1
EXHIBIT 10.27
================================================================================
MAITLAND PROPERTY INVESTORS, LTD.,
as Contributor
and
TOWER REALTY OPERATING PARTNERSHIP, L.P.,
as Contributee
================================================================================
CONTRIBUTION AGREEMENT
================================================================================
Dated: As of August 4, 1997
================================================================================
2
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
the 4th day of August, 1997 by and between MAITLAND PROPERTY INVESTORS, LTD., a
Florida limited partnership, having an address at 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 ("Contributor") and TOWER REALTY OPERATING PARTNERSHIP,
L.P., a Delaware limited partnership, having an address at 000 Xxxx 00xx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 (the "OP").
R E C I T A L S:
A. The subject property is located in Orange County, Florida and
is comprised of a leasehold estate, as more particularly described in Section
1.1 hereof.
B. Contributor desires to contribute to the capital of the OP and
the OP desires to acquire, as a result of this contribution to capital, all of
Contributor's right, title and interest in and to the subject property in
exchange for interests in the OP (the "Units")
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties do hereby agree as
follows:
ARTICLE I
CONTRIBUTION OF PROPERTY
1.1 Contribution and Assignment. Subject to the terms and
conditions hereinafter specified, Contributor agrees to contribute to the
capital of the OP, and the OP agrees to acquire from Contributor, as a result
of this contribution to capital, (i) Contributor's interest in the buildings
and improvements (collectively, the "Building") located on that certain plot,
piece and parcel of land (the "Land") located in Orange County, Florida and
more particularly described in Exhibit A attached hereto and made a part
hereof, (ii) Contributor's interest in that certain lease dated as of March 9,
1984 between Contributor and Maitland Associates, Ltd., as lessee, and recorded
on August 3, 1984 in Deed Book 3538, Page 2679 (as amended, the "Ground
Lease"), which Ground Lease encumbers the Land (the Building, the Land and the
Ground Lease are hereinafter sometimes collectively referred to as the
"Premises"), and (iii) all of Contributor's right, title and interest in, to
and under:
(a) all easements, rights of way, privileges,
appurtenances, strips, gores, air rights and other rights pertaining to the
Premises, if any;
(b) any land lying in the bed of any street, road, avenue,
open or proposed, public or private, in front of or adjoining the Premises or
any portion thereof, to the center line thereof, and any award to be made in
lieu thereof and in and to any unpaid award for damage to the Premises by
reason of change of grade of any street occurring after the date of execution
and delivery of this Agreement;
1
3
(c) all the fixtures, furniture, furnishings, equipment
and other personal property owned by Contributor and used in connection with
the Premises (the "Personalty");
(d) all of Contributor's right, title and interest in and
to all leases and other occupancy agreements for the leasing of space at the
Premises (collectively, the "Leases"), and all security deposits under the
Leases (collectively, the "Security Deposits") which have not been applied by
Contributor to the payment of past due amounts under the Leases in accordance
with the terms of the respective Leases (and which shall continue to be held
in accordance with the terms and conditions of the respective Leases);
(e) all of Contributor's right, title and interest in and
to service, supply, security, maintenance, employment and all other agreements,
licenses or contracts (the "Contracts"), subject to any consents required
pursuant to the terms and provisions of such Contracts; and
(f) all certificates of occupancy and other documents,
permits, warranties, guarantees and approvals pertaining to the operation of
the Premises (collectively, the "Permits"; the Land, the Building, the Ground
Lease, the Personalty, the Leases, the Security Deposits, the Contracts, and
the Permits being hereinafter collectively referred to as the "Property").
1.2 Contribution Consideration. In exchange for the
contribution of the Property to the capital of the OP, the Contributor shall
receive such number of the Units equal to the quotient of (A) 600,000 and (B)
the mid-point of the proposed per share price range for shares of common stock
in Tower Realty Trust, Inc., a Maryland corporation, (the "Company") as set
forth in the final preliminary prospectus included in the Registration
Statement on Form S-11 filed by the Company with the Securities and Exchange
Commission in connection with the proposed public offering of the shares of its
common stock (the "IPO").
1.3 Adjustment to Contribution Consideration. Contributor agrees
that the consideration payable pursuant to Section 1.2 hereof may be reduced to
reflect the OP's acquisition of interests in the Contributor simultaneously
with the closing in exchange for cash, provided, however, in no event shall the
contribution consideration be reduced by an amount greater than the product of
(x) the percentage interest in the Contributor acquired by the OP and (y)
$600,000. In the event the contribution consideration is reduced pursuant to
this Section 1.3, immediately following the closing, the OP shall recontribute
to the Contributor, without additional consideration, any interests in the
Contributor previously acquired by the OP.
ARTICLE II
THE CLOSING
2.1 Time and Place. The closing of the contribution of
Contributor's rights, title and interest in and to the Property to the OP (the
"Closing") shall occur, subject to the satisfaction or waiver of the conditions
set forth in Sections 2.2 and 2.4 hereof, simultaneously with the closing of
the IPO (the "Closing Date"). Contributor shall give the OP at least five (5)
business days' advance notice of the Closing Date. The Closing shall take
place at the offices of Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000.
2
4
2.2 Conditions Precedent to Obligations of Contributor. The
obligation of Contributor to convey the Property to the OP on the Closing Date
is subject to the fulfillment of the following conditions to Contributor's sole
satisfaction prior to or as of the Closing Date:
(a) the OP shall have issued the Units to Contributor as
set forth in Article I evidenced by (i) an amendment to the Agreement of
Limited Partnership of the OP in the form attached hereto as Exhibit B (the
"OP Agreement") and (ii) such additional actions and execution of such
additional documentation as may be required by the OP Agreement or the
Agreement of Limited Partnership of Contributor, or otherwise, in order to
effect the transactions hereby contemplated;
(b) Contributor shall have obtained any and all consents
required in order to effect the transactions hereby contemplated;
(c) the representations and warranties of the OP set
forth in Article IV hereof shall be true and correct in all material respects
on and as of the Closing Date; and
(d) the OP shall have satisfied its obligations set forth
in Section 2.5 hereof.
2.3 Deliveries of Contributor. At the Closing, Contributor shall
deliver or cause to be delivered the following:
(a) a Lock-Up Agreement whereby the OP's transfer of the
Units shall be restricted as provided therein, which agreement shall be in the
form attached hereto as Exhibit D-1 and Exhibit D-2 and made a part hereof;
(b) a Registration Rights Agreement in the form attached
hereto as Exhibit E and made a part hereof;
(c) an Exchange Rights Agreement in the form attached
hereto as Exhibit F and made a part hereof;
(d) an Assignment and Assumption of Lease Agreement,
substantially in the form attached hereto as Exhibit G, assigning to the OP
Contributor's interest in the Ground Lease;
(e) an Omnibus Assignment and Assumption and Xxxx of Sale,
substantially in the form attached hereto as Exhibit H, (i) assigning all of
Contributor's interest in the Contracts (provided same are assignable), (ii)
assigning all of Contributor's interest in the Permits, (iii) assigning all of
Contributor's interest in the Leases and Security Deposits, and (iv)
evidencing the sale of the Personal Property included in the sale of the
Property;
(f) any required transfer tax returns;
(g) a "non-foreign person affidavit" as required by
Internal Revenue Code Section 1445, substantially in the form attached hereto
as Exhibit I; and
(h) a signature page to the Partnership Agreement.
2.4 Conditions Precedent to Obligations of the OP. The obligation
of the OP to receive the contribution of the Property on the Closing Date is
subject to the fulfillment of the following conditions prior to or as of the
Closing Date:
3
5
(a) the representations and warranties of Contributor set
forth in Article IV shall be true and correct in all material respects on and
as of the Closing Date;
(b) Contributor shall have satisfied its obligations set
forth in Section 2.3 hereof;
(c) the IPO shall have been consummated; and
(d) the OP shall have acquired all the equity interests
in the entity that holds the Ground Lease.
2.5 Deliveries of the OP. At Closing, the OP shall deliver, or
cause to be delivered, the following:
(a) the issuance of the Units in accordance with Article
I hereof; and
(b) signed counterparts of any of the documents set forth
in Section 2.3 hereof on which a signature block for the OP appears.
ARTICLE III
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF CONTRIBUTOR
3.1 Organization and Capacity. Contributor represents that it has
full power and authority and has taken all action necessary to authorize it to
enter into and perform its obligations under this Agreement and all other
documents or instruments contemplated hereby. Contributor represents that this
Agreement is a legal, valid and binding obligation of Contributor, and this
Agreement is enforceable in accordance with its terms, except (i) that such
enforceability may be subject to bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect relating to
creditors' rights generally, (ii) that such enforceability may be subject to
general equitable principles, including, without limitation, the principle that
the availability of equitable remedies, such as specific enforcement,
injunctive relief or reformation, is subject to the discretion of the court
before which any proceeding might be brought, and (iii) that rights to
indemnity referred to or provided in any such agreements may be limited by
federal or state securities laws or public policy underlying such laws.
3.2 No Broker. Contributor represents and warrants that
Contributor has not engaged on its own behalf or for its benefit any person or
entity as an agent, broker, dealer or otherwise who is entitled to a commission
or fee in connection with the sale of the Property to the OP. Contributor
hereby agrees to indemnify and hold the OP harmless from and against any and
all claims, demands, causes of action, losses, costs and expenses (including
attorneys' fees) and other liabilities arising from Contributor's breach of the
representations and warranties contained in this Section 3.2. Notwithstanding
anything to the contrary contained herein, the provisions of this Section 3.2
shall survive the Closing Date until the expiration of the applicable statute
of limitations therefor.
4
6
3.3 Investment Representations and Warranties. 1. (i) The
Contributor has received and reviewed a copy of the Private Placement
Memorandum (the "Private Placement Memorandum") prepared in connection with the
contribution of Interests to the capital of the Operating Partnership (which
Private Placement Memorandum includes a draft Registration Statement, the
Summary of Partnership Agreement Provisions (the "Partnership Summary") and the
Summary of Tax Matters (the "Tax Matters Summary"), and understands the risks
of, and other considerations relating to, an investment in Units.
(ii) The Contributor, by reason of its business
and financial experience, together with the business and financial
experience of those persons, if any, retained by it to represent or advise
it with respect to its investment in Units,
(A) has such knowledge, sophistication
and experience in financial and business matters and in
making investment decisions of this type that it is capable
of evaluating the merits and risks of and of making an
informed investment decision with respect to an investment
in Units,
(B) is capable of protecting its own
interest or has engaged representatives or advisors to
assist it in protecting its interests, and
(C) is capable of bearing the economic
risk of such investment.
(iii) (A) The Contributor is an "accredited
investor" as defined in Rule 501 of the regulations
promulgated under the Securities Act of 1933.
(B) If the Contributor has retained or
retains a person to represent or advise it with respect to
its investment in Units, the Contributor will advise the OP
of such retention and, at the OP's request, the Contributor
shall, prior to or at the Closing,
(I) acknowledge in writing such
representation, and
(II) cause such representative or
advisor to deliver a certificate to the OP containing
such representations as may be reasonably requested
by the OP.
(b) (i) The Contributor understands that an
investment in the OP involves substantial risks.
(ii) The Contributor has been given the
opportunity to make a thorough investigation of the proposed activities of
the OP and has been furnished with materials relating to the OP and its
proposed activities, including, without limitation, the Private Placement
Memorandum, the Partnership Summary and the Tax Matters Summary.
(iii) The Contributor has been afforded the
opportunity to obtain any additional information requested by it.
(iv) The Contributor has had an opportunity
to ask questions of and receive answers from representatives of the OP
concerning
5
7
the OP and its proposed activities and the terms and conditions of an
investment in Units.
(v) The Contributor has relied and is making
its investment decision based upon the Private Placement Memorandum, the
Partnership Summary, the Tax Matters Summary and other written information
provided to the Contributor by or on behalf of the OP.
(c) (i) The Units to be issued to the Contributor
at the Closing will be acquired by the Contributor for its own account, for
investment only and not with a view to, or with any intention of, a
distribution or resale thereof, in whole or in part, or the grant of any
participation therein.
(ii) The Contributor was not formed for the
specific purpose of acquiring an interest in the OP.
(d) (i) The Contributor acknowledges that
(A) the Units to be issued to the
Contributor at the Closing have not been registered under
the Securities Act of 1933 or state securities laws by
reason of a specific exemption or exemptions from
registration under the Securities Act of 1933 and
applicable state securities laws and, if such Units are
represented by certificates, such certificates will bear
a legend to such effect,
(B) the Company's and the OP's reliance
on such exemptions is predicated in part on the accuracy
and completeness of the representations and warranties of
the Contributor contained herein,
(C) the Units to be issued to the
Contributor at the Closing may not be resold or otherwise
distributed unless registered under the Securities Act of
1933 and applicable state securities laws, or unless an
exemption from registration is available,
(D) there is no public market for such
Units, and
(E) the OP has no obligation or
intention to register such Units under the Securities
Act of 1933 or any state securities laws or to take any
action that would make available any exemption from the
registration requirements of such laws, except as
provided in the Registration Rights Agreement (as defined
below).
(ii) The Contributor hereby acknowledges that
because of the restrictions on transfer or assignment of such Units to be
issued hereunder, which will be set forth in the Partnership Agreement and
in the Lock-up Agreement, the Contributor may have to bear the economic
risk of the investment commitment evidenced by this Agreement and any of
the Units issued hereunder for an indefinite period of time, although, if
applicable,
(A) under the terms of the Exchange
Rights Agreement, as it will be in effect at the time of
the IPO, Units will, subject to the limitations set forth
in the Exchange Rights Agreement, be exchangeable at the
request of the holder thereof at
6
8
any time after the first anniversary of their issuance
for cash based on their fair market value or, at the
option of the Company, for shares of common stock in the
Company, and
(B) the holder of any such common stock
issued upon exchange of Units will be afforded certain
rights to have such common stock registered under the
Securities Act of 1933 and applicable state securities
laws pursuant to the Registration Rights Agreement.
3.4 Private Placement Memorandum. (a) The
Contributor understands and acknowledges that the Private Placement Memorandum,
including, but not limited to, the descriptions of the various transactions
relating to the formation and business of the Company and the OP set forth in
the Private Placement Memorandum, are in draft form only, and such transactions
are subject to change without the consent of the Contributor.
(b) Without limiting the foregoing, such changes
may include the deletion (or addition) of one or more properties expected to
be acquired by the OP and changes in the amount of the indebtedness expected
to be repaid with the proceeds of the IPO.
(c) The OP shall not be obligated to obtain the
Contributor's consent as a result of such changes, although such changes could
affect the nature and value of the Contributor's investment in the Units.
3.5 No Other Representations or Warranties.
Contributor makes no other representation or warranty to the OP of any kind or
character.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF THE OP
4.1 Organization and Capacity. The OP represents that
it has full power and authority and has taken all actions necessary to
authorize it to enter into and perform its obligations under this Agreement and
all other documents or instruments contemplated hereby. This Agreement is a
legal, valid and binding obligation of the OP, and this Agreement is
enforceable in accordance with its terms, except (i) that such enforceability
may be subject to bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights
generally, (ii) that such enforceability may be subject to general equitable
principles, including, without limitation, the principle that the availability
of equitable remedies, such as specific enforcement, injunctive relief or
reformation, is subject to the discretion of the court before which any
proceeding might be brought, and (iii) that rights to indemnity referred to or
provided in any such agreements may be limited by federal or state securities
laws or public policy underlying such laws.
4.2 Additional Representations. (i) The OP
represents and warrants that it is a sophisticated investor and has
independently made its own analysis of the Property for the purpose of
acquiring the same, and the OP has reviewed such documents and other
information and materials as it considers appropriate to make its necessary
evaluations, and (ii) the OP acknowledges that, except as otherwise provided
herein, the transfer of the Property to the OP is "AS IS" and without any
recourse of or liability of Contributor.
7
9
4.3 No Broker. The OP represents and warrants that
neither the OP nor any of its affiliates has dealt or negotiated with, or
engaged on their own behalf or for their benefit, any person or entity as an
agent, broker, dealer or otherwise who is entitled to a commission or fee in
connection with its purchase of the Property. The OP hereby agrees to
indemnify and hold Contributor harmless from and against any and all claims,
demands, causes of action, losses, costs and expenses (including attorneys'
fees) and other liabilities arising from the OP's breach of the representations
and warranties contained in this Section 4.3. Notwithstanding anything to the
contrary contained herein, the provisions of this Section 4.3 shall survive the
Closing Date until the expiration of the applicable statute of limitations
therefor.
4.4 Acknowledgments of the OP. The OP acknowledges and
agrees for the benefit of Contributor that:
(a) except as expressly set forth in Article III
hereof, neither Contributor nor any affiliate, agent, officer, employee or
representative of Contributor has made any verbal or written representations,
warranties, promises or guarantees whatsoever to the OP, expressed or implied,
and, in particular, that no such representations, warranties, guarantees or
promises have been made with respect to the Property, including, without
limitation, the condition of the improvements thereon or any other matter or
thing affecting or related to the offering or sale of Contributor's right to
purchase the Property;
(b) the OP is relying on the OP's own
investigation regarding the Property, any financial information or other
information which the OP deems relevant regarding the Property, and all other
matters related to the foregoing and not on any representations, warranties,
statements or other information provided by Contributor;
(c) (i) there may be environmental risks
associated with the Property, and Contributor makes no representation or
warranty (express or implied) regarding the existence of any hazardous
materials or hazardous substances at or on the Property, 1 Contributor makes no
representation or warranty (express or implied) regarding the content of 1. any
report or other document evidencing an environmental assessment or review of
the Property, or 2. any appraisal, title report or survey relating to the
Property, or 1.1 any financial report, statement or analysis or any other
report or analysis with respect to the Property, and 2 Contributor has advised
the OP to conduct its own independent review of the Property (including,
without limitation, an environmental review) and all other reviews and
inspections regarding the Property utilizing such third-party inspectors and
experts as the OP deems appropriate; and
(d) the OP shall assume the risk of all adverse
matters pertaining to the Property, including, without limitation, violations
of any applicable laws, construction defects and adverse physical and
environmental conditions that may not have been revealed by the OP's
investigations, and the OP acknowledges that it shall have no claim, demand or
cause of action by reason of or arising out of any and all acts, omissions,
events, circumstances or matters regarding the Property.
8
10
ARTICLE V
DEFAULT AND REMEDIES
If either Contributor or the OP defaults in the
performance of any of their respective obligations hereunder, then the
non-defaulting party shall have the right either (a) to receive specific
performance of this Purchase Agreement or (b) to terminate this Agreement.
ARTICLE VI
COSTS AND EXPENSES
Except as expressly provided in this Article VI to
the contrary, Contributor and the OP shall be solely responsible for all costs
or expenses (including legal expenses) respectively incurred by each of them
with respect to the negotiation and preparation of this Agreement and the
consummation of the transaction described herein. The OP (and not Contributor)
shall be solely liable for and shall pay when due all fees and disbursements
relating to title insurance and endorsements, UCC searches, recording costs and
other expenses associated with the transfer of the Property from Contributor to
the OP.
ARTICLE VII
MISCELLANEOUS
7.1 Notices. All notices, demands or other
communications of any type given by the parties, whether required by this
Agreement or in any way related to the contemplated transaction, shall be void
and of no effect unless given in accordance with the provisions of this Section
7.1. All notices, demands or other communications shall be in writing and
shall be sent to the party to whom the notice, demand or other communication is
directed at the following addresses.
If to Contributor, as follows:
Maitland Property Investors, Ltd.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx
If to the OP, as follows:
Tower Realty Operating Partnership, L.P.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxx
All notices, demands or other communications shall be sent either by 1.
personal delivery with receipt acknowledged in writing, 2. United States mail,
postage prepaid, as a registered or certified item, return receipt requested,
3. national prepaid overnight delivery service. Each notice, demand or other
communication sent by hand delivery or by national prepaid overnight delivery
service shall be effective when received or refused by the party to whom the
same is directed. Each notice, demand or other communication sent by certified
or
9
11
registered mail shall be deemed given on the date of receipt or refusal as
indicated on the return receipt. Either party hereto may change the address
for notice, demand or other communication specified above by giving the other
party five (5) business days' advance written notice of such change of address.
Any notice, demand or other communication may be given either by a party hereto
or by such party's attorney.
7.2 Survival of Representations and Warranties.
Unless a different survival period is expressly provided for herein,
Contributor's and the OP's representations, warranties, covenants and
agreements contained herein shall survive for six (6) months following the
Closing Date.
7.3 No Merger. Any representation, warranty,
covenant or agreement herein of either party to this Agreement whether to be
performed before or after the time of Closing shall not be deemed to be merged
into or waived by the instruments of Closing and shall survive the Closing
except as otherwise provided in Section 7.2 above.
7.4 Modification. This Agreement may not be
modified or amended except by an agreement in writing signed by both parties.
The parties may waive any of the conditions contained herein or any of the
obligations of the other party hereunder, but any such waiver shall be
effective only if in writing and signed by both parties to this Agreement.
7.5 Headings. The descriptive headings of the
several Articles, sections and paragraphs contained in this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
7.6 Entire Agreement. This Agreement, including
the exhibits hereto, and the documents to be executed and delivered at the
Closing constitute the entire agreement among the parties pertaining to the
subject matter hereof and supersede all prior and contemporaneous agreements
and understanding of the parties in connection therewith.
7.7 Multiple Originals. Numerous copies of this
Agreement may be executed by the parties hereto. Each such executed original
copy shall have the full force and effect of an original executed instrument.
7.8 Authorization. If any party hereto is a
legal entity or representative of an estate, guardianship, partnership,
corporation, trust and/or other legal entity, such party represents unto the
other that this Agreement, the transactions contemplated herein and the
execution and delivery hereof have been duly authorized by all necessary
proceedings and actions.
7.9 Governing Law. This Agreement shall be
controlled by and construed in accordance with the laws of the State of New
York.
7.10 Binding Effect; Limitation on Assignment.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors, legal representatives and
assigns. The OP may not assign or otherwise transfer this Agreement (or any
rights hereunder or in the OP).
7.11 Waiver of Jury Trial. THE OP AND CONTRIBUTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE THE RIGHT TO A JURY TRIAL IN ANY
ACTION, SUIT OR PROCEEDING ARISING FROM OR RELATED TO THIS AGREEMENT.
10
12
7.12 Third-Party Beneficiary. This Agreement is
solely for the benefit of Contributor and the OP. No other person, party or
entity shall have any right hereunder nor shall any other person, party or
entity be entitled to rely upon the terms, covenants and provisions contained
herein.
7.13 Severability. In the event that any of the
provisions of this Agreement shall for any reason be held to be invalid,
illegal or unenforceable, such invalidity, illegality or unenforceability shall
not affect any other provision hereof and this Agreement shall be construed as
if such invalid, illegal or unenforceable provision had never been contained
herein.
7.14 Business Day. As used in this Agreement, the
term "business day" shall mean every day other than Saturdays, Sundays, all
days observed by the federal or State of New York government as legal holidays
and all days on which commercial banks in State of New York are required by law
to be closed.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the day and year first above written.
Contributor:
MAITLAND PROPERTY INVESTORS, LTD.
By: Lake Success Realty Investors, Inc.
By: /s/ XXXXXXXX X. XXXXXXX
------------------------------------
Name: Xxxxxxxx X. Xxxxxxx
-------------------------------
Title: President
------------------------------
The OP:
TOWER REALTY OPERATING PARTNERSHIP, L.P.
By: Tower Realty Trust, Inc., general partner
By: /s/ XXXXXX X. XXX
-------------------------------------
Xxxxxx X. Xxx
Executive Vice President and
Chief Operating Officer
11
13
EXHIBIT A
Legal Description of the Land
See attached copy
14
Exhibit A
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
LEGAL DESCRIPTION
A portion of the Northeast 1/4 of the Southeast 1/4, Section 27, Township 21
South, Range 29 East; and Tract 10A Maitland Center Section Two as recorded in
Plat Book 10, Pages 76 and 77 of the Public Records of Orange County, Florida;
all lying in the City of Maitland, Orange County, Florida, and being more
particularly described as follows:
Begin at the Southeast corner of Tract 10A; thence S. 89 degrees 41'
55" W. along the South line of said Tract 10A, for 932.11 feet; thence continue
S. 89 degrees 41' 55" W. along the South line of the Northeast 1/4 of the
Southeast 1/4 of said Section 27 for 362.73 feet to the East right-of-way line
of Xxxxxx Road, being 30.00 feet Easterly of and parallel with the West line of
the Northeast 1/4 of the Southeast 1/4 of said Section 27; thence N. 00 degrees
10' 58" W. along said East right-of-way line for 869.86 feet to an intersection
with the Westerly prolongation of a curve concave Northeasterly and lying along
the North right-of-way line of Lake Lucien Drive, a radial line to said
intersection bearing S. 37 degrees 24' 32" W.; thence Southeasterly along the
arc of said curve, having a radius of 2034.86 feet through a central angle of
13 degrees 03' 44" for 463.91 feet to a point on the Westerly termination of
said Lake Lucien Drive; thence S. 24' 20" 48" W. along said Westerly
termination of said Lake Lucien Drive for 7.15 feet to a point on a curve
concave Easterly; thence Southwesterly along the arc of said curve, having a
radius of 50.00 feet; through a central angle of 81 degrees 04' 45", for 70.76
feet to a point on the said Westerly termination of said Lake Lucien Drive, a
radial line to said point bearing S. 73 degrees 48' 25" W.; thence S. 24
degrees 20' 48" W. for 7.85 feet to a point on a curve concave Northeasterly
and lying along the South right-of-way line of said Lake Lucien Drive, a radial
line to said point bearing S. 24 degrees 20' 48" W.; thence Southeasterly along
the arc of said curve, having a radius of 2114.86 feet, through a central angle
of 00 degrees 13' 44" for 8.45 feet to a point on a curve concave
Northeasterly, a radial line to said point bearing S. 24 degrees 07' 04" W.;
thence Southeasterly along the arc of said curve, having a radius of 50.00
feet, through a central angle of 63 degrees 43' 10", for 55.61 feet to a point
of reverse curvature of a curve concave Southwesterly; thence Southeasterly
along the arc of said curve, having a radius of 50.00 feet; through a central
angle of 25 degrees 15' 32", for 22.04 feet to a point of compound curvature of
a curve concave Northeasterly and lying along the South right-of-way of said
Lake Lucien Drive, a radial line to said point bearing N. 22 degrees 07' 08"
E.; thence Southeasterly along the arc of said curve, having a radius of
2114.86 feet, through a central angle of 17 degrees 35' 09" for 649.11 feet to
the point of reverse curvature of a curve concave Southerly and lying along
said South right-of-way line of said Lake Lucien Drive; thence Southeasterly
along the arc of said curve, having a radius of 841.47 feet and a central angle
of 15 degrees 56' 41" for 234.17 feet to the East line of said Tract 10A,
thence S. 00 degrees 07' 19" E. along said East line of Tract 10A for 320.59
feet to the Point of Beginning.
