EXHIBIT 4.1
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SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
OF ▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
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▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
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THE LIMITED PARTNER UNITS IN THIS PARTNERSHIP ARE BEING SOLD WITHOUT
REGISTRATION UNDER THE SECURITIES LAWS OF CERTAIN STATES, IN RELIANCE UPON
EXEMPTIONS THEREFROM. CONSEQUENTLY, LIMITED PARTNER UNITS IN THE PARTNERSHIP MAY
NOT BE SOLD OR TRANSFERRED WITHOUT REGISTRATION OF SUCH UNITS UNDER SUCH
SECURITIES LAWS UNLESS SUCH UNITS ARE SOLD IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION THEREUNDER. ADDITIONAL LIMITATIONS ON TRANSFER OF THE LIMITED
PARTNER UNITS ARE CONTAINED HEREIN.
TABLE OF CONTENTS
PAGE
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ARTICLE I
Defined Terms........................................................................................... 1
ARTICLE II
CONTINUATION, PURPOSE, AND TERM
Section 2.1 Continuation....................................................................................... 5
Section 2.2 Name, Principal Office, Registered Office and Registered Agent..................................... 5
Section 2.3 Purpose............................................................................................ 5
Section 2.4 Authorized Acts.................................................................................... 5
Section 2.5 Term and Dissolution............................................................................... 6
ARTICLE III
PARTNERS; CAPITAL
Section 3.1 General Partner.................................................................................... 7
Section 3.2 Limited Partners................................................................................... 7
Section 3.3 Partnership Capital................................................................................ 7
Section 3.4 Withdrawal of Capital.............................................................................. 7
Section 3.5 Liability of Limited Partners...................................................................... 7
Section 3.6 Limited Partners................................................................................... 7
ARTICLE IV
CAPITAL CONTRIBUTIONS OF LIMITED PARTNERS
Section 4.1 Payments........................................................................................... 8
Section 4.2 Additional Capital Contributions by Limited Partners and Admission of Additional Limited
Partners........................................................................................... 8
Section 4.3 Fees and Expense Reimbursements Paid to Certain Entities........................................... 8
ARTICLE V
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
Section 5.1 Business Management and Control..................................................................... 9
Section 5.2 Duties and Obligations.............................................................................. 9
Section 5.3 Indemnification..................................................................................... 9
Section 5.4 Liability of the General Partner to Limited Partners................................................ 10
Section 5.5 Limited Partners' Right to Restrict General Partner's Authority..................................... 10
Section 5.6 Other Activities.................................................................................... 11
ARTICLE VI
RETIREMENT OF A GENERAL PARTNER
Section 6.1 Retirement; Dissolution; Continuation............................................................... 11
ARTICLE VII
TRANSFERABILITY OF LIMITED PARTNERSHIP INTERESTS
Section 7.1 Limitations and Restrictions....................................................................... 12
Section 7.2 Assignment Effective at Death; Death or Incapacity................................................. 12
Section 7.3 Conveyance of Partnership Interests................................................................ 13
Section 7.4 Lost Investor Certificates......................................................................... 14
PAGE
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ARTICLE VIII
LOANS
Section 8.1 In General......................................................................................... 14
ARTICLE IX
PROFITS AND LOSSES; DISTRIBUTIONS
Section 9.1 Profits and Losses................................................................................. 14
Section 9.2 Distributions Prior to Dissolution................................................................. 19
Section 9.3 Distributions On Dissolution....................................................................... 21
Section 9.4 Changes in Percentage Interests.................................................................... 21
ARTICLE X
BOOKS AND RECORDS, ACCOUNTING, TAX ELECTIONS, ETC.
Section 10.1 Books and Records.................................................................................. 21
Section 10.2 Bank Accounts...................................................................................... 22
Section 10.3 Accountants........................................................................................ 22
Section 10.4 Reports to Limited Partners........................................................................ 22
Section 10.5 Tax Elections...................................................................................... 22
Section 10.6 Special Basis Adjustments.......................................................................... 22
Section 10.7 Fiscal Year and Accounting Method.................................................................. 22
Section 10.8 Tax Matters Partner................................................................................ 23
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Restrictions on Transfer........................................................................... 23
Section 11.2 Appointment of General Partner as Attorney in-Fact................................................. 23
Section 11.3 Notices............................................................................................ 24
Section 11.4 Word Meanings...................................................................................... 24
Section 11.5 Binding Provisions................................................................................. 24
Section 11.6 Applicable Law..................................................................................... 24
Section 11.7 Counterparts....................................................................................... 24
Section 11.8 Survival of Representations and Warranties......................................................... 25
Section 11.9 Separability of Provisions......................................................................... 25
Section 11.10 Investment Representation.......................................................................... 25
Section 11.11 Paragraph Titles................................................................................... 25
Section 11.12 Meeting of Partners................................................................................ 25
Section 11.13 Amendment Procedure................................................................................ 25
Section 11.14 Partition.......................................................................................... 26
▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
Second Amended and Restated Agreement of Limited Partnership (the
'Agreement') of ▇▇▇▇ ▇▇▇▇▇▇▇▇ Associates Limited Partnership, a Delaware limited
partnership (the 'Partnership'), dated as of November , 1997, by and among
Winthrop Financial Associates, A Limited Partnership, a Maryland limited
partnership, as General Partner, those persons named on the Schedule as
Unitholders and those persons named on the Schedule as Preferred Unitholders.
WHEREAS, the Partnership, pursuant to the Registration Statement has
offered subscription rights to purchase an aggregate of 460 Preferred Units on
terms more fully described in the Registration Statement and herein; and
WHEREAS, the General Partner wishes to amend and restate the First Amended
and Restated Limited Partnership Agreement, dated as of January 5, 1989, as
amended thereafter (the 'Prior Agreement'), to effect the issuance of the
Preferred Units and the admission of the Preferred Unitholders to the
Partnership.
NOW, THEREFORE, the Prior Agreement is hereby amended to admit the persons
listed on the Schedule as Preferred Unitholders and to amend and restate all of
the provisions thereof so that the Prior Agreement, as amended and restated
hereby, reads in its entirety as follows:
ARTICLE I
DEFINED TERMS
The capitalized terms used in this Agreement shall have the meanings
specified below.
'Accountants' means the firm of certified public accountants engaged by the
General Partner on behalf of the Partnership.
'Admission Date' means, as to each Limited Partner, the date on which his
admission to the Partnership in accordance with Section 3.6 is duly recorded on
the records of the Partnership.
'Affiliate' or 'Affiliated Person' means any (i) General Partner, (ii)
member of the Immediate Family of any General Partner; (iii) legal
representative, successor, or assignee of any Person referred to in the
preceding clauses (i) and (ii); (iv) trustee of a trust for the benefit of any
Person referred to in the preceding clauses (i) through (iii); (v) Entity which
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, any Person referred to in the
preceding clauses (i) through (iv); or (vi) Person who is an officer, director,
trustee, employee, stockholder (10% or more), or partner of any Person referred
to in the preceding clauses (i) through (v). For purposes of this definition,
the term 'control' means the ownership of 10% or more of the beneficial interest
or the voting power of the appropriate Entity.
'Agreement' means this Second Amended and Restated Limited Partnership
Agreement, as it may be further amended from time to time.
'Annual Return' has the meaning set forth in Section 9.2.D.
'Capital Account' means, as to any Partner or class of Partners, the
Capital Contribution actually paid to the Partnership by the Partner or class
(reduced by selling commissions, if any) plus Net Income (or item thereof) and
Gain from a Capital Transaction allocated to the Partner or class, minus the sum
of (i) all Net Loss and deduction (or item thereof) and Loss from a Capital
Transaction allocated to the Partner or class, (ii) the cash and the fair market
value of property distributed to the Partner or class (net of any liabilities
assumed by such Partner or class or to which such distributed property is
subject), and (iii) the Partners' or class' distributive share of expenditures
of the Partnership described in Code Section 705(a)(2)(B) (relating to
expenditures which are neither deductible nor properly chargeable to capital,
such as unamortized organization expenses or losses disallowed under the
related-party loss disallowance rules of the Code). In addition, the capital
accounts of all Partners shall be determined and maintained throughout the term
of the partnership in accordance with the capital accounting rules of Income Tax
Regulation Section1.704-1(b)(2)(iv). In the event that any Interest is
transferred in
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accordance with the terms of this Agreement, the Capital Account of the
transferee shall be equal to the Capital Account of the transferor at the time
of the transfer of the Interest.
'Capital Contribution' means with respect to (i) each Unitholder, $100,000
per Unit for Cash Method Unitholders and $101,789 per Unit for Installment
Method Unitholders, (ii) Preferred Unitholders, $23,250 per Preferred Unit, and
(iii) the General Partner, the aggregate of the amount of cash heretofore
contributed by the General Partner.
'Capital Proceeds' means the net cash proceeds received by the Partnership
from a Capital Transaction after payment of all related expenses but prior to
payment of debts and obligations of the Partnership, or funding of reserves.
'Capital Transaction' means any transaction the proceeds of which do not
constitute Cash Flow, including (i) a Capital Transaction as described in the
Operating Partnership Agreement and (ii) the financing, sale, exchange, or other
disposition of interest of the Partnership in the Operating Partnership.
'Cash Flow' shall have the meaning provided in Section 9.2.A.
'Cash Method Unitholders' means those Unitholders who elected to pay their
Capital Contributions in a single payment of $100,000 per Unit.
'Certificate' means the Certificate of Limited Partnership establishing the
Partnership, as filed in the office of the Secretary of State of Delaware on
January 10, 1989, as amended and as it may be amended from time to time in the
future in accordance with the terms of this Agreement and the Uniform Act.
'Code' means the Internal Revenue Code of 1986, as amended.
'Consent of the Limited Partners' means the written consent or approval of
Limited Partners owning in the aggregate Units and Preferred Units representing
more than 50% of the votes entitled to be cast on any action, which Consent
shall be obtained prior to the taking of any action for which it is required by
this Agreement. Each Unit shall entitle the holder thereof to one vote.
Preferred Units will not entitle the holders thereof to any voting rights;
provided, however, that Preferred Units will entitle the holders thereof, voting
together with the Unitholders as a single class, to two votes per Preferred Unit
with respect to any decision to approve or disapprove the sale of all or
substantially all of the assets of the Partnership or the Operating Partnership
in a single or related series of transactions. Consent shall be deemed to be
granted if the General Partner makes a written request for the consent of the
Limited Partners to a particular action, unless the General Partner receives
written refusals to consent within 30 days of the request from Limited Partners
owning in the aggregate Units and Preferred Units representing more than 50% of
the votes entitled to be cast with respect to such action.
'Entity' means any general partnership, limited partnership, corporation,
joint venture, trust, business trust, cooperative, or association.
'Event of Bankruptcy' means as to a General Partner:
(a) its filing a petition commencing a case as a debtor under the
Bankruptcy Code (as now or in the future amended), or the commencement of
an involuntary case against it under the Bankruptcy Code and the earlier of
the entry of an order for relief or the appointment of an interim trustee
to take possession of its estate and/or to operate any of its business;
(b) its making a general assignment for the benefit of its creditors;
(c) its consenting to the appointment of a receiver for all or a
substantial part of its property;
(d) the entry of a court order appointing a receiver or trustee for
all or a substantial part of its property without its consent; or
(e) the assumption of custody or sequestration by a court of competent
jurisdiction of all or substantially all of its property.
'Gain or Loss from a Capital Transaction' means the gain or loss recognized
by the Partnership as a result of a Capital Transaction as determined for
Federal income tax purposes by the Accountants, but without regard to any
adjustments to basis pursuant to Sections 734 and 743 of the Code.
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'General Partner' or 'General Partners' means any Person designated as a
General Partner in the Schedule or any Person who becomes a General Partner as
provided in this Agreement, including a substitute General Partner, in that
Person's capacity as a General Partner.
'Immediate Family' means, with respect to any Person, his spouse, parents,
parents-in-law, descendants, nephews, nieces, brothers, sisters,
brothers-in-law, sisters-in-law, children-in-law, and grandchildren-in-law.
'Installment Method Unitholders' means those Unitholders who elected to pay
their Capital Contributions in installments pursuant to Section 4.1.A of the
Prior Agreement.
'Interest' or 'Partnership Interest' means the ownership interest of a
Partner in the Partnership at any particular time, including the right of such
Partner to any and all benefits to which such Partner may be entitled as
provided in this Agreement, together with the obligations of such Partner to
comply with all the terms and provisions of this Agreement.
'Invested Capital' means, for each Limited Partner at any point in time,
the amount by which his Capital Contribution exceeds the aggregate amount
previously distributed to such Limited Partner pursuant to Article IX hereof.
