.5(e) hereof) on the date of such purported issuance
and (b) the exercise price of a Series B Warrant.
11.11 Reservation of Stock. The Company will at all times
reserve and keep available, solely for issuance and delivery upon
exchange of Class B Limited Partner Interests, the number of REIT
Common Shares and REIT Preferred Shares from time to time issuable
upon exchange of all Class B Common Units and Class B Preferred
Units at the time outstanding.
11.12 Legends.
(a) Each Class B Limited Partner agrees that the
certificates representing any REIT Common Shares, REIT Preferred
Shares, Series B Warrants, Additional Common Shares or Additional
Preferred Shares acquired upon or following exchange of the Class
B Limited Partner Interests shall bear a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON OWNERSHIP AND TRANSFER FOR THE
PURPOSE OF THE CORPORATION'S MAINTENANCE OF ITS STATUS AS
A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"). EXCEPT AS
OTHERWISE PROVIDED PURSUANT TO THE CHARTER OF THE
CORPORATION, NO PERSON MAY (1) BENEFICIALLY OWN SHARES OF
STOCK IN EXCESS OF 9.0% (OR SUCH OTHER PERCENTAGE AS MAY
BE PROVIDED IN THE CHARTER OF THE CORPORATION) OF THE
AGGREGATE VALUE OF ALL OUTSTANDING STOCK OR (2)
BENEFICIALLY OWN STOCK THAT WOULD RESULT IN THE
CORPORATION BEING "CLOSELY HELD" UNDER SECTION 856(h) OF
THE CODE. ANY PERSON WHO ATTEMPTS TO BENEFICIALLY OWN
SHARES OF STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST
IMMEDIATELY NOTIFY THE CORPORATION. IF THE RESTRICTIONS
ON OWNERSHIP OR TRANSFER ARE VIOLATED, THE SHARES OF
STOCK REPRESENTED HEREBY WILL BE AUTOMATICALLY CONVERTED
INTO SHARES OF EXCESS STOCK WHICH WILL BE HELD IN TRUST
BY THE CORPORATION. THE CORPORATION HAS THE OPTION TO
REDEEM SHARES OF EXCESS STOCK UNDER CERTAIN
CIRCUMSTANCES. ALL TERMS IN THIS LEGEND NOT OTHERWISE
DEFINED HEREIN HAVE THE MEANINGS ASCRIBED THERETO IN THE
CORPORATION'S CHARTER, AS THE SAME MAY BE FURTHER AMENDED
FROM TIME TO TIME, A COPY OF WHICH, INCLUDING THE
RESTRICTIONS ON OWNERSHIP OR TRANSFER, WILL BE SENT
WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO REQUESTS.
(b) In the event that any certificates representing
Class B Limited Partner Interests or any REIT Common Shares, REIT
Preferred Shares, Series B Warrants, Additional Common Shares or
Additional Preferred Shares acquired upon or following exchange of
the Class B Limited Partner Interests are not registered under the
Federal Securities Act, each Class B Limited Partner agrees that
the certificates representing such Interests or unregistered shares
shall, upon original issuance and until such time as the same is no
longer required under the applicable requirements of the Federal
Securities Act, bear a legend in substantially the following form:
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE
REOFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID
ACT OR EVIDENCE SATISFACTORY TO THE PARTNERSHIP OR
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
11.13 Right of First Refusal. If, under Debtor Relief Laws
or other laws affecting the disposition of any of the Class B
Common Units or the Class B Preferred Units, the right of the
Company to require the Class B Limited Partners to exchange their
Class B Common Units or Class B Preferred Units pursuant to the
terms of Section 11.2 hereof is voided or declared unenforceable as
to any of the Class B Common Units or the Class B Preferred Units
by any court of competent jurisdiction, the Company shall have a
right of first refusal to purchase any or all Class B Common Units
or Class B Preferred Units in the event of any proposed transfer
thereof by any trustee, receiver, conservator, liquidator, guardian
or other transferee of the person holding the Class B Common Units
or the Class B Preferred Units who is, or whose assets are, subject
to such laws at the same price and on the same terms as such Class
B Common Units or Class B Preferred Units are proposed to be sold
by such trustee, receiver, conservator, liquidator, guardian or
other transferee.
11.14 Fees and Expenses. All fees and expenses incurred by
any of the parties hereto in connection with this Article or the
transactions contemplated hereby shall be borne and paid solely by
the party incurring such fees and expenses.
ARTICLE 12
MISCELLANEOUS
12.1 Amendments.
(a) Amendments to this Agreement may be proposed by the
General Partner and the General Partner shall submit any proposed
amendment to all of the Limited Partners entitled to vote thereon
or Approve. The General Partner shall seek the Approval 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. Except as provided in Section 12.1(b) or 12.1(c), a
proposed amendment shall be adopted and be effective as an
amendment hereto if it is approved by the General Partner and it
receives the Supermajority Approval of all Partners.