Less the following:
The West 392.70 feet of the South 869.86 feet of the NE 1/4 of the SE 1/4 of
Section 27, township 21 South, Range 29 East, Orange County, Florida, lying
East of and within 45 feet of the survey line of Xxxxxx Road, Section 750.11,
between survey Stations 6+500.00 and 5+00.00; said survey line and said
Stations being located and described as follows:
Begin on the West line of the NE 1/4 of the SE 1/4 of Section 27, Township 21
South, Range 29 East, at a point 609.12 feet South 0 degrees 10' 12" East of
the Northwest corner of said NE 1/4 of SE 1/4; at Station 6+50; thence continue
South 0 degrees 10' 12" East a distance of 150 feet to survey Station 5+00.00;
being 556.65 feet North 0 degrees 10' 12" West of the Southwest corner of the
NE 1/4 of the SE 1/4 of said
15
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
Section 27 for the end of this described survey line.
AND
All rights of access, ingress, egress, light, air and view between the South
869.80 feet of the NE 1/4 of the SE 1/4 of said Section 27, and Xxxxxx Road
along the following described line:
Commence on the West line of the NE 1/4 of the SE 1/4 of said Section 27, at a
point 446.20 feet South 0 degrees 10' 12" East of the Northwest corner of the
said NE 1/4 of the SE 1/4; thence run North 89 degrees 58' 48" East a distance
of 30 feet to the East right of way line of Xxxxxx Road for the Point of
Beginning, thence run South 0 degrees 10' 12" East a distance of 162.92 feet,
thence run North 89 degrees 58' 48" East a distance of 15 feet, thence run
South 0 degrees 10' 12" East a distance of 150 feet, thence run South 89
degrees 58' 48" West a distance of 15 feet to the existing East right of way
line of said Xxxxxx Road for the end of this described access line.
END OF LEGAL DESCRIPTION
16
EXHIBIT B
Form of
Amendment and Restatement of
Agreement of Limited Partnership of
Tower Realty Operating Partnership, L.P.
See attached copy
17
Exhibit B
AMENDMENT AND RESTATEMENT OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
TOWER REALTY OPERATING PARTNERSHIP, L.P.
______ __, 1997
18
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2 ORGANIZATIONAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.1 Formation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
2.2 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Registered Office and Agent; Principal Office . . . . . . . . . . . . . 14
2.4 Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.5 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE 3 PURPOSE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.1 Purpose and Business . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.2 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 4 CAPITAL CONTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.1 Capital Contributions of the Partners . . . . . . . . . . . . . . . . . 18
4.2 Additional Funds; Restrictions on the General Partner . . . . . . . . . 18
4.3 Issuance of Additional Partnership Interests; Admission
of Additional Limited Partners . . . . . . . . . . . . . . . . . . . . . 20
4.4 Contribution of Proceeds of Issuance of REIT Stock . . . . . . . . . . . 21
4.5 Repurchase of REIT Stock; Shares-In-Trust . . . . . . . . . . . . . . . 21
4.6 No Third-Party Beneficiary . . . . . . . . . . . . . . . . . . . . . . . 22
4.7 No Interest; No Return . . . . . . . . . . . . . . . . . . . . . . . . . 22
4.8 No Preemptive Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 23
ARTICLE 5 DISTRIBUTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.1 Regular Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.2 Qualification as a REIT . . . . . . . . . . . . . . . . . . . . . . . . 23
5.3 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.4 Additional Partnership Interests . . . . . . . . . . . . . . . . . . . . 24
5.5 Distributions Upon Liquidation . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 6 ALLOCATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.1 Allocations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.2 Revisions to Allocations to Reflect Issuance of Partnership Interests. . 24
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS . . . . . . . . . . . . . . . . . . . . . 25
7.1 Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Certificate of Limited Partnership . . . . . . . . . . . . . . . . . . . 29
7.3 Reimbursement of the General Partner . . . . . . . . . . . . . . . . . . 30
7.4 Outside Activities of the General Partner . . . . . . . . . . . . . . . 31
19
Page
----
7.5 Contracts with Affiliates . . . . . . . . . . . . . . . . . . . . . . . 31
7.6 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.7 Liability of the General Partner . . . . . . . . . . . . . . . . . . . . 34
7.8 Other Matters Concerning the General Partner . . . . . . . . . . . . . . 35
7.9 Title to Partnership Assets . . . . . . . . . . . . . . . . . . . . . . 36
7.10 Reliance by Third Parties . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS . . . . . . . . . . . . . . . . . . 37
8.1 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . 37
8.2 Management of Business . . . . . . . . . . . . . . . . . . . . . . . . . 37
8.3 Outside Activities of Limited Partners . . . . . . . . . . . . . . . . . 38
8.4 Return of Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.5 Rights of Limited Partners Relating to the Partnership . . . . . . . . . 39
8.6 Exchange Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS . . . . . . . . . . . . . . . . . . . . 40
9.1 Records and Accounting . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.2 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
9.3 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
ARTICLE 10 TAX MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.1 Preparation of Tax Returns . . . . . . . . . . . . . . . . . . . . . . . 41
10.2 Tax Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
10.3 Tax Matters Partner . . . . . . . . . . . . . . . . . . . . . . . . . . 42
10.4 Organizational Expenses . . . . . . . . . . . . . . . . . . . . . . . . 44
10.5 Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
ARTICLE 11 TRANSFERS AND WITHDRAWALS . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.1 Transfer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.2 Transfer of the General Partner's General Partner Interest . . . . . . . 46
11.3 Limited Partners' Rights to Transfer . . . . . . . . . . . . . . . . . . 48
11.4 Substituted Limited Partners . . . . . . . . . . . . . . . . . . . . . . 49
11.5 Assignees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.6 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
ARTICLE 12 ADMISSION OF PARTNERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
12.1 Admission of Successor General Partner . . . . . . . . . . . . . . . . . 52
12.2 Admission of Additional Limited Partners . . . . . . . . . . . . . . . . 53
12.3 Amendment of Agreement and Certificate of Limited Partnership . . . . . 54
ii
20
Page
----
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION . . . . . . . . . . . . . . . . . . . 54
13.1 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
13.2 Winding Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
13.3 No Obligation to Contribute Deficit . . . . . . . . . . . . . . . . . . 57
13.4 Rights of Limited Partners . . . . . . . . . . . . . . . . . . . . . . . 58
13.5 Notice of Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . 58
13.6 Termination of Partnership and Cancellation of Certificate
of Limited Partnership . . . . . . . . . . . . . . . . . . . . . . . . . 58
13.7 Reasonable Time for Winding-Up . . . . . . . . . . . . . . . . . . . . . 58
13.8 Waiver of Partition . . . . . . . . . . . . . . . . . . . . . . . . . . 58
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS . . . . . . . . . . . . . . . . . 59
14.1 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
14.2 Meetings of the Partners . . . . . . . . . . . . . . . . . . . . . . . . 61
ARTICLE 15 GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
15.1 Addresses and Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 62
15.2 Titles and Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 62
15.3 Pronouns and Plurals . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.4 Further Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.5 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.6 Creditors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.7 Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.9 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
15.10 Invalidity of Provisions . . . . . . . . . . . . . . . . . . . . . . . . 64
15.11 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
15.12 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
15.13 No Rights as Stockholders . . . . . . . . . . . . . . . . . . . . . . . 64
iii
21
FOR ALL INVESTORS:
THE OP UNITS ISSUED UNDER THIS AGREEMENT HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR REGISTERED OR
QUALIFIED UNDER THE APPLICABLE STATE SECURITIES LAWS, IN RELIANCE UPON
EXEMPTIONS FROM REGISTRATION AND QUALIFICATION PROVIDED IN THE SECURITIES ACT
AND THE APPLICABLE STATE SECURITIES LAWS, AND MAY NOT BE SOLD OR TRANSFERRED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND
QUALIFICATION OR REGISTRATION UNDER THE APPLICABLE STATE SECURITIES LAWS, OR AN
OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.
IN ADDITION, THE OP UNITS ISSUED UNDER THIS AGREEMENT MAY BE SOLD OR
TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER SET FORTH
HEREIN.
IN MAKING AN INVESTMENT DECISION INVESTORS MUST RELY ON THEIR OWN EXAMINATION
OF THE COMPANY AND THE TERMS OF THIS OFFERING, INCLUDING THE MERITS AND RISKS
INVOLVED. THE OP UNITS OFFERED HEREBY HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL
OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE
FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE
ADEQUACY OF THIS MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THE OP UNITS OFFERED HEREBY ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE
THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR
AN INDEFINITE PERIOD OF TIME.
FOR NEW YORK INVESTORS:
THIS AGREEMENT HAS NOT BEEN REVIEWED BY THE ATTORNEY GENERAL PRIOR TO ITS
ISSUANCE AND USE. THE ATTORNEY GENERAL OF THE STATE OF NEW YORK HAS NOT PASSED
ON OR ENDORSED THE MERITS OF THIS OFFERING. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.
(iv)
22
THIS AGREEMENT DOES NOT CONTAIN AN UNTRUE STATEMENT OF A MATERIAL FACT OR OMIT
TO STATE A MATERIAL FACT NECESSARY TO MAKE THE STATEMENTS MADE, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY ARE MADE, NOT MISLEADING. STATEMENTS CONTAINED
HEREIN AS TO THE CONTENTS OF DOCUMENTS GOVERNING THIS INVESTMENT ARE SUMMARIES
AND ARE NOT COMPLETE COPIES OF THE DOCUMENTS, AND, ACCORDINGLY, REFERENCE
SHOULD BE MADE TO THE DOCUMENTS THEMSELVES FOR A MORE COMPLETE UNDERSTANDING OF
THE INVESTMENT. HOWEVER, THIS PARTNERSHIP AGREEMENT CONTAINS A FAIR SUMMARY OF
THE MATERIAL TERMS OF DOCUMENTS PURPORTED TO BE SUMMARIZED HEREIN.
FOR FLORIDA INVESTORS:
THE OP UNITS OFFERED HEREBY WILL BE SOLD TO, AND ACQUIRED BY, THE PURCHASER IN
A TRANSACTION EXEMPT UNDER SECTION 517.061(11) OF THE FLORIDA SECURITIES AND
INVESTOR PROTECTION ACT. THAT SECTION PROVIDES THAT WHEN SALES ARE MADE TO
FIVE OR MORE PERSONS, ANY SALE MADE PURSUANT TO SUCH SECTION IS VOIDABLE AT THE
OPTION OF THE PURCHASER WITHIN THREE (3) DAYS AFTER THE FIRST TENDER OF
CONSIDERATION IS MADE BY SUCH PURCHASER TO THE ISSUER, AN AGENT OF THE ISSUER,
OR AN ESCROW AGENT OR WITHIN THREE (3) DAYS AFTER THE AVAILABILITY OF THAT
PRIVILEGE IS COMMUNICATED TO SUCH PURCHASER, WHICHEVER OCCURS LATER.XXXX
(v)
23
AMENDMENT AND RESTATEMENT
OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
TOWER REALTY OPERATING PARTNERSHIP, L.P.
THIS AMENDMENT AND RESTATEMENT OF AGREEMENT OF LIMITED PARTNERSHIP OF
TOWER REALTY OPERATING PARTNERSHIP, L.P. (this "AGREEMENT"), dated as of
________ __, 1997, is entered into by and among Tower Realty Trust, Inc., a
Maryland corporation, as general partner (the "GENERAL PARTNER"), and the
Limited Partners;
WHEREAS, the General Partner and the Limited Partners desire to amend
and restate the Agreement of Limited Partnership of Tower Realty Operating
Partnership, L.P., dated as of March 24, 1997 (the "Original Agreement") in its
entirety;
NOW THEREFORE, in consideration of the mutual covenants herein
contained, and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties do hereby agree that the Original
Agreement is amended and restated as follows:
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"ACT" means the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time, and any successor to such statute.
"ADDITIONAL LIMITED PARTNER" means a Person that has executed and
delivered an additional limited partner signature page in the form attached
hereto, has been admitted to the Partnership as a Limited Partner pursuant to
Section 4.3 hereof and that is shown as such on the books and records of the
Partnership. The Initial Limited Partner may also be an Additional Limited
Partner.
"ADJUSTED CAPITAL ACCOUNT DEFICIT" means with respect to any Partner,
the negative balance, if any, in such Partner's Capital Account as of the end
of any relevant fiscal year, determined after giving effect to the following
adjustments:
(a) credit to such Capital Account any portion of such
negative balance which such Partner (i) is treated as obligated to
restore to the Partnership pursuant to the provisions of Sec tion
1.704-1(b)(2)(ii)(c) of the Regulations, or (ii) is deemed to be
24
obligated to restore to the Partnership pursuant to the penultimate
sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
Regulations; and
(b) debit to such Capital Account the items described in
Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6) of the Regulations.
"ADJUSTED CONTRIBUTION" means the Capital Contributions of any Partner
reduced by the total distributions to such Partner from Capital Events. With
respect to the General Partner, the Adjusted Contribution shall include the
difference, if any, between gross proceeds from the future issuance of REIT
Stock, if any, and the proceeds actually received by the General Partner.
"AFFILIATE" means,
(a) with respect to any individual Person, any member of the
Immediate Family of such Person or a trust established for the benefit
of such member, or
(b) with respect to any Entity, any Person which, directly or
indirectly through one or more intermediaries, controls, is controlled
by, or is under common control with, any such Entity.
"AGREEMENT" means this Agreement of Limited Partnership, as originally
executed and as amended, modified, supplemented or restated from time to time,
as the context requires.
"ARTICLES OF INCORPORATION" means the General Partner's Articles of
Incorporation, filed with the Maryland State Department of Assessments and
Taxation, as amended, modified, supplemented or restated from time to time, as
the context requires.
"ASSIGNEE" means a Person to whom one or more OP Units have been
transferred in a manner permitted under this Agreement, but who has not become
a Substituted Limited Partner, and who has the rights set forth in Section
11.5.
"AVAILABLE CASH" means, with respect to the applicable period of
measurement (i.e., any period beginning on the first day of the fiscal year,
quarter or other period commencing immediately after the last day of the fiscal
year, quarter or other applicable period for purposes of the prior calculation
of Available Cash for or with respect to which a distribution has been made,
and ending on the last day of the fiscal year, quarter or other applicable
period immediately preceding the date of the calculation), the excess, if any,
as of such date, of
(a) the gross cash receipts of the Partnership for such
period from all sources whatsoever, including, without limitation, the
following:
2
25
(i) all rents, revenues, income and proceeds
derived by the Partnership from its operations, including,
without limitation, distributions received by the Partnership
from any Entity in which the Partnership has an interest;
(ii) all proceeds and revenues received by the
Partnership on account of any sales of office buildings,
development parcels or other property of the Partnership or as
a refinancing of or payment of principal, interest, costs,
fees, penalties or otherwise on account of any borrowings or
loans made by the Partnership or financings or refinancings of
any property of the Partnership;
(iii) the amount of any insurance proceeds and
condemnation awards received by the Partnership;
(iv) all capital contributions or loans received
by the Partnership from its Partners;
(v) all cash amounts previously reserved by the
Partnership, to the extent such amounts are no longer needed
for the specific purposes for which such amounts were
reserved; and
(vi) the proceeds of liquidation of the
Partnership's property in accordance with this Agreement;
over
(b) the sum of:
(i) all operating costs and expenses, including
taxes and other expenses of the properties directly and
indirectly held by the Partnership and capital expenditures
made during such period (without deduction, however, for any
capital expenditures, charges for Depreciation or other
expenses not paid in cash or expenditures from reserves
described in (viii) below);
(ii) all costs and expenses expended or paid
during such period in connection with the sale or other
disposition, or financing or refinancing, of the property
directly or indirectly held by the Partnership or the recovery
of insurance or condemnation proceeds;
(iii) all fees provided for under this Agreement;
(iv) all debt service, including principal and
interest, paid during such period on all indebtedness
(including under any line of credit) of the Partnership;
3
26
(v) all capital contributions, advances,
reimbursements, loans or similar payments made to any Person
in which the Partnership has an interest;
(vi) all loans made by the Partnership in
accordance with the terms of this Agreement;
(vii) all reimbursements to the General Partner or
its Affiliates during such period; and
(viii) any new reserves or increases in reserves
determined by the General Partner in its sole and absolute
discretion to be necessary for working capital, capital
improvements, payments of periodic expenditures, debt service
or other purposes for the Partnership or any Person in which
the Partnership has an interest.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements made
or reserves established, after commencement of the dissolution and liquidation
of the Partnership.
"CAPITAL ACCOUNT" means with respect to any Partner, the Capital
Account maintained for such Partner in accordance with the following
provisions:
(a) to each Partner's Capital Account there shall be
credited
(i) such Partner's Capital Contributions,
(ii) such Partner's distributive share of Net
Income and any items in the nature of income or gain which are
specially allocated to such Partner pursuant to Paragraphs 1
and 2 of Exhibit B and
(iii) the amount of any Partnership liabilities
assumed by such Partner or which are secured by any asset
distributed to such Partner;
(b) to each Partner's Capital Account there shall be
debited
(i) the amount of cash and the Gross Asset Value
of any property distributed to such Partner pursuant to any
provision of this Agreement,
(ii) such Partner's distributive share of Net
Losses and any items in the nature of expenses or losses which
are specially allocated to such Partner pursuant to Paragraphs
1 and 2 of Exhibit B and
4
27
(iii) the amount of any liabilities of such Partner
assumed by the Partnership or which are secured by any asset
contributed by such Partner to the Partnership; and
(c) in the event all or a portion of a Partnership
Interest is transferred in accordance with the terms of this
Agreement, the transferee shall succeed to the Capital Account of the
transferor to the extent it relates to the transferred Partnership
Interest.
The foregoing provisions and the other provisions of this Agreement relating to
the maintenance of Capital Accounts are intended to comply with Sections
1.704-1(b) and 1.704-2 of the Regulations, and shall be interpreted and applied
in a manner consistent with such Regulations. In the event the General Partner
shall reasonably determine that it is prudent to modify the manner in which the
Capital Accounts, or any debits or credits thereto (including, without
limitation, debits or credits relating to liabilities which are secured by
contributed or distributed assets or which are assumed by the Partnership, the
General Partner or any Limited Partner) are computed in order to comply with
such Regulations, the General Partner may make such modification; provided that
it would not cause the amounts distributable to any Partner pursuant to Article
13 hereof upon the dissolution of the Partnership to vary from the amount
contemplated as set forth in Section 2(g) of Exhibit B.
"CAPITAL CONTRIBUTION" means, with respect to any Partner, any cash,
cash equivalents or the Gross Asset Value of property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to Article 4
hereof.
"CAPITAL EVENT" means any Partnership transaction not in the ordinary
course of its business including, without limitation, principal payments,
prepayments, the incurrence of prepayment penalties, sales, exchanges,
foreclosures or other dispositions of property directly or indirectly owned by
the Partnership, recoveries of damage awards and insurance proceeds not used to
rebuild (other than the receipt of contributions to the capital of the
Partnership and business or rental interruption insurance proceeds not used to
rebuild).
"CERTIFICATE" means the Certificate of Limited Partnership relating to
the Partnership to be filed in the form of Exhibit C hereto as soon as
practicable after the date hereof in the office of the Delaware Secretary of
State, as amended from time to time in accordance with the terms hereof and the
Act.
"CODE" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"CONSENT" means the consent or approval of a proposed action by a
Partner given in accordance with Section 14.2 hereof.
5
28
"CONTRIBUTED PROPERTY" means each property, partnership interest,
contract right or other asset, in such form as may be permitted by the Act,
contributed or deemed contributed to the Partnership by any Partner (including
deemed contributions to the Partnership on termination and reconstitution
thereof pursuant to Sec tion 708 of the Code).
"DEPRECIATION" means, with respect to any asset of the Partnership for
any fiscal year or other period, the depreciation, depletion, amortization or
other cost recovery deduction, as the case may be, allowed or allowable for
federal income tax purposes in respect of such asset for such fiscal year or
other period; provided, however, that except as otherwise provided in Section
1.704-2 of the Regulations, if there is a difference between the Gross Asset
Value (including the Gross Asset Value, as increased pursuant to paragraph (d)
of the definition of Gross Asset Value) and the adjusted tax basis of such
asset at the beginning of such fiscal year or other period, Depreciation for
such asset shall be an amount that bears the same ratio to the beginning Gross
Asset Value of such asset as the federal income tax depreciation, depletion,
amortization or other cost recovery deduction for such fiscal year or other
period bears to the beginning adjusted tax basis of such asset; provided,
further, that if the federal income tax depreciation, depletion, amortization
or other cost recovery deduction for such asset for such fiscal year or other
period is zero, Depreciation of such asset shall be determined with reference
to the beginning Gross Asset Value of such asset using any reasonable method
selected by the General Partner.
"EFFECTIVE DATE" means the date of closing of the initial offering of
REIT Stock by the General Partner.
"ENTITY" means any general partnership, limited partnership,
corporation, joint venture, trust, business trust, real estate investment
trust, limited liability company, limited liability partnership, cooperative or
association.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time (or any corresponding provisions of succeeding laws).
"EXCHANGE FACTOR" has the meaning set forth in the Exchange Rights
Agreement.
"EXCHANGE RIGHT" has the meaning set forth in the Exchange Rights
Agreement.
"EXCHANGE RIGHTS AGREEMENT" has the meaning set forth in Section 8.6.
"GAAP" means United States generally accepted accounting principles,
as in effect from time to time.
"GENERAL PARTNER" means Tower Realty Trust, Inc., a Maryland
corporation, and any successor as general partner of the Partnership.
6
29
"GENERAL PARTNER INTEREST" means a Partnership Interest held by the
General Partner, in its capacity as general partner. A General Partner
Interest may be expressed as a number of OP Units.
"GROSS ASSET VALUE" means, with respect to any asset of the
Partnership, such asset's adjusted basis for federal income tax purposes,
except as follows:
(a) the initial Gross Asset Value of any asset
contributed by a Partner to the Partnership shall be the gross fair
market value of such asset, without reduction for liabilities, as
determined by the contributing Partner and the Partnership on the date
of contribution thereof;
(b) if the General Partner reasonably determines that an
adjustment is necessary or appropriate to reflect the relative
economic interests of the Partners, the Gross Asset Values of all
Partnership assets shall be adjusted in accordance with Sections
1.704-1(b)(2)(iv)(f) and (g) of the Regulations to equal their
respective gross fair market values, without reduction for
liabilities, as reasonably determined by the General Partner, as of
the following times:
(i) a Capital Contribution (other than a de
minimis Capital Contribution) to the Partnership by a new or
existing Partner as consideration for a Partnership Interest;
or
(ii) the distribution by the Partnership to a
Partner of more than a de minimis amount of Partnership assets
as consideration for the repurchase of a Partnership Interest;
or
(iii) the liquidation of the Partnership within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Regulations;
(c) the Gross Asset Values of Partnership assets
distributed to any Partner shall be the gross fair market values of
such assets (taking Section 7701(g) of the Code into account) without
reduction for liabilities, as reasonably determined by the General
Partner as of the date of distribution; and
(d) the Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Sections 734(b) or 743(b) of the
Code, but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations (as set forth in Exhibit B);
provided, however, that Gross Asset Values shall not be adjusted
pursuant to this paragraph (d) to the extent that the General Partner
reasonably determines that an adjustment pursuant to paragraph (b)
above is necessary or appropriate in connection with a transaction
that would otherwise result in an adjustment pursuant to this
paragraph (d).
7
30
At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Net Income and Net Loss.
"IMMEDIATE FAMILY" means, with respect to any individual, such
individual's spouse, parents, parents- in-law, children, nephews, nieces,
brothers, sisters, brothers-in-law, sisters-in-law, stepchildren, sons-in-law
and daughters-in-law or any trust solely for the benefit of any of the
foregoing family members whose sole beneficiaries include the foregoing family
members.