'Investor Certificate' means the certificate, in the form of Exhibits A
and/or B to this Agreement, issued to each Unitholder and Preferred Unitholder,
as applicable; it being understood that such Investor Certificate and the
Interest it represents shall for all purposes be considered a 'Certificated
Security' for purposes of Article VIII of the Uniform Commercial Code of the
State of Delaware.
'Limited Partner' or 'Limited Partners' means the Unitholders and the
Preferred Unitholders.
'Management Agreement' means the Amended and Restated Commercial Management
Agreement, dated as of January 1, 1990, and the First Amendment thereto, dated
as of October 22, 1991, between Winthrop Management and the Operating
Partnership.
'Minimum Gain' means the excess of the outstanding principal balance of the
non-recourse debt secured by the Property (excluding any portion of the
principal balance which would not be treated as an amount realized under Section
1001 of the Code and Income Tax Regulation 1.1001-2(a) if the debt were
foreclosed upon) over the adjusted basis of the Property for Federal income tax
purposes.
'Mortgage Documents' means the mortgage, security agreement and financing
statements and assignments of leases, rents, issues and profits, and any other
agreements entered into by the Mortgage Lender and the Partnership in connection
with the Mortgage Loan, and shall include, where the context admits, any
mortgage or deed of trust to the extent secured by the Property, security
agreement, modification agreement, allonge, or financing statement and the
promissory note or other credit instrument evidencing the debt thereunder and
any other instrument in connection with the Mortgage Loan which is binding on
the Partnership. If the Mortgage Loan is replaced by any subsequent mortgage or
mortgages, the term Mortgage Documents shall refer to any subsequent mortgage or
mortgages.
'Mortgage Lender' means First Interstate Structures, Inc., a subsidiary of
First Interstate Bank, or other mortgage lender as described in the Registration
Statement.
'Mortgage Loan' means the loan made by the Mortgage Lender to the
Partnership in the amount of $56,000,000 on the terms described in the Mortgage
Documents.
'Net Income or Net Loss' for any fiscal year means the net income or net
loss of the Partnership for the Year as determined for Federal income tax
purposes by the Accountants (a) excluding Gain or Loss from a Capital
Transaction; (b) determined without regard to any adjustments to basis pursuant
to Section 743 of the Code; (c) if, and to the extent that, assets of the
Partnership have been reflected in the Capital Accounts of the Partners and on
the books of the Partnership at their respective fair market values rather than
their adjusted bases for tax purposes, by computing items of gain, loss, and
deduction based upon such assets' values as reflected on the Partnership's
books; (d) by including as an item of gross income any tax-exempt income
received by the Partnership; and (e) by treating as a deductible expense any
expenditure of the Partnership described in Section 705(a)(2)(B) of the Code
(amounts paid or incurred to organize the Partnership (unless an election is
made pursuant to Code Section 709(b)) or to promote the sale of interests in the
Partnership and deductions for
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any losses incurred in connection with the sale or exchange of Partnership
property disallowed pursuant to Section 267(a)(1) or Section 707(b) of the Code
shall be treated as expenditures described in Section 705(a)(2)(B) of the Code).
'Non-Terminating Capital Transaction' means a Capital Transaction which
does not result in liquidation, dissolution, or termination of the Partnership.
'Operating Partnership' means ▇▇▇▇ ▇▇▇▇▇▇▇▇ Partnership, a Delaware general
partnership.
'Operating Partnership Agreement' means the partnership agreement of the
Operating Partnership, as amended from time to time.
'Other Equity Interests' means equity interests in the Partnership, other
than Units or Preferred Units, which may be issued by the Partnership from time
to time, having such rights to distributions of Cash Flow, Net Profits and Net
Losses, Sale Proceeds, Refinancing Proceeds and net liquidation proceeds as the
General Partner may determine, which shall be issued only with the Consent of
the Limited Partners. Other Equity Interests may take the form of convertible
debt instruments issued in connection with loans made to the Partnership by the
Partners, including the General Partner, as contemplated in Section 8.1.
'Partner' means any General Partner or Limited Partner.
'Partnership' means the limited partnership governed by this Agreement as
constituted and amended from time to time.
'Partnership Administration and Investor Service Fee' means the fee
described in Section 4.3.A.
'Percentage Interest' means, as to a Partner, the applicable percentage
specified in the Schedule. A Preferred Unitholder, as such, shall not be
assigned any Percentage Interest.
'Person' means any individual or Entity, and his heirs, executors,
administrators, legal representatives, successors, and assigns where the context
requires. Unless the context otherwise requires, the singular shall include the
plural, and the masculine gender shall include the feminine and the neuter and
vice versa.
'Preferred Invested Capital' means, as to each Preferred Unitholder,
$23,250 per Preferred Unit, reduced (but not below zero) by the amount of any
prior distribution to such Preferred Unitholder under Section 9.2.D(i)(B).
'Preferred Unitholder' means any Person designated as such in the Schedule
or any Person who becomes a Preferred Unitholder as provided in this Agreement,
including a substitute Preferred Unitholder, in that Person's capacity as a
Preferred Unitholder.
'Preferred Unit' means an interest in the Partnership held by a Preferred
Unitholder, as set forth on the Schedule.
'Property' means the office building located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, the parking structure located at ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, and
the parcels of land upon which such properties are situated.
'Property Expenses' means all the costs and expenses of any type incurred
incident to the ownership and operation of the Property, including, without
limitation, taxes, payments of principal and interest on the Mortgage Loan or
any other Partnership loans, maintenance, repairs and capital improvements to
the Property, the Management Fee, and the Partnership Administrative and
Investor Services Fee, and the funding of any reserves, deposits, escrow
accounts, or fees required to be maintained or paid by the Mortgage Documents.
Property Expenses shall be determined on an accrual basis of accounting
regardless of the basis upon which the books of the Partnership are kept for
other purposes.
'Registration Statement' means the Partnership's proxy and registration
statement on Form S-3 (SEC Registration No. 333-36471) declared effective in
October, 1997.
'Retirement' (including Retire, Retired, and Retiring) means, as to a
General Partner, and shall be deemed to have occurred automatically upon the
occurrence of, an Event of Bankruptcy, dissolution, or voluntary or involuntary
withdrawal of a General Partner for any reason.
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'Schedule' means the Schedule of Partners, as amended from time to time,
maintained by the Partnership.
'State' means the State of Delaware,
'Substitute Limited Partner' means any Person who is admitted to the
Partnership as a Limited Partner under the provisions of Article VII.
'Terminating Capital Transaction' means a Capital Transaction which results
in the termination of the Partnership. The term shall also include the receipt
and collection of notes, if any, and payments thereon or any other consideration
received or to be received by the Partnership upon such a Transaction during the
winding up of Partnership affairs.
'Uniform Act' means the Delaware Revised Uniform Limited Partnership Act, 6
Del. C. 17-101 et seq., as amended or modified from time to time.
'Unit' means an interest in the Partnership held by a Unitholder as set
forth on the Schedule.
'Unitholder' means any Person designated as such in the Schedule or any
Person who becomes a Unitholder as provided in this Agreement, including a
substitute Unitholder, in that Person's capacity as a Unitholder.
'WFA' means Winthrop Financial Associates, A Limited Partnership, a
Maryland limited partnership, and is the General Partner of the Partnership.
ARTICLE II
CONTINUATION, PURPOSE, AND TERM
Section 2.1 Continuation.
The parties hereto hereby agree to continue the limited partnership known
as ▇▇▇▇ ▇▇▇▇▇▇▇▇ Associates Limited Partnership as a limited partnership under
the provisions of the Uniform Act.
Section 2.2 Name, Principal Office, Registered Office and Registered
Agent.
The Partnership shall continue to be conducted under the name of ▇▇▇▇
▇▇▇▇▇▇▇▇ Associates Limited Partnership. The principal office of the Partnership
is Five ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. The General Partner may at
any time change the location of the principal office and shall give due notice
of any such change to the Limited Partners. The address of the Registered Office
of the Partnership in the State of Delaware is c/o The ▇▇▇▇▇▇▇▇-▇▇▇▇
Corporation, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The
Registered Agent for service of process in the State of Delaware is The
▇▇▇▇▇▇▇▇-▇▇▇▇ Corporation, ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇-▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇.
Section 2.3 Purpose.
The purpose of the Partnership is to acquire an interest as a general
partner in the Operating Partnership; to hold, own, maintain, sell, transfer,
convey, exchange, otherwise dispose of or deal in this partnership interest; to
exercise all of the powers of a general partner in the Operating Partnership;
and further to invest the assets of the Partnership in interim short-term
investments as provided elsewhere herein. The Partnership shall not engage in
any other business or activity, except that it may engage in any business or
activity that is (i) within the scope of the purposes of the Operating
Partnership or (ii) necessary, advisable or convenient to the business of the
Partnership.
Section 2.4 Authorized Acts.
In furtherance of its purposes, but subject to all other provisions of this
Agreement, the Partnership by its General Partner is hereby authorized:
(i) to acquire by purchase, lease, or otherwise, any real or personal
property necessary, convenient, or incidental to the accomplishment of the
purpose of the Partnership;
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(ii) to invest in interest-bearing accounts and short-term
investments, including obligations of Federal, state and local governments
and their agencies, mutual funds, commercial paper, and certificates of
deposit of commercial banks, savings banks or savings and loan
associations;
(iii) to borrow money or establish a line of credit on the general
credit of the Partnership or secure any such debt by mortgage, pledge or
other lien on any of the assets of the Partnership, and issue evidences of
indebtedness in furtherance of any of the purposes of the Partnership,
including without limitation, the Mortgage Loan, and to take any action and
enter into any agreement necessary or advisable in connection with any such
borrowing;
(iv) to bring and defend actions at law or suits in equity;
(v) to purchase, cancel or otherwise retire or dispose of the Units or
Preferred Units of any Partner according to the express provisions of this
Agreement;
(vi) to execute and deliver all documents for the sale of Units or
Preferred Units, including the Registration Statement and filings under the
Securities Act of 1933 and any other Federal and state laws relating to the
sale of securities;
(vii) to execute any Agreement and to enter into any transaction
described in the Registration Statement;
(viii) to take any action necessary to allow the amendment of the
Operating Partnership Agreement and to give its consent as a general
partner of the Operating Partnership;
(ix) to act in all ways as a general partner of the Operating
Partnership and to take any action contemplated, authorized or necessary to
be taken by general partners under the Uniform Act and the Operating
Partnership Agreement, including the execution of a mortgage loan and
acquisition documents on behalf of the Operating Partnership;
(x) to enter into any kind of activity and to carry out contracts of
any kind necessary to, or in connection with, or incidental to, the
purposes of the Partnership, so long as the activities and contracts may be
lawfully entered into or carried on by a partnership under the laws of the
State;
(xi) to establish any reserves for contingencies of the Partnership
and for working capital and other requirements of the Partnership, and to
release funds from these reserves to the extent that the General Partner no
longer regards such reserves as reasonably necessary in the efficient
conduct of the affairs of the Partnership;
(xii) to cause the Operating Partnership to employ and supervise the
Management Agent (as defined in the Operating Partnership Agreement),
including any Affiliate of a Partner, to manage the Property;
(xiii) to employ such other management or service personnel as may
from time to time be required to carry on the business of the Partnership;
and
(xiv) to cause the Operating Partnership to obtain and keep in force
during the terms of the Partnership and the Operating Partnership such fire
and extended coverage, workmen's compensation, liability and other
insurance in favor of the Partnership and the Operating Partnership as the
General Partner deems appropriate.
Section 2.5 Term and Dissolution.
The Partnership shall continue in effect until December 31, 2038, except
that the Partnership shall be dissolved prior to that date if any of the
following events occurs:
(i) the sale or other disposition of all or substantially all the
assets of the Partnership unless the General Partner, with the Consent of
the Limited Partners, elects to continue the Partnership business solely
for the purpose of receiving and collecting a note or notes or any other
consideration to be received in exchange for the assets of the Partnership;
(ii) the Retirement of the General Partner, if the Partnership is not
continued as provided in Section 6.1; or
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(iii) the election to dissolve the Partnership made in writing by the
General Partner with the Consent of the Limited Partners.
Upon completion of winding up of the affairs of the Partnership, the
General Partner (or its trustees, receivers, successors, or legal
representatives) shall, unless the Partnership is continued pursuant to Sections
5.1.C or 6.1, liquidate the Partnership assets and distribute the proceeds in
accordance with Section 9.3. Notwithstanding the foregoing, if the General
Partner determines that an immediate sale of part or all of the Partnership's
assets would cause undue loss to the Partners, the General Partner may either
(i) defer liquidation of, and withhold from distribution for a reasonable time,
any assets of the Partnership except those necessary to satisfy the
Partnership's debts and obligations; or (ii) distribute the assets to the
Partners in kind.