(b) Notwithstanding Section 12.1(a) hereof, the General
Partner shall have the power, without the Approval of the Limited
Partners, to amend this Agreement as may be required to facilitate
or implement any of the following purposes:
(i) to add to the obligations of the
General Partner or surrender any
right or power granted to the
General Partner or any Affiliate of
the General Partner for the benefit
of the Limited Partners;
(ii) to reflect the admission,
substitution, termination, or
withdrawal of Partners in accordance
with this Agreement;
(iii) to set forth the designations,
rights powers, duties and
preferences of the holders of any
additional Partnership Interests
issued pursuant to Section 3.2(a)
hereof;
(iv) to reflect any change that does not
adversely affect the Limited
Partners in any material respect, or
to cure any ambiguity, correct or
supplement any provision in this
Agreement not inconsistent with law
or with other provisions, or make
other changes with respect to
matters arising under this Agreement
that will not be inconsistent with
law or with the provisions of this
Agreement; and
(v) to satisfy any requirements,
conditions, or guidelines contained
in any order, directive, opinion,
ruling, or regulations of a federal
or state agency or contained in
federal or state law.
The General Partner shall provide notice promptly to the Limited
Partners when any action under this Section 12.1(b) is taken.
(c) Notwithstanding Sections 12.1(a) and 12.1(b) hereof,
this Agreement, including any definitional provisions under Article
1 hereof, shall not be amended without the Approval of each Partner
adversely affected if such amendment would (i) convert a Limited
Partner Interest in the Partnership into a General Partner
Interest, (ii) modify the limited liability of a Limited Partner in
a manner adverse to such Limited Partner, (iii) alter rights of the
Partner to receive distributions pursuant to Article 5 or the
allocations specified in Article 5 or Article 9 in a manner adverse
to such Partner (except as permitted pursuant to Section 3.2 and
Section 12.1(b)(iii) hereof), (iv) cause the termination of the
Partnership prior to the time set forth in Sections 2.10 or 9.1
hereof, or (v) amend Section 2.9, Section 2.10, Section 6.2,
Article 7, Article 8, Article 9, Article 11 or any provision of
this Section 12.1(c).
12.2 Meetings of the Partners.
(a) Meetings of the Partners may be called 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 Business Days nor more than 30
Business Days prior to the date of such meeting. Partners may vote
in person or by proxy at such meeting. Whenever the vote or
Approval of Partners is permitted or required under this Agreement,
such vote or Approval may be given at a meeting of Partners or may
be given in accordance with the procedure prescribed in the
definition of "Approved" or "Approval" or Section 12.2(b) hereof.
Except as otherwise expressly provided in this Agreement, the
Approval of holders of a majority of the Percentage Interests held
by Limited Partners shall control.
(b) Any action required or permitted to be taken at a
meeting of the Partners may be taken without a meeting if, after
five Business Days prior written notice to all Partners whose vote
or Approval is required with respect to such action, 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) whose vote
or consent is required with respect to such action. 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) whose vote or consent is required with
respect to such action. 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) Each Limited Partner may authorize any Person or
Persons to act for him 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 his 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 written notice of such revocation from the Limited Partner
executing such proxy.
(d) 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 in his
sole discretion.
12.3 Complete Agreement. This Agreement and each agreement
referred to herein and therein constitutes the complete and
exclusive statement of the agreement between the Partners and
replaces and supersedes any other oral or written agreements by and
among the Partners or any of them.
12.4 Governing Law. This agreement and the rights of the
parties hereunder shall be governed by, interpreted and enforced in
accordance with, the internal laws (exclusive of the choice of law
provisions thereof) of the State of Delaware as to all matters,
including, but not limited to, matters of validity, construction,
effect, performance and remedies.
12.5 Binding Effect. Subject to the provisions of this
Agreement relating to transferability, this Agreement shall be
binding upon and inure to the benefit of the parties signatory
hereto, and their respective distributes, successors and assigns.
12.6 Headings. All headings, title or captions herein are
inserted only for convenience and ease of reference and are not to
be considered in the construction or interpretation of any
provision of this Agreement.
12.7 Severability. If any provision of this Agreement or the
application thereof to any Person or circumstances is or becomes
invalid or unenforceable to any extent, the remainder of this
Agreement and the application of such provisions to other Persons
or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
12.8 Multiple Counterparts; Facsimile Signatures. This
Agreement may be executed in several counterparts, each of which
shall be deemed an original but all of which shall constitute one
and the same instrument. However, in making proof hereof it shall
be necessary to produce only one copy hereof signed by the party
against whom enforcement is sought. Each party hereto hereby
acknowledges the effectiveness of, and agrees to accept, facsimile
signatures of any other party hereto for purposes of executing this
Agreement; provided, however, that any party executing this
Agreement by facsimile signature shall provide the General Partner
with the number of original signatures pages as the General Partner
may specify as soon as is practicable following a request for same
by the General Partner.