"INCAPACITY" or "INCAPACITATED" means,
(a) as to any individual Partner, death, total physical
disability or entry by a court of competent jurisdiction adjudicating
him incompetent to manage his person or his estate;
(b) as to any corporation which is a Partner, the filing
of a certificate of dissolution, or its equivalent, for the
corporation or the revocation of its charter;
(c) as to any partnership which is a Partner, the
dissolution and commencement of winding up of the partnership;
(d) as to any estate which is a Partner, the distribution
by the fiduciary of the estate's entire interest in the Partnership;
(e) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee);
or
(f) as to any Partner, the bankruptcy of such Partner,
which shall be deemed to have occurred when
(i) the Partner commences a voluntary proceeding
seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter
in effect;
(ii) the Partner is adjudged as bankrupt or
insolvent, or a final and nonappealable order for relief under
any bankruptcy, insolvency or similar law now or hereafter in
effect has been entered against the Partner;
(iii) the Partner executes and delivers a general
assignment for the benefit of the Partner's creditors;
(iv) the Partner files an answer or other pleading
admitting or failing to contest the material allegations of a
petition filed against the Partner in any proceeding of the
nature described in clause (ii) above;
8
31
(v) the Partner seeks, consents to or acquiesces
in the appointment of a trustee, receiver or liquidator for
the Partner or for all or any substantial part of the
Partner's properties;
(vi) any proceeding seeking liquidation,
reorganization or other relief of or against such Partner
under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within one hundred
twenty (120) days after the commencement thereof;
(vii) the appointment without the Partner's consent
or acquiescence of a trustee, receiver or liquidator has not
been vacated or stayed within ninety (90) days of such
appointment; or
(viii) an appointment referred to in clause (vii)
which has been stayed is not vacated within ninety (90) days
after the expiration of any such stay.
"INDEMNITEE" means
(a) any Person made a party to a proceeding by reason of
(i) such Person's status as
(A) the General Partner,
(B) a director, trustee or officer of
the Partnership or the General Partner, or
(C) a director, trustee, member or
officer of any other Entity, each Person serving in
such capacity at the request of the Partnership or
the General Partner, or
(ii) his or its liabilities, pursuant to a loan
guarantee or otherwise, for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or
any Subsidiary of the Partnership has assumed or taken assets
subject to); and
(b) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may
designate from time to time (whether before or after the event giving
rise to potential liability), in its sole and absolute discretion.
"IRS" shall mean the Internal Revenue Service of the United States.
"LIEN" means any lien, security interest, mortgage, deed of trust,
charge, claim, encumbrance, pledge, option, right of first offer or first
refusal and any other right or interest of others of any kind or nature, actual
or contingent, or other similar encumbrance of any nature whatsoever.
9
32
"LIMITED PARTNER" means, prior to the admission of the first
Additional Limited Partner to the Partnership, the Initial Limited Partner, and
thereafter any Person named as a Limited Partner in Exhibit A, as such Exhibit
may be amended from time to time, upon the execution and delivery by such
Person of an additional limited partner signature page, or any Substituted
Limited Partner or Additional Limited Partner, in such Person's capacity as a
Limited Partner of the Partnership.
"LIMITED PARTNER INTEREST" means a Partnership Interest of a Limited
Partner in the Partnership representing a fractional part of the Partnership
Interests of all Partners and includes any and all benefits to which the holder
of such a Partnership Interest may be entitled, as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement. A Limited Partner Interest may be expressed as a
number of OP Units.
"LIQUIDATING EVENT" has the meaning set forth in Section 13.1 hereof.
"LIQUIDATOR" has the meaning set forth in Section 13.2 hereof.
"LOCK-UP AGREEMENT" means each letter issued by certain Limited
Partners to the Partnership and Xxxxxxx Xxxxx & Co.
"NET INCOME" or "NET LOSS" means, for each fiscal year or other
applicable period, an amount equal to the Partnership's taxable income or loss
for such year or period as determined for federal income tax purposes by the
General Partner, determined in accordance with Section 703(a) of the Code (for
this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Section 703(a) of the Code shall be included in
taxable income or loss), adjusted as follows:
(a) by including as an item of gross income any
tax-exempt income received by the Partnership and not otherwise taken
into account in computing Net Income or Net Loss;
(b) by treating as a deductible expense any expenditure
of the Partnership described in Section 705(a)(2)(B) of the Code (or
which is treated as a Section 705(a)(2)(B) expenditure pursuant to
Section 1.704-1(b)(2)(iv)(i) of the Regulations) and not otherwise
taken into account in computing Net Income or Net Loss, including
amounts paid or incurred to organize the Partnership (unless an
election is made pursuant to Section 709(b) of the Code) or to promote
the sale of interests in the Partnership and by treating deductions
for any losses incurred in connection with the sale or exchange of
Partnership property disallowed pursuant to Section 267(a)(1) or
707(b) of the Code as expenditures described in Section 705(a)(2)(B)
of the Code;
(c) by taking into account Depreciation in lieu of
depreciation, depletion, amortization and other cost recovery
deductions taken into account in computing taxable income or loss;
10
33
(d) by computing gain or loss resulting from any
disposition of Partnership property with respect to which gain or loss
is recognized for federal income tax purposes by reference to the
Gross Asset Value of such property rather than its adjusted tax basis;
(e) in the event of an adjustment of the Gross Asset
Value of any Partnership asset which requires that the Capital
Accounts of the Partnership be adjusted pursuant to Sections
1.704-1(b)(2)(iv)(e), (f) and (g) of the Regulations, by taking into
account the amount of such adjustment as if such adjustment
represented additional Net Income or Net Loss pursuant to Exhibit B;
and
(f) by not taking into account in computing Net Income or
Net Loss items separately allocated to the Partners pursuant to
Paragraphs 1 and 2 of Exhibit B.
"NONRECOURSE DEDUCTIONS" has the meaning set forth in Sections
1.704-2(b)(1) and 1.704-2(c) of the Regulations.
"NONRECOURSE LIABILITIES" has the meaning set forth in Section
1.704-2(b)(3) of the Regulations.
"OP UNIT" means a fractional, undivided share of the Partnership
Interests of all Partners issued pursuant to Sections 4.1, 4.2 and 4.3. The
number of OP Units outstanding and the Percentage Interests in the Partnership
represented by such OP Units are set forth in Exhibit A, as such Exhibit may be
amended from time to time. The ownership of OP Units shall be evidenced by
such form of certificate for OP Units as the General Partner adopts from time
to time unless the General Partner determines that the OP Units shall be
uncertificated securities.
"PARTNER" means a General Partner or a Limited Partner, and "Partners"
means the General Partner and the Limited Partners collectively.
"PARTNER MINIMUM GAIN" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"PARTNER NONRECOURSE DEBT" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"PARTNER NONRECOURSE DEDUCTIONS" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership taxable
year shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
"PARTNERSHIP" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
11
34
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership
representing a Capital Contribution by either a Limited Partner or the General
Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together
with all obligations of such Person to comply with the terms and provisions of
this Agreement. A Partnership Interest may be expressed as a number of OP
Units.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in a Partnership Minimum Gain, for a Partnership
taxable year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"PARTNERSHIP RECORD DATE" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section 5.1
hereof, which record date shall be the same as the record date established by
the General Partner for a distribution to its stockholders of some or all of
its portion of such distribution.
"PARTNERSHIP YEAR" means the fiscal year of the Partnership, as set
forth in Section 9.2 hereof.
"PERCENTAGE INTEREST" means, as to a Partner, the fractional part of
the Partnership Interests owned by such Partner and expressed as a percentage
as specified in Exhibit A, as such Exhibit may be amended from time to time.
"PERMITTED PARTNERS" has the meaning set forth in subparagraph 1(b) of
Exhibit B.
"PERMITTED TRANSFEREE" means any person to whom OP Units are
Transferred in accordance with Sec tion 11.3 of this Agreement.
"PERSON" means an individual or Entity.
"PRECONTRIBUTION GAIN" has the meaning set forth in subparagraph 3(c)
of Exhibit B.
"QUARTER" means each of the three-month periods ending on March 31,
June 30, September 30 and December 31.
"REGISTRATION STATEMENT" means the Registration Statement on Form S-11
to be filed by the General Partner with the Securities and Exchange Commission,
and any amendments at any time made thereto.
"REGULATIONS" means the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).
"REIT" means a real estate investment trust as defined in Section 856
of the Code.
"REIT REQUIREMENTS" has the meaning set forth in Section 5.2.
12
35
"REIT STOCK" means a share of stock of the General Partner.
"REIT STOCK AMOUNT" has the meaning set forth in the Exchange Rights
Agreement.
"RESTRICTED PARTNER" has the meaning set forth in Section 1(b) of
Exhibit B.
"STOCK OPTION PLANS" means collectively, the General Partner's 1997
Incentive Plan and Non-Employee Directors' Incentive Plan and any other plan
adopted from time to time by the General Partner pursuant to which REIT Stock
is issued, or options to acquire REIT Stock are granted, to employees or
directors of the General Partner, employees of the Partnership or employees of
their respective Affiliates in consideration for services or future services.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which a majority of
(a) the voting power of the voting equity securities; or
(b) the outstanding equity interests, is owned, directly or
indirectly, by such Person.
"SUBSTITUTED LIMITED PARTNER" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4 hereof.
"TAX ITEMS" has the meaning set forth in Exhibit B.
"TERMINATING CAPITAL TRANSACTION" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related
series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"TRANSFER" as a noun, means any sale, assignment, conveyance, pledge,
hypothecation, gift, encumbrance or other transfer, and as a verb, means to
sell, assign, convey, pledge, hypothecate, give, encumber or otherwise
transfer.
Certain additional terms and phrases have the meanings set forth in
Exhibit B.
ARTICLE 2
ORGANIZATIONAL MATTERS
2.1 Formation
The Partners have agreed to form the Partnership under and pursuant to
the Act. Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the
Partnership shall be governed by the Act. The Partnership Interest of each
Partner shall be personal property for all purposes.
13
36
2.2 Name
The name of the Partnership shall be Tower Realty Operating
Partnership, L.P. The Partnership's business may be conducted under any other
name or names deemed advisable by the General Partner, including the name of
the General Partner or any Affiliate thereof. The words "Limited
Partnership,""L.P.,""Ltd." or similar words or letters shall be included in the
Partnership's name where necessary for the purposes of complying with the laws
of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership and shall notify the
Limited Partners of such change in the next regular communication to the
Limited Partners.
2.3 Registered Office and Agent; Principal Office
The address of the registered office of the Partnership in the State
of Delaware and the name and address of the registered agent for service of
process on the Partnership in the State of Delaware is United Corporate
Services, Inc., 00 Xxxx Xxxxx Xxxxxx, Xxxxx (Xxxx Xxxxxx), Xxxxxxxx 00000.
The principal office of the Partnership shall be 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000-0000, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places within or outside the State of
Delaware as the General Partner deems advisable.
2.4 Power of Attorney
(a) Each Limited Partner and each Assignee is deemed to
irrevocably constitute and appoint the General Partner, any
Liquidator, and authorized officers and attorneys-in-fact of each, and
each of those acting singly, in each case with full power of
substitution, as its true and lawful agent and attorney-in-fact, with
full power and authority in its name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file
and record in the appropriate public offices
(A) all certificates, documents and
other instruments (including, without limitation,
this Agreement and the Certificate and all amendments
or restatements thereof) that the General Partner or
the Liquidator deems appropriate or necessary to
form, qualify or continue the existence or
qualification of the Partnership as a limited
partnership (or a partnership in which the Limited
Partners have limited liability) in the State of
Delaware and in all other jurisdictions in which the
Partnership may or plans to conduct business or own
property, including, without limitation, any
documents necessary or advisable to convey any
Contributed Property to the Partnership;
(B) all instruments that the General
Partner deems appropriate or necessary to reflect any
amendment, change, modification or restatement of
this Agreement in accordance with its terms;
14
37
(C) all conveyances and other
instruments or documents that the General Partner or
the Liquidator deems appropriate or necessary to
reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of
cancellation;
(D) all instruments relating to the
admission, withdrawal, removal or substitution of any
Partner pursuant to, or other events described in,
Article 11, 12 or 13 hereof or the Capital
Contribution of any Partner;
(E) all certificates, documents and
other instruments relating to the determination of
the rights, preferences and privileges of Partnership
Interest; and
(F) amendments to this Agreement as
provided in Article 14 hereof; and
(ii) execute, swear to, seal, acknowledge and file
all ballots, consents, approvals, waivers, certificates and
other instruments appropriate or necessary, in the sole and
absolute discretion of the General Partner or any Liquidator,
to make, evidence, give, confirm or ratify any vote, consent,
approval, agreement or other action which is made or given by
the Partners hereunder or is consistent with the terms of this
Agreement or appropriate or necessary, in the sole discretion
of the General Partner or any Liquidator, to effectuate the
terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Article 14
hereof or as may be otherwise expressly provided for in this Agreement.
(b) (i) The foregoing power of attorney is hereby
declared to be irrevocable and a power coupled with an
interest, in recognition of the fact that each of the Partners
will be relying upon the power of the General Partner and any
Liquidator to act as contemplated by this Agreement in any
filing or other action by it on behalf of the Partnership, and
it shall survive and not be affected by the subsequent
Incapacity of any Limited Partner or Assignee and the Transfer
of all or any portion of such Limited Partner's or Assignee's
OP Units and shall extend to such Limited Partner's or
Assignee's heirs, successors, assigns and personal
representatives.
(ii) Each such Limited Partner or Assignee hereby
agrees to be bound by any representation made by the General
Partner or any Liquidator, acting in good faith pursuant to
such power of attorney, and each such Limited Partner or
Assignee hereby waives any and all defenses which may be
available to contest, negate or disaffirm the action of the
General Partner or any Liquidator, taken in good faith under
such power of attorney.
15
38
(iii) Each Limited Partner or Assignee shall
execute and deliver to the General Partner or the Liquidator,
within fifteen (15) days after receipt of the General
Partner's or Liquidator's request therefor, such further
designation, powers of attorney and other instruments as the
General Partner or the Liquidator, as the case may be, deems
necessary to effectuate this Agreement and the purposes of the
Partnership.
2.5 Term
The term of the Partnership shall commence on the date hereof and
shall continue until December 31, 2047, unless the Partnership is dissolved
sooner pursuant to the provisions of Article 13 or as otherwise provided by
law.
ARTICLE 3
PURPOSE
3.1 Purpose and Business
(a) The purpose and nature of the business to be
conducted by the Partnership is to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the
Act including, without limitation, to engage in the following
activities:
(i) to acquire, hold, own, develop, construct,
improve, maintain, operate, sell, lease, transfer, encumber,
convey, exchange, and otherwise dispose of or deal with the
properties described in the prospectus contained in the
Registration Statement;
(ii) to acquire, hold, own, develop, construct,
improve, maintain, operate, sell, lease, transfer, encumber,
convey, exchange, and otherwise dispose of or deal with real
and personal property of all kinds;
(iii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the
foregoing;
(iv) to undertake such other activities as may be
necessary, advisable, desirable or convenient to the business
of the Partnership; and
(v) to engage in such other ancillary activities
as shall be necessary or desirable to effectuate the foregoing
purposes;
provided, however, that such business shall be limited to and conducted in such
a manner as to permit the General Partner at all times to be classified as a
REIT, unless the General Partner ceases to qualify as a REIT for any reason not
related to the business conducted by the Partnership.
16
39
(b) The Partnership shall have all powers necessary or
desirable to accomplish the purposes enumerated.
(c) In connection with the foregoing, but subject to all
of the terms, covenants, conditions and limitations contained in this
Agreement and any other agreement entered into by the Partnership, the
Partnership shall have full power and authority to enter into,
perform, and carry out contracts of any kind, to borrow money and to
issue evidences of indebtedness, whether or not secured by mortgage,
trust deed, pledge or other Lien, and, directly or indirectly, to
acquire and construct additional properties necessary or useful in
connection with its business.
3.2 Powers
(a) Subject to paragraph (c) below, the Partnership is
empowered to do any and all acts and things necessary, appropriate,
proper, advisable, incidental to or convenient for the furtherance and
accomplishment of the purposes and business described herein and for
the protection and benefit of the Partnership; provided, that the
Partnership shall not take, or refrain from taking, any action which,
in the judgment of the General Partner, in its sole and absolute
discretion,
(i) could adversely affect the ability of the
General Partner to continue to qualify as a REIT, unless the
General Partner otherwise ceases to qualify as a REIT;
(ii) could subject the General Partner to any
additional taxes under Section 857 or Section 4981 of the
Code; or
(iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the
General Partner or its securities.
(b) The Partnership also is empowered to do any and all
acts and things necessary, appropriate or advisable to ensure that the
Partnership will not be classified as a "publicly traded partnership"
for the purposes of Section 7704 of the Code.
(c) Prior to the effectiveness of the Registration
Statement and the issuance and sale of the shares of the General
Partner's common stock to be issued and sold thereunder, the
affirmative vote or consent of the General Partner's independent
director (as such term is used in the General Partner's Articles of
Incorporation) will be required for the approval of any of the
following actions by or with respect to the Partnership or any
Subsidiary:
(i) filing or consenting to the filing of a
bankruptcy petition;
(ii) otherwise instituting or causing the
Partnership or such Subsidiary to acquiesce in the institution
of an insolvency proceeding;
17
40
(iii) dissolving, liquidating, consolidating,
merging or selling all or substantially all of its assets; or
(iv) amending this Agreement or the articles of
incorporation, limited liability company agreement,
partnership agreement or trust agreement of any Subsidiary.
ARTICLE 4
CAPITAL CONTRIBUTIONS
4.1 Capital Contributions of the Partners
(a) The Partners have made or shall make at the Effective
Date, if applicable, the Capital Contributions as set forth in Exhibit
A to this Agreement.
(b) To the extent the Partnership acquires any property
by the merger of any other Person into the Partnership, Persons who
receive Partnership Interests in exchange for their interests in the
Person merging into the Partnership shall become Partners and shall be
deemed to have made Capital Contributions as provided in the
applicable merger agreement and as set forth in Exhibit A, as amended
to reflect such deemed Capital Contributions.
(c) Each Partner shall own OP Units in the amounts set
forth for such Partner in Exhibit A and shall have a Percentage
Interest in the Partnership as set forth in Exhibit A, which
Percentage Interest shall be adjusted in Exhibit A from time to time
by the General Partner to the extent necessary to reflect accurately
exchanges, additional Capital Contributions, the issuance of
additional OP Units or similar events having an effect on any
Partner's Percentage Interest.
(d) The number of OP Units held by the General Partner,
in its capacity as general partner, shall be deemed to be the General
Partner Interest.
(e) Except as provided in Sections 4.2 and 10.5, the
Partners shall have no obligation to make any additional Capital
Contributions or loans to the Partnership.
4.2 Additional Funds; Restrictions on the General Partner
(a) (i) The sums of money required to finance the
business and affairs of the Partnership shall be derived from
the initial capital Contributions made to the Partnership by
the Partners as set forth in Section 4.1 and from funds
generated from the operation and business of the Partnership,
including, without limitation, rents and distributions
directly or indirectly received by the Partnership from any
Subsidiary.
18
41
(ii) In the event additional financing is needed
from sources other than as set forth in Section 4.2(a)(i) for
any reason, the General Partner may, in its sole and absolute
discretion, in such amounts and at such times as it solely
shall determine to be necessary or appropriate,
(A) cause the Partnership to issue
additional Partnership Interests and admit additional
Limited Partners to the Partnership in accordance
with Section 4.3;
(B) make additional Capital
Contributions to the Partnership (subject to the
provisions of Section 4.2(b));
(C) cause the Partnership to borrow
money, enter into loan arrangements, issue debt
securities, obtain letters of credit or otherwise
borrow money on a secured or unsecured basis;
(D) make a loan or loans to the
Partnership (subject to Section 4.2(b)); or
(E) sell any assets or properties
directly or indirectly owned by the Partnership.
(iii) In no event shall the Limited Partners be
required to make any additional Capital Contributions or any
loan to, or otherwise provide any financial accommodation for
the benefit of, the Partnership.
(b) The General Partner shall not issue any debt
securities, any preferred stock or any common stock (including
additional REIT Stock (other than (i) as payment of the REIT Stock
Amount or (ii) in connection with the conversion or exchange of
securities of the General Partner solely in conversion or exchange for
other securities of the General Partner)) or rights, options, warrants
or convertible or exchangeable securities containing the right to
subscribe for or purchase any of the foregoing (collectively,
"SECURITIES"), other than to all holders of REIT Stock, unless the
General Partner shall
(i) in the case of debt securities, lend to the
Partnership the proceeds of or consideration received for such
Securities on the same terms and conditions, including
interest rate and repayment schedule, as shall be applicable
with respect to or incurred in connection with the issuance of
such Securities and the proceeds of, or consideration received
from, any subsequent exercise, exchange or conversion thereof
(if applicable);
(ii) in the case of equity Securities senior or
junior to the REIT Stock as to dividends and distributions on
liquidation, contribute to the Partnership the proceeds of or
consideration (including any property or other non-cash
assets) received for such Securities and the proceeds of, or
consideration received from, any subsequent exercise, exchange
or conversion thereof (if applicable), and
19
42
receive from the Partnership, interests in the Partnership in
consideration therefor with the same terms and conditions,
including dividend, dividend priority and liquidation
preference, as are applicable to such Securities; and
(iii) in the case of REIT Stock or other equity
Securities on a parity with the REIT Stock as to dividends and
distributions on liquidation, (including, without limitation,
REIT Stock or other Securities issued as a stock award or upon
exercise of options issued under the Stock Option Plans),
contribute to the Partnership the proceeds of or consideration
(including any property or other non-cash assets, including
services) received for such Securities and the proceeds of, or
consideration received from, any subsequent exercise, exchange
or conversion thereof (if applicable), and receive from the
Partnership a number of additional OP Units in consideration
therefor equal to the product of
(A) the number of shares of REIT Stock
or other equity Securities issued by the General
Partner, multiplied by
(B) a fraction the numerator of which is
one and the denominator of which is the Exchange
Factor in effect on the date of such contribution.
4.3 Issuance of Additional Partnership Interests; Admission of
Additional Limited Partners
(a) In addition to any Partnership Interests issuable by
the Partnership pursuant to Sec tion 4.2, the General Partner is
authorized to cause the Partnership to issue additional Partnership
Interests (or options therefor) in the form of OP Units or other
Partnership Interests in one or more series or classes, or in one or
more series of any such class senior or junior to the OP Units to any
Persons at any time or from time to time, on such terms and
conditions, as the General Partner shall establish in each case in its
sole and absolute discretion subject to Delaware law, including,
without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each class or series of
Partnership Interests, (ii) the right of each class or series of
Partnership Interests to share in Partnership distributions, and (iii)
the rights of each class or series of Partnership Interest upon
dissolution and liquidation of the Partnership; provided that, no such
Partnership Interests shall be issued to the General Partner unless
either (a) the Partnership Interests are issued in connection with the
grant, award, or issuance of REIT Stock or other equity interests in
the General Partner having designations, preferences and other rights
such that the economic interests attributable to such REIT Stock or
other equity interests are substantially similar to the designations,
preferences and other rights (except voting rights) of the Partnership
Interests issued to the General Partner in accordance with this
Section 4.3(a) or (b) the additional Partnership Interests are issued
to all Partners holding Partnership Interests in the same class in
proportion to their respective Percentage interests in such class,
without any approval being required from any Limited Partner or any
other Person; provided, however, that
20
43
(i) such issuance does not cause the Partnership
to become, with respect to any employee benefit plan subject
to Title I of ERISA or Section 4975 of the Code, a "party in
interest" (as defined in Section 3(14) of ERISA) or a
"disqualified person" (as defined in Sec tion 4975(e) of the
Code); and
(ii) such issuance would not cause any portion of
the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Section 2510.3-101 of the
regulations of the United States Department of Labor.
(b) Subject to the limitations set forth in Section
4.3(a), the General Partner may take such steps as it, in its sole and
absolute discretion, deems necessary or appropriate to admit any
Person as a Limited Partner of the Partnership or to issue any
Partnership Interests, including, without limitation, amending the
Certificate, Exhibit A or any other provision of this Agreement.
4.4 Contribution of Proceeds of Issuance of REIT Stock
In connection with the initial offering of common stock by the General
Partner, and any other offering, grant, award, or issuance of REIT Stock or
securities, rights, options, warrants or convertible or exchangeable securities
pursuant to Section 4.2, the General Partner shall make aggregate Capital
Contributions to the Partnership of the proceeds raised in connection with such
offering, grant, award, or issuance; provided, however, that if the proceeds
actually received by the General Partner are less than the gross proceeds of
such offering, grant, award, or issuance as a result of any underwriter's
discount, commission, or fee or other expenses paid or incurred in connection
with such offering, grant, award, or issuance, then the General Partner shall
be deemed to have made a Capital Contribution to the Partnership in the amount
of the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid pursuant to Section 7.3(c) for the amount of such
underwriter's discount or other expenses.
4.5 Repurchase of REIT Stock; Shares-In-Trust
(a) In the event that the General Partner shall elect to
purchase from its stockholders REIT Stock for the purpose of
delivering such REIT Stock to satisfy an obligation under any dividend
reinvestment program adopted by the General Partner, any employee
stock purchase plan adopted by the General Partner, or any other
obligation or arrangement undertaken by the General Partner in the
future, the purchase price paid by the General Partner for such REIT
Stock and any other expenses incurred by the General Partner in
connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursed to the General Partner, subject to
the condition that:
(i) if such REIT Stock subsequently is to be sold
by the General Partner, the General Partner shall pay to the
Partnership any proceeds received by the General Partner from
the sale of such REIT Stock (provided that an exchange
21
44
of REIT Stock for OP Units pursuant to the Exchange Rights
Agreement would not be considered a sale for such purposes);
and
(ii) if such REIT Stock is not re-transferred by
the General Partner within 30 days after the purchase thereof,
the General Partner shall cause the Partnership to cancel a
number of OP Units held by the General Partner (as applicable)
equal to the product of
(x) the number of shares of such REIT
Stock, multiplied by
(y) a fraction, the numerator of which
is one and the denominator of which is the Exchange
Factor in effect on the date of such cancellation.