ARTICLE III
PARTNERS; CAPITAL
Section 3.1 General Partner.
A. The General Partner is WFA and its Capital Contribution is set forth in
the Schedule.
B. The General Partner shall have the right to admit any Person as an
additional or substitute General Partner with the Consent of the Limited
Partners. Upon an assignment of the General Partner's Interest in the
Partnership, the assignee shall become an additional or substitute General
Partner and shall have the right to exercise any rights or powers of a General
Partner. The Limited Partners recognize that this procedure is necessary for the
orderly and efficient operation of the business of the Partnership.
Section 3.2 Limited Partners.
The Limited Partners are the Limited Partners designated as Limited
Partners on the Schedule. The names, addresses, Capital Contributions, Units,
Percentage Interests and Preferred Units of the Limited Partners are set forth
in the Schedule.
Section 3.3 Partnership Capital.
The capital of the Partnership shall be the aggregate amount of cash and
property contributed by the General Partner and the Limited Partners as set
forth in the Schedule. No interest shall be paid by the Partnership on any
Capital Contribution.
Section 3.4 Withdrawal of Capital.
No Partner shall have the right to withdraw any part of his Capital
Contribution from the Partnership until December 31, 2038. No Partner shall have
the right to demand and receive property of the Partnership, instead of cash, in
return of his Capital Contribution except as specifically provided in this
Agreement. All rights to withdraw a Partner's Capital Contribution shall be
subject to the provisions of the Uniform Act. No General Partner shall be liable
for the return of any Partner's capital.
Section 3.5 Liability of Limited Partners.
No Limited Partner shall be liable for any debts, liabilities, contracts or
obligations of the Partnership.
Section 3.6 Limited Partners.
A. Each Limited Partner shall be admitted to the Partnership as of the date
on which an amendment is made to the Schedule listing his name, address, Capital
Contribution, Units, Percentage Interest or Preferred Units.
B. Each Limited Partner agrees, by the execution of this Agreement or as a
result of being admitted to the Partnership as a Substitute Limited Partner
pursuant to Article VII, and as a condition of receiving any interest in the
Partnership property, to be bound by the terms and provisions of this Agreement
and any other documents required in connection therewith. Each Limited Partner
also agrees to accept any other terms and conditions set forth in writing at the
time of admission which are determined to be reasonably necessary by the General
Partner.
C. Upon the admission of each Limited Partner, the Schedule shall be
amended to reflect his name, address and Capital Contribution. Each Limited
Partner may become signatory hereto by his attorney-in-fact signing a
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conformed copy of this Agreement pursuant to the power of attorney contained in
his subscription documents. Each Limited Partner shall thereupon be deemed to
have adopted and to have agreed to be bound by all the provisions of this
Agreement; provided, however, that no such signed copy shall be binding until it
has been signed by the General Partner. The Partnership shall thereupon issue to
each Limited Partner an Investor Certificate as evidence of his Interest in the
Partnership. Unless otherwise determined by the General Partner, all Investor
Certificates shall be held by the Partnership on behalf of the Limited Partners.
D. To the extent that the Partnership makes any payment or payments which
are treated as syndication expenses under Section 709 of the Code and are not
amortized, such payment or payments shall be charged, at that time, against the
Limited Partners' Capital Accounts. If at any time thereafter, the Partnership
takes a deduction for Federal income tax purposes which is attributable to such
payment or payments (or a portion thereof), such deduction shall be allocated
solely to the Limited Partners, but no adjustment of the Limited Partners'
Capital Accounts shall be made at such time. All amounts allocated under this
Section 3.6.D to the Limited Partners as a group shall be allocated among them
pro rata based upon the Percentage Interest of each Limited Partner as set forth
on the Schedule. Selling commissions shall be allocated under this Section 3.6.D
and shall be charged to the Capital Account of such Partner based upon the
selling commissions paid with respect to each Partner's Units.
ARTICLE IV
CAPITAL CONTRIBUTIONS OF LIMITED PARTNERS
Section 4.1 Payments. The Unitholders and the Preferred Unitholders have
made the Capital Contributions identified on the Schedule.
Section 4.2 Additional Capital Contributions by Limited Partners and
Admission of Additional Limited Partners.
A. In the event that the General Partner determines that it is in the best
interests of the Partnership to raise additional capital for the Partnership,
the General Partner may, (i) without the Consent of the Limited Partners, sell
additional Units or Preferred Units in the Partnership and (ii) with the Consent
of the Limited Partners cause the Partnership to issue Other Equity Interests.
Additional limited partnership interests and, with the Consent of the Limited
Partners, Other Equity Interests may be sold on such terms and conditions, and
additional Limited Partners shall have such rights and obligations, as the
General Partner shall determine.
B. In the event that the General Partner determines to issue and sell
additional limited partnership interests as provided in Section 4.2.A, the
General Partner may, but is not required to, prior to the offer or sale of such
interests to Persons other than the Limited Partners, offer such interests to
the Limited Partners pro rata in accordance with their Percentage Interests. No
fees will be payable to the General Partner or any Affiliate from the proceeds
of the sale of such interests except for customary brokerage commissions on
interests sold to Persons who are not Partners of the Partnership and except for
reimbursement of any reasonable 'out-of-pocket' expenses incurred in connection
with the sale of such interests.
Section 4.3 Fees and Expense Reimbursements Paid to Certain Entities.
A. For Partnership administration and other services, the Partnership will
pay to the General Partner or its Affiliate an annual Partnership Administration
and Investor Service Fee of $100,000 beginning in 1989, increasing annually at
the rate of 6%.
B. The Partnership may pay the General Partner or an Affiliated Person fees
for various goods and services including without limitation insurance, insurance
brokerage, mortgage brokerage in connection with financings and refinancings of
the Property, management, rehabilitation, construction supervision, leasing and
property brokerage at then prevailing market rates in the vicinity of the
Property.
C. In the event of a sale of all or a portion of the Property which is
financed by the Operating Partnership, or a sale of the Partnership's interest
in the Operating Partnership which is financed by the Partnership, the General
Partner or its Affiliate will receive the fee described in Section 5.1.C(ii).
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D. The Partnership shall pay to the General Partner a Disposition Fee equal
to 1.5% of the gross sales price of the Property or the Partnership's interest
in the Operating Partnership. This fee is in addition to any other real estate
brokerage fees that may be paid by the Operating Partnership in connection with
such sale.
E. Any fees or reimbursements by the Partnership to the General Partner or
to any Affiliate thereof which are not specifically provided for in this
Agreement or the Registration Statement shall be fully disclosed to the Limited
Partners and shall be payable only if they constitute reasonable reimbursements
or compensation for services or goods actually rendered or sold to the
Partnership in the ordinary course of business.
ARTICLE V
RIGHTS, POWERS AND DUTIES OF THE GENERAL PARTNER
Section 5.1 Business Management and Control.
A. The General Partner shall have the exclusive right to manage and control
the business of the Partnership, to bind the Partnership by its sole signature
and to take any action it deems necessary or advisable in connection with the
business of the Partnership. The Partnership hereby ratifies all action
heretofore taken by the General Partner in connection with the Partnership's
acquisition of the interest in the Operating Partnership.
B. Subject to Sections 5.1.E and 5.5(iv), the General Partner, on behalf of
the Partnership, in its capacity as a general partner of the Operating
Partnership, may take any action it deems necessary or advisable in connection
with the business of the Operating Partnership without the Consent of the
Limited Partners.
C. If the Partnership or Operating Partnership enters into a Capital
Transaction and elects to continue in existence for the purpose of receiving and
collecting a promissory note or notes received in the transaction, then:
(i) any payments of interest on the note(s) shall be considered as
income of the Partnership or Operating Partnership, as the case may be, for
purposes of determining Cash Flow, and any payments of principal shall be
considered proceeds of a Capital Transaction; and
(ii) WFA or its Affiliate shall be entitled to receive an annual
Installment Sale Service Fee each year in the amount of 1% of the interest
payments and other fees collected for that year by the Partnership or
Operating Partnership, as the case may be; provided, however, that any
Installment Sale Service Fee relating to a Capital Transaction of the
Operating Partnership shall be paid to the General Partner solely from the
Partnership's share of payments of interest and other fees collected by the
Operating Partnership.
D. No Limited Partner (except one who may also be a General Partner, and
then only in his capacity as General Partner) shall (i) have any authority or
right to act for or bind the Partnership, or (ii) participate in or have any
control over the Partnership business, except as required by law. The Limited
Partners hereby approve of the exercise by the General Partner of the powers
conferred on it by this Agreement.
E. The Limited Partners, for themselves and their successors and assigns,
hereby authorize the General Partner to propose, approve or disapprove all
amendments to the Operating Partnership Agreement that relate to the operation
of the Operating Partnership and to approve, on behalf of the Partnership, the
following transactions: (1) a proposed Capital Transaction, so long as its
approval would not result in the inability of the Operating Partnership to carry
on its normal operations; and (2) an amendment of the Operating Partnership
Agreement pursuant to Section 9.8 of that Agreement.
Section 5.2 Duties and Obligations.
The General Partner shall diligently and faithfully devote as much of its
time, but shall not be required to devote its full time, to the business of the
Partnership as necessary to conduct the business of the Partnership and shall at
all times act in a fiduciary manner toward the Partnership and the Limited
Partners. The General Partner shall at all times have a fiduciary responsibility
for the safekeeping and use of all Partnership funds and assets.
Section 5.3 Indemnification.
A. Subject to the provisions of Section 5.3.B, the Partnership (but not any
Partner) shall indemnify and hold harmless each General Partner and each Person
performing services on behalf of the Partnership who (a) directly
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or indirectly controls, is controlled by, or is under common control with the
General Partner, (b) owns or controls 10% or more of the outstanding voting
interest in the General Partner, and (c) any officer, director or partner of the
General Partner, to the full extent permitted by law, for any loss, damage,
liability, cost or expense (including reasonable attorneys' fees) sustained by
it or them in connection with the Partnership, provided that such loss, damage,
liability, cost or expense was not the result of negligence or misconduct by the
General Partner or such Persons. Any indemnity under this Section 5.3 shall be
paid from, and only to the extent of, Partnership assets and no Partner shall
have any personal liability on account thereof.
B. Notwithstanding any other provision of this Agreement, neither the
General Partner nor any Entity or Person entitled to indemnification pursuant to
Section 5.3.A above, shall be indemnified for any loss, damage or cost resulting
from the violation of any Federal or state securities laws in connection with
the sale of Units or Preferred Units unless (i) there has been a successful
adjudication on the merits of each count involving such securities law
violations, (ii) such claims have been dismissed with prejudice on the merits by
a court of competent jurisdiction or (iii) a court of competent jurisdiction
approves a settlement of such claims. In any claim for indemnification for
federal or state securities law violations, the party seeking indemnification
shall place before the court the position of the Securities and Exchange
Commission and the Massachusetts Securities Division and any other applicable
regulatory authority with respect to the issue of indemnification for securities
law violations.
C. Except as otherwise required by applicable law, and subject to the
provisions of Section 5.2 of this Agreement, the General Partner shall be
required to take only such actions on behalf of the Partnership as are expressly
required by this Agreement, and it shall not be required to take any such action
requiring the expenditure of funds if Partnership funds are not available. The
General Partner shall not be required to advance, contribute or provide funds to
the Partnership for any purpose in excess of its Capital Contributions.
D. No Partnership funds shall be used to purchase any insurance that
insures any party against any liability for which indemnification is not
available pursuant to this Section 5.3.
Section 5.4 Liability of the General Partner to Limited Partners.
Neither the General Partner nor any Person directly or indirectly owning
any interest in the General Partner or any of its directors, executive officers
and Affiliates shall be liable, responsible or accountable for damages or
otherwise to any Limited Partner or the Partnership arising out of any act
performed or any failure to act by any of them if they determined, in good
faith, that such act or failure to act was in the best interests of the
Partnership, and such course of conduct did not constitute negligence or
misconduct on the part of such Persons.
Section 5.5 Limited Partners' Right to Restrict General Partner's
Authority.