12.9 Execution of Documents. Each party hereto agrees to
execute, with acknowledgment or affidavit, if required, any and all
documents and writings which may be necessary or expedient in
connection with the achievement of the Partnership's purposes,
specifically including the amendment to the Partnership's
Certificate contemplated by the terms hereof and all further
amendments thereto or cancellation thereof.
12.10 Reliance on Authority. In no event shall any Person
dealing with the General Partner be obligated to ascertain that the
terms of this Agreement have been complied with, or be obligated
to inquire into the necessity or expediency of any act or action of
the General Partner; and every contract, agreement, deed, mortgage,
promissory note, or other instrument or document executed by the
General Partner with respect to the Partnership 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/or
delivery thereof, this Agreement was in full force and effect,
(ii) such instrument or document was duly executed in accordance
with the terms and provisions of this Agreement and is binding upon
the Partnership and all of the Partners thereof, and (iii) the
General Partner was duly authorized and empowered to execute and
deliver any and every such instrument or documents for and on
behalf of the Partnership.
12.11 No Third Party Beneficiary. Except as otherwise
provided herein, this Agreement is made solely and specifically
among and for the benefit of the parties hereto and their
respective successors and assigns, and no other Person shall have
any rights, interest or claims hereunder or be entitled to any
benefits under or on account of this Agreement as a third party
beneficiary or otherwise.
12.12 References to this Agreement. Numbered or lettered
articles, sections and subsections herein contained refer to
articles, sections and subsections of this Agreement unless
otherwise expressly stated.
12.13 Notices. All notices and other communications provided
for herein shall be given or made by telex, telecopy, facsimile,
telegraph, cable or in writing and telexed, telecopied, faxed,
telegraphed, cabled, mailed or delivered to the intended recipient
at the address set forth in the books and records of the
Partnership. Except as otherwise provided in this Agreement, all
such communications shall be deemed to have been duly given when
received by telex, telecopy, facsimile, telegraph or cable or
personally delivered by a courier service or, by mail, postage
prepaid and return receipt requested, in each case given or
addressed as aforesaid. Any party hereto may, at any time by
giving ten Business Days prior written notice to the other parties
hereto, designate any other address in substitution of the
foregoing address to which such notice shall be given.
12.14 Title to Partnership Property. Title to Partnership
property, whether real, personal or mixed and whether tangible or
intangible, and all interests in such property shall be deemed to
be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in
such Partnership property or any portion thereof except as a
Partner in the Partnership. Title to any or all of the Partnership
property 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
property 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 for the use and benefit of the Partnership in accordance with
the provisions of this Agreement; provided, however, that, subject
to the provisions of the Agreement of General Partnership of
▇▇▇▇▇▇-WDOP Partners, the General Partner shall use its best
efforts to cause beneficial and record title to such property to be
vested in the Partnership as soon as reasonably practicable. All
Partnership assets and properties 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 property is held.
12.15 Reliance on Authority of Person Signing Agreement. In
the event that a Partner is any Person other than a natural person,
neither the Partnership nor any Partner shall (i) be required to
determine the authority of the Person signing this Agreement to
make any commitment or undertaking on behalf of such first Person
or to determine any fact or circumstance bearing upon the existence
of the authority of such Person; or (ii) be required to see to the
application or distribution of proceeds paid or credited to persons
signing this Agreement on behalf of such first Person.
12.16 Waiver. No failure by any party to insist upon strict
performance of any covenant, duty, agreement or condition of this
Agreement or to the exercise of any right or remedy resulting from
a breach thereof shall constitute, or be deemed to constitute, a
waiver of any such breach or any other covenant, duty, agreement or
condition.
IN WITNESS WHEREOF, the General Partner and the Limited
Partner have executed this Agreement on the date set forth opposite
their signatures.
SIGNATURE PAGES OF PARTNERS ATTACHED
This signature page is attached to that certain Amended and
Restated Limited Partnership Agreement of ▇▇▇▇▇▇/Drever Operating
Partnership, L.P.
GENERAL PARTNER:
▇▇▇▇▇▇ RESIDENTIAL PROPERTIES, INC.,
a Maryland corporation
Date: August 12, 1997 By: / s / ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Executive Vice President
and Chief Financial Officer
This signature page is attached to that certain Amended and
Restated Limited Partnership Agreement of ▇▇▇▇▇▇/Drever Operating
Partnership, L.P.
LIMITED PARTNER:
WDN PROPERTIES, INC.,
a New York corporation
Date: August 12, 1997 By: / s / ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: President
EXHIBIT A
Drever Partnerships
EXHIBIT B
Agreement of General Partnership of ▇▇▇▇▇▇-WDOP Partners
I:\FINANCE\SECFIL~1\01-Q-98\EX-10-1.WPD