(b) In the event the General Partner purchases
Shares-in-Trust (as from time to time defined in the Articles of
Incorporation), the Partnership will purchase from the General Partner
a number of OP Units equal to the product of
(i) the number of Shares-in-Trust purchased by
the General Partner, multiplied by
(ii) a fraction, the numerator of which is one and
the denominator of which is the Exchange Factor in effect on
the date of such purchase.
4.6 No Third-Party Beneficiary
No creditor or other third party having dealings with the Partnership
shall have the right to enforce the right or obligations of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder
or at law or in equity, it being understood and agreed that the provisions of
this Agreement shall be solely for the benefit of, and may be enforced solely
by, the parties hereto and their respective successors and assigns.
4.7 No Interest; No Return
(a) No Partner shall be entitled to interest on its
Capital Contribution or on such Partner's Capital Account.
22
45
(b) Except as provided herein or by law, no Partner shall
have any right to demand or receive the return of its Capital
Contribution from the Partnership.
4.8 No Preemptive Rights
Subject to any preemptive rights that may be granted pursuant to
Section 4.3 hereof, no Person shall have any preemptive or other similar right
with respect to
(a) additional Capital Contributions or loans to the
Partnership; or
(b) issuance or sale of any OP Units or other Partnership
Interests.
ARTICLE 5
DISTRIBUTIONS
5.1 Regular Distributions
Except for distributions pursuant to Section 13.2 in connection with
the dissolution and liquidation of the Partnership, and subject to the
provisions of Sections 5.3, 5.4, 5.5 and 12.2(c), the General Partner shall
cause the Partnership to distribute, on a quarterly basis (or, at the election
of the General Partner, more frequently), an amount of Available Cash,
determined by the General Partner in its sole discretion to the Partners, as of
the applicable Partnership Record Date, in accordance with each Partner's
respective Percentage Interest; provided, however, that in no event may a
Partner receive a distribution of Available Cash with respect to an OP Unit if
such Partner is entitled to receive a distribution out of such Available Cash
with respect to REIT Stock for which such OP Unit has been exchanged.
5.2 Qualification as a REIT
The General Partner shall use its best efforts to cause the
Partnership to distribute sufficient amounts under this Article 5 to enable the
General Partner to pay stockholder dividends that will enable the General
Partner to
(a) satisfy the requirements for qualification as a REIT
under the Code and Regulations ("REIT Requirements"), and
(b) avoid any federal income or excise tax liability;
provided, however, the General Partner shall not be bound to comply with this
covenant to the extent such distributions would
(x) violate applicable Delaware law or
23
46
(y) contravene the terms of any notes, mortgages or other
types of debt obligations to which the Partnership may be subject in
conjunction with borrowed funds.
5.3 Withholding
With respect to any withholding tax or other similar tax liability or
obligation to which the Partnership may be subject as a result of any act or
status of any Partner or to which the Partnership becomes subject with respect
to any OP Unit, the Partnership shall have the right to withhold amounts of
Available Cash distributable to such Partner or with respect to such OP Units,
to the extent of the amount of such withholding tax or other similar tax
liability or obligation pursuant to the provisions contained in Section 10.5.
5.4 Additional Partnership Interests
If the Partnership issues Partnership Interests in accordance with
Section 4.2 or 4.3, the distribution priorities set forth in Section 5.1 shall
be amended, as necessary, to reflect the distribution priority of such
Partnership Interests and corresponding amendments shall be made to the
provisions of Exhibit B.
5.5 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction and any other cash
received or reductions in reserves made after commencement of the liquidation
of the Partnership shall be distributed to the Partners in accordance with
Section 13.2.
ARTICLE 6
ALLOCATIONS
6.1 Allocations
The Net Income, Net Loss and other Partnership items shall be
allocated pursuant to the provisions of Exhibit B.
6.2 Revisions to Allocations to Reflect Issuance of Partnership
Interests
If the Partnership issues Partnership Interests to the General Partner
or any additional Limited Partner pursuant to Article IV, the General Partner
shall make such revisions to this Article 6 and Exhibit B as it deems necessary
to reflect the terms of the issuance of such Partnership Interests, including
making preferential allocations to classes of Partnership Interests that are
entitled thereto. Such revisions shall not require the consent or approval of
any other Partner.
24
47
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
7.1 Management
(a) (i) Except as otherwise expressly provided in
this Agreement, full, complete and exclusive discretion to
manage and control the business and affairs of the Partnership
are and shall be vested in the General Partner, and no Limited
Partner shall have any right to participate in or exercise
control or management power over the business and affairs of
the Partnership.
(ii) The General Partner may not be removed by the
Limited Partners with or without cause.
(iii) In addition to the powers now or hereafter
granted a general partner of a limited partnership under
applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General
Partner shall have full power and authority to do all things
deemed necessary or desirable by it to conduct the business of
the Partnership, to exercise all powers set forth in Section
3.2 hereof and to effectuate the purposes set forth in Section
3.1 hereof, including, without limitation:
(A) (I) the making of any expenditures,
the lending or borrowing of money, including,
without limitation, making prepayments on
loans and borrowing money to permit the
Partnership to make distributions to its
Partners in such amounts as will permit the
General Partner (so long as the General
Partner qualifies as a REIT) to avoid the
payment of any federal income tax (including,
for this purpose, any excise tax pursuant to
Section 4981 of the Code) and to make
distributions to its stockholders in amounts
sufficient to permit the General Partner to
maintain REIT status,
(II) the assumption or guarantee of,
or other contracting for, indebtedness and
other liabilities,
(III) the issuance of evidence of
indebtedness (including the securing of the
same by deed, mortgage, deed of trust or
other lien or encumbrance on the
Partnership's assets) and
(IV) the incurring of any
obligations it deems necessary for the
conduct of the activities of the Partnership,
including the payment of all expenses
associated with the General Partner;
25
48
(B) the making of tax, regulatory and
other filings, or rendering of periodic or other
reports to governmental or other agencies having
jurisdiction over the business or assets of the
Partnership or the General Partner;
(C) the acquisition, disposition,
mortgage, pledge, encumbrance, hypothecation or
exchange of any assets of the Partnership (including
the exercise or grant of any conversion, option,
privilege, or subscription right or other right
available in connection with any assets at any time
held by the Partnership) or the merger or other
combination of the Partnership with or into another
entity;
(D) the use of the assets of the
Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of
this Agreement and on any terms it sees fit,
including, without limitation,
(I) the financing of the conduct of
the operations of the General Partner, the
Partnership or any of the Partnership's
Subsidiaries,
(II) the lending of funds to other
Persons (including, without limitation, the
Subsidiaries of the Partnership and/or the
General Partner) and the repayment of
obligations of the Partnership and its
Subsidiaries and any other Person in which it
has an equity investment, and
(III) the making of capital
contributions to its Subsidiaries;
(E) the expansion, development,
construction, leasing, repair, alteration, demolition
or improvement of any property in which the
Partnership or any Subsidiary of the Partnership owns
an interest;
(F) the negotiation, execution, and
performance of any contracts, conveyances or other
instruments that the General Partner considers useful
or necessary to the conduct of the Partnership's
operations or the implementation of the General
Partner's powers under this Agreement, including
contracting with contractors, developers,
consultants, accountants, legal counsel, other
professional advisors and other agents and the
payment of their expenses and compensation out of the
Partnership's assets;
26
49
(G) the distribution of Partnership cash
or other Partnership assets in accordance with this
Agreement;
(H) holding, managing, investing and
reinvesting cash and other assets of the Partnership;
(I) the collection and receipt of
revenues and income of the Partnership;
(J) the establishment of one or more
divisions of the Partnership, the selection and
dismissal of employees of the Partnership (including,
without limitation, employees having titles such as
"president," "vice president," "secretary" and
"treasurer" of the Partnership), and agents, outside
attorneys, accountants, consultants and contractors
of the Partnership, and the determination of their
compensation and other terms of employment or
engagement;
(K) the maintenance of such insurance
for the benefit of the Partnership and the Partners
as it deems necessary or appropriate;
(L) the formation of, or acquisition of
an interest in, and the contribution of property to,
any further Entities or other relationships that it
deems desirable, including, without limitation, the
acquisition of interests in, and the contributions of
property to, its Subsidiaries and any other Person
from time to time;
(M) the control of any matters affecting
the rights and obligations of the Partnership,
including
(I) the settlement, compromise,
submission to arbitration or any other form
of dispute resolution, or abandonment of, any
claim, cause of action, liability, debt or
damages, due or owing to or from the
Partnership,
(II) the commencement or defense of
suits, legal proceedings, administrative
proceedings, arbitration or other forms of
dispute resolution, and
(III) the representation of the
Partnership in all suits or legal
proceedings, administrative proceedings,
arbitrations or other forms of dispute
resolution, the incurring of legal expenses,
and the indemnification of any Person against
liabilities and contingencies to the extent
permitted by law;
27
50
(N) the undertaking of any action in
connection with the Partnership's direct or indirect
investment in its Subsidiaries or any other Person
(including, without limitation, the contribution or
loan of funds by the Partnership to such Persons);
(O) the determination of the fair market
value of any Partnership property distributed in kind
using such reasonable method of valuation as the
General Partner, in its sole discretion, may adopt;
(P) the exercise, directly or
indirectly, through any attorney-in-fact acting under
a general or limited power of attorney, of any right,
including the right to vote, appurtenant to any asset
or investment held by the Partnership;
(Q) the exercise of any of the powers of
the General Partner enumerated in this Agreement on
behalf of or in connection with any Subsidiary of the
Partnership or any other Person in which the
Partnership has a direct or indirect interest, or
jointly with any such Subsidiary or other Person;
(R) the exercise of any of the powers of
the General Partner enumerated in this Agreement on
behalf of any Person in which the Partnership does
not have an interest pursuant to contractual or other
arrangements with such Person;
(S) the making, execution and delivery
of any and all deeds, leases, notes, mortgages, deeds
of trust, security agreements, conveyances,
contracts, guarantees, warranties, indemnities,
waivers, releases or legal instruments or agreements
in writing necessary or appropriate, in the judgment
of the General Partner, for the accomplishment of any
of the foregoing;
(T) the issuance of additional OP Units
in connection with Capital Contributions by
Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4
hereof; and
(U) The opening of bank accounts on
behalf of, and in the name of, the Partnership and
its Subsidiaries.
(b) (i) Each of the Limited Partners agrees that the
General Partner is authorized to execute, deliver and perform
the above-mentioned agreements and transactions on behalf of
the Partnership without any further act, approval or vote
28
51
of the Partners, notwithstanding any other provision of this
Agreement to the fullest extent permitted under the Act or
other applicable law, rule or regulation.
(ii) The execution, delivery or performance by the
General Partner or the Partnership of any agreement authorized
or permitted under this Agreement shall not constitute a
breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or any
other Persons under this Agreement or of any duty stated or
implied by law or equity.
(c) At all times from and after the date hereof, the
General Partner at the expense of the Partnership, may or may not,
cause the Partnership to obtain and maintain
(i) casualty, liability and other insurance on
the properties of the Partnership and
(ii) liability insurance for the Indemnities
hereunder.
(d) At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain at
any and all times working capital accounts and other cash or similar
balances in such amount as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to
time.
(e) (i) In exercising its authority under this
Agreement, the General Partner may, but shall be under no
obligation to, take into account the tax consequences to any
Partner of any action taken (or not taken) by it. The General
Partner and the Partnership shall not have liability to a
Limited Partner for monetary damages or otherwise for losses
sustained, liabilities incurred or benefits not delivered by
such Limited Partner in connection with such decisions,
provided that the General Partner has acted in good faith
pursuant to its authority under this Agreement
(ii) The General Partner and the Partnership shall
not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred
by such Limited Partner as a result of an action (or inaction)
by the General Partner taken pursuant to its authority under
and in accordance with this Agreement.
7.2 Certificate of Limited Partnership
(a) Promptly after the execution and delivery of this
Agreement by the General Partner and the Initial Limited Partner, the
General Partner will file the Certificate with the Secretary of State
of Delaware as required by the Act.
29
52
(b) (i) The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or
documents as may be reasonable and necessary or appropriate
for the formation, continuation, qualification and operation
of a limited partnership (or a partnership in which the
limited partners have limited liability) in the State of
Delaware and any other state, or the District of Columbia, in
which the Partnership may elect to do business or own
property.
(ii) To the extent that such action is determined
by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and
restatements of the Certificate and do all of the things to
maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each
other state, or the District of Columbia, in which the
Partnership may elect to do business or own property.
(iii) Subject to the terms of Section 8.5(a)(iv)
hereof, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate or
any amendment thereto to any Limited Partner.
7.3 Reimbursement of the General Partner
(a) Except as provided in this Section 7.3 and elsewhere
in this Agreement (including the provisions of Articles 5 and 6
regarding distributions, payments, and allocations to which it may be
entitled), the General Partner shall not be compensated for its
services as general partner of the Partnership.
(b) (i) The General Partner shall be reimbursed on a
monthly basis, or such other basis as it may determine in its
sole and absolute discretion, for all expenses that it incurs
on behalf of the Partnership relating to the ownership and
operation of the Partnership's assets, or for the benefit of
the Partnership, including all expenses associated with
compliance by the General Partner and the Initial Limited
Partner with laws, rules and regulations promulgated by any
regulatory body and any and all salaries, compensation and
expenses of officers and employees of the General Partner;
provided, that the amount of any such reimbursement shall be
reduced by any interest earned by the General Partner with
respect to bank accounts or other instruments or accounts held
by it in its name.
(ii) Such reimbursement shall be in addition to
any reimbursement made as a result of indemnification pursuant
to Section 7.6 hereof.
(iii) Notwithstanding any provisions to the
contrary set forth herein, the General Partner shall not be
entitled to reimbursement for the ratable portion of any
administrative costs and expenses incurred by it with respect
to, or that are
30
53
attributable to, properties or partnership interests in a
Subsidiary of the Partnership that are owned by the General
Partner directly. If certain expenses are incurred for the
benefit of the Partnership and other entities (including the
General Partner), such expenses will be allocated to the
Partnership and such other entities in such a manner as the
General Partner, it its sole and absolute discretion, deems
fair and reasonable.
(c) (i) Expenses incurred by the General Partner
relating to the organization or reorganization of the
Partnership and the General Partner, the initial public
offering of REIT Stock by the General Partner and any other
issuance of additional Partnership Interests, REIT Stock or
rights, options, warrants, or convertible or exchangeable
securities pursuant to Section 4.2 hereof and all costs and
expenses associated with the preparation and filing of any
periodic reports by the General Partner under federal, state
or local laws or regulations (including, without limitation,
all costs, expenses, damages, and other payments resulting
from or arising in connection with litigation related to any
of the foregoing) are primarily obligations of the
Partnership.
(ii) To the extent the General Partner pays or
incurs such expenses, the General Partner shall be reimbursed
for such expenses.
7.4 Outside Activities of the General Partner
(a) Without the Consent of Limited Partners holding a
majority of the Partnership Interests not held by the General Partner,
the General Partner shall not directly or indirectly enter into or
conduct any business other than in connection with the ownership,
acquisition, and disposition of Partnership Interests and the
management of the business of the Partnership, and such activities as
are incidental thereto.
(b) The General Partner and any Affiliates of the General
Partner may acquire Limited Partner Interests and shall be entitled to
exercise all rights of a Limited Partner relating to such Limited
Partner Interests.
7.5 Contracts with Affiliates
(a) (i) The Partnership may lend or contribute funds
or other assets to its Subsidiaries or other Persons in which
it has an equity investment and such Subsidiaries and Persons
may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General
Partner.
(ii) The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other
Person.
31
54
(b) Except as provided in Section 7.4, the Partnership
may Transfer assets to Entities in which it is or thereby becomes a
participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law as the General Partner, in its
sole and absolute discretion, may determine.
(c) Except as expressly permitted by this Agreement,
neither the General Partner nor any of its Affiliates shall sell,
Transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions
that are determined by the General Partner in good faith to be fair
and reasonable.
(d) The General Partner, in its sole and absolute
discretion and without the approval of the Limited Partners, may
propose and adopt, on behalf of the Partnership, employee benefit
plans, stock option plans, and similar plans funded by the Partnership
for the benefit of employees of the Partnership, the General Partner,
any Subsidiaries of the Partnership or any Affiliate of any of them in
respect of services performed, directly or indirectly, for the benefit
of the Partnership, the General Partner, any Subsidiaries of the
Partnership or any Affiliate of any of them.
(e) The General Partner is expressly authorized to enter
into, in the name and on behalf of the Partnership, a "right of first
opportunity" or "right of first offer" arrangement, non-competition
agreements and other conflict avoidance agreements with various
Affiliates of the Partnership and the General Partner, on such terms
as the General Partner, in its sole and absolute discretion, believes
are advisable.
7.6 Indemnification
(a) (i) To the fullest extent permitted by Delaware
law, the Partnership shall indemnify each Indemnitee from and
against any and all losses, claims, damages, liabilities,
joint or several, expenses (including, without limitation,
reasonable attorneys' fees and other legal fees and expenses),
judgments, fines, settlements, and other amounts arising from
any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate
to the operations of the Partnership or the General Partner as
set forth in this Agreement, in which such Indemnitee may be
involved, or is threatened to be involved, as a party or
otherwise, except to the extent it is finally determined by a
court of competent jurisdiction, from which no further appeal
may be taken, that such Indemnitee's action constituted
intentional acts or omissions constituting willful misconduct
or fraud.
(ii) Without limitation, the foregoing indemnity
shall extend to any liability of any Indemnitee, pursuant to a
loan guaranty or otherwise for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or
any Subsidiary of the
32
55
Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnity agreements
consistent with the provisions of this Section 7.6 in favor of
any Indemnitee having or potentially having liability for any
such indebtedness.
(iii) Any indemnification pursuant to this Section
7.6 shall be made only out of the assets of the Partnership,
and neither the General Partner nor any Limited Partner shall
have any obligation to contribute to the capital of the
Partnership, or otherwise provide funds, to enable the
Partnership to fund its obligations under this Section 7.6.
(b) Reasonable expenses incurred by an Indemnitee who is
a party to a proceeding shall be paid or reimbursed
by the Partnership in advance of the final
disposition of the proceeding.
(c) The indemnification provided by this Section 7.6
shall be in addition to any other rights to which an Indemnitee or any
other Person may be entitled under any agreement, pursuant to any vote
of the Partners, as a matter of law or otherwise, and shall continue
as to an Indemnitee who has ceased to serve in such capacity unless
otherwise provided in a written agreement pursuant to which such
Indemnities are indemnified.
(d) The Partnership may, but shall not be obligated to,
purchase and maintain insurance, on behalf of the Indemnities and such
other Persons as the General Partner shall determine, against any
liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power
to indemnify such Person against such liability under the provisions
of this Agreement.
(e) For purposes of this Section 7.6, the Partnership
shall be deemed to have requested an Indemnitee to serve as fiduciary
of an employee benefit plan whenever the performance by such
Indemnitee of its duties to the Partnership also imposes duties on, or
otherwise involves services by, such Indemnitee to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to
applicable law shall constitute fines within the meaning of this
Section 7.6; and actions taken or omitted by the Indemnitee with
respect to an employee benefit plan in the performance of its duties
for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Partnership.
(f) In no event may an Indemnitee subject any of the
Partners to personal liability by reason of the indemnification
provisions set forth in this Agreement.
33
56
(g) An Indemnitee shall not be denied indemnification in
whole or in part under this Sec tion 7.6 because the Indemnitee had an
interest in the transaction with respect to which the indemnification
applies if the transaction was otherwise permitted by the terms of
this Agreement.
(h) (i) The provisions of this Section 7.6 are for
the benefit of the Indemnities, their heirs, successors,
assigns and administrators and shall not be deemed to create
any rights for the benefit of any other Persons.
(ii) Any amendment, modification or repeal of this
Section 7.6 or any provision hereof shall be prospective only
and shall not in any way affect the Partnership's liability to
any Indemnitee under this Section 7.6, as in effect
immediately prior to such amendment, modification, or repeal
with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may
arise or be asserted.
7.7 Liability of the General Partner
(a) Notwithstanding anything to the contrary set forth in
this Agreement, the General Partner and its officers and directors
shall not be liable for monetary damages to the Partnership, any
Partners or any Assignees for losses sustained or liabilities incurred
as a result of errors in judgment or mistakes of fact or law or of any
act or omission unless the General Partner acted in bad faith and the
act or omission was material to the matter giving rise to the loss,
liability or benefit not derived.
(b) (i) The Limited Partners expressly acknowledge
that the General Partner is acting on behalf of the
Partnership and the shareholders of the General Partner
collectively, that the General Partner, subject to the
provisions of Section 7.1(e) hereof, is under no obligation to
consider the separate interest of the Limited Partners
(including, without limitation, the tax consequences to
Limited Partners or Assignees) in deciding whether to cause
the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with
such decisions; provided that the General Partner has acted in
good faith.
(ii) With respect to any indebtedness of the
Partnership which any Limited Partner may have guaranteed, the
General Partner shall have no duty to keep such indebtedness
outstanding.
(c) (i) Subject to its obligations and duties as
General Partner set forth in Sec tion 7.1(a) hereof, the
General Partner may exercise any of the powers granted
34
57
to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agent.
(ii) The General Partner shall not be responsible
for any misconduct or negligence on the part of any such agent
appointed by the General Partner in good faith.
(d) The Limited Partners expressly acknowledge that in
the event of any conflict in the fiduciary duties owed by the General
Partner to its stockholders and by the General Partner, in its
capacity as a general partner of the Partnership, to the Limited
Partners, the General Partner may act in the best interests of the
General Partner's stockholders without violating its fiduciary duties
to the Limited Partners, and that the General Partner shall not be
liable for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by the Limited Partners in
connection with any such violation.
(e) Any amendment, modification or repeal of this Section
7.7 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner's and its
officers' and directors' liability to the Partnership and the Limited
Partners under this Section 7.7 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from
or relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
7.8 Other Matters Concerning the General Partner
(a) The General Partner may rely and shall be protected
in acting, or refraining from acting, upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, bond, debenture, or other paper or document believed
by it in good faith to be genuine and to have been signed or presented
by the proper party or parties.
(b) The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers,
architects, engineers, environmental consultants and other consultants
and advisers selected by it, and any act taken or omitted to be taken
in reliance upon the opinion of such Persons as to matters which such
General Partner reasonably believes to be within such Person's
professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such
opinion.
(c) (i) The General Partner shall have the right, in
respect of any of its powers or obligations hereunder, to act
through any of its duly authorized officers and duly appointed
attorneys-in-fact.
35
58
(ii) Each such attorney shall, to the extent
provided by the General Partner in the power of attorney, have
full power and authority to do and perform each and every act
and duty which is permitted or required to be done by the
General Partner hereunder.
(d) Notwithstanding any other provisions of this
Agreement or the Act, any action of the General Partner on behalf of
the Partnership or any decision of the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith
belief that such action or omission is necessary or advisable in order
(i) to protect the ability of the General Partner
to continue to qualify as a REIT; or
(ii) to avoid the General Partner incurring any
taxes under Section 857 or Sec tion 4981 of the Code,
is expressly authorized under this Agreement and is deemed approved by
all of the Limited Partners.
7.9 Title to Partnership Assets
(a) Title to Partnership assets, whether real, personal
or mixed and whether tangible or intangible, shall be deemed to be
owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership
assets or any portion thereof.
(b) (i) Title to any or all of the Partnership assets
may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may
determine, including Affiliates of the General Partner.
(ii) The General Partner hereby declares and
warrants that any Partnership asset for which legal title is
held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General
Partner for the use and benefit of the Partnership in
accordance with the provisions of this Agreement; provided,
that the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable.
(iii) All Partnership assets shall be recorded as
the property of the Partnership in its books and records,
irrespective of the name in which legal title to such
Partnership assets is held.
36
59
7.10 Reliance by Third Parties
(a) Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled
to assume that the General Partner has full power and authority,
without consent or approval of any other Partner or Person, to
encumber, sell or otherwise use in any manner any and all assets of
the Partnership and to enter into any contracts on behalf of the
Partnership, and take any and all actions on behalf of the
Partnership, and such Person shall be entitled to deal with the
General Partner as if the General Partner were the Partnership's sole
party in interest, both legally and beneficially.
(b) Each Limited Partner hereby waives any and all
defenses or other remedies which may be available against such Person
to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing.
(c) In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the
terms of this Agreement have been complied with or to inquire into the
necessity or expediency of any act or action of the General Partner or
its representatives.
(d) Each and every certificate, document or other
instrument executed on behalf of the Partnership by the General
Partner or its representatives shall be conclusive evidence in favor
of any and every Person relying thereon or claiming thereunder that
(i) at the time of the execution and delivery of
such certificate, document or instrument, this Agreement was
in full force and effect;
(ii) the Person executing and delivering such
certificate, document or instrument was duly authorized and
empowered to do so for and on behalf of the Partnership; and
(iii) such certificate, document or instrument was
duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the
Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
8.1 Limitation of Liability
The Limited Partners shall have no liability under this Agreement
except as expressly provided in this Agreement, including Section 10.5 hereof,
or under the Act.