A. Notwithstanding any provisions to the contrary in this Agreement,
Limited Partners owning in the aggregate more than 50% of the Units shall have
the right:
(i) to remove any General Partner;
(ii) to amend this Agreement (subject to the requirement of Section
11.13 for unanimous consent to certain amendments), or to approve or
disapprove any amendment proposed by the General Partner, the effect of
which would be to alter the basic substance of the Agreement;
(iii) to dissolve the Partnership; and
(iv) voting together with Limited Partners owning Preferred Untis, to
approve or disapprove the sale of all or substantially all of the assets of
the Partnership or the Operating Partnership in a single or related series
of transactions; provided, however, that no amendment of the Agreement
shall affect the timing or amount of the fees to be paid by the Partnership
under this Agreement; provided, further, that no removal of a General
Partner or amendment shall affect the rights of any General Partner
(including the right to receive any fees payable to any General Partner,
including fees payable pursuant to Section 4.3) or any share of the
profits, losses, and distributions allocable or distributable to a Partner
pursuant to Article IX (collectively referred to in this Section as
'Retained Rights') without its prior written consent; and, provided
further, that in addition to the provisions of Section 11.13, no such
amendment, without the prior written consent of the affected Limited
Partner, shall increase the liability of a Limited Partner or alter the
amounts allocable or
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distributable to him with respect to his Retained Rights in any manner that
is disproportionate to the alteration of the amounts allocable or
distributable to any other Limited Partner.
B. Any General Partner removed pursuant to this Section shall, upon
removal, become a Limited Partner and as such shall not have any right to
participate in the management of the affairs of the Partnership but shall
continue to own its Partnership Interest and the Retained Rights which it owned
as a General Partner. The Limited Partners, or any successor General Partner
proposed by them, shall have the option but not the obligation to acquire, upon
payment of any agreed-upon value or its fair market value, all or any part of
the Interest in the Partnership of any General Partner so removed. Any dispute
as to fair market value shall be settled by averaging appraisals of the fair
market value of the Interest submitted by three appraisers, one chosen by the
removed General Partner, one chosen by the successor General Partner or the
Limited Partners, as the case may be, and the third chosen by the two appraisers
so chosen. Any General Partner removed pursuant to this Section shall not be
liable as General Partner for any liability or obligation of the Partnership
incurred on account of the activities of the Partnership from and after the time
its removal is effective.
Section 5.6 Other Activities.
A General Partner or any Affiliate may engage in or possess an interest in
other business ventures of every nature and description, independently or with
others, including, without limitation, real estate business ventures, whether or
not such other enterprises shall be in competition with any activities of the
Partnership.
ARTICLE VI
RETIREMENT OF A GENERAL PARTNER
Section 6.1 Retirement; Dissolution; Continuation.
A. Subject to the provisions of this Article VI, a General Partner shall be
automatically Retired from the Partnership upon the occurrence of any of the
events specified in Article I under the definition of 'Retirement.'
B. A General Partner may withdraw voluntarily from the Partnership only if
another General Partner, including a substitute or additional General Partner
admitted pursuant to Section 3.1, remains.
C. Upon the Retirement of a General Partner, any remaining General Partner
or if none, the Retired General Partner or its heirs, successors, or assigns,
shall immediately send notice of its Retirement (the 'Retirement Notice') to
each Limited Partner. In such event the Partnership (i) shall be dissolved
(unless it is continued by all of the Unitholders as provided in paragraph D) if
there is no remaining General Partner, or (ii) shall be continued by any
remaining General Partner if the remaining General Partner, in its sole
discretion, so elects.
D. If following the Retirement of a General Partner there is no remaining
General Partner or substitute General Partner who elects to continue the
Partnership, the Unitholders may, within ninety (90) days after the Retirement,
elect to continue the Partnership's business for the balance of the term
specified in Section 2.5 by selecting a substitute General Partner by unanimous
written consent. If the Unitholders elect to continue the Partnership by
admitting a substitute General Partner, the relationship of the Partners (and of
any person who has acquired an Interest of a Partner) shall be governed by this
Agreement.
E. Notwithstanding any other provisions of this Agreement, if the
Retirement of a General Partner is due to an Event of Bankruptcy, any fees
otherwise payable to the bankrupt General Partner and not paid at the time of
the Event of Bankruptcy shall be retained by the Partnership for such purposes
as any remaining General Partner determines.
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ARTICLE VII
TRANSFERABILITY OF LIMITED PARTNERSHIP INTERESTS
Section 7.1 Limitations and Restrictions.
A. No Limited Partner shall have the right to assign, sell, transfer,
exchange or otherwise dispose of or pledge or otherwise create a security
interest in any portion of his Partnership Interest except as set forth in this
Agreement.
B. No assignment, sale, transfer, exchange or other disposition or pledge
or creation of a security interest in any portion of a Partnership Interest (a
'Transfer') otherwise permitted by Section 7.3 or 7.4 may be made except in
compliance with Section 11.1.
C. No Transfer of any portion of a Partnership Interest otherwise permitted
by Section 7.3 or 7.4 may be made without the prior written consent of the
General Partner which consent may be granted or withheld in the sole discretion
of the General Partner.
D. No assignment, sale, transfer, exchange or other disposition of any
portion of a Partnership Interest, including a disposition which constitutes a
present assignment for security or which results from any action taken by a
holder of a security interest in such Interest to realize upon such Interest as
collateral (a 'Conveyance'), may be made if such portion, when added to all
other Partnership Interests transferred as Conveyances within the preceding 12
months ending with the date of the proposed Conveyance, would result in the
termination of the Partnership under Section 708 of the Code.
E. No Transfer of any portion of a Partnership Interest may be made to a
minor (other than pursuant to Section 7.2 to a minor who is a member of the
Immediate Family of the transferor thereof) or to an incompetent.
F. No Transfer of any portion of a Partnership Interest may be made if such
portion shall represent less than one-half of a Unit or a Preferred Unit unless
such portion constitutes the entire Interest of the transferor thereof or unless
the transferor thereof shall have received the prior written consent of the
General Partner. No Transfer of any portion of a Partnership Interest shall
consist of less than the transferor's entire interest in such portion unless
such Transfer shall be a pledge or other grant of a security interest in the
transferor's entire interest in such portion.
G. No pledge or creation of a security interest in any portion of a
Partnership Interest may be made except to an 'accredited investor.' No pledge
or creation of a security interest may be made with respect to any portion of a
Partnership Interest unless such portion is free and clear of all prior pledges
or grants of security interests.
H. The General Partner may require, as a condition of any Transfer of a
Partnership Interest, that the transferor thereof pay or agree to pay all costs
incurred by the Partnership or the General Partner in connection with such
Transfer, and furnish the Partnership with a legal opinion satisfactory to it to
the effect that such Transfer was made in compliance with the requirements of
federal and state securities laws.
I. No Transfer of any Interest in the Partnership by a Limited Partner may
be made if such Transfer would constitute the Transfer of an Interest in the
Partnership that, in the General Partner's determination, could result in the
Partnership's classification as a 'publicly traded partnership' (as defined in
section 7704(b) of the Code) unless the General Partner determines that imposing
such restrictions on Transfers would not be in the best interests of the
Partnership and the Partners taken as a whole.
J. Any Transfer made in violation of this Section 7.1 shall be void and of
no force or effect.
Section 7.2 Assignment Effective at Death; Death or Incapacity.
A. By a written instrument otherwise in compliance with applicable law, a
Limited Partner may designate one or more Persons to become the transferee of
all or any portion of his Partnership Interest, such designation to take effect
as a Transfer, however, only upon the death of such Limited Partner. Any such
Person, if then living, shall become the transferee of the portion of the
Partnership Interest so transferred to him immediately upon the transferor's
death, without any act by the legal representative of the transferor, and such
legal representative and the estate of the transferor shall have no interest
whatsoever in the Partnership. Any such designation shall be void and of no
force or effect unless it shall have been delivered to the Partnership during
such transferor's
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lifetime and unless it shall comply with Section 7.1.E. Any such designation
from time to time in effect may be revoked by a written instrument delivered to
the Partnership during such transferor's lifetime, whether or not any new
designation is delivered to the Partnership. As a transferee of any portion of
the Partnership Interest of such transferor, such Person shall be entitled to
become the registered holder thereof upon compliance with the provisions of
Section 7.3. The Partnership shall not be liable for any failure to recognize
any such designation unless duly notified in writing of the death of such
transferor.
B. A Person designated by a Limited Partner as a transferee of any portion
of a Partnership Interest in accordance with Section 7.2.A shall become a
Substitute Limited Partner only if (i) the Partnership shall have received the
Investor Certificate of the deceased Limited Partner duly endorsed by the legal
representative thereof to such Person, unless such certificate is already held
by the Partnership; (ii) the Partnership shall have been duly notified in
writing of the death of such Limited Partner; (iii) the Partnership shall have
received a legal opinion, satisfactory to the General Partner, to the effect
that the designation is valid under the applicable laws of testate or intestate
succession; and (iv) such Person shall have complied with Section 7.3.
C. If a Limited Partner who has not delivered a designation to the
Partnership as described in Section 7.2.A shall die or become disabled, his
legal representative shall be entitled to become a Substitute Limited Partner to
the same extent and with the same effect as though such legal representative
were a transferee of such Partnership Interest, provided such legal
representative shall comply with Section 7.2.B.
D. No act of a legal representative of a deceased or incapacitated Limited
Partner shall be recognized by the Partnership under this Section 7.2 unless the
Partnership shall have received evidence, satisfactory to the General Partner,
of the legal authority of such representative.
E. The death or incapacity of a Limited Partner shall not dissolve or
terminate the Partnership.
Section 7.3 Conveyance of Partnership Interests.
A. A Conveyance of a Partnership Interest shall be accomplished, in the
case of a transferor having possession of an Investor Certificate, by the
delivery of such Investor Certificate to the Partnership, duly endorsed to the
intended transferee or in blank, together with a request by an appropriate
person to transfer the same, accompanied by a guarantee of signature as
described in Section 8-402 of the Uniform Commercial Code of Delaware and such
other documentation as shall be necessary to enable the transferee to cause the
registration of the Conveyance upon the records of the Partnership. Upon
delivery to the Partnership of such Investor Certificate, such guarantee of
signature and such other documentation, together with instructions from the
transferor or transferee as to the registration of such Conveyance, the General
Partner shall examine the same and shall examine the books and records of the
Partnership. If satisfied as to its duty to register the purported Conveyance
pursuant to Section 8-401 of the Uniform Commercial Code of Delaware, the
General Partner shall cause the Conveyance to be registered in the register
maintained by the Partnership and shall issue an Investor Certificate
representing the transfer of such Partnership Interest in accordance with the
instructions provided to the Partnership. Upon the registration of such
Conveyance, the transferee of such Partnership Interest shall be admitted to the
Partnership as a Substitute Limited Partner, and shall be entitled to receive
and profits and losses and distributions of Partnership property allocable to
the Interest transferred to him.
B. Each purported transferee of a Partnership Interest, by his submission
to the Partnership of an Investor Certificate and other documents and
instruments as described in Section 7.3.A or by his submission to the
Partnership of the instructions and other documents and instruments as described
in Section 7.3.A, shall be deemed to have agreed to all of the terms and
conditions of this Agreement, shall be deemed to have appointed the Partnership
and the General Partner as his agent and attorney-in-fact for all purposes
described in this Agreement, and shall be deemed to have authorized and directed
the General Partner, on behalf of such purported transferee, to execute and
deliver a counterpart of this Agreement.
C. If a Limited Partner shall make a Transfer of his entire Partnership
Interest, such Limited Partner shall no longer be entitled to exercise the
rights of a Limited Partner or to receive any benefits as a Limited Partner, but
shall remain liable for all his obligations as a Limited Partner.
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Section 7.4 Lost Investor Certificates.
If any Investor Certificate is lost, mutilated, or destroyed while in the
possession of a Limited Partner, the General Partner may issue a replacement
Certificate and may require as a precondition that the Limited Partner, his
legal representatives, or any holder of the lost, mutilated, or destroyed
Certificate execute and deliver any indemnity agreements, affidavits, bonds, or
other security reasonably required by the General Partner.
ARTICLE VIII
LOANS
Section 8.1 In General.
A. The Partnership may borrow from any source, including Partners. If any
Partner lends money to the Partnership, the amount of any such loan shall not be
an increase of his Capital Account or, except as contemplated by Section 4.3.A
or applicable Treasury Regulations, affect in any way his share of the profits,
losses or distributions of the Partnership.
B. Except as otherwise provided in the Management Agreement, loans made by
a Partner or Affiliate to the Partnership shall be evidenced by promissory notes
which shall:
(i) bear interest at a commercially reasonable rate not in excess of
the lesser of (x) the maximum rate permitted by law and (y) three percent
(3%) above the rate of interest announced from time to time by Citibank,
N.A. as its 'base rate' (the 'Base Rate'), said Base Rate being computed at
the end of each calendar month (based upon the Base Rate on the last day of
each such month) following the making of said loan; and
(ii) provide that the obligation of the Partnership to make interest
and principal payments thereunder shall be subordinate to the obligation of
the Partnership to pay unrelated creditors of the Partnership but shall
have priority over the distribution to Partners of Cash Flow and Capital
Proceeds pursuant to Sections 9.2 and 9.3 of this Agreement.