37
60
8.2 Management of Business
(a) No Limited Partner or Assignee (other than the
General Partner, any of its Affiliates or any officer, director,
employee, agent or trustee of the General Partner, the Partnership or
any of their Affiliates, in their capacity as such) shall take part in
the operation, management or control (within the meaning of the Act)
of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or
otherwise bind the Partnership.
(b) The transaction of any such business by the General
Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner, the Partnership or
any of their Affiliates, in their capacity as such, shall not affect,
impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
8.3 Outside Activities of Limited Partners
(a) Subject to any agreements entered into pursuant to
Section 7.5 hereof and any other agreements entered into by a Limited
Partner or its Affiliates with the Partnership or any of its
Subsidiaries, any Limited Partner and any officer, director, employee,
agent, trustee, Affiliate or shareholder of any Limited Partner shall
be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including
business interests and activities that are in direct competition with
the Partnership or that are enhanced by the activities of the
Partnership.
(b) Neither the Partnership nor any Partners shall have
any rights by virtue of this Agreement in any business ventures of any
Limited Partner or Assignee.
(c) None of the Limited Partners nor any other Person
shall have any rights by virtue of this Agreement or the Partnership
relationship established hereby in any business ventures of any other
Person and such Person shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures to the
Partnership, any Limited Partner or any such other Person, even if
such opportunity is of a character which, if presented to the
Partnership, any Limited Partner or such other Person, could be taken
by such Person.
8.4 Return of Capital
(a) Except pursuant to the Exchange Rights Agreement, no
Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made
pursuant to this Agreement or upon termination of the Partnership as
provided herein.
38
61
(b) Except to the extent provided by Exhibit B, or as
otherwise expressly provided in this Agreement, no Limited Partner or
Assignee shall have priority over any other Limited Partner or
Assignee, either as to the return of Capital Contributions or as to
profits, losses or distributions.
8.5 Rights of Limited Partners Relating to the Partnership
(a) In addition to the other rights provided by this
Agreement or by the Act, and except as limited by Section 8.5(b)
hereof, each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner's interest as a limited
partner in the Partnership, upon written demand with a statement of
the purpose of such demand and at such Limited Partner's own expense
(including such reasonable copying and administrative charges as the
General Partner may establish from time to time):
(i) to obtain a copy of the most recent annual
and quarterly reports filed with the Securities and Exchange
Commission by the General Partner pursuant to the Securities
Exchange Act of 1934;
(ii) to obtain a copy of the Partnership's
federal, state and local income tax returns for each
Partnership Year;
(iii) to obtain a current list of the name and last
known business, residence or mailing address of each Partner;
(iv) to obtain a copy of this Agreement and the
Certificate and all amendments or restatements thereto,
together with executed copies of all powers of attorney
pursuant to which this Agreement, the Certificate and all
amendments and/or restatements thereto have been executed; and
(v) to obtain true and full information regarding
the amount of cash and a description and statement of any
other property or services contributed by each Partner and
which each Partner has agreed to contribute in the future, and
the date on which each became a Partner.
(b) Notwithstanding any other provision of this Section
8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in
its sole and absolute discretion to be reasonable, any information
that
(i) the General Partner reasonably believes to be
in the nature of trade secrets or other information, the
disclosure of which the General Partner in good faith believes
is not in the best interests of the Partnership or could
damage the Partnership or its business; or
39
62
(ii) the Partnership is required by law or by
agreements with an unaffiliated third party to keep
confidential.
8.6 Exchange Rights Agreement
(a) The Limited Partners have been granted the right, but
not the obligation, to exchange all or a portion of their OP Units for
cash or, at the option of the General Partner, for shares of REIT
Stock on the terms and subject to the conditions and restrictions
contained in that certain Exchange Rights Agreement among the General
Partners and the Limited Partners (as amended from time to time, the
"Exchange Rights Agreement"), the form of which is attached hereto as
Exhibit E.
(b) The Limited Partners and all successors, assignees
and transferees (whether by operation of law, including by merger or
consolidation, dissolution or liquidation of an entity that is a
Limited Partner, or otherwise) shall be bound by the provisions of the
Exchange Rights Agreement.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
9.1 Records and Accounting
(a) The General Partner shall keep or cause to be kept at
the principal office of the Partnership those records and documents
required to be maintained by the Act and other books and records
deemed by the General Partner to be appropriate with respect to the
Partnership's business, including, without limitation, all books and
records necessary for the General Partner to comply with applicable
REIT Requirements and to provide to the Limited Partners any
information, lists and copies of documents required to be provided
pursuant to Sections 8.5(a) and 9.3 hereof.
(b) Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on, or
be in the form of, punch cards, magnetic tape, photographs,
micrographics or any other information storage device, provided that
the records so maintained are convertible into clearly legible written
form within a reasonable period of time.
(c) The books of the Partnership shall be maintained, for
financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles, or such
other basis as the General Partner determines to be necessary or
appropriate.
40
63
9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
9.3 Reports
(a) As soon as practicable, but in no event later than
the date on which the General Partner mails its annual report to its
Stockholders, the General Partner shall cause to be mailed to each
Limited Partner as of the close of the Partnership Year, an annual
report containing financial statements of the Partnership, or of the
General Partner, if such statements are prepared on a consolidated
basis with the Partnership, for such Partnership Year, presented in
accordance with GAAP, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the
General Partner in its sole discretion.
(b) If and to the extent that the General Partner mails
quarterly reports to its Stockholders, then as soon as practicable,
but in no event later than the date such reports are mailed, the
General Partner shall cause to be mailed to each Limited Partner a
report containing unaudited financial statements as of the last day of
the calendar quarter of the Partnership, or of the General Partner, if
such statements are prepared on a consolidated basis with the
Partnership, and such other information as may be required by
applicable law or regulation, or as the General Partner determines to
be appropriate.
ARTICLE 10
TAX MATTERS
10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely
filing of all returns of Partnership income, gains, deductions, losses and
other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by Limited Partners for federal and state income tax reporting purposes.
10.2 Tax Elections
(a) Except as otherwise provided herein, the General
Partner shall, in its sole and absolute discretion, determine whether
to make any available election pursuant to the Code; provided,
however, that the General Partner shall make the election under
Section 754 of the Code in accordance with applicable regulations
thereunder effective for the first calendar year following the
Effective Date.
41
64
(b) The General Partner shall elect a permissible method
of eliminating the disparity between the book value and the tax basis
of property contributed to the Partnership or to a Subsidiary of the
Partnership pursuant to the regulations promulgated under the
provisions of Section 704(c) of the Code.
(c) The General Partner shall have the right to seek to
revoke any tax election it makes, including, without limitation, the
election under Section 754 of the Code, upon the General Partner's
determination, in its sole and absolute discretion, that such
revocation is in the best interests of the Partners.
10.3 Tax Matters Partner
(a) (i) The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes.
(ii) Pursuant to Section 6230(e) 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 tax matters partner shall furnish the
Internal Revenue Service with the name, address, taxpayer
identification number, and profit interest of each of the
Limited Partners and the Assignees; provided, that such
information is provided to the Partnership by the Limited
Partners and the Assignees.
(iii) The tax matters partner is authorized, but
not required:
(A) to enter into any settlement with
the Internal Revenue Service with respect to any
administrative or judicial proceedings for the
adjustment of Partnership items required to be taken
into account by a Partner for income tax purposes
(such administrative proceedings being referred to as
a "tax audit" and such judicial proceedings being
referred to as "judicial review"), and in the
settlement agreement the tax matters partner may
expressly state that such agreement shall bind all
Partners, except that such settlement agreement shall
not bind any Partner
(I) who (within the time prescribed
pursuant to the Code and Regulations) files a
statement with the Internal Revenue Service
providing that the tax matters partner shall
not have the authority to enter into a
settlement agreement on behalf of such
Partner; or
(II) who is a "notice partner" (as
defined in Section 6231(a)(8) of the Code) or
a member of a "notice group" (as defined in
Sec tion 6223(b)(2) of the Code);
42
65
(B) in the event that a notice of a
final administrative adjustment at the Partnership
level of any item required to be taken into account
by a Partner for tax purposes (a "final adjustment")
is mailed to the tax matters partner, to seek
judicial review of such final adjustment, including
the filing of a petition for readjustment with the
Tax Court or the filing of a complaint for refund
with the United States Claims Court or the District
Court of the United States for the district in which
the Partnership's principal place of business is
located;
(C) to intervene in any action brought
by any other Partner for judicial review of a final
adjustment;
(D) to file a request for an
administrative adjustment with the Internal Revenue
Service and, if any part of such request is not
allowed by the Internal Revenue Service, to file an
appropriate pleading (petition or complaint) for
judicial review with respect to such request;
(E) to enter into an agreement with the
Internal Revenue Service to extend the period for
assessing any tax which is attributable to any item
required to be taken account of by a Partner for tax
purposes, or an item affected by such item; and
(F) to take any other action on behalf
of the Partners or the Partnership in connection with
any tax audit or judicial review proceeding to the
extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by
the tax matters partner in connection with any such
proceeding, except to the extent required by law, is a matter
in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General
Partner set forth in Section 7.6 of this Agreement shall be
fully applicable to the tax matters partner in its capacity as
such.
(c) (i) The tax matters partner shall receive no
compensation for its services.
(ii) All third party costs and expenses incurred
by the tax matters partner in performing its duties as such
(including legal and accounting fees and expenses) shall be
borne by the Partnership.
(iii) Nothing herein shall be construed to restrict
the Partnership from engaging an accounting firm to assist the
tax matters partner in discharging its
43
66
duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.
10.4 Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it
in organizing the Partnership ratably over a sixty (60) month period as
provided in Section 709 of the Code.
10.5 Withholding
(a) Each Limited Partner hereby authorizes the
Partnership to withhold from, or pay on behalf of or with respect to,
such Limited Partner any amount of federal, state, local, or foreign
taxes that the General Partner determines that the Partnership is
required to withhold or pay with respect to any amount distributable
or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Sections 1441, 1442, 1445, or 1446
of the Code.
(b) (i) Any amount paid on behalf of or with respect
to a Limited Partner shall constitute a loan by the
Partnership to such Limited Partner, which loan shall be
repaid by such Limited Partner within fifteen (15) days after
notice from the General Partner that such payment must be made
unless
(A) the Partnership withholds such
payment from a distribution which would otherwise be
made to the Limited Partner; or
(B) the General Partner determines, in
its sole and absolute discretion, that such payment
may be satisfied out of the available funds of the
Partnership which would, but for such payment, be
distributed to the Limited Partner.
(ii) Any amounts withheld pursuant to the
foregoing clauses (i)(A) or (B) shall be treated as having
been distributed to such Limited Partner.
(c) (i) Each Limited Partner hereby unconditionally
and irrevocably grants to the Partnership a security interest
in such Limited Partner's Partnership Interest to secure such
Limited Partner's obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5.
(ii) (A) In the event that a Limited Partner
fails to pay when due any amounts owed to the
Partnership pursuant to this Section 10.5, the
General Partner may, in its sole and absolute
discretion, elect to make the payment to the
Partnership on behalf of such defaulting Limited
Partner, and in such
44
67
event shall be deemed to have loaned such amount to
such defaulting Limited Partner and shall succeed to
all rights and remedies of the Partnership as against
such defaulting Limited Partner.
(B) Without limitation, in such event,
the General Partner shall have the right to receive
distributions that would otherwise be distributable
to such defaulting Limited Partner until such time as
such loan, together with all interest thereon, has
been paid in full, and any such distributions so
received by the General Partner shall be treated as
having been distributed to the defaulting Limited
Partner and immediately paid by the defaulting
Limited Partner to the General Partner in repayment
of such loan.
(iii) Any amount payable by a Limited Partner
hereunder shall bear interest at the highest base or prime
rate of interest published from time to time by any of
Citibank, N.A., Chemical Bank, Xxxxxx Guaranty Trust Company
of New York and Chase Manhattan Bank, N.A., plus four (4)
percentage points, but in no event higher than the maximum
lawful rate of interest on such obligation, such interest to
accrue from the date such amount is due (i.e., fifteen (15)
days after demand) until such amount is paid in full.
(iv) Each Limited Partner shall take such actions
as the Partnership or the General Partner shall request in
order to perfect or enforce the security interest created
hereunder.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
11.1 Transfer
(a) (i) The term "Transfer," when used in this
Article 11 with respect to an OP Unit, shall be deemed to
refer to a transaction by which
(A) the General Partner purports to
assign all or any part of its General Partner
Interest to another Person or
(B) a Limited Partner purports to assign
all or any part of its Limited Partner Interest to
another Person.
(ii) The term "Transfer" when used in this Article
11 does not include any exchange of OP Units for cash or REIT
Stock pursuant to the Exchange Rights Agreement.
45
68
(b) (i) No Partnership Interest shall be Transferred,
in whole or in part, except in accordance with the terms and
conditions set forth in this Article 11.
(ii) Any Transfer or purported Transfer of a
Partnership Interest not made in accordance with this Article
11 shall be null and void.
11.2 Transfer of the General Partner's General Partner Interest
(a) The General Partner may not Transfer any of its
General Partner Interest or withdraw as General Partner, or Transfer
any of its Limited Partner Interest, except
(i) if Limited Partners holding at least a
majority of the Percentage Interests of the Limited Partners
(other than Limited Partner Interests held by the General
Partner or any Affiliate thereof) consent to such Transfer or
withdrawal,
(ii) if such Transfer is to an entity which is
wholly owned by the General Partner and is a Qualified REIT
Subsidiary as defined in Section 856(i) of the Code or
(iii) in connection with a transaction described in
Section 11.2(c) or 11.2(d) (as applicable).
(b) In the event the General Partner withdraws as general
partner of the Partnership in accordance with Section 11.2(a), the
General Partner's General Partner Interest shall immediately be
converted into a Limited Partner Interest.
(c) Except as otherwise provided in Section 11.2(d), the
General Partner shall not engage in any merger, consolidation or other
combination with or into another Person or sale of all or
substantially all of its assets, or any reclassification, or any
recapitalization or change of outstanding REIT Stock (other than a
change in par value, or from par value to no par value, or as a result
of a subdivision or combination of REIT Stock) (a "Transaction"),
unless
(i) in connection with the Transaction all
Limited Partners will either receive, or will have the right
to elect to receive, for each OP Unit an amount of cash,
securities, or other property equal to the product of the
Exchange Factor and the greatest amount of cash, securities or
other property or value paid in the Transaction to or received
by a holder of one share of REIT Stock in consideration of one
share of REIT Stock at any time during the period from and
after the date on which the Transaction is consummated;
provided that if, in connection with the Transaction, a
purchase, tender or exchange offer ("Offer") shall have been
made to and accepted by the holders of more than 50% of the
outstanding REIT Stock, each holder of OP Units shall be given
the option to exchange its OP Units for the
46
69
greatest amount of cash, securities, or other property which a
Limited Partner would have received had it
(A) exercised its Exchange Right and
(B) sold, tendered or exchanged pursuant
to the Offer the REIT Stock received upon exercise of
the Exchange Right immediately prior to the
expiration of the Offer; and
(ii) no more than 75% of the equity securities of
the acquiring Person in such Transaction shall be owned, after
consummation of such Transaction, by the General Partner or
Persons who were Affiliates of the Partnership or the General
Partner immediately prior to the date on which the Transaction
is consummated.
(d) (i) Notwithstanding Section 11.2(c), the General
Partner may merge into or consolidate with another entity if
immediately after such merger or consolidation
(A) substantially all of the assets of
the successor or surviving entity (the "Surviving
General Partner"), other than OP Units held by the
General Partner, are contributed to the Partnership
as a Capital Contribution in exchange for OP Units
with a fair market value equal to the value of the
assets so contributed as determined by the Surviving
General Partner in good faith and
(B) the Surviving General Partner
expressly agrees to assume all obligations of the
General Partner hereunder.
(ii) (A) Upon such contribution and
assumption, the Surviving General Partner shall have the right
and duty to amend this Agreement and the Exchange Rights
Agreement as set forth in this Section 11.2(d).
(B) (I) The Surviving General
Partner shall in good faith arrive at a new
method for the calculation of the Exchange
Factor for an OP Unit after any such merger
or consolidation so as to approximate the
existing method for such calculation as
closely as reasonably possible.
(II) Such calculation shall take
into account, among other things, the kind
and amount of securities, cash and other
property that was receivable upon such merger
or consolidation by a holder of REIT Stock or
options, warrants or other rights relating
47
70
thereto, and which a holder of OP Units could
have acquired had such OP Units been redeemed
for REIT Stock immediately prior to such
merger or consolidation.
(C) Such amendment to this Agreement
shall provide for adjustment to such method of
calculation, which shall be as nearly equivalent as
may be practicable to the adjustments provided for
with respect to the Exchange Factor.
(iii) The above provisions of this Section 11.2(d)
shall similarly apply to successive mergers or consolidations
permitted hereunder.
11.3 Limited Partners' Rights to Transfer
(a) Subject to the provisions of Sections 11.3(c),
11.3(d), 11.3(e) and 11.4 and the restrictions included in the
applicable Lock-up Agreement, a Limited Partner may, without the
consent of the General Partner, Transfer all or any portion of its
Limited Partnership Interest.
(b) (i) If a Limited Partner is Incapacitated, the
executor, administrator, trustee, committee, guardian,
conservator or receiver of such Limited Partner's estate shall
have all of the rights of a Limited Partner, but not more
rights than those enjoyed by other Limited Partners, for the
purpose of settling or managing the estate and such power as
the Incapacitated Limited Partner possessed to Transfer all or
any part of his or its interest in the Partnership.
(ii) The Incapacity of a Limited Partner, in and
of itself, shall not dissolve or terminate the Partnership.
(c) The General Partner may prohibit any Transfer by a
Limited Partner of its OP Units if, in the opinion of legal counsel to
the Partnership, such Transfer would require filing of a registration
statement under the Securities Act of 1933, as amended, or would
otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the OP Units.
(d) No Transfer by a Limited Partner of its OP Units may
be made to any Person if
(i) in the opinion of legal counsel of the
Partnership, it would adversely affect the ability of the
General Partner to continue to qualify as a REIT or would
subject the General Partner to any additional taxes under
Section 857 or Section 4981 of the Code;
48
71
(ii) in the opinion of legal counsel for the
Partnership, it would result in the Partnership being treated
as an association taxable as a corporation for federal income
tax purposes;
(iii) such Transfer would cause the Partnership to
become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Sec
tion 3(14) of ERISA) or a "disqualified person" (as defined in
Section 4975(c) of the Code);
(iv) such Transfer would, in the opinion of legal
counsel for the Partnership, cause any portion of the assets
of the Partnership to constitute assets of any employee
benefit plan pursuant to Department of Labor Regulations
Section 2510.2-101;
(v) such Transfer would subject the Partnership
to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or the Employee Retirement
Income Security Act of 1974, each as amended;
(vi) without the consent of the General Partner,
which consent may be withheld in its sole and absolute
discretion, such Transfer is a sale or exchange, and such sale
or exchange would, when aggregated with all other sales and
exchanges during the 12-month period ending on the date of the
proposed Transfer, result in 50% or more of the interests in
Partnership capital and profits being sold or exchanged during
such 12-month period; or
(vii) such Transfer is effectuated through an
"established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Section
7704 of the Code.
(e) No transfer of any OP Units may be made to a lender
to the Partnership or any Person who is related (within the meaning of
Regulations Section 1.752-4(b)) to any lender to the Partnership whose
loan constitutes a nonrecourse liability (within the meaning of
Regulations Section 1.752-1(a)(2)), without the consent of the General
Partner, which may be withheld in its sole and absolute discretion,
provided that as a condition to such consent the lender will be
required to enter into an arrangement with the Partnership and the
General Partner to exchange for the Cash Amount (as such term is
defined in the Exchange Rights Agreement) any OP Units in which a
security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes
of allocating liabilities to such lender under Section 752 of the
Code.
49
72
(f) Any Transfer in contravention of any of the
provisions of this Section 11.3 shall be void and ineffectual and
shall not be binding upon, or recognized by, the Partnership.
11.4 Substituted Limited Partners
(a) (i) No Limited Partner shall have the right to
substitute a Permitted Transferee for a Limited Partner in his
place.
(ii) The General Partner shall, however, have the
right to consent to the admission of a Permitted Transferee of
the Partnership Interest of a Limited Partner pursuant to this
Section 11.4 as a Substitute Limited Partner, which consent
may be given or withheld by the General Partner in its sole
and absolute discretion.
(iii) The General Partner's failure or refusal to
permit such transferee to become a Substituted Limited Partner
shall not give rise to any cause of action against the
Partnership or any Partner.
(b) A transferee who has been admitted as a Substituted
Limited Partner in accordance with this Article 11 shall have all the
rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.
(c) (i) No Permitted Transferee will be admitted as a
Substituted Limited Partner unless such transferee has
furnished to the General Partner
(A) evidence of acceptance in form
satisfactory to the General Partner of all of the
terms and conditions of this Agreement and the
Exchange Rights Agreement, including, without
limitation, the power of attorney granted in Section
2.4 hereof, and
(B) such other documents or instruments
as may be required in the reasonable discretion of
the General Partner in order to effect such Person's
admission as a Substituted Limited Partner.
(ii) Upon the admission of a Substituted Limited
Partner, the General Partner shall amend Exhibit A to reflect
the name, address, number of OP Units, and Percentage Interest
of such Substituted Limited Partner and to eliminate or
adjust, if necessary, the name, address and interest of the
predecessor of such Substituted Limited Partner.
50
73
11.5 Assignees
(a) If the General Partner, in its sole and absolute
discretion, does not consent to the admission of any transferee as a
Substituted Limited Partner, as described in Section 11.4(a), such
transferee shall be considered an Assignee for purposes of this
Agreement.
(b) An Assignee shall be deemed to have had assigned to
it, and shall be entitled to receive distributions from the
Partnership and the share of Net Income, Net Losses and any other
items, gain, loss deduction and credit of the Partnership attributable
to the OP Units assigned to such transferee, but shall not be deemed
to be a holder of OP Units for any other purpose under this Agreement,
and shall not be entitled to vote such OP Units in any matter
presented to the Limited Partners for a vote (such OP Units being
deemed to have been voted on such matter in the same proportion as all
other OP Units held by Limited Partners are voted).
(c) In the event any such transferee desires to make a
further assignment of any such OP Units, such transferee shall be
subject to all of the provisions of this Article 11 to the same extent
and in the same manner as any Limited Partner desiring to make an
assignment of OP Units.
11.6 General Provisions
(a) No Limited Partner may withdraw from the Partnership
other than as a result of a permitted Transfer of all of such Limited
Partner's OP Units in accordance with this Article 11 or pursuant to
exchange of all of its OP Units pursuant to the Exchange Rights
Agreement.
(b) (i) Any Limited Partner which shall Transfer all
of its OP Units in a Transfer permitted pursuant to this
Article 11 shall cease to be a Limited Partner upon the
admission of all Assignees of such OP Units as Substituted
Limited Partners.
(ii) Similarly, any Limited Partner which shall
Transfer all of its OP Units pursuant to an exchange of all of
its OP Units pursuant to the Exchange Rights Agreement shall
cease to be a Limited Partner.
(c) Other than pursuant to the Exchange Rights Agreement
or without the consent of the General Partner, transfers pursuant to
this Article 11 may only be made as of the first day of a fiscal
quarter of the Partnership.
(d) (i) If any Partnership Interest is transferred or
assigned during the Partnership's fiscal year in compliance
with the provisions of this Article 11 or
51
74
exchanged pursuant to the Exchange Rights Agreement on any day
other than the first day of a Partnership Year, then Net
Income, Net Losses, each item thereof and all other items
attributable to such interest for such Partnership Year shall
be divided and allocated between the transferor Partner and
the transferee Partner by taking into account their varying
interests during the Partnership Year in accordance with
Section 706(d) of the Code, using the interim closing of the
books method.
(ii) Solely for purposes of making such
allocations, each of such items for the calendar month in
which the Transfer or assignment occurs shall be allocated to
the transferee Partner, and none of such items for the
calendar month in which an exchange occurs shall be allocated
to the exchanging Partner, provided, however, that the General
Partner may adopt such other conventions relating to
allocations in connection with transfers, assignments, or
exchanges as it determines are necessary or appropriate.
(iii) All distributions of Available Cash
attributable to OP Units, with respect to which the
Partnership Record Date is before the date of such transfer,
assignment, or exchange of such OP Units, shall be made to the
transferor Partner or the exchanging Partner, as the case may
be, and in the case of a transfer or assignment other than an
exchange, all distributions of Available Cash thereafter
attributable to such OP Units shall be made to the transferee
Partner.
ARTICLE 12
ADMISSION OF PARTNERS
12.1 Admission of Successor General Partner
(a) (i) A successor to all of the General Partner
Interest pursuant to Section 11 hereof who is proposed to be admitted
as a successor General Partner shall be admitted to the Partnership as
the General Partner, effective immediately following such transfer and
the admission of such successor General Partner as a general partner
of the Partnership upon the satisfaction of the terms and conditions
set forth in Section 12.1(b).
(ii) Any such transferee shall carry on the
business of the Partnership without dissolution.