C. The Partnership will not be permitted to make loans to WFA or any of its
Affiliates.
ARTICLE IX
PROFITS AND LOSSES; DISTRIBUTIONS
Section 9.1 Profits and Losses.
A. Allocation of Net Income or Net Loss. Except as otherwise provided in
this Section 9.1, (i) Net Loss for each fiscal year shall be allocated 99% to
the Unitholders and 1% to WFA and (ii) Net Income for each fiscal year shall be
allocated to the Partners in proportion to the Cash Flow distributable to the
Partners with respect to such year, and, if there is no such Cash Flow, 97% to
the Unitholders and 3% to WFA.
B. Allocation of Gain from a Non-Terminating Capital Transaction. The
Gain, if any, arising from a Non-Terminating Capital Transaction shall be
allocated in the following order:
First, to each Partner who has received or will receive a distribution
out of the proceeds of the Capital Transaction under Section 9.2.C Third,
Fourth, Fifth, and Sixth, in proportion to and in an amount equal to the
excess of the distribution over the positive balance in his Capital Account
determined without taking into account such distribution.
Second, to all Partners having negative balances in their Capital
Accounts (determined after the allocation provided in Section 9.1.B First
above), in proportion to their negative balances, the portion of such Gain
that is necessary to increase all their negative balances to zero; and
Third, the balance of the Gain, if any, shall be allocated so as to
increase each Partner's Capital Account (determined after the allocations
provided in Section 9.1.B First and Second above) to an amount
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equal to the proceeds of a hypothetical Capital Transaction that would be
distributable to him pursuant to Section 9.2.C if the proceeds were equal
to the sum of:
(1) the amount of Gain being allocated pursuant to this Section
9.1.B Third, plus
(2) the sum of the positive balances, if any, in the Capital
Accounts of all Partners (determined after the allocations provided in
Section 9.1.B First and Second) as of the end of the fiscal year in
which the Capital Transaction resulting in the Gain being allocated
pursuant to this Section 9.1.B Third occurs.
C. Allocation of Gain from a Terminating Capital Transaction. The Gain,
if any, arising from a Terminating Capital Transaction shall be allocated in the
following order:
First, to all Partners having negative balances in their Capital
Accounts, in proportion to their negative balances, the portion of such
Gain that is necessary to increase their negative balances to zero;
Second, to each Partner who has received or will receive a
distribution out of the proceeds of the Terminating Capital Transaction
under Section 9.3, the excess of (i) the sum of the amounts which would
have been distributable to him under Section 9.2.C Third, Fourth, Fifth and
Sixth if this transaction were not a Terminating Capital Transaction, over
(ii) the positive balance in his Capital Account, determined without taking
into account such distribution and after any allocation under Section 9.1.C
First; and
Third, the balance of the Gain, if any, 70% to the Unitholders and 30%
to WFA.
D. Loss from a Capital Transaction. A Loss arising from a Capital
Transaction, including a Terminating Capital Transaction, shall be allocated in
the following order:
First, to the Unitholders with positive balances in their Capital
Accounts, an amount of loss so that, to the extent possible, the positive
Capital Accounts per Unit of all Unitholders will be the same;
Second, to the Partners with positive balances in their Capital
Accounts in proportion to their positive balances, the amount of such Loss
necessary to reduce their positive balances to zero; and
Third, the remainder 99% to the Unitholders and 1% to WFA.
E. Allocations While Preferred Units Are Outstanding. Notwithstanding the
provisions of Sections 9.1.A, 9.1.B, 9.1.C and 9.1.D, for each fiscal year (or
portion thereof) that Preferred Units are outstanding, commencing on the date
hereof, (i) Net Loss shall be allocated (A) first, 1% to the General Partner and
99% to the Limited Partners, in proportion to and to the extent of the positive
balances in the Limited Partners' Capital Accounts, until the Limited Partners'
Capital Account balances are reduced to zero, and (B) the balance, if any, to
the Partners on account of their Units and general partnership interests as
provided in Section 9.1.A, (ii) Net Income shall be allocated (A) first, to the
Preferred Unitholders, in an amount equal to the excess of the Annual Return (as
defined in Section 9.2.D) accrued on their Preferred Invested Capital for all
periods through the close of the fiscal year just ended over the cumulative
amounts of Net Income and Gain from a Capital Transaction previously allocated
to them on account of such accrued Annual Return pursuant to this Section 9.1.E,
(B) second, to the Preferred Unitholders, to restore Net Loss previously
allocated to them on account of their Preferred Units pursuant to this Section
9.1.E, (C) third, to the Partners, to restore Net Loss previously allocated to
them on account of their Units and general partnership interests pursuant to
this Section 9.1.E, and (D) the balance, if any, to the Partners on account of
their Units and general partnership interests as provided in Section 9.1.A, and
(iii) Gain or Loss from a Capital Transaction shall be allocated (A) if any
amounts are distributed or to be distributed on account of such Capital
Transaction, first, in such manner as shall cause the Partners' respective
positive Capital Account balances to at least equal, or, in the case of a
Terminating Capital Transaction, to most nearly equal, the amounts distributed
or to be distributed to them pursuant to and in the priority set forth in
Section 9.2.D on account of such Capital Transaction, (B) if no amounts are to
be distributed on account of such Capital Transaction, in the case of Gain only,
to the Preferred Unitholders, first, to restore Net Loss previously allocated to
them on account of their Preferred Units pursuant to this Section 9.1.E, and
then, in an amount equal to the excess of the cumulative distributions
previously made to them pursuant to Section 9.2.D(B) in excess of $23,250 per
Preferred Unit for all periods through the close of the fiscal year just ended,
over the cumulative amount of Net Income and Gain from a Capital Transaction
previously
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allocated to them on account of such excess distributions under this Section
9.1.E, and (C) the balance, if any, to the Partners on account of their Units
and general partnership interests as provided in Sections 9.1.B, C and D;
provided, however, that if the Capital Transaction is a Terminating Capital
Transaction, then any Gain therefrom shall first be allocated to all Partners
having negative balances in their Capital Accounts in proportion to and to the
extent of such negative balances and, to the extent insufficient to eliminate
such negative balances, such Partners shall be allocated Net Income and, if
necessary, gross income in an amount and manner sufficient to eliminate such
negative balances.
F. Allocation Among Partners or Classes of Partners. Except as otherwise
provided in this Agreement, all Net Income, Net Loss and Gain or Loss from a
Capital Transaction allocated to Partners or a class of Partners shall be shared
by the Partners or the members of the class in the ratios of their respective
Percentage Interests or, in the case of the Preferred Unitholders, in proportion
to their respective Preferred Units.
G. Section 754 Election. All allocations of Net Income, Net Loss and Gain
or Loss from a Capital Transaction pursuant to this Section 9.1 shall be made
without regard to any adjustments under Section 743 of the Code. After the
allocations are made, however, appropriate adjustments shall be made in the Net
Income, Net Loss, and Gain or Loss from a Capital Transaction allocated to each
Partner to give effect to any such election.
H. Allocation Causing Negative Capital Accounts; Minimum Gain Rule and
Qualified Income Offset.
(1) Notwithstanding the other provisions of this Section 9.1, if an
allocation of Net Loss (or item thereof) or Loss from a Capital Transaction
to a Limited Partner would cause or increase a deficit balance in its
Capital Account in excess of its obligation to restore any such negative
balance to the Partnership in the event of the liquidation of the
Partnership or of its Interest (a 'Restoration Obligation'), then the
allocation shall not be made to such Limited Partner, but shall be made
instead to the other Partners in proportion to their Percentage Interests.
For purposes of making the determination set forth in the preceding
sentence:
(a) Each Partner's Restoration Obligation shall be deemed to
include (i) its proportionate share of the Partnership's Minimum Gain,
and (ii) any amount which it is unconditionally required under this
Agreement or by law to contribute to the Partnership by the later of (x)
the end of the taxable year in which the liquidation of the Partnership
(or of its Interest) occurs, or (y) 90 days after the date of
liquidation of the Partnership (or of its Interest) (including such
Partner's or its Affiliates' personal liability, if any, with respect to
Partnership indebtedness, such personal liability at any time being
equal to the maximum amount that such Partner or its Affiliates
ultimately could be compelled to pay to creditors of the Partnership
(assuming the successful exercise by all persons of all rights of
contribution, subrogation or indemnification if the assets of the
Partnership were disposed of at a price equal to the amount at which
they are carried on the books of the Partnership maintained pursuant to
this Agreement and the proceeds of such disposition were paid over to
the Partnership's creditors), determined at the end of the taxable year
for which any allocation of Net Loss or Loss from a Capital Transaction
is to be made.
(b) Each Partner's Capital Account balance shall be reduced by
reasonably expected allocations or adjustments of loss (or item thereof)
including Loss from a Capital Transaction under Income Tax Regulations
Section 1.704-1(b)(2)(ii)(d)(4) and (5), and by reasonably expected
distributions to the extent not offset by reasonably expected Capital
Account increases ('Account Reduction Items'). For purposes of
calculating reasonably expected Capital Account increases, the value of
the Partnership's assets shall be presumed to be equal to the amount at
which they are carried on the books of the Partnership maintained
pursuant to this Agreement.
(2) No Partner shall be obligated to contribute additional capital to
the Partnership in order to restore a deficit balance in his Capital
Account except (i) as provided in Section 9.3.C and (ii) as described in
Section 9.1.H(1)(a) above. A Partner's proportionate share of the Minimum
Gain equals the Partner's aggregate share of nonrecourse deductions, plus
the amount of any financing proceeds distributed to such Partner if and to
the extent that such Minimum Gain exceeds such nonrecourse deductions.
(3) Notwithstanding the other provisions of this Section 9.1, (i) if
an Account Reduction Item unexpectedly causes or increases a deficit
balance in a Partner's Capital Account in excess of its Restoration
Obligation (as calculated above), then any such Partner, or (ii) if there
is a net decrease in Partnership
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Minimum Gain during a taxable year, then all Partners with a share of such
Partnership Minimum Gain, shall be specially allocated items of income
(including Net Income and Gain from a Capital Transaction and, if
necessary, gross income) in an amount and manner (A) if clause (i) is
applicable, sufficient to eliminate the excess deficit balance as quickly
as possible, or (B) if clause (ii) is applicable, sufficient to allocate to
each Partner an amount equal to his share of the reduction in Partnership
Minimum Gain.
(4) Any special allocations of Net Income, Gain from a Capital
Transaction or gross income under this Section 9.1.H shall be taken into
account in computing subsequent allocations of Net Income and Net Loss or
Gain or Loss from a Capital Transaction, so that to the extent possible the
aggregate amounts of Net Income and Net Loss or Gain or Loss from a Capital
Transaction allocated to each Partner will be equal to the aggregate
amounts that would have been allocated to them in the absence of the
unexpected Account Reduction Items or reduction in Partnership Minimum
Gain.
I. Allocation of Gain Attributable to Depreciation Recapture. To the
extent that any portion of a Gain from a Capital Transaction is treated as
ordinary income pursuant to Sections 751(b), 1245, or, 1250 of the Code, this
ordinary income shall be allocated among the Partners in proportion to the
balances in their 'Depreciation Recapture Accounts' as of the last day of the
fiscal year in which such Capital Transaction occurs; provided, however, that
the amount of such ordinary income allocated to any Partner shall not be less
than the lesser of (i) his 'Priority Recapture Amount' as defined in this
Section 9.1.I or (ii) the amount of such ordinary income multiplied by a
fraction, the numerator of which is the Partner's Priority Recapture Amount, and
the denominator of which is the total of all Partners' Priority Recapture
Amounts. Each Partner's Depreciation Recapture Account shall be determined as
follows:
(1) there shall be added to his Account at the end of each fiscal year
(a) the amount of depreciation allowable to the Partnership for
that year with respect to 'Section 1245 property' multiplied by his
percentage of the Partnership's Net Income or Net Loss for that year;
and
(b) the amount of 'additional depreciation' allowable to the
Partnership for that year with respect to 'Section 1250 property',
multiplied by his percentage of the Partnership's Net income or Net Loss
for that year; for Section 1250 property held for one year or less as of
the end of the fiscal year, all depreciation deductions shall be treated
as 'additional depreciation';
(2) there shall be deducted from his Account at the end of each fiscal
year the excess, if any, of
(a) the amount of depreciation which would have been allowable to
the Partnership for that year with respect to Section 1250 property, if
such depreciation had been claimed on a straight-line basis from the
date of acquisition or completion of construction of the Property,
multiplied by his percentage of the Partnership's Net Income or Net Loss
for that year;
over
(b) the amount of depreciation allowable to the Partnership with
respect to 'Section 1250 property' for that year, multiplied by his
percentage of the Partnership's Net Income or Net Loss for that year.
(3) there shall be deducted from his Account at the beginning of each
fiscal year the amount of any ordinary income allocated to him pursuant to
this Section 9.1.I for the prior fiscal year;
(4) for any Section 1245 property and Section 1250 property sold or
otherwise disposed of by the Partnership during the fiscal year, there
shall be deducted from his Account, at the beginning of the next fiscal
year, his proportionate share, in accordance with the balances of the
Partners Depreciation Recapture Accounts at the end of the fiscal year of
the sale or other disposition, of the excess, if any, of
(a) the amount of ordinary income which would have been realized by
the Partnership if the asset had been sold or otherwise disposed of for
its original basis (determined under Section 1012 of the Code prior to
any adjustments pursuant to Section 1016 of the Code),
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(b) the amount of ordinary income actually realized by the
Partnership upon the sale or other disposition of the asset; and
(5) for Section 1250 property held for one year or less as of the end
of the previous fiscal year, there shall be deducted from such Account as
of the date that such property has been held more than one year the amount
of depreciation deductions which would have been allowable under the
straight line method for such previous fiscal year. The terms 'Section 1245
property', 'Section 1250 property', and 'additional depreciation' shall
have the meanings specified in Sections 1245 and 1250, respectively, of the
Code.
To the extent that the amount of ordinary income allocable to any Partner
pursuant to this Section 9.1.I exceeds the amount of Gain allocable to him under
Section 9.1.B, 9.1.C or 9.1.E, the amount of Gain allocable to him under Section
9.1.B, 9.1.C or 9.1.E, as applicable, shall be increased by the amount of the
excess, and the amount of Gain allocated to all other Partners under those
Sections (excluding Partners whose share of Gain is increased pursuant to this
sentence) shall be decreased by the amount of the excess in proportion to the
respective amounts of Gain otherwise allocable to them pursuant to those
Sections; provided, however, that the provisions of this sentence shall not
apply to the extent that their application would create or increase a positive
balance in the Capital Account of any Partner while the balance in the Capital
Account of any other Partner (after applying Sections 9.1.B, 9.1.C or 9.1.E) is
negative.
Each Partner's Priority Recapture Amount is equal to the total of his
Priority Recapture increments, reduced by the amount of ordinary income
previously recognized by him pursuant to this Section 9.1.I. A Partner will
incur a Priority Recapture increment as of the date that his Partnership
interest is diluted through the admission of new Partners to the Partnership
(the 'Dilution Date'). On each Dilution Date, each Partner will incur a Priority
Recapture increment equal to the product of (a) the sum of (i) the aggregate
amount of depreciation allowable to the Partnership with respect to 'Section
1245 property' prior to the Dilution Date and (ii) the aggregate amount of
'additional depreciation' allowable to the Partnership with respect to 'Section
1250 property' of the Partnership prior to the Dilution Date, multiplied by (b)
the decimal equivalent of the difference between his Percentage Interest
immediately after the dilution and his Percentage Interest immediately before
the dilution. For Section 1250 property held for one year or less on a Dilution
Date, all depreciation deductions shall be treated as 'additional depreciation.'
J. Determination of Capital Account Balances. For purposes of Sections
9.1.B, C, D and E, Capital Accounts shall, except as otherwise specifically
provided therein, be determined as of the last day of the fiscal year, after
giving effect to distributions during the 60 days after the end of the fiscal
year and, in the case of allocations of Gain or Loss from a Capital Transaction,
after giving effect to allocations of Net Income or Net Loss, but before giving
effect to the applicable allocation of Gain or Loss from the Capital
Transaction, including a Terminating Capital Transaction. In applying Sections
9.1.C First and 9.1.E(iii), Capital Accounts shall be determined prior to the
distribution of the Capital Proceeds resulting in the Gain or Loss to be
allocated under those Sections. If more than one Capital Transaction occurs in
any fiscal year, the Gain or Loss shall be allocated in the order in which the
Capital Transactions occur. For purposes of allocating Gain from a Terminating
Capital Transaction, the Capital Account of the General Partner shall be
determined after adding any amounts required to be contributed by the General
Partner to discharge Partnership obligations.
K. Allocations with Respect to Reserved Proceeds of Capital
Transactions. To the extent that Capital Proceeds received by the Partnership
are reserved pursuant to Sections 9.2.C and 9.3.A, the reserved proceeds shall,
for purposes of Section 9.1.B First and 9.1.C Second, be deemed to have been
distributed pursuant to Sections 9.2.C or 9.3, and any deduction allowed to the
Partnership by reason of the subsequent payment of any contingent or unforeseen
liability shall be allocated among the Partners in the same proportions that the
amount paid on such a liability would otherwise have been distributed pursuant
to Sections 9.2.C and 9.3.
L. Tax Allocations; Section 704(c). Notwithstanding the provisions of
Section 9.1, in accordance with Section 704(c) of the Internal Revenue Code (the
'Code') and the Income Tax Regulations thereunder, income, gain, loss, and
deduction (including depreciation) 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 fair market value on the date of contribution. Furthermore, in the event the
value at which Partnership assets are carried on its balance sheet maintained
under the terms of this Agreement are adjusted pursuant to Income Tax
Regulations
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1.704-1(b)(2)(iv)(f), subsequent allocations of income, gain, loss and deduction
with respect to such assets shall take account of any variation between the
adjusted basis of such asset for federal income tax purposes and the value
carried on such balance sheet in the same manner as under Section 704(c) of the
Code and the Income Tax Regulations thereunder. Any elections or other decisions
relating to such allocations shall be made by the General Partner in any manner
that reasonably reflects the purpose and intention of this Agreement.
Allocations pursuant to this Section 9.1.L are solely for purposes of federal,
state and local taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of profits and losses
allocated pursuant to Section 9.1, or distributions pursuant to any provision of
this Agreement.
Section 9.2 Distributions Prior to Dissolution.
A. Definitions of Cash Flow. For all purposes of this Agreement, the term
'Cash Flow' shall mean the Net Income or Net Loss of the Partnership, subject to
the following:
(a) Depreciation of building, improvements and personal property,
amortization of any fee and other non-cash charges taken into account in
determining taxable income of the Partnership or the Operating Partnership
shall not be considered as deductions in determining Cash Flow.
(b) Payments of principal on the Mortgage Loan, repayment of the debts
of the Partnership or the Operating Partnership, including loans from
Partners and any other cash expenditures not deductible in determining
taxable income of the Partnership or the Operating Partnership shall be
considered as deductions in determining Cash Flow.
(c) If the General Partner so determines, reasonable additional
reserves shall be established to provide for any contingencies of the
Partnership or the Operating Partnership, and in determining Cash Flow any
amounts allocated to any such reserves from time to time shall be
considered as deductions and, conversely, any amounts previously set aside
as reserves from Cash Flow shall be considered as additions when and to the
extent the General Partner no longer regards them as reasonably necessary
for the efficient conduct of the affairs of the Partnership, including
release of any such reserves upon disposition of the Property or
termination of the Partnership or the Operating Partnership.
(d) Any amounts paid by the Partnership or the Operating Partnership
for capital expenditures shall be considered as a deduction in determining
Cash Flow, unless paid by cash withdrawal from insurance or condemnation
proceeds or from the Operating Reserve, Capital Improvement Fund or any
additional reserve for capital expenditures.
(e) Gain or loss from the sale, exchange, condemnation (or similar
eminent domain taking), casualty or other disposition of all, or any
substantial portion of, the Property (other than the proceeds of any
business or rental interruption insurance), or from the liquidation of the
Property following a dissolution of the Partnership or the Operating
Partnership, shall not be included in determining Cash Flow.
Cash Flow shall be determined separately for each calendar year (or part of
a year) and shall not be cumulative.
B. Cash Flow for each calendar year (or part of a year) shall be
distributed to the Partners as follows:
First, 99% to the Limited Partners and 1% to the General Partner until
the Limited Partners have received an amount equal to an annual 6% per
annum noncumulative, noncompounded return on their Invested Capital;
Second, 97% to the Limited Partners, and 3% to the General Partner
until the Limited Partners have received an amount equal to their Invested
Capital; and
Third, the balance, if any, 70% to the Limited Partners and 30% to the
General Partner.
Distributions of Cash Flow to the Partners shall be made at reasonable
intervals during the fiscal year as determined by the General Partner, and in
any event shall be made within 60 days after the close of each fiscal year.
Notwithstanding anything to the contrary that may be contained in this
Agreement, (a) Cash Flow for each month in 1989 shall be determined by dividing
the total Cash Flow of the Partnership for 1989 by (ii) 12, and the
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amount of such Cash Flow for each month, as determined by this sentence, shall
thereafter be distributed to and among the Partners as described above in this
Section 9.2.B.
C. Distribution of Capital Proceeds of a Non-Terminating Capital
Transaction. Prior to the termination and dissolution of the Partnership, if
there are Capital Proceeds from a Non-Terminating Capital Transaction or cash
other than Cash Flow available for distribution, such Capital Proceeds or cash
shall be distributed as follows:
First, to discharge, to the extent required by any lender or creditor,
the debts and obligations of the Partnership, including, without
limitation, all amounts required to be paid in connection with any resale
or refinancing of any portion of the Property;
Second, to fund additional reserves of the Partnership to the extent
deemed reasonable by the General Partner and the Accountants.
Third, to each Limited Partner, an amount equal to a cumulative annual
6% noncompounded return on his Invested Capital, reduced by any prior
distributions to him of Cash Flow and by any prior distributions to him
under this Section 9.2.C Third;
Fourth, to each Limited Partner, an amount equal to his Invested
Capital, reduced by any prior distributions to him under this Section 9.2.C
Fourth;
Fifth, to the General Partner, the aggregate amounts of their Capital
Contributions to the Partnership as set forth on the Schedule, reduced by
any prior distributions to the General Partner under this Section 9.2.C
Fifth; and
Sixth, the balance, 70% to the Limited Partners and 30% to the General
Partner.
Notwithstanding the foregoing, in no event shall the General Partner
receive as an aggregate distribution under this Section 9.2.C less than 1% of
the aggregate of the amounts distributed to the Partners under this Section. If
the aggregate amount distributable to the General Partner under Section 9.2.C
does not equal 1% of the aggregate amount distributable to the Partners without
regard to this provision, then the amounts otherwise distributable to the
Limited Partners under Section 9.2.C shall be reduced to assure that the General
Partner receives its 1% share.
D. Distributions While Preferred Units Are Outstanding. Notwithstanding
the provisions of Sections 9.2.B and 9.2.C, prior to any other distributions to
any Partners pursuant to said Sections, (i) for each fiscal year (or portion
thereof) that the Preferred Units are outstanding, commencing on the date
hereof, Cash Flow and Capital Proceeds determined to be available for
distribution to the Partners shall be distributed (A) first, to the Preferred
Unitholders in an amount equal to a cumulative annual 12% non-compounded return
(the 'Annual Return') on their Preferred Invested Capital, (B) in the case of
Capital Proceeds only, to the Preferred Unitholders in a cumulative amount equal
to the greater of (1) $46,500 and (2) an amount equal to the Preferred Invested
Capital per Preferred Unit together with a cumulative annual 15% compounded
return thereon, exclusive of any amounts distributed pursuant to Section
9.2.D(i)(A), and (C) the balance, if any, as provided in Sections 9.2.B and
9.2.C (and the amounts so paid shall be deemed to have been distributed to said
Sections), and (ii) immediately upon the removal of the General Partner pursuant
to Section 5.5, there shall be paid to the Preferred Unitholders, the sum of the
amounts described in Sections 9.2.D(i)(A) and (B) (and the amounts so paid shall
be deemed to have been distributed pursuant to said Sections). Notwithstanding
anything to the contrary contained herein, immediately after the receipt of all
distributions required to be paid to the holders thereof under this Agreement,
the Preferred Units shall be deemed cancelled and Preferred Unitholders shall
not be deemed Limited Partners for the purpose of determining amounts to be
received by the Limited Partners as provided in Sections 9.2.B and 9.2.C.
E. Except as otherwise provided in this Agreement, all distributions to the
Partners (or a class of Partners) shall be shared by the Partners (or the
members of the class) in the ratio of their respective Percentage Interests or,
in the case of the Preferred Unitholders, in proportion to their respective
Preferred Units.
F. For purposes of this Article IX, the Limited Partners shall constitute a
single class.
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Section 9.3 Distributions On Dissolution.