(b) A Person shall be admitted as a substitute or
successor General Partner of the Partnership only if the following
terms and conditions are satisfied:
(i) the Person to be admitted as a substitute or
additional General Partner shall have accepted and agreed to
be bound by all the terms and provisions
52
75
of this Agreement by executing a counterpart thereof and such
other documents or instruments as may be required or
appropriate in order to effect the admission of such Person as
a General Partner;
(ii) if the Person to be admitted as a substitute
or additional General Partner is a corporation or a
partnership it shall have provided the Partnership with
evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound
by the terms and provisions of this Agreement; and
(iii) counsel for the Partnership shall have
rendered an opinion (relying on such opinions from other
counsel as may be necessary) that the admission of the person
to be admitted as a substitute or additional General Partner
is in conformity with the Act, that none of the actions taken
in connection with the admission of such Person as a
substitute or additional General Partner will cause
(A) the Partnership to be classified
other than as a partnership for federal income tax
purposes, or
(B) the loss of any Limited Partner's
limited liability.
(c) In the case of such admission on any day other than
the first day of a Partnership Year, all items attributable to the
General Partner Interest for such Partnership Year shall be allocated
between the transferring General Partner and such successor as
provided in Section 11.6(d) hereof.
12.2 Admission of Additional Limited Partners
(a) A Person who makes a Capital Contribution to the
Partnership in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to
the General Partner
(i) evidence of acceptance in form satisfactory
to the General Partner of all of the terms and conditions of
this Agreement and the Exchange Rights Agreement, including,
without limitation, the power of attorney granted in Section
2.4 hereof, and
(ii) such other documents or instruments as may be
required in the discretion of the General Partner in order to
effect such Person's admission as an Additional Limited
Partner.
(b) (i) Notwithstanding anything to the contrary in
this Section 12.2, no Person shall be admitted as an
Additional Limited Partner without the consent of
53
76
the General Partner, which consent may be given or withheld in
the General Partner's sole and absolute discretion.
(ii) The admission of any Person as an Additional
Limited Partner shall become effective on the date upon which
the name of such Person is recorded on the books and records
of the Partnership, following the consent of the General
Partner to such admission.
(c) (i) If any Additional Limited Partner is admitted
to the Partnership on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item
thereof and all other items allocable among Partners and
Assignees for such Partnership Year shall be allocated among
such Additional Limited Partner and all other Partners and
Assignees by taking into account their varying interests
during the Partnership Year in accordance with Section 706(d)
of the Code, using the interim closing of the books method.
(ii) (A) Solely for purposes of making such
allocations, each of such items for the calendar
month in which an admission of any Additional Limited
Partner occurs shall be allocated among all of the
Partners and Assignees, including such Additional
Limited Partner.
(B) distributions of Available Cash with
respect to which the Partnership Record Date is
before the date of such admission shall be made
solely to Partners and Assignees, other than the
Additional Limited Partner, and all distributions of
Available Cash thereafter shall be made to all of the
Partners and Assignees, including such Additional
Limited Partner.
(d) Upon the admission of the first Additional Limited
Partner to the Partnership, the Initial Limited Partner's
original interest in the Partnership shall automatically, and
without further action on the part of the Initial Limited
Partner or the Partnership, be withdrawn.
12.3 Amendment of Agreement and Certificate of Limited Partnership
For the admission to the Partnership of any Partner, the General
Partner shall take all steps necessary and appropriate under the Act to amend
the records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate
and may for this purpose exercise the power of attorney granted pursuant to
Section 2.4 hereof.
54
77
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
13.1 Dissolution
(a) The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited
Partners or by the admission of a successor General Partner in
accordance with the terms of this Agreement.
(b) The Partnership shall dissolve, and its affairs shall
be wound up, only upon the first to occur of any of the following
("Liquidating Events"):
(i) the expiration of its term as provided in
Section 2.5 hereof;
(ii) an event of withdrawal of the General
Partner, as defined in the Act (other than an event of
bankruptcy), unless, within ninety (90) days after such event
of withdrawal, a majority in interest of the remaining
Partners agree in writing to continue the business of the
Partnership and to the appointment, effective as of the date
of withdrawal, of a successor General Partner;
(iii) from and after the date of this Agreement
through December 31, 2047, an election to dissolve the
Partnership made by the General Partner, with the Consent of
Limited Partners holding at least a majority of the Percentage
Interest of the Limited Partners (including Limited Partner
Interests held by the General Partner);
(iv) on or after January 1, 2048, an election to
dissolve the Partnership made by the General Partner, in its
sole and absolute discretion;
(v) entry of a decree of judicial dissolution of
the Partnership pursuant to the provisions of the Act;
(vi) the sale of all or substantially all of the
assets and properties of the Partnership;
(vii) a final and non-appealable judgment is
entered by a court of competent jurisdiction ruling that the
General Partner is bankrupt or insolvent, or a final and
non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each
case under any federal or state bankruptcy or insolvency laws
as now or hereafter in effect, unless prior to the entry of
such order or judgment all of the remaining Partners agree in
writing to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such
order or judgment, of a substitute General Partner.
55
78
13.2 Winding Up
(a) (i) Upon the occurrence of a Liquidating Event,
the Partnership shall continue solely for the purposes of
winding up its affairs in an orderly manner, liquidating its
assets, and satisfying the claims of its creditors and
Partners.
(ii) No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership's business and affairs.
(iii) The General Partner, or, in the event there
is no remaining General Partner, any Person elected by Limited
Partners holding at least a majority of the Limited
Partnership Interests (the General Partner or such other
Person being referred to herein as the "Liquidator"), shall be
responsible for overseeing the winding up and dissolution of
the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership
property shall be liquidated as promptly as is consistent with
obtaining the fair value thereof, and the proceeds therefrom
(which may, to the extent determined by the General Partner,
include shares of common stock or other securities of the
General Partner) shall be applied and distributed in the
following order:
(A) First, to the payment and discharge
of all of the Partnership's debts and liabilities to
creditors other than the Partners;
(B) Second, to the payment and discharge
of all of the Partnership's debts and liabilities to
the General Partner;
(C) Third, to the payment and discharge
of all of the Partnership's debts and liabilities to
the other Partners; and
(D) The balance, if any, to the General
Partner and Limited Partners to the extent of and in
accordance with the positive balances in their
Capital Accounts, after giving effect to all
contributions, distributions, and allocations for all
periods.
(iv) The General Partner shall not receive any
additional compensation for any services performed pursuant to
this Article 13.
(v) Any distributions pursuant to this Section
13.2(a) shall be made by the end of the Partnership's taxable
year in which the liquidation occurs (or, if later, within 90
days after the date of the liquidation).
56
79
(b) (i) Notwithstanding the provisions of Section
13.2(a) hereof which require liquidation of the assets of the
Partnership, but subject to the order of priorities set forth
therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or
all of the Partnership's assets would be impractical or would
cause undue loss to the Partners, the Liquidator may, in its
sole and absolute discretion, defer for a reasonable time the
liquidation of any asset except those necessary to satisfy
liabilities of the Partnership (including to those Partners as
creditors) or distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of
Section 13.2(a) hereof, undivided interests in such
Partnership assets as the Liquidator deems not suitable for
liquidation.
(ii) Any such distributions in kind shall be made
only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interests of the
Partners, and shall be subject to such conditions relating to
the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such
time.
(iii) The Liquidator shall determine the fair
market value of any property distributed in kind using such
reasonable method of valuation as it may adopt.
(c) In the discretion of the Liquidator, a pro rata
portion of the distributions that would otherwise be made to
the General Partner and Limited Partners pursuant to this
Article 13 may be:
(A) distributed to a trust established
for the benefit of the General Partner and Limited
Partners for the purposes of liquidating Partnership
assets, collecting amounts owed to the Partnership,
and paying any contingent or unforeseen liabilities
or obligations of the Partnership or the General
Partner arising out of or in connection with the
Partnership; the assets of any such trust shall be
distributed to the General Partner and Limited
Partners from time to time, in the reasonable
discretion of the Liquidator, in the same proportions
as the amount distributed to such trust by the
Partnership would otherwise have been distributed to
the General Partner and Limited Partners pursuant to
this Agreement; or
(B) withheld or escrowed to provide a
reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the
unrealized portion of any installment obligations
owed to the Partnership, provided that such withheld
or escrowed amounts shall be distributed to the
General
57
80
Partner and Limited Partners in the manner and order
of priority set forth in Section 13.2(a) as soon as
practicable.
13.3 No Obligation to Contribute Deficit
If any Partner has a deficit balance in his Capital Account (after
giving effect to all contributions, distributions and allocations for all
taxable years, including the year during which such liquidation occurs), such
Partner shall have no obligation to make any contribution to the capital of the
Partnership with respect to such deficit, and such deficit shall not be
considered a debt owed to the Partnership or to any other Person for any
purpose whatsoever.
13.4 Rights of Limited Partners
(a) Except as otherwise provided in this Agreement, each
Limited Partner shall look solely to the assets of the Partnership for
the return of its Capital Contributions and shall have no right or
power to demand or receive property other than cash from the
Partnership.
(b) Except as otherwise provided in this Agreement, no
Limited Partner shall have priority over any other Partner as to the
return of its Capital Contributions, distributions, or allocations.
13.5 Notice of Dissolution
In the event a Liquidating Event occurs or an event occurs that would,
but for the provisions of an election or objection by one or more Partners
pursuant to Section 13.1, result in a dissolution of the Partnership, the
General Partner shall, within thirty (30) days thereafter, provide written
notice thereof to each of the Partners.
13.6 Termination of Partnership and Cancellation of Certificate of
Limited Partnership
Upon the completion of the liquidation of the Partnership's assets, as
provided in Section 13.2 hereof, the Partnership shall be terminated, a
certificate of cancellation shall be filed, and all qualifications of the
Partnership as a foreign limited partnership in jurisdictions other than the
state of Delaware shall be canceled and such other actions as may be necessary
to terminate the Partnership shall be taken.
13.7 Reasonable Time for Winding-Up
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect among the Partners during the period of liquidation.
58
81
13.8 Waiver of Partition
Each Partner hereby waives any right to partition of the Partnership
property.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
14.1 Amendments
(a) (i) Amendments to this Agreement may be proposed
by the General Partner or by any Limited Partners holding in
the aggregate 25 percent or more of the Partnership Interests.
(ii) (A) Following such proposal, the General
Partner shall submit any proposed amendment to the
Limited Partners.
(B) The General Partner shall seek the
written vote of the Partners on the proposed
amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem
appropriate.
(C) For purposes of obtaining a written
vote, the General Partner may require a response
within a reasonable specified time, but not less than
fifteen (15) days, and failure to respond in such
time period shall constitute a vote which is
consistent with the General Partner's recommendation
with respect to the proposal.
(D) Except as provided in Section
14.1(b), 14.1(c) or 14.1(d), a proposed amendment
shall be adopted and be effective as an amendment
hereto if it is approved by the General Partner and
it receives the Consent of Limited Partners holding
at least a majority of the Percentage Interests of
the Limited Partners (including Limited Partner
Interests held by the General Partner).
(b) (i) Notwithstanding Section 14.1(a), the General
Partner shall have the power, without the consent of the
Limited Partners, to amend this Agreement as may be required
to facilitate or implement any of the following purposes:
(A) to add to the obligations of the
General Partner or surrender any right or power
granted to the General Partner or any Affiliate of
the General Partner for the benefit of the Limited
Partners;
59
82
(B) to reflect the admission,
substitution, termination, or withdrawal of Partners
in accordance with this Agreement (which may be
effected through the amendment or replacement of
Exhibit A);
(C) to set forth the designations,
rights, powers, duties, and preferences of the
holders of any additional Partnership Interests
issued pursuant to Section 4.3 hereof;
(D) to reflect a change that does not
adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or
supplement any provision in this Agreement not
inconsistent with law or with other provisions, or
make other changes with respect to matters arising
under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;
and
(E) to satisfy any requirements,
conditions, or guidelines contained in any order,
directive, opinion, ruling or regulation of a federal
or state agency or contained in federal or state law.
(ii) The General Partner shall provide notice to
the Limited Partners when any action under this Section
14.1(b) is taken in the next regular communication to the
Limited Partners.
(c) Notwithstanding Section 14.1(a) and 14.1(b) hereof,
this Agreement shall not be amended with respect to any Partner
adversely affected without the Consent of such Partner adversely
affected if such amendment would
(i) convert a Limited Partner's interest in the
Partnership into a General Partner Interest;
(ii) modify the limited liability of a Limited
Partner in a manner adverse to such Limited Partner; or
(iii) amend this Section 14.1(c).
This Section 14.1(c) does not require unanimous consent of all Partners
adversely affected unless the amendment is to be effective against all Partners
adversely affected.
(d) Notwithstanding Section 14.1(a) or Section 14.1(b)
hereof, the General Partner shall not amend, without the Consent of
Limited Partners holding a majority of the Percentage Interests of the
Limited Partners, Section 4.3 (a), Article 5, Article 6 (except that
Articles V and VI may be amended as permitted pursuant to Sections
4.3, 5.4, 6.2 and 14.1(b)(i)(c)), Section 7.4, 7.5, 11.2, or 13.1.
60
83
14.2 Meetings of the Partners
(a) (i) Meetings of the Partners may be called by
the General Partner and shall be called upon the receipt by
the General Partner of a written request by Limited Partners
holding 25 percent or more of the Partnership Interests.
(ii) The request shall state the nature of the
business to be transacted.
(iii) Notice of any such meeting shall be given to
all Partners not less than seven (7) days nor more than
thirty (30) days prior to the date of such meeting.
(iv) Partners may vote in person or by proxy at
such meeting.
(v) Whenever the vote or Consent of the Limited
Partners is permitted or required under this Agreement, such
vote or Consent may be given at a meeting of the Partners or
may be given in accordance with the procedure prescribed in
Section 14.1(a) hereof.
(vi) Except as otherwise expressly provided in this
Agreement, the Consent of holders of a majority of the
Percentage Interests held by Partners (including the General
Partner) shall control.
(b) (i) Any action required or permitted to be taken
at a meeting of the Partners may be taken without a meeting
if a written consent setting forth the action so taken is
signed by a majority of the Percentage Interests of the
Partners (or such other percentage as is expressly required
by this Agreement).
(ii) Such consent may be in one instrument or in
several instruments, and shall have the same force and effect
as a vote of a majority of the Percentage Interests of the
Partners (or such other percentage as is expressly required
by this Agreement).
(iii) Such consent shall be filed with the General
Partner.
(iv) An action so taken shall be deemed to have
been taken at a meeting held on the effective date of the
consent as certified by the General Partner.
(c) (i) Each Limited Partner may authorize any
Person or Persons to act for him by proxy on all matters in
which a Limited Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at
a meeting.
61
84
(ii) Every proxy must be signed by the Limited Partner or
his attorney-in-fact and a copy thereof delivered to the Partnership.
(iii) No proxy shall be valid after the expiration of
eleven (11) months from the date thereof unless otherwise provided in
the proxy.
(iv) Every proxy shall be revocable at the pleasure of the
Limited Partner executing it, such revocation to be effective upon the
General Partner's receipt of written notice of such revocation from
the Limited Partner executing such proxy.
(d) (i) Each meeting of the Partners shall be conducted by
the General Partner or such other Person as the General Partner may
appoint pursuant to such rules for the conduct of the meeting as the
General Partner or such other Person deems appropriate.
(ii) Meetings of Partners may be conducted in the same
manner as meetings of the stockholders of the General Partner and may
be held at the same time, and as part of, meetings of the stockholders
of the General Partner.
ARTICLE 15
GENERAL PROVISIONS
15.1 Addresses and Notice
Any notice, demand, request or report required or permitted to be
given or made to a Partner or Assignee under this Agreement shall be in writing
and shall be deemed given or made when delivered in person or when sent by
first class United States mail or by overnight delivery or via facsimile to the
Partner or Assignee at the address set forth in Exhibit A or such other address
of which the Partner shall notify the General Partner in writing.
15.2 Titles and Captions
All article or section titles or captions in this Agreement are for
convenience only, shall not be deemed part of this Agreement and shall in no
way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles"
and "Sections" are to Articles and Sections of this Agreement.
62
85
15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this Agreement
shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice
versa.
15.4 Further Action
The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their heirs, executors, administrators, successors, legal
representatives and permitted assigns.
15.6 Creditors
Other than as expressly set forth herein with respect to the
Indemnities, none of the provisions of this Agreement shall be for the benefit
of, or shall be enforceable by, any creditor of the Partnership.
15.7 Waiver
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
15.8 Counterparts
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all of the parties hereto,
notwithstanding that all such parties are not signatories to the original or
the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto.
15.9 Applicable Law
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflicts of laws thereof.
63
86
15.10 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.
15.11 Entire Agreement
This Agreement contains the entire understanding and agreement among
the Partners with respect to the subject matter hereof and supersedes any other
prior written or oral understandings or agreements among them with respect
thereto.
15.12 Merger
Subject to Section 4.2 herein, the Partnership may merge with, or
consolidate into, any Person or Entity in accordance with Section 17-211 of the
Act.
15.13 No Rights as Stockholders
Nothing contained in this Agreement shall be construed as conferring
upon the holders of the OP Units any rights whatsoever as stockholders of the
General Partner, including, without limitation, any right to receive dividends
or other distributions made to shareholders or to vote or to consent or receive
notice as shareholders in respect to any meeting or shareholders for the
election of directors of the General Partner or any other matter.
64
87
Signature Page to Agreement of Limited Partnership of Tower
Realty Operating Partnership, L.P., by and among the undersigned and the other
parties thereto.
GENERAL PARTNER:
TOWER REALTY TRUST, INC.
By:
------------------------------
Name:
Title:
LIMITED PARTNER:
By:
------------------------------
Name:
Title:
88
CORPORATE/LIMITED LIABILITY COMPANY ADDITIONAL LIMITED PARTNER SIGNATURE PAGE
TO AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF TOWER REALTY
OPERATING PARTNERSHIP, L.P., BY AND AMONG THE UNDERSIGNED
AND THE OTHER PARTIES THERETO.
Dated: , 1997 [Name of Corporation/LLC]
---------- --
By:
-------------------------
Name:
Title:
89
Exhibit A
Partners' Contributions and Partnership Interests
Type of Capital Number of Percentage Security
Name and Address of Partner Interest Contribution(1) OP Units Interest Interests(2)
--------------------------- -------- ------------ -------- -------- ----------
Tower Realty Trust, Inc. General page A-2 8,154 1.00 page A-20
Tower Realty Trust, Inc. Limited page A-2 151,846 18.62 page A-20
Xxxxxxxx Xxxxxxx Limited pages A-3,4 236,870 29.05 page A-20
Tower Equities and Realty Corp. Limited page A-5 153,570 18.83
Xxxxxx Xxxxxxxx Limited page A-6 9,910 1.22
Xxxxxx Xxx Limited page A-7 9,910 1.22
Xxxx Xxxxxx Limited page A-8 9,910 1.22
2800 Company, L.L.C. Limited page A-9 40,790 5.00
Hannah Properties, Inc. Limited page A-10 62,740 7.69
Xxxxxx Xxxxx Limited page A-11 33,710 4.13
Forum Management & Realty Corp. Limited page A-12 24,000 2.94
Madison 40/41 Management Corp. Limited page A-13 24,000 2.94
CXX Mineola Management Corp. Limited page A-14 24,000 2.94
Tower Equities of Arizona, L.L.C. Limited page A-15 24,000 2.94
Corporate-Partners, L.L.C. Limited page A-16 200 2.02
Corporate-Xxxxxxx, L.L.C. Limited page X-00 000 .00
XXX Associates, L.P. Limited page A-18 889 .11
A-1
90
Type of Capital Number of Percentage Security
Name and Address of Partner Interest Contribution(1) OP Units Interest Interests(2)
--------------------------- -------- ------------ -------- -------- ----------
Xxxxxxx Mot Portfolio Corp. Limited page A-19 111 .01
1. The Capital Contribution of each Partner is set forth on the page
referenced hereunder.
2. Security Interests are set forth on page A-21.
A-2
91
Exhibit B
Allocations
1. Allocation of Net Income and Net Loss.
(a) Net Income. Except as otherwise provided in this Exhibit B,
Net Income (or items thereof) (other than Net Income, or items thereof, arising
in connection with a Terminating Capital Transaction) for any fiscal year or
other applicable period shall be allocated to the Partners in accordance with
their respective Percentage Interests.
(b) Net Loss. Except as otherwise provided in this Exhibit B, Net
Loss (or items thereof) of the Partnership for each fiscal year or other
applicable period shall be allocated to the Partners in accordance with the
Partners' respective Percentage Interests. Notwithstanding the preceding
sentence, to the extent any Net Loss (or items thereof) allocated to a Partner
under this subparagraph (b) would cause such Partner (hereinafter, a
"Restricted Partner") to have an Adjusted Capital Account Deficit, or increase
the amount of an existing Adjusted Capital Account Deficit, as of the end of
the fiscal year or other applicable period to which such Net Loss relates, such
Net Loss shall not be allocated to such Restricted Partner and instead shall be
allocated to the other Partner(s) (hereinafter, the "Permitted Partners") pro
rata in accordance with each Permitted Partner's Percentage Interest.
(c) Terminating Capital Transaction; Liquidation. Allocations of
Net Income or Net Loss (or items thereof) in connection with a Terminating
Capital Transaction or liquidation of the Partnership shall first be made so
that, to the extent possible, each Partner's Capital Account balance is equal
to such Partner's Adjusted Contribution, and the remainder of such Net Income
or Net Loss (or items thereof) shall be allocated to the Partners in accordance
with their Percentage Interests. Notwithstanding the preceding sentence, to
the extent any Net Loss (or items thereof) would be allocated to a Restricted
Partner under this subparagraph (c), such Net Loss shall not be allocated to
such Restricted Partner and instead shall be allocated to the Permitted
Partners pro rata in accordance with each Permitted Partner's Percentage
Interest.
(d) Rules of Construction.
(1) Capital Account Increases. For purposes of making
allocations pursuant to subparagraph 1(c) of this Exhibit B, a Partner's
Capital Account balance shall be deemed to be increased by such Partner's share
of any Partnership Minimum Gain and Partner Minimum Gain remaining at the close
of the fiscal period in respect of which such allocations are being made.
(2) Change in Percentage Interests. In the event any
Partner's Percentage Interest changes during a fiscal year for any reason,
including without limitation, the Transfer of any interest in the Partnership,
the tax allocations contained in this Exhibit B shall be applied as necessary
to reflect the varying interests of the Partners during such year.
B-1
92
2. Special Allocations. Notwithstanding any provisions of paragraph 1 of
this Exhibit B, the following special allocations shall be made.
(a) Minimum Gain Chargeback (Nonrecourse Liabilities). Except as
otherwise provided in Sec tion 1.704-2(f) of the Regulations, if there is a net
decrease in Partnership Minimum Gain for any Partnership fiscal year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain to the extent
required by Regulations Section 1.704-2(f). The items to be so allocated shall
be determined in accordance with Sections 1.704-2(f) and (i) of the
Regulations. This subparagraph 2(a) is intended to comply with the minimum
gain chargeback requirement in said section of the Regulations and shall be
interpreted consistently therewith. Allocations pursuant to this subparagraph
2(a) shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant hereto.
(b) Partner Minimum Gain Chargeback. Except as otherwise provided
in Section 1.704-2(i)(4) of the Regulations, if there is a net decrease in
Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any
fiscal year, each Partner who has a share of the Partner Minimum Gain
attributable to such Partner Nonrecourse Debt, determined in accordance with
Section 1.704-2(i)(5) of the Regulations, shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to that Partner's share of the net decrease in the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt to the extent and in
the manner required by Section 1.704-2(i) of the Regulations. The items to be
so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and
(j)(2) of the Regulations. This subparagraph 2(b) is intended to comply with
the minimum gain chargeback requirement with respect to Partner Nonrecourse
Debt contained in said section of the Regulations and shall be interpreted
consistently therewith. Allocations pursuant to this subparagraph 2(b) shall
be made in proportion to the respective amounts required to be allocated to
each Partner pursuant hereto.
(c) Qualified Income Offset. In the event a Partner unexpectedly
receives any adjustments, allocations or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), (5) or (6) of the Regulations, and such Partner has an
Adjusted Capital Account Deficit, items of Partnership income (including gross
income) and gain shall be specially allocated to such Partner in an amount and
manner sufficient to eliminate the Adjusted Capital Account Deficit as quickly
as possible as required by the Regulations. This subparagraph 2(c) is intended
to constitute a "qualified income offset" under Section 1.704-1(b)(2)(ii)(d) of
the Regulations and shall be interpreted consistently therewith.
(d) Other Chargeback of Impermissible Negative Capital Account.
To the extent any Partner has an Adjusted Capital Account Deficit at the end of
any Partnership fiscal year, each such Partner shall be specially allocated
items of Partnership income (including gross income) and gain in the amount of
such excess as quickly as possible, provided that an allocation pursuant to
this paragraph 2(d) shall be made if and only to the extent that such Partner
would have an
B-2
93
Adjusted Capital Account Deficit after all other allocations provided for in
this Exhibit B have been tentatively made as if this paragraph 2(d) were not in
the Agreement.
(e) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal
year or other applicable period shall be allocated to the Partners in
accordance with their respective Percentage Interests.
(f) Partner Nonrecourse Deductions. Partner Nonrecourse
Deductions for any fiscal year or other applicable period with respect to a
Partner Nonrecourse Debt shall be specially allocated to the Partner that bears
the economic risk of loss for such Partner Nonrecourse Debt (as determined
under Sections 1.704-2(b)(4) and 1.704-2(i)(1) of the Regulations).
(g) Intent of Allocations. The parties intend that the allocation
provisions of this Exhibit B shall result in final Capital Account balances of
the Partners that initially are equal to each Partner's Adjusted Contribution
and are then in proportion to the Partners' respective Percentage Interests, so
that when liquidating distributions are made in accordance with such final
Capital Account balances under Section 13.2A(4) hereof, such distributions will
be able to return to each Partner its Adjusted Contribution and then will be
made in proportion to the Partners' respective Percentage Interests. To the
extent that such final Capital Account balances do not so reflect the
provisions of this Exhibit B, income and loss of the Partnership for the
current year and future years, as computed for book purposes, shall be
allocated among the Partners so as to result in final Capital Account balances
reflecting the provisions of this Exhibit B and to the extent such allocations
of items of income (including gross income) and deduction do not result in such
final Capital Account balances, then, income and loss of the Partnership for
prior open years, as computed for book purposes (or items of gross income and
deduction of the Partnership for such years, as computed for book purposes)
shall be reallocated among the Partners consistent with the foregoing. This
subparagraph shall control notwithstanding any reallocation of income, loss, or
items thereof, as computed for book purposes, by the Internal Revenue Service
or any other taxing authority.
(h) Section 754 Adjustment. To the extent an adjustment to the
adjusted tax basis of any asset of the Partnership pursuant to Section 734(b)
of the Code or Section 743(b) of the Code is required, pursuant to Section
1.704-1(b)(2)(iv)(m) of the Regulations, to be taken into account in
determining Capital Accounts, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis) and such
gain or loss shall be specially allocated among the Partners in a manner
consistent with the manner in which each of their respective Capital Accounts
are required to be adjusted pursuant to such section of the Regulations.
(i) Gross Income Allocation. There shall be specially allocated
to the General Partner an amount of Partnership income and gain during each
Partnership Year or portion thereof, before any other allocations are made
hereunder, which is equal to the excess, if any, of the cumulative
distributions of cash made to the General Partner under Section 7.3B hereof
over the cumulative allocations of Partnership income and gain to the General
Partner pursuant to this Section 2(i) of this Exhibit B.
B-3
94
3. Tax Allocations.
(a) Items of Income or Loss. Except as is otherwise provided in
this Exhibit B, an allocation of Partnership Net Income or Net Loss to a
Partner shall be treated as an allocation to such Partner of the same share of
each item of income, gain, loss, deduction and item of tax-exempt income or
Section 705(a)(2)(B) expenditure (or item treated as such expenditure pursuant
to Regulations Section 1.704-1(b)(2)(iv)(i)) ("Tax Items") that is taken into
account in computing Net Income or Net Loss.
(b) Section 1245/1250 Recapture. If any portion of gain from the
sale of Partnership assets is treated as gain which is ordinary income by
virtue of the application of Code Sections 1245 or 1250 ("Affected Gain"), then
such Affected Gain shall be allocated among the Partners in the same proportion
that the depreciation and amortization deductions giving rise to the Affected
Gain were allocated. This subparagraph 3(b) shall not alter the amount of Net
Income (or items thereof) allocated among the Partners, but merely the
character of such Net Income (or items thereof). For purposes hereof, in order
to determine the proportionate allocations of depreciation and amortization
deductions for each fiscal year or other applicable period, such deductions
shall be deemed allocated on the same basis as Net Income and Net Loss for such
respective period.
(c) Precontribution Gain, Revaluations. With respect to any
Contributed Property, the Partnership shall use any permissible method
contained in the Regulations promulgated under Section 704(c) of the Code
selected by the General Partner, in its sole discretion, to take into account
any variation between the adjusted basis of such asset and the fair market
value of such asset as of the time of the contribution ("Precontribution
Gain"). Each Partner hereby agrees to report income, gain, loss and deduction
on such Partner's federal income tax return in a manner consistent with the
method used by the Partnership. If any asset has a Gross Asset Value which is
different from the Partnership's adjusted basis for such asset for federal
income tax purposes because the Partnership has revalued such asset pursuant to
Regulations Section 1.704-1(b)(2)(iv)(f), the allocations of Tax Items shall be
made in accordance with the principles of Section 704(c) of the Code and the
Regulations and the methods of allocation promulgated thereunder. The intent
of this subparagraph 3(c) is that each Partner who contributed to the capital
of the Partnership a Contributed Property will bear, through reduced
allocations of depreciation, increased allocations of gain or other items, the
tax detriments associated with any Precontribution Gain. This subparagraph
3(c) is to be interpreted consistently with such intent.
(d) Excess Nonrecourse Liability Safe Harbor. Pursuant to
Regulations Section 1.752-3(a)(3), solely for purposes of determining each
Partner's proportionate share of the "excess nonrecourse liabilities" of the
Partnership (as defined in Regulations Section 1.752-3(a)(3)), the Partners'
respective interests in Partnership profits shall be determined in accordance
with each Partner's Percentage Interest; provided, however, that each Partner
who has contributed an asset to the Partnership shall be allocated, to the
extent possible, a share of "excess nonrecourse liabilities" of the Partnership
which results in such Partner being allocated nonrecourse liabilities in an
amount which is at least equal to the amount of income pursuant to Section
704(c) of the Code and the Regulations promulgated thereunder (the "Liability
Shortfall"). In the event there is an insufficient amount of nonrecourse
liabilities to allocate to
B-4
95
each Partner an amount of nonrecourse liabilities equal to the Liability
Shortfall, then an amount of nonrecourse liabilities in proportion to, and to
the extent of, the Liability Shortfall shall be allocated to each Partner.
(e) References to Regulations. Any reference in this Exhibit B or
the Agreement to a provision of proposed and/or temporary Regulations shall, in
the event such provision is modified or renumbered, be deemed to refer to the
successor provision as so modified or renumbered, but only to the extent such
successor provision applies to the Partnership under the effective date rules
applicable to such successor provision.
(f) Successor Partners. For purposes of this Exhibit B, a
transferee of a Partnership Interest shall be deemed to have been allocated the
Net Income, Net Loss and other items of Partnership income, gain, loss,
deduction and credit allocable to the transferred Partnership Interest that
previously have been allocated to the transferor Partner pursuant to this
Agreement.
B-5
96
EXHIBIT C
[INTENTIONALLY OMITTED]
97
EXHIBIT D-1
Form of Lock-Up Agreement relating to
Tower Realty Operating Partnership, L.P.
See attached copy
98
EXHIBIT D-1
FORM OF LOCK-UP AGREEMENT
, 1997
-------------
Tower Realty Operating Partnership, L.P.
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Sirs,
Reference is made to the Contribution Agreement, dated _________, 1997
(the "Contribution Agreement"), by and between the undersigned and Tower
Realty Operating Partnership, L.P., a Delaware limited partnership (the
"Operating Partnership"). Capitalized terms used but not otherwise defined in
this letter agreement will have the meaning set forth in the Contribution
Agreement.
In consideration of the execution and exercise of the Contribution
Agreement by the Operating Partnership, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
undersigned hereby irrevocably agrees that without the prior written consent of
the Operating Partnership, the undersigned will not directly or indirectly
sell, offer to sell, solicit an offer to buy, contract to sell, grant any
option to purchase, or otherwise transfer or dispose (or enter into any
transaction or device which is designed to, or could be expected to, result in
the disposition at any time in the future) of any units of limited partnership
interest (the "OP Units") in the Operating Partnership, or any securities
convertible into or exercisable or exchangeable for OP Units, beneficially
owned by the undersigned as of the date hereof, for a period of twenty-four
(24) months after the date hereof. Prior to the expiration of such period, the
undersigned will not publicly announce or disclose any intention to do anything
after the expiration of such period which the undersigned is prohibited, as
provided in the preceding sentence, from doing during such period.
The undersigned agrees that the provisions of this agreement shall
also be binding upon the successors, assigns, heirs and personal
representatives of the undersigned.
In furtherance of the foregoing, the Operating Partnership is hereby
authorized to decline to make any transfer of securities if such transfer would
constitute a violation or breach of this letter agreement.
Very truly yours,
[INVESTOR]
By:
------------------------------
Name:
Title:
1
99
EXHIBIT D-2
Form of Lock-Up Agreement relating to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated
See attached copy
100
EXHIBIT D-2
FORM OF LOCK-UP AGREEMENT
, 1997
-------------
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated
World Financial Center
Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Dear Sirs,
The undersigned understands that Xxxxxxx Lynch, Pierce, Xxxxxx &
Xxxxx, Incorporated ("Xxxxxxx Xxxxx") and certain other firms propose to enter
into an Underwriting Agreement (the "Underwriting Agreement") providing for the
purchase by Xxxxxxx Xxxxx and such other firms (the Underwriters") of shares
(the "Shares") of Common Stock, par value $0.01 per share (the "Common Stock"),
of Tower Realty Trust, Inc. (the "Company") and that the Underwriters propose
to reoffer the Shares to the public pursuant to a public offering (the
"Offering"). Capitalized terms used but not otherwise defined in this letter
agreement will have the meaning set forth in the Company's Registration
Statement on Form S-11 in connection with the registration under the Securities
Act of 1933, as amended (the "Act"), of Shares.
In consideration of the execution of the Underwriting Agreement by the
Underwriters, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the undersigned hereby irrevocably
agrees that without the prior written consent of Xxxxxxx Xxxxx, the undersigned
will not (and, except as may be disclosed in the Prospectus, will not announce
or disclose any intention to) directly or indirectly sell, offer to sell,
solicit an offer to buy, contract to sell, grant any option to purchase, or
otherwise transfer or dispose (or enter into any transaction or device which is
designed to, or could be expected to, result in the disposition at any time in
the future) of, any shares of Common Stock, or any securities convertible into
or exercisable or exchangeable for Common Stock, including any units of limited
partnership interest (the "OP Units") in Tower Realty Operating Partnership,
L.P., a Delaware limited partnership (the "Operating Partnership"),
beneficially owned by the undersigned as of the date of the closing of the
Company's initial public offering, for a period of twenty-four (24) months
after the later of (i) date of the final Prospectus relating to the offering of
the Shares to the public by the Underwriters and (ii) the date the Offering is
consummated and closed. Prior to the expiration of such period, the
undersigned will not publicly announce or disclose any intention to do anything
after the expiration of such period which the undersigned is prohibited, as
provided in the preceding sentence, from doing during such period.
The undersigned agrees that the provisions of this agreement shall
also be binding upon the successors, assigns, heirs and personal
representatives of the undersigned.
1
101
In furtherance of the foregoing, the Company and
________________________, its Transfer Agent, are hereby authorized to decline
to make any transfer of securities if such transfer would constitute a
violation or breach of this letter agreement.
Very truly yours,
[INVESTOR]
By:
----------------------------
Name:
Title:
2
102
EXHIBIT E
Registration Rights Agreement
See attached copy
103
EXHIBIT E
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of _______ __, 1997 by and among Tower Realty Trust, Inc., a
Maryland corporation, which operates as a real estate investment trust (the
"COMPANY"), Tower Realty Operating Partnership, L.P., a Delaware limited
partnership (the "OPERATING PARTNERSHIP"), and the other parties which are
signatories hereto (together with their respective successors, transferees and
assigns, each a "HOLDER" and collectively the "HOLDERS").
WHEREAS, on the date hereof, the Operating Partnership is acquiring,
among other things, certain partnership interests or assets of various
partnerships, joint ventures, limited liability companies, corporations and
other entities which are Holders or in which the Holders own direct or indirect
interests (the "PROPERTY PARTNERSHIPS") pursuant to Option or Contribution
Agreements (the "OPTION AGREEMENTS") among the Operating Partnership and the
Grantors named therein, and in connection therewith the Holders will receive
units of limited partnership interest in the Operating Partnership (such units
of limited partnership interest being referred to hereinafter as the "OP
UNITS");
WHEREAS, the Company, the Operating Partnership and the Holders are
parties to an Exchange Rights Agreement which provides the Holders, among other
things, with the right to demand that the Operating Partnership redeem their OP
Units for cash and, at the option of the Company, the Company may satisfy that
redemption request on behalf of the Operating Partnership through the issuance
of the Company's Common Stock, par value $0.01 per share; and
WHEREAS, in order to induce the Property Partnerships and the Holders
to consummate the closings contemplated under the Option Agreements, the
Company has agreed to grant to the Holders the registration rights set forth in
Section 2 hereof.
NOW, THEREFORE, the parties hereto, in consideration of the foregoing,
the mutual covenants and agreements hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, hereby agree as follows:
VIII Definitions.
As used in this Agreement, the following capitalized defined terms
shall have the following meanings:
"COMMON STOCK" shall mean shares of common stock, par value $0.01 per
share, of the Company.
"COMPANY" shall have the meaning set forth in the Preamble and also
shall include the Company's successors.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"EXCHANGE RIGHTS AGREEMENT" shall mean the Exchange Rights Agreement,
dated the date hereof, among the Company, the Operating Partnership and the
other parties thereto.
"EXCHANGE STOCK" shall mean any Common Stock issued or to be issued to
the Holders upon the exchange of their OP Units pursuant to the Exchange Rights
Agreement.
E-1
104
"HOLDER" or "HOLDERS" shall have the meaning set forth in the
Preamble.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"OP UNITS" shall have the meaning set forth in the Preamble.
"OPERATING PARTNERSHIP" shall have the meaning set forth in the
Preamble and also shall include the Operating Partnership's successors.
"PERSON" shall mean an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement with respect to the terms
of the offering of any portion of the Registrable Securities covered by a Shelf
Registration Statement, and by all other amendments and supplements to such
prospectus, including post-effective amendments, and in each case including all
material incorporated by reference therein.
"REGISTRABLE SECURITIES" shall mean the Exchange Stock, excluding
(i) Exchange Stock for which a Registration Statement relating
to the sale thereof shall have become effective under the Securities
Act and which have been disposed of under such Registration Statement
or
(ii) Exchange Stock sold or eligible for sale pursuant to Rule
144(k).
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance with this Agreement, including, without
limitation:
(i) all SEC, stock exchange or NASD registration and filing
fees;
(ii) all fees and expenses incurred in connection with
compliance with state securities or "blue sky" laws (including
reasonable fees and disbursements of counsel in connection with "blue
sky" qualification of any of the Registrable Securities and the
preparation of a Blue Sky Memorandum) and compliance with the rules of
the NASD;
(iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus, certificates and other documents relating
to the performance of and compliance with this Agreement;
(iv) all fees and expenses incurred in connection with the
listing, if any, of any of the Registrable Securities on any
securities exchange or exchanges pursuant to Article III, Section
(xii) hereof; and
(v) the fees and disbursements of counsel for the Company and
of the independent public accountants of the Company, including the
expenses of any special audits or "cold comfort" letters required by
or incident to such performance and compliance.
Registration Expenses shall specifically exclude underwriting discounts and
commissions, the fees and disbursements of counsel representing a selling
Holder, and transfer taxes, if any, relating to the sale or disposition of
E-2
105
Registrable Securities by a selling Holder, all of which shall be borne by such
Holder in all cases.
"REGISTRATION STATEMENT" or "SHELF REGISTRATION STATEMENT" shall mean
a "shelf" registration statement of the Company and any other Person required
to be a registrant with respect to such shelf registration statement pursuant
to the requirements of the Securities Act which covers the issuance or resale
of the Registrable Securities on Form S-3 or otherwise under Rule 415
promulgated under the Securities Act, or any similar rule that may be adopted
by the SEC, and all amendments and supplements to such registration statement,
including post-effective amendments, in each case including the Prospectus
contained therein, all exhibits thereto and all materials incorporated by
reference therein.
"RULE 144" shall mean Rule 144 promulgated under the Securities Act,
as amended from time to time, and any successor rule or regulation under the
Securities Act.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time, and any successor Act.
"SHELF REGISTRATION" shall mean a registration required to be effected
pursuant to Section 2 hereof.
IX Shelf Registration Under the Securities Act.
9.1 Filing of Shelf Registration Statement.
(i) Within 15 days after the first anniversary date of the
date hereof, the Company shall cause to be filed a Shelf Registration
Statement providing for the sale by the Holders of the Registrable
Securities and will use its reasonable efforts to cause such Shelf
Registration Statement to be declared effective by the SEC as soon as
practicable.
(ii) The Company agrees to use its reasonable best efforts to
keep the Shelf Registration Statement continuously effective for a
period expiring on the date on which all of the Registrable Securities
covered by the Shelf Registration Statement have been sold pursuant to
the Shelf Registration Statement or have become eligible for sale
pursuant to Rule 144(k) and, subject to Article III hereof, further
agrees to supplement or amend the Shelf Registration Statement, if and
as required by the rules, regulations or instructions applicable to
the registration form used by the Company for such Shelf Registration
Statement or by the Securities Act or by any other rules and
regulations thereunder for shelf registration; provided, however, that
the Company shall not be deemed to have used its reasonable efforts to
keep a Registration Statement effective during the applicable period
if it voluntarily takes any action that would result in selling
Holders covered thereby not being able to sell such Registrable
Securities during that period, unless such action is required under
applicable law or the Company has filed a post-effective amendment to
the Registration Statement and the SEC has not declared it effective.
(iii) Notwithstanding the foregoing, the Company shall not be
required to file a Registration Statement or to keep a Registration
Statement effective if the negotiation or consummation of a
transaction is pending or an event has occurred, which negotiation,
consummation or event would require additional disclosure by the
Company in the Registration Statement of material information which
the Company has a bona fide business purpose for keeping confidential
and the nondisclosure of which in the Registration Statement might
E-3
106
cause the Registration Statement to fail to comply with applicable
disclosure requirements; provided, however, that the Company may not
delay, suspend or withdraw a Registration Statement for such reason
for more than 60 days or more often than twice during any period of 12
consecutive months.
(iv) The Company is not required to file a separate
Registration Statement, but may file one Registration Statement
covering the Registrable Securities held by more than one Holder.
9.2 Expenses.
(i) The Company shall pay all Registration Expenses in
connection with any registration pursuant to Article II.
(ii) Each Holder shall pay all underwriting discounts, if any,
sales commissions, the fees and disbursements of counsel representing
such Holder and transfer taxes, if any, relating to the sale or
disposition of such Holder's Registrable Securities pursuant to the
Shelf Registration Statement or Rule 144.
9.3 Inclusion in Shelf Registration Statement. Any Holder that
does not, within 10 days after receipt of a reasonable request by the Company
for information in connection with the Shelf Registration Statement, provide
such information to the Company, shall not be entitled to have its Registrable
Securities included in the Shelf Registration Statement.
9.4 Effect of Material Breach. In the event that the Company
shall breach any of its material obligations hereunder in any material respect,
any Holder of Registrable Securities may demand that the Company file a
registration statement covering such Holder's Registrable Securities. The
Company agrees to file such registration statement within 60 days after receipt
of such demand and agrees to use its best efforts to procure the effectiveness
of such registration statement within 60 days after filing.
X Registration Procedures. (a) In connection with the obligations of the
Company with respect to the Registration Statement required to be filed
pursuant to Article 2 hereof, the Company shall, to the extent applicable:
(i) Prepare and file with the SEC, within the time period set
forth in Section 2 hereof, a Shelf Registration Statement, which Shelf
Registration Statement
(A) shall be available for the sale of the
Registrable Securities in accordance with the intended method
or methods of distribution by the selling Holders thereof, and
(B) shall comply as to form in all material respects
with the requirements of the applicable form of registration
statement and include all financial statements required by the
SEC to be filed therewith.
(ii) (A) Subject to Article III, Section (a)(ii)(B),
(I) prepare and file with the SEC such
amendments and post-effective amendments to each such
Registration Statement as may be necessary to keep
such Registration Statement effective for the
applicable period;
(II) cause each such Prospectus to be
supplemented by any required prospectus supplement,
and as so supplemented to be filed pursuant to Rule
424 or any similar rule that may be adopted under the
Securities Act;
X-0
000
(XXX) respond as promptly as practicable to
any comments received from the SEC with respect to
the Shelf Registration Statement, or any amendment,
post-effective amendment or supplement relating
thereto; and
(IV) comply with the provisions of the
Securities Act with respect to the disposition of all
securities covered by each Registration Statement
during the applicable period in accordance with the
intended method or methods of distribution by the
selling Holders thereof.
(B) (I) Each Holder shall promptly provide to the
Company such information as the Company reasonably
requests in order to identify such Holder and the
method of distribution in a post-effective amendment
to the Registration Statement or a supplement to the
Prospectus.
(II) Such Holder also shall notify the
Company in writing upon completion of any offer or
sale or at such time as such Holder no longer intends
to make offers or sales under the Registration
Statement.
(iii) Furnish to each Holder of Registrable Securities,
without charge, as many copies of each Prospectus, including each
preliminary Prospectus, and any amendment or supplement thereto and
such other documents as such Holder may reasonably request, in order
to facilitate the public sale or other disposition of the Registrable
Securities; the Company consents to the use of the Prospectus,
including each preliminary Prospectus, by each such Holder of
Registrable Securities in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or the preliminary
Prospectus.
(iv) Use its reasonable efforts to register or qualify the
Registrable Securities by the time the applicable Registration
Statement is declared effective by the SEC under all applicable state
securities or "blue sky" laws of such jurisdictions as any Holder of
Registrable Securities covered by a Registration Statement shall
reasonably request in writing, keep each such registration or
qualification effective during the period such Registration Statement
is required to be kept effective, and do any and all other acts and
things which may be reasonably necessary or advisable to enable such
Holder to consummate the disposition in each such jurisdiction of such
Registrable Securities owned by such Holder; provided, however, that
the Company shall not be required to
(A) qualify generally to do business in any
jurisdiction or to register as a broker or dealer in such
jurisdiction where it would not otherwise be required to
qualify but for this Article III, Section (a)(iv),
(B) subject itself to taxation in any such
jurisdiction, or
(C) submit to the general service of process in any
such jurisdiction.
(v) Notify each Holder of Registrable Securities promptly and,
if requested by such Holder, confirm such notification in writing
(A) when a Registration Statement has become
effective and when any post-effective amendments and
supplements thereto become effective,
X-0
000
(X) of the issuance by the SEC or any state
securities authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of
any proceedings for that purpose,
(C) if the Company receives any notification with
respect to the suspension of the qualification of the
Registrable Securities for sale in any jurisdiction or the
initiation of any proceeding for such purpose, and
(D) of the happening of any event during the period a
Registration Statement is effective which is of a type
specified in Article II, Section 2.1(iii) hereof or as a
result of which such Registration Statement or the related
Prospectus contains any untrue statement of a material fact or
omits to state any material fact required to be stated therein
or necessary to make the statements therein, in light of the
circumstances under which they were made (in the case of the
Prospectus), not misleading.
(vi) Make every reasonable effort to obtain the withdrawal of
any order suspending the effectiveness of a Registration Statement at
the earliest possible moment.
(vii) Furnish to each Holder of Registrable Securities,
without charge, at least one conformed copy of each Registration
Statement and any post-effective amendment thereto (without documents
incorporated therein by reference or exhibits thereto, unless
requested).
(viii) (A) Cooperate with the selling Holders of Registrable
Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not
bearing any Securities Act legend; and
(B) enable certificates for such Registrable
Securities to be issued for such numbers of shares of Common
Stock and registered in such names as the selling Holders may
reasonably request at least two business days prior to any
sale of Registrable Securities.
(ix) Subject to Article II, Section 2.1(iii) and Article III,
Section (a)(ii)(B) hereof, upon the occurrence of any event
contemplated by Article III, Section (a)(v)(D) hereof, use its
reasonable efforts promptly to prepare and file a supplement or
prepare, file and obtain effectiveness of a post-effective amendment
to a Registration Statement or the related Prospectus or any document
incorporated therein by reference or file any other required document
so that, as thereafter delivered to the purchasers of the Registrable
Securities, such Prospectus will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(x) Make available for inspection by representatives of the
Holders of the Registrable Securities and any counsel or accountant
retained by such Holders, all financial and other records, pertinent
corporate documents and properties of the Company, and cause the
respective officers, directors and employees of the Company to supply
all information reasonably requested by any such representative,
counsel or accountant in connection with a Registration Statement;
provided, however, that such records, documents or information which
the Company determines, in good faith, to be confidential and notifies
such representatives, counsel or accountants in writing that such
E-6
109
records, documents or information are confidential shall not be
disclosed by such representatives, counsel or accountants unless
(A) the disclosure of such records, documents or
information is necessary to avoid or correct a material
misstatement or omission in a Registration Statement,
(B) the release of such records, documents or
information is ordered pursuant to a subpoena or other order
from a court of competent jurisdiction, or
(C) such records, documents or information have been
generally made available to the public.
(xi) Within a reasonable time prior to the filing of any
Registration Statement, any Prospectus, any amendment to a
Registration Statement or amendment or supplement to a Prospectus,
provide copies of such document (not including any documents
incorporated by reference therein unless requested) to the Holders of
Registrable Securities.
(xii) Use its reasonable efforts to cause all Registrable
Securities to be listed on any securities exchange on which similar
securities issued by the Company are then listed.
(xiii) Provide a CUSIP number for all Registrable Securities,
not later than the effective date of a Registration Statement.
(xiv) Otherwise use its reasonable efforts to comply with all
applicable rules and regulations of the SEC and make available to its
security holders, as soon as reasonably practicable, an earnings
statement covering at least 12 months which shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder.
(xv) Use its reasonable efforts to cause the Registrable
Securities covered by a Registration Statement to be registered with
or approved by such other governmental agencies or authorities as may
be necessary by virtue of the business and operations of the Company
to enable Holders to consummate the disposition of such Registrable
Securities.
(b) The Company may require each Holder of Registrable Securities to
furnish to the Company in writing such information regarding the
proposed distribution by such Holder of such Registrable Securities as
the Company may from time to time reasonably request in writing.