A. On termination and winding up of the Partnership, the remaining assets
of the Partnership (or the proceeds of any Terminating Capital Transaction, as
determined by the remaining or surviving General Partner) remaining after
payment of all liabilities of the Partnership (including the Mortgage Loan and
any accrued interest thereon), and funding all reserves, to the extent deemed
reasonable by the General Partner and the Accountants, shall be distributed to
the Partners in accordance with their respective Capital Account balances
determined after all allocations pursuant to Section 9.1 and all prior
distributions pursuant to Section 9.2, but before any distributions pursuant to
this Section 9.3.
B. If any assets of the Partnership are to be distributed in kind, they
shall be distributed on the basis of their fair market value, and any Partner
entitled to any interest in the assets distributed shall receive his interest as
a tenant-in-common with all other Partners so entitled. If assets are to be
distributed in kind, the Partners' Capital Accounts shall be appropriately
adjusted before any such distribution to reflect the increases or decreases to
the Capital Accounts which would have occurred if the property distributed in
kind had been sold for its fair market value by the Partnership prior to the
distribution.
C. If on the termination of the Partnership, the General Partner's Capital
Account is less than zero (after allocation of profits and losses recognized
upon the disposition of Partnership assets in connection with the liquidation of
the Partnership), the General Partner shall pay to the Partnership an amount
equal to the lesser of (i) the deficiency in its Capital Account, or (ii) 1.01%
of the Limited Partners' Capital Contribution.
D. If, on the termination of the Partnership, the Preferred Units are
outstanding, then notwithstanding anything to the contrary in this Section 9.3,
there shall be paid to the Preferred Unitholders the amount described in clause
(ii) of Section 9.2.D before any other distributions are made to the Partners
pursuant to this Section 9.3 (and said payment shall be deemed to have been
distributed pursuant to Sections 9.2.D(i)(A) and/or (B), as applicable).
Section 9.4 Changes in Percentage Interests.
A. In the event of the transfer of all or any part of a Unit or the
transfer of all or any part of a Preferred Unit at any time other than the end
of a Partnership accounting year, the distributive share of the Net Income and
Net Loss of the Partnership allocable to the Interest transferred shall be
allocated between the transferor Limited Partner and the Transferee in the same
ratio as the number of days in the Partnership accounting year before and after
the Transfer. The provisions of the preceding sentence shall not be applicable
to a Gain or Loss arising from a Capital Transaction or any 'allocable cash
basis item' required to be allocated otherwise under Section 706(d) of the Code.
Gain or Loss from a Capital Transaction or any allocable cash basis item shall
be allocated on the basis of Unit or Preferred Units, as applicable, on the date
the Gain is realized or the Loss incurred, as the case may be, and the allocable
cash basis items shall be allocated as required under Section 706(d) of the Code
and the Treasury regulations thereunder.
ARTICLE X
BOOKS AND RECORDS, ACCOUNTING, TAX ELECTIONS, ETC.
Section 10.1 Books and Records.
The General Partner shall keep or cause to be kept complete and accurate
books and records of the Partnership and supporting documentation of
transactions with respect to the conduct of the Partnership's business. The
Partnership's books and records shall be maintained in accordance with sound
accounting practices and shall be available at the principal office of the
Partnership for examination by any Partner, or his duly authorized
representatives, at any reasonable time during normal business hours. The
General Partner shall maintain at the principal offices of the Partnership a
register listing the names of all Limited Partners, the number of Units or
Preferred Units owned by each Limited Partner and all transfers and other
information required to be contained therein by Article 8 of the Uniform
Commercial Code as enacted in the State of Delaware. All distributions of cash
and allocations of profits and losses by the Partnership shall be made only to
the Limited Partners listed on the register. Upon admission of a Substitute
Limited Partner, the General Partner shall reflect the Transfer on the register.
Copies of the register will be available for inspection by the Limited Partners.
The
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Partnership will maintain such books and records and will provide such financial
or other statements as the General Partner deems advisable or as may be required
by such Article 8.
Section 10.2 Bank Accounts.
The bank accounts of the Partnership shall be maintained in banking
institutions selected by the General Partner, and withdrawals shall be made only
in the regular course of business on signatures determined by the General
Partner. All funds not needed in the operation of the business may be invested
as provided in Section 2.4. The funds of the Partnership shall not be commingled
with any other funds.
Section 10.3 Accountants.
The Accountants for the Partnership shall be a firm of certified public
accountants engaged by the General Partner. The Accountants shall audit and
certify all annual financial reports to the Partnership in accordance with
generally accepted accounting principles.
Section 10.4 Reports to Limited Partners.
A. At the request of any Limited Partner, the General Partner shall, within
30 days after receipt of such request, distribute to the requesting Limited
Partner a copy of the Certificate, this Agreement and all reports or other
materials received pursuant to the Management Agreement.
B. Within 120 days after the end of each fiscal year, the General Partner
shall cause to be prepared and sent to all Limited Partners: (i) a balance sheet
and the related statements of income and Partners' capital and changes in
financial position, prepared in accordance with generally accepted accounting
principles and accompanied by a report of the Accountants; (ii) a notice by the
General Partner (a) if any mortgage payments and taxes or insurance premiums
with respect to the Property are not current as of the date of the year-end
report, or (b) if any notice has been received by the partnership or the
Operating Partnership of any defaults under any mortgage, or this Agreement, and
a description thereof; and (iii) a descriptive statement of all transactions
during the fiscal year between the Partnership and any Affiliated Person,
including the nature of the transaction and the payments involved. All necessary
tax information, including Schedule K-1 (Form 1065) or any successor or
additional form required by the Limited Partners to prepare their tax returns,
shall be furnished to all Limited Partners within 90 days after the end of each
fiscal year. Each Partner shall be entitled to receive, upon request, copies of
all federal, state and local income tax returns and informational returns that
the Partnership is required to file. All costs for preparing such statements,
reports, returns and information shall be Partnership expenses.
Section 10.5 Tax Elections.
The Partnership shall elect to use such methods of depreciation with
respect to all depreciable assets as are, in the opinion of the Accountants,
most advantageous to the Limited Partners. Except as provided in Section 10.6,
all other elections required or permitted to be made by the Partnership under
the Code shall be made by the General Partner in such manner as will, in the
opinion of the Accountants, be most advantageous to the Limited Partners.
Section 10.6 Special Basis Adjustments.
If any part of the Interest of any Partner is transferred, including a
Transfer of an Interest pursuant to Article VII, the Partnership may elect, in
the General Partner's sole discretion, pursuant to Section 754 of the Code (or
corresponding provisions of succeeding law), to adjust the basis for the
Partnership's property. Notwithstanding anything contained in Article IX, any
adjustments made pursuant to Sections 734 and 743 of the Code shall affect only
the successor-in-interest to the transferring Partner. Each Partner will furnish
the Partnership all information necessary to give effect to any such election.
Section 10.7 Fiscal Year and Accounting Method.
The fiscal year of the Partnership shall be the calendar year. The books of
the Partnership shall be kept on an accrual basis.
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Section 10.8 Tax Matters Partner.
The General Partner shall be the 'tax matters partner' of the Partnership
for Federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code,
upon receipt of notice from the Internal Revenue Service of the beginning of an
administrative proceeding with respect to the Partnership, the General Partner,
as the tax matters partner, agrees to furnish the Internal Revenue Service with
the names, addresses, and interests in profits and losses of each of the Limited
Partners. The General Partner agrees not to enter into a settlement agreement
pursuant to Section 6224 of the Code without providing at least 30 days' advance
written notice of the terms of the settlement to each of the Limited Partners.
If the Partnership receives from the IRS a Final Partnership Administration
Adjustment pursuant to Code Section 6223, and if the General Partner determines
to seek judicial review of the IRS action pursuant to Code Section 6226, then
the General Partner shall select the forum for judicial review.
Subject to the provisions of Section 5.3.B, the Partnership hereby
indemnifies and holds harmless the General Partner against any claim, loss,
liability, action, or damage resulting from its action or its failure to take
any action as the 'tax matters partner,' provided that its action or failure to
act was not willful misconduct.
ARTICLE XI
GENERAL PROVISIONS
Section 11.1 Restrictions on Transfer.
A. No assignment, sale, transfer, exchange, or other disposition of any
Interest may be made except in compliance with the then applicable rules and
regulations of any governmental authority with jurisdiction over such
disposition, and the General Partner may require as a condition thereof that the
transferor furnish a legal opinion that the proposed disposition complies with
applicable Federal and state securities laws.
B. Any sale, exchange, or other transfer in contravention of any of the
provisions of this Section 11.1 shall be void and ineffectual and shall not bind
or be recognized by the Partnership.
Section 11.2 Appointment of General Partner as Attorney-in-Fact.
A. Each Limited Partner (including a Substitute or additional Limited
Partner) hereby irrevocably appoints and empowers the Partnership and the
General Partner, acting through its authorized officers and agents and the
general partner and principals of its general partner, acting singly or
collectively, in each case with full power of substitution, as his true and
lawful attorney-in-fact, in his name, place and ▇▇▇▇▇, to execute, acknowledge,
swear and deliver to all instruments and file all documents required to carry
out the purposes of this Agreement, including, without limitation, the
following:
(i) the Certificate and any amendment or restatement that may be
required by this Agreement or the laws of the State of Delaware;
(ii) any certificate of cancellation of the Certificate that may be
necessary upon the termination of the Partnership;
(iii) any amendments to this Agreement and to the Schedule, any
assignments necessary to reflect any change or transfer of a Partner's
Partnership Interest, including, without limitation, any other amendments
to this Agreement adopted in accordance with Section 11.13
(iv) any business certificate, Certificate of Limited Partnership,
amendment thereto or restatement thereof, or other instrument or document
of any kind necessary to accomplish the business purposes and objectives of
the Partnership;
(v) any instrument or documents required to continue the business of
the Partnership pursuant to Article VI;
(vi) any endorsements, transfer instructions, instruments, stock
powers, UCC financing statements, continuation statements, and other
documents necessary or required to grant and perfect the security interest,
B-23
if any, of the Partnership, the Mortgage Lender and/or the General Partner
in the Partnership Interest of a Limited Partner;
(vii) all other instruments that may be required or permitted by law
to be filed on behalf of the Partnership and that are not inconsistent with
this Agreement;
(viii) any amendments to this Agreement that may be required to cure
any ambiguity or to correct or supplement any provision which is
inconsistent in any respect with any other provision hereof or with the
Registration Statement, or to add or delete any provision of this Agreement
in response to the concerns of any federal agency or by a state 'Blue Sky'
commissioner or similar official, which addition or deletion is deemed by
such agency or official, or counsel for the Partnership, to be for the
benefit or protection of the Limited Partners; and
(ix) any amendments required to clarify the terms of the Partnership's
ownership of the Operating Partnership and the allocation of taxable income
and loss and the distribution of cash flow and the proceeds of a sale or
disposition of all or a portion of the Operating Partnership or the
Property;
(x) any amendments described in Section 11.13.B, or any amendments
described in Section 11.13.A that have received the consent of the
requisite number of Limited Partners.
The Partnership and the General Partner shall take no action as an
attorney-in-fact for any Limited Partner which would in any way increase the
liability of any Limited Partner beyond the liability expressly set forth in
this Agreement or would diminish the substantive rights of any Limited Partner
except as expressly permitted, or to accomplish a result expressly contemplated,
by this Agreement.
B. The appointment by each Limited Partner of the Partnership and the
General Partner acting through its officers and agents and the general partner
and principals of its general partner, acting singly or collectively, in each
case as attorneys-in-fact, shall be deemed to be a power coupled with an
interest in recognition of the fact that the Limited and General Partners under
this Agreement will be relying upon the power of the Partnership or the General
Partner and its officers, agents and the general partner and principals of its
general partner on behalf of the Partnership, to act as contemplated by this
Agreement in any filing or other action by them. This power of attorney shall
survive and not be affected by the subsequent death, disability, or incapacity
of the Limited Partner or by the Transfer by any Limited Partner of any Interest
in the Partnership.
Section 11.3 Notices.
A. Any notices (as distinguished from periodic reports) called for under
this Agreement shall be deemed adequately given only if in writing and sent
registered or certified mail, postage prepaid, to the party or parties for whom
such notices are intended.
B. All such notices or periodic reports, in order to be effective, shall be
addressed to the last address of record on the Partnership books when given by
the General Partner and intended for the other Partners, and to the address of
the Partnership when given by the Limited Partners and intended for the General
Partner or the Partnership.
Section 11.4 Word Meanings.
The singular shall include the plural and the masculine gender shall
include the feminine, and vice versa, unless the context otherwise requires.
Section 11.5 Binding Provisions.
A. The covenants and agreements contained in this Agreement shall be
binding upon, and inure to the benefit of, the heirs, legal representatives,
successors, and assigns of the respective parties.