(c) In connection with and as a condition to the Company's obligations
with respect to the Registration Statement required to be filed
pursuant to Section 2 hereof and this Section 3, each Holder agrees
that
(i) it will not offer or sell its Registrable Securities under
the Registration Statement until it has received copies of the
supplemental or amended Prospectus contemplated by Article III,
Section (a)(ii) hereof and receives notice that any post-effective
amendment has become effective, and
(ii) upon receipt of any notice from the Company of the
happening of any event of the kind described in Article III, Section
(a)(v)(D) hereof, such Holder will forthwith discontinue disposition
of Registrable Securities pursuant to a Registration Statement until
such Holder receives copies of the supplemented or amended Prospectus
contemplated by Article III, Section (a)(ix) hereof and receives
E-7
110
notice that any post-effective amendment has become effective, and, if
so directed by the Company, such Holder will deliver to the Company
(at the expense of the Company) all copies in its possession, other
than permanent file copies then in such Holder's possession, of the
Prospectus covering such Registrable Securities current at the time of
receipt of such notice.
XI Indemnification; Contribution.
11.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Holder and its officers and directors and each
Person, if any, who controls any Holder (within the meaning of Section 15 of
the Securities Act) as follows:
(a) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of
(A) any untrue statement or alleged untrue statement
of a material fact contained in any Registration Statement (or
any amendment thereto) pursuant to which Registrable
Securities were registered under the Securities Act, including
all documents incorporated therein by reference, or
(B) the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to
make the statements therein not misleading or
(C) arising out of any untrue statement or alleged
untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto), including
all documents incorporated therein by reference, or
(D) the omission or alleged omission therefrom of a
material fact necessary in order to make the statements
therein, in the light of the circumstances under which they
were made, not misleading;
(b) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding
by any governmental agency or body, commenced or threatened, or of any
claim whatsoever based upon any such untrue statement or omission, or
any such alleged untrue statement or omission, if such settlement is
effected with the written consent of the Company, which consent shall
not be unreasonably withheld or delayed; and
(c) against any and all expense whatsoever, as incurred
(including reasonable fees and disbursements of counsel), reasonably
incurred in investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency
or body, commenced or threatened, in each case whether or not a party,
or any claim whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or omission, to the
extent that any such expense is not paid under subparagraph (a) or (b)
above;
provided, however, that the indemnity provided pursuant to this
Article IV, Section 4.1(c) does not apply to any Holder with respect
to any loss, liability, claim, damage or expense to the extent arising
out of
(x) any untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by such Holder expressly
for use
E-8
111
in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) or
(y) such Holder's failure to deliver an amended or
supplemental Prospectus, after having been provided copies of any such
amended or supplemental Prospectus by the Company, if such loss,
liability, claim, damage or expense would not have arisen had such
delivery occurred.
11.2 Indemnification by Holders. Each Holder severally agrees to
indemnify and hold harmless the Company and the other selling Holders, and each
of their respective directors and officers (including each director and officer
of the Company who signed the Registration Statement), and each Person, if any,
who controls the Company or any other selling Holder within the meaning of
Section 15 of the Securities Act, under the same circumstances and to the same
extent as the indemnity contained in Section 4.1(a) hereof (except that any
settlement described in Section 4.1(a)(B) shall be effected with the written
consent of such Holder, which consent shall not be unreasonably withheld or
delayed), but only insofar as such loss, liability, claim, damage or expense
arises out of or is based upon any untrue statement or omission, or alleged
untrue statements or omissions, made in a Registration Statement (or any
amendment thereto) or any Prospectus (or any amendment or supplement thereto)
in reliance upon and in conformity with written information furnished to the
Company by such selling Holder expressly for use in such Registration Statement
(or any amendment thereto) or such Prospectus (or any amendment or supplement
thereto).
11.3 Conduct of Indemnification Proceedings. (i) Each indemnified
party shall give reasonably prompt notice to each indemnifying party of any
action or proceeding commenced against it in respect of which indemnity may be
sought hereunder, but failure to so notify an indemnifying party
(A) shall not relieve it from any liability which it
may have under the indemnity agreement provided in Section
4.1(a) or 4.1(b) above, unless and to the extent it did not
otherwise learn of such action and the lack of notice by the
indemnified party results in the forfeiture by the
indemnifying party of substantial rights and defenses and
(B) shall not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than
the indemnification obligation provided under Section 4.1(a)
or 4.1(b) above.
(ii) If the indemnifying party so elects within a reasonable
time after receipt of such notice, the indemnifying party may assume
the defense of such action or proceeding at such indemnifying party's
own expense with counsel chosen by the indemnifying party and approved
by the indemnified parties defendant in such action or proceeding,
which approval shall not be unreasonably withheld; provided, however,
that, if such indemnified party or parties reasonably determine that a
conflict of interest exists where it is advisable for such indemnified
party or parties to be represented by separate counsel or that, upon
advice of counsel, there may be legal defenses available to them which
are different from or in addition to those available to the
indemnifying party, then the indemnifying party shall not be entitled
to assume such defense and the indemnified party or parties shall be
entitled to one separate counsel at the indemnifying party's or
parties' expense.
(iii)(A) If an indemnifying party is not entitled to assume
the defense of such action or proceeding as a result of the
proviso to Section 4.1(c), such indemnifying party's counsel
shall be entitled to conduct such indemnifying party's
defense, and
E-9
112
counsel for the indemnified party or parties shall be entitled
to conduct the defense of such indemnified party or parties,
it being understood that both such counsel will cooperate with
each other to conduct the defense of such action or proceeding
as efficiently as possible.
(B) If an indemnifying party is not so entitled to
assume the defense of such action or does not assume such
defense, after having received the notice referred to in
Section 4.1(c), the indemnifying party or parties will pay the
reasonable fees and expenses of counsel for the indemnified
party or parties as incurred.
(C) In such event, however, no indemnifying party
will be liable for any settlement effected without the written
consent of such indemnifying party, which consent may not be
unreasonably withheld or delayed.
(iv) If an indemnifying party is entitled to assume, and
assumes, the defense of such action or proceeding in accordance with
this Section 4(c), such indemnifying party shall not be liable for any
fees and expenses of counsel for the indemnified parties incurred
thereafter in connection with such action or proceeding.
11.4 Contribution.
(i) (A) In order to provide for just and equitable
contribution in circumstances in which the indemnity agreement
provided for in this Section 4 is for any reason held to be
unenforceable although applicable in accordance with its
terms, the Company and the selling Holders shall contribute to
the aggregate losses, liabilities, claims, damages and
expenses of the nature contemplated by such indemnity
agreement incurred by the Company and the selling Holders, in
such proportion as is appropriate to reflect the relative
fault of and benefits to the Company on the one hand and the
selling Holders on the other (in such proportions that the
selling Holders are severally, not jointly, responsible for
the balance), in connection with the statements or omissions
which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable
considerations.
(B) (I) The relative benefits to the indemnifying
party and indemnified parties shall be determined by
reference to, among other things, the total proceeds
received by the indemnifying party and indemnified
parties in connection with the offering to which such
losses, claims, damages, liabilities or expenses
relate.
(II) The relative fault of the indemnifying
party and indemnified parties shall be determined by
reference to, among other things, whether the action
in question, including any untrue or alleged untrue
statement of a material fact or omission or alleged
omission to state a material fact, has been made by,
or relates to information supplied by, such
indemnifying party or the indemnified parties, and
the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent
such action.
(ii) (A) The parties hereto agree that it would not be just or
equitable if contribution pursuant to this Section 4.4(d) were
determined by pro rata allocation or by any other method of
E-10
113
allocation which does not take account of the equitable
considerations referred to in Section 4.4(i).
(B) Notwithstanding the provisions of this Section
4.4, no selling Holder shall be required to contribute any
amount in excess of the amount by which the total price at
which the Registrable Securities of such selling Holder were
offered to the public exceeds the amount of any damages which
such selling Holder would otherwise have been required to pay
by reason of such untrue statement or omission.
(iii) Notwithstanding the foregoing, no Person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any Person
who was not guilty of such fraudulent misrepresentation.
(iv) For purposes of this Section 4.4, each Person, if any,
who controls a Holder within the meaning of Section 15 of the
Securities Act and directors and officers of a Holder shall have the
same rights to contribution as such Holder, and each director of the
Company, each officer of the Company who signed the Registration
Statement and each Person, if any, who controls the Company within the
meaning of Section 15 of the Securities Act shall have the same rights
to contribution as the Company.
XII Filing of Exchange Act Reports; Rule 144 Sales
12.1 The Company covenants that it will file the reports required
to be filed by the Company under the Securities Act and the Exchange Act so as
to enable any Holder to sell Exchange Stock pursuant to Rule 144.
12.2 In connection with any sale, transfer or other disposition by
any Holder of any Exchange Stock pursuant to Rule 144, the Company shall
cooperate with such Holder to facilitate the timely preparation and delivery of
certificates representing Exchange Stock to be sold and not bearing any
Securities Act legend, and enable certificates for such Exchange Stock to be
for such number of shares and registered in such names as the selling Holders
may reasonably request at least two business days prior to any sale of Exchange
Stock.
XIII Miscellaneous.
13.1 Amendments and Waivers. (i) The provisions of this Agreement,
including the provisions of this Section 6.1(i), may not be amended,
modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given without the written consent of
the Company and the Holders of a majority in amount of the outstanding
Registrable Securities; provided, however, that no amendment,
modification or supplement or waiver or consent to the departure with
respect to the provisions of Articles 2, 4 or 5 hereof shall be
effective as against any Holder unless consented to in writing by such
Holder.
(ii) Notice of any amendment, modification or supplement to
this Agreement adopted in accordance with this Section 6.1 shall be
provided by the Company to each Holder at least thirty (30) days prior
to the effective date of such amendment, modification or supplement.
13.2 Notices. (i) All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery, to the parties at their respective addresses set forth opposite their
signatures below or at such other address as a party may indicate by written
notice to the other party or parties.
E-11
114
(ii) All such notices and communications shall be deemed to
have been duly given:
(A) at the time delivered by hand, if personally
delivered;
(B) three (3) business days after being deposited in
the mail, postage prepaid, if mailed;
(C) when answered back, if telexed;
(D) when receipt is acknowledged, if telecopied; or
(E) at the time delivered, if delivered by an air
courier guaranteeing overnight delivery.
13.3 Successors, Assigns and Transferees. (i) This Agreement shall
inure to the benefit of and be binding upon the successors, assigns and
transferees of each of the parties, including, without limitation and without
the need for an express assignment, subsequent Holders.
(ii) If any successor, assignee or transferee of any Holder
shall acquire Registrable Securities, in any manner, whether by
operation of law or otherwise, such Registrable Securities shall be
held subject to all of the terms of this Agreement, and by taking and
holding such Registrable Securities such Person shall be entitled to
receive the benefits hereof and shall be conclusively deemed to have
agreed to be bound by all of the terms and provisions hereof.
(iii) The term "successor, assignee or transferee of a Holder"
shall include any Person that acquires Registrable Securities by
operation of law, including upon the merger or consolidation,
liquidation or dissolution of a Holder.
13.4 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
13.5 Headings. The headings in this Agreement are for convenience
of reference only and shall not limit or otherwise affect the meaning hereof.
13.6 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF MARYLAND WITHOUT GIVING
EFFECT TO THE CONFLICTS OF LAW PROVISIONS THEREOF.
13.7 Specific Performance. The parties hereto acknowledge that
there would be no adequate remedy at law if any party fails to perform any of
its obligations hereunder, and accordingly agree that each party, in addition
to any other remedy to which it may be entitled at law or in equity, shall be
entitled to compel specific performance of the obligations of any other party
under this Agreement in accordance with the terms and conditions of this
Agreement in any court of the United States or any State thereof having
jurisdiction.
13.8 Entire Agreement. This Agreement is intended by the parties
as a final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
E-12
115
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement, or caused this Agreement to be duly executed on its behalf, as of
the date first written above.
Address:
000 Xxxx 00xx Xxxxxx TOWER REALTY TRUST, INC.
Xxx Xxxx, Xxx Xxxx 00000-0000
By:
------------------------------
Name:
Title:
000 Xxxx 00xx Xxxxxx TOWER REALTY OPERATING PARTNERSHIP, L.P.
Xxx Xxxx, Xxx Xxxx 00000-0000
By: Tower Realty Trust, Inc., its
general partner
By:
-----------------------------
Name:
Title:
HOLDERS:
[Address:] ---------------------------------
Signature
---------------------------------
Name (Please Print or Type)
E-13
116
EXHIBIT F
Exchange Rights Agreement
See attached copy
117
EXHIBIT F
EXCHANGE RIGHTS AGREEMENT
THIS EXCHANGE RIGHTS AGREEMENT (this "Agreement"), dated as of
__________ __, 1997, is entered into by and among Tower Realty Trust, Inc., a
Maryland corporation (the "Company"), Tower Realty Operating Partnership, L.P.,
a Delaware limited partnership (the "Operating Partnership"), and the Persons
whose names are set forth on Exhibit A attached hereto (as it may be amended
from time to time).
R E C I T A L S:
(a) The Company, together with certain other limited
partners, has formed the Operating Partnership
pursuant to the Agreement of Limited Partnership of
the Operating Partnership dated __________ __, 1997
(as such agreement may be amended or amended and
restated from time to time, the "Partnership
Agreement").
(b) Pursuant to the Partnership Agreement, the Limited
Partners (as defined below) directly or indirectly
hold units of limited partnership interest ("OP
Units") in the Operating Partnership.
(c) The Operating Partnership has agreed to provide the
Limited Partners with certain direct or indirect
rights to exchange their OP Units for cash or, at the
election of the Company, for shares of the Company's
common stock, par value $0.01 per share (the "REIT
Stock").
Accordingly, the parties hereto do hereby agree as follows:
ARTICLE I
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this Agreement.
"Assignee" means a Person to whom one or more OP Units have been
transferred in a manner permitted under the Partnership Agreement, but who has
not become a substituted Limited Partner in accordance therewith.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New York are authorized or required by law
to close.
"Cash Amount" means an amount of cash per OP Unit equal to the Value
on the Valuation Date of the REIT Stock Amount.
"Exchange Factor" means 1.0, provided, that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Stock in REIT
Stock or makes a distribution to all holders of its outstanding REIT Stock in
REIT Stock; (ii) subdivides its outstanding REIT Stock; or (iii) combines its
outstanding REIT Stock into a smaller number of shares of REIT Stock, the
Exchange Factor shall be adjusted by multiplying the Exchange Factor by a
fraction, the numerator of which shall be the number of shares of REIT Stock
issued and outstanding on the record date for such dividend, contribution,
subdivision or combination assuming for such purpose that such dividend,
distribution, subdivision or combination has occurred as of such
F-1
118
time, and the denominator of which shall be the actual number of shares of REIT
Stock (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, subdivision or combination. Any
adjustment to the Exchange Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
"Exchanging Partner" has the meaning set forth in Section 2.1 hereof.
"Exchange Right" has the meaning set forth in Section 2.1 hereof.
"IPO" means an initial public offering by the Company of the REIT
Stock pursuant to a Registration Statement on Form S-11, filed with and
declared effective by the SEC.
"Lien" means any lien, security interest, mortgage, deed of trust,
charge, claim, encumbrance, pledge, option, right of first offer or first
refusal and any other right or interest of others of any kind or nature, actual
or contingent, or other similar encumbrance of any nature whatsoever.
"Limited Partner" means any Person, other than the Company, named as a
Limited Partner on Exhibit A, as such Exhibit may be amended from time to time.
"Lock-up Agreement" means, collectively, the several Lock-up
Agreements executed by each of the Limited Partners other than the Company,
dated the date hereof, which prohibit the transfer of the OP Units held by such
Limited Partner without the consent of Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,
Incorporated and/or the Operating Partnership.
"Notice of Exchange" means the Notice of Exchange substantially in the
form of Exhibit B to this Agreement.
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust, estate, or unincorporated organization, or other
entity, or a government or agency or political subdivision thereof.
"REIT Stock Amount" means that number of shares of REIT Stock equal to
the product of the number of OP Units offered for exchange by an Exchanging
Partner, multiplied by the Exchange Factor as of the Valuation Date, provided,
that in the event the Company or the Operating Partnership issues to all
holders of REIT Stock rights, options, warrants or convertible or exchangeable
securities entitling the stockholders to subscribe for or purchase REIT Stock,
or any other securities or property (collectively, the "rights"), then the REIT
Stock Amount shall also include such rights that a holder of that number of
shares of REIT Stock would be entitled to receive.
"SEC" means the Securities and Exchange Commission.
"Specified Exchange Date" means the tenth (10th) Business Day after
receipt by the Operating Partnership and the Company of a Notice of Exchange.
"Valuation Date" means the date of receipt by the Operating
Partnership and the Company of a Notice of Exchange or, if such date is not a
Business Day, the first Business Day thereafter.
"Value" means, with respect to shares of REIT Stock, the average of
the daily market price for the five (5) consecutive trading days immediately
preceding the Valuation Date. The market price for each such trading day shall
be:
(i) if the REIT Stock are listed or admitted to trading on the
New York Stock Exchange (the "NYSE"), any other national securities
F-2
119
exchange or the Nasdaq Stock Market ("Nasdaq"), the closing price on
such day, or if no such sale takes place on such day, the average of
the closing bid and asked prices on such day; or
(ii) if the REIT Stock are not listed or admitted to trading
on the NYSE, any national securities exchange or Nasdaq, the last
reported sale price on such day or, if no sale takes place on such
day, the average of the closing bid and asked prices on such day, as
reported by a reliable quotation source designated by the Company.
In the event the REIT Stock Amount includes rights that a holder of REIT Stock
would be entitled to receive, then the Value of such rights shall be determined
by the independent directors of the Company acting in good faith on the basis
of such quotations and other information as they consider, in their reasonable
judgment, appropriate.
ARTICLE II
EXCHANGE RIGHT
2.1 Exchange Right. (a) Subject to Sections 2.2, 2.3, 2.4 and 2.5
hereof, and subject to any limitations under applicable law, the Operating
Partnership hereby grants to each Limited Partner and each Limited Partner
hereby accepts the right (the "Exchange Right"), exercisable on or after the
date that is one (1) year after the closing of the IPO, to exchange on a
Specified Exchange Date all or a portion of the OP Units held by such Limited
Partner at an exchange price equal to the Cash Amount.
(b) The Exchange Right shall be exercised pursuant to a Notice of
Exchange delivered to the Operating Partnership, with a copy delivered to the
Company, by the Limited Partner who is exercising the Exchange Right (the
"Exchanging Partner"); provided, however, that the Company, on behalf of the
Operating Partnership, may elect, after a Notice of Exchange is delivered, to
satisfy the Exchange Right which is the subject of such notice in accordance
with Section 2.2.
(c) A Limited Partner may not exercise the Exchange Right for less
than one thousand (1,000) OP Units or, if such Limited Partner holds less than
one thousand (1,000) OP Units, all of the OP Units held by such Limited
Partner.
(d) Any Assignee of a Limited Partner may exercise the rights of such
Limited Partner pursuant to this Article 2, and such Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Assignee.
(e) In connection with any exercise of such rights by an Assignee on
behalf of a Limited Partner, the Cash Amount or the REIT Stock Amount, as the
case may be, shall be satisfied by the Operating Partnership or the Company, as
the case may be, directly to such Assignee and not to such Limited Partner.
2.2 Option of Company to Exchange for REIT Stock. (a)
Notwithstanding the provisions of Section 2.1, the Company may, on behalf of
the Operating Partnership, in its sole and absolute discretion, elect to
satisfy an Exchanging Partner's Exchange Right by exchanging REIT Stock and
rights equal to the REIT Stock Amount on the Specified Exchange Date for the OP
Units offered for exchange by the Exchanging Partner.
(b) In the event the Company shall elect to satisfy, on behalf of the
Operating Partnership, an Exchanging Partner's Exchange Right by exchanging
REIT Stock for the OP Units offered for exchange,
F-3
120
(i) the Company hereby agrees so to notify the Exchanging
Partner within five (5) Business Days after the receipt by the
Company of such Notice of Exchange,
(ii) each Exchanging Partner hereby agrees to execute such
documents and instruments as the Company may reasonably require in
connection with the issuance of REIT Stock upon exercise of the
Exchange Right, and
(iii) the Company hereby agrees to deliver stock certificates
representing fully paid and nonassessable shares of REIT Stock.
2.3 Prohibition of Exchange for REIT Stock. Notwithstanding
anything herein to the contrary, the Company shall not be entitled to satisfy
an Exchanging Partner's Exchange Right pursuant to Section 2.2 if the delivery
of REIT Stock to such Limited Partner by the Company pursuant to Section 2.2
(regardless of the Operating Partnership's obligations to the Limited Partner
under Section 2.1)
(a) would be prohibited under the Articles of Incorporation of
the Company,
(b) would otherwise jeopardize the REIT status of the Company,
or
(c) would cause the acquisition of the REIT Stock by the
Limited Partner to be "integrated" with any other distribution of REIT
Stock by the Company for purposes of complying with the registration
provisions of the Securities Act.
2.4 Payment Date. Any Cash Amount to be paid to an Exchanging
Partner shall be paid on the Specified Exchange Date; provided, however, that
the Operating Partnership may elect to cause the Specified Exchange Date to be
delayed for up to an additional 180 days to the extent required for the Company
to cause additional REIT Shares to be issued to provide financing to be used to
make such payment of the Cash Amount by the Operating Partnership.
2.5 Exercise by Pledgee. Notwithstanding the provisions of this
Article 2, any person to whom OP Units have been pledged, in compliance with
the terms of the Lock-up Agreement, may exercise its Exchange Right prior to
the date that is one (1) year after the closing of the IPO, provided, however,
such OP Units shall only be exchangeable for the Cash Amount.
2.6 Expiration of Exchange Right. The Exchange Right shall expire
with respect to any OP Units for which an Exchange Notice has not been
delivered to the Operating Partnership and the Company on or before December
31, 2047.
2.7 Effect of Exchange. (a) Any exchange of OP Units pursuant to
this Article 2 shall be deemed to have occurred as of the Specified Exchange
Date for all purposes, including without limitation the payment of
distributions or dividends in respect of OP Units or REIT Stock, as applicable.
(b) Any OP Units acquired by the Company pursuant to an exercise by
any Limited Partner of an Exchange Right shall be deemed to be acquired by and
reallocated or reissued to the Company.
(c) The Company, as general partner of the Operating Partnership,
shall amend the Partnership Agreement to reflect each such exchange and
reallocation or reissuance of OP Units and each corresponding recalculation of
the OP Units of the Limited Partners.
F-4
121
ARTICLE III
OTHER PROVISIONS
3.1 Covenants of the Company. (a) At all times during the
pendency of the Exchange Right, the Company shall reserve for issuance such
number of shares of REIT Stock as may be necessary to enable the Company to
issue such shares in full payment of the REIT Stock Amount in regard to all OP
Units held by Limited Partners which are from time to time outstanding.
(b) During the pendency of the Exchange Right, the Company shall
deliver to Limited Partners in a timely manner all reports filed by the Company
with the SEC to the extent the Company also transmits such reports to its
stockholders and all other communications transmitted from time to time by the
Company to its stockholders generally.
(c) The Company shall notify each Limited Partner, upon request, of
the then current Exchange Factor and such notice will include a reasonable
explanation of the Exchange Factor calculation to be applied at such time.
3.2 Fractional Shares. (a) No fractional shares of REIT Stock
shall be issued upon exchange of OP Units.
(b) The number of full shares of REIT Stock which shall be issuable
upon exchange of OP Units (or the cash equivalent amount thereof if the Cash
Amount is paid) shall be computed on the basis of the aggregate amount of OP
Units so surrendered.
(c) Instead of any fractional shares of REIT Stock which would
otherwise be issuable upon exchange of any OP Units, the Operating Partnership
shall pay a cash adjustment in respect of such fraction in an amount equal to
the Cash Amount of an OP Unit multiplied by such fraction.
3.3 Investment Representations and Warranties. By delivering to
the Company a Notice of Exchange, each Exchanging Partner will be deemed to
represent and warrant to the Company and the Operating Partnership that such
Exchanging Partner is aware of the Company's option to exchange such Exchanging
Partner's OP Units for REIT Stock pursuant to Section 2.2 hereof and that:
(a) (i) Such Exchanging Partner has received and reviewed
(A) a copy of the prospectus contained in the
Registration Statement on Form S-11 filed by the Company in
connection with the IPO, any prospectus contained in any
Registration Statement subsequently filed by the Company, and
any supplement or amendment thereto (each, a "Prospectus"),
and
(B) copies of all reports and other filings (the "SEC
Reports"), including Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and Current Reports on Form 8-K, made by
the Company with the SEC pursuant to the Securities Exchange
Act of 1934, as amended, and the rules and regulations
thereunder,
and understands the risks of, and other considerations relating to, an
investment in REIT Stock.
(ii) Such Exchanging Partner, by reason of its business and
financial experience, together with the business and financial
experience of those persons, if any, retained by it to represent or
advise it with respect to its investment in REIT Stock,
(A) has such knowledge, sophistication and experience
in financial and business matters and in making investment
decisions of this type that it is capable of evaluating the
F-5
122
merits and risks of and of making an informed investment
decision with respect to an investment in REIT Stock,
(B) is capable of protecting its own interest or has
engaged representatives or advisors to assist it in protecting
its interests and
(C) is capable of bearing the economic risk of such
investment.
(iii) (A) Such Exchanging Partner is an "accredited
investor" as defined in Rule 501 of the regulations
promulgated under the Securities Act.
(B) If such Exchanging Partner has retained or
retains a person to represent or advise it with respect to its
investment in REIT