B. None of the provisions of this Agreement shall be for the benefit of or
enforceable by any creditor of the Partnership.
Section 11.6 Applicable Law.
This Agreement shall be construed and enforced in accordance with the laws
of the State of Delaware.
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Section 11.7 Counterparts.
This Agreement may be executed in several counterparts, and all
counterparts so executed shall constitute one agreement binding on all parties,
notwithstanding the fact that all the parties have not signed the original or
the same counterpart, except that no counterpart shall be binding unless signed
by the General Partner. Any counterpart signed by the party against whom
enforcement of this Agreement is sought shall be admissible into evidence as an
original of this Agreement to prove its contents.
Section 11.8 Survival of Representations and Warranties.
All representations and warranties stated in this Agreement shall survive
the dissolution and final liquidation of the Partnership, except to the extent
that a representation or warranty expressly provides otherwise.
Section 11.9 Separability of Provisions.
Each provision of this Agreement shall be considered separable, and (a) if
for any reason any provision is determined to be invalid and contrary to any
existing or future law, the invalidity shall not impair the operation of or
affect those portions of this Agreement which are valid, or (b) if for any
reason any provision would cause the Limited Partners to be bound by the
obligations of the Partnership under the laws of the State of Delaware as they
may now or hereafter exist, that provision or provisions shall be deemed void
and of no effect.
Section 11.10 Investment Representation.
Each Limited Partner represents that he is acquiring his Interest as a
Limited Partner for his own account for investment and not with a view to or
present intention of distributing or reselling it. Each Limited Partner agrees
that he will not sell or offer to sell any portion of his Interest as a Limited
Partner, or solicit offers to buy any portion of his Interest or otherwise
approach or negotiate with, any Person so as to bring this transaction and the
offering of Limited Partner Interests in the Partnership within the provisions
of Section 5 of the Securities Act of 1933, as amended, or the registration
requirements of any state 'Blue Sky' statute or regulations.
Section 11.11 Paragraph Titles.
Captions contained in this Agreement are inserted only as a matter of
convenience and in no way define, limit, extend, or describe the scope of this
Agreement or the intent of any of its provisions.
Section 11.12 Meeting of Partners.
Unitholders whose Capital Contributions represent at least 10% in interest
of the Unitholders may request in writing that the General Partner call a
meeting of the Partners. The General Partner shall be required to give written
notice of any such meeting and its purpose to all Limited Partners within ten
days of receipt of a request for such a meeting. Any such meeting shall be held
on a date not less than 15 nor more than 60 days after the date of receipt of
said request.
Section 11.13 Amendment Procedure.
A. This Agreement may be modified or amended pursuant to Sections 5.5,
11.2, and 11.13.B, or with the written consent of the General Partner and the
Consent of the Limited Partners, provided that any modification or amendment
that would (i) increase the amount of the Capital Contributions required to be
paid by the Limited Partners, (ii) extend the termination date specified in
Section 2.5, (iii) reduce the percentage allocations of the Limited Partners set
forth in Article IX other than as may be necessary to reflect the transactions
contemplated by Section 4.2 or (iv) amend this Section 11.13, shall require the
written consent of all of the Limited Partners.
B. The General Partner shall have the authority, upon advice of the
Accountants and counsel for the Partnership, to amend Article IX and restate the
Capital Accounts of the Partners in order to cause the provisions of such
Article to comply with the income tax regulations promulgated by the U.S.
Treasury Department under Section 704(b) of the Code relating to the allocations
of profits and losses among partners and the administrative and judicial
interpretations thereof. In addition, the General Partner shall have the
authority to amend the Agreement without the Consent of the Limited Partners in
order to provide for the special allocation of depreciation attributable to
tax-exempt use property resulting from the admission of tax-exempt entities as
Limited Partners and the application of Section 168(j)(9) of the Code so that
the depreciation allocated to the taxpaying Partners will not be reduced. The
General Partner shall also have the right to specially allocate gain on a sale
of the Property in order to equalize the Capital Accounts of the taxpaying and
tax-exempt Partners.
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C. In making any amendment described in Section 11.13.B, the General
Partner shall use its best efforts to effect as little change in the economic
and tax arrangements among the Partners as the General Partner shall determine
in its sole discretion to be necessary to provide for allocations of profits and
losses to the Limited Partners which the General Partner believes will be
respected for Federal income tax purposes. Any amendments made in accordance
with Section 11.13.B shall be deemed to have been made in accordance with the
General Partner's fiduciary obligations to the Partnership and the Limited
Partners, and no such amendment shall give rise to any claim or cause of action
by any Limited Partner.
Section 11.14 Partition.
The Partners hereby agree that no Partner or successor-in-interest shall
have the right, while this Agreement remains in effect, to have the property of
the Partnership partitioned or to file a complaint or institute any proceeding
at law or in equity to have the property of the Partnership partitioned. Each
Partner, on behalf of himself, his successors, representatives, heirs, and
assigns, hereby waives any right to partition. It is the intention of the
Partners that during the term of this Agreement the rights of the Partners and
their successors-in-interest, as among themselves, shall be governed by the
terms of this Agreement, and that the right of any Partner or
successors-in-interest to assign, transfer, sell, or otherwise dispose of his
Interest in the Partnership's properties shall be subject to the limitations and
restrictions of this Agreement.
B-26
WITNESS the execution under seal as of the day of , 1997.
GENERAL PARTNER:
ATTEST: Winthrop Financial Associates, A Limited Partnership
By:
------------------------------------------------
Authorized Officer
UNITHOLDERS:
ATTEST: By: Winthrop Financial Associates, A Limited Partnership,
their Attorney-in-fact
By:
------------------------------------------------
Authorized Officer/Agent
ATTEST: PREFERRED UNITHOLDERS:
By: Winthrop Financial Associates, A Limited Partnership,
their Attorney-in-fact
By:
------------------------------------------------
Authorized Officer/Agent
B-27
SCHEDULE A
TO ▇▇▇▇ ▇▇▇▇▇▇▇▇ ASSOCIATES LIMITED PARTNERSHIP
SECOND AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
CAPITAL UNITHOLDERS PREFERRED
NAME AND ADDRESS CONTRIBUTION PERCENTAGE INTEREST UNITS OWNED
--------------------------------------------------------- ------------ ------------------- -----------
GENERAL PARTNER:
Winthrop Financial Associates, A
Limited Partnership
Five ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Unitholders..............................................
Preferred Unitholders....................................
B-28
EXHIBIT A
FORM OF UNIT CERTIFICATE
Registered Number
1999 BROADWAY ASSOCIATES
LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP FORMED UNDER THE
LAWS OF THE STATE OF DELAWARE)
CERTIFICATE FOR UNITS OF LIMITED
PARTNERSHIP INTEREST
THIS CERTIFIES THAT
is the registered holder of units of
limited partnership interest (the 'Units') in ▇▇▇▇ ▇▇▇▇▇▇▇▇ Associates Limited
Partnership (the 'Partnership'), a limited partnership organized under the laws
of the State of Delaware pursuant to a Certificate of Limited Partnership, filed
with the Secretary of State of the State of Delaware, as amended from time to
time (the 'Certificate'), and an Amended and Restated Limited Partnership
Agreement dated January 10, 1989, as amended from time to time (the 'Partnership
Agreement'). Copies of both the Certificate and the Partnership Agreement are on
file at the office of the Partnership. The Certificate and the Partnership
Agreement are incorporated by reference herein as fully as if set forth in their
entirety. EACH TRANSFEREE OF THIS CERTIFICATE, UPON DELIVERY TO THE PARTNERSHIP
OF THIS CERTIFICATE DULY ENDORSED FOR TRANSFER ACCOMPANIED BY APPROPRIATE
TRANSFER INSTRUCTIONS, SHALL BE DEEMED TO HAVE APPLIED TO BECOME A SUBSTITUTE
LIMITED PARTNER, SHALL BE DEEMED TO HAVE AGREED TO THE TERMS AND CONDITIONS OF
THE PARTNERSHIP AGREEMENT AND TO HAVE APPOINTED THE PARTNERSHIP AND THE GENERAL
PARTNER AS AGENTS AND ATTORNEYS-IN-FACT OF SUCH TRANSFEREE UPON THE TERMS AND
FOR ALL PURPOSES SET FORTH IN THE PARTNERSHIP AGREEMENT. A Unitholder may, under
certain circumstances, be required to return to the Partnership a portion of
cash distributions from the Partnership to the Unitholder, if the Partnership
does not have assets sufficient to discharge its liabilities.
WITNESS the facsimile seal of the General Partner of the Partnership and
the facsimile signature of its duly authorized officer.
Dated: WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP
By:
Authorized Officer/Agent
THE UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE 'ACT'), OR UNDER THE SECURITIES LAWS
OF CERTAIN STATES, IN RELIANCE ON EXEMPTIONS THEREFROM. UNITS MAY NOT BE SOLD OR
TRANSFERRED WITHOUT REGISTRATION OF SUCH UNITS UNDER THE ACT AND SUCH SECURITIES
LAWS UNLESS SUCH UNITS ARE SOLD IN A TRANSACTION WHICH IS EXEMPT FROM
REGISTRATION THEREUNDER, AND THE GENERAL PARTNER MAY REQUIRE AS A CONDITION OF
TRANSFER THE DELIVERY OF AN OPINION TO THE EFFECT THAT SUCH TRANSFER COMPLIES
WITH ALL APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
B-29
EXHIBIT B
FORM OF PREFERRED UNIT CERTIFICATE
Registered Number
1999 BROADWAY ASSOCIATES
LIMITED PARTNERSHIP
(A LIMITED PARTNERSHIP FORMED UNDER THE
LAWS OF THE STATE OF DELAWARE)
CERTIFICATE FOR PREFERRED UNITS OF LIMITED
PARTNERSHIP INTEREST
THIS CERTIFIES THAT
is the registered holder of preferred
units of limited partnership interest (the 'Preferred Units') in ▇▇▇▇ ▇▇▇▇▇▇▇▇
Associates Limited Partnership (the 'Partnership'), a limited partnership
organized under the laws of the State of Delaware pursuant to a Certificate of
Limited Partnership, filed with the Secretary of State of the State of Delaware,
as amended from time to time (the 'Certificate'), and an Amended and Restated
Limited Partnership Agreement dated January 10, 1989, as amended from time to
time (the 'Partnership Agreement'). Copies of both the Certificate and the
Partnership Agreement are on file at the office of the Partnership. The
Certificate and the Partnership Agreement are incorporated by reference herein
as fully as if set forth in their entirety. EACH TRANSFEREE OF THIS CERTIFICATE,
UPON DELIVERY TO THE PARTNERSHIP OF THIS CERTIFICATE DULY ENDORSED FOR TRANSFER
ACCOMPANIED BY APPROPRIATE TRANSFER INSTRUCTIONS, SHALL BE DEEMED TO HAVE
APPLIED TO BECOME A SUBSTITUTE LIMITED PARTNER, SHALL BE DEEMED TO HAVE AGREED
TO THE TERMS AND CONDITIONS OF THE PARTNERSHIP AGREEMENT AND TO HAVE APPOINTED
THE PARTNERSHIP AND THE GENERAL PARTNER AS AGENTS AND ATTORNEYS-IN-FACT OF SUCH
TRANSFEREE UPON THE TERMS AND FOR ALL PURPOSES SET FORTH IN THE PARTNERSHIP
AGREEMENT. A Preferred Unitholder may, under certain circumstances, be required
to return to the Partnership a portion of cash distributions from the
Partnership to the Preferred Unitholder, if the Partnership does not have assets
sufficient to discharge its liabilities.
WITNESS the facsimile seal of the General Partner of the Partnership and
the facsimile signature of its duly authorized officer.
Dated: WINTHROP FINANCIAL ASSOCIATES,
A LIMITED PARTNERSHIP
By:
Authorized Officer/Agent
THE PREFERRED UNITS REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES LAWS OF CERTAIN STATES, IN RELIANCE ON
EXEMPTIONS THEREFROM. PREFERRED UNITS MAY NOT BE SOLD OR TRANSFERRED WITHOUT
REGISTRATION OF SUCH PREFERRED UNITS UNDER SUCH SECURITIES LAWS UNLESS SUCH
PREFERRED UNITS ARE SOLD IN A TRANSACTION WHICH IS EXEMPT FROM REGISTRATION
THEREUNDER, AND THE GENERAL PARTNER MAY REQUIRE AS A CONDITION OF TRANSFER THE
DELIVERY OF AN OPINION TO THE EFFECT THAT SUCH TRANSFER COMPLIES WITH ALL
APPLICABLE FEDERAL AND STATE SECURITIES LAWS.
B-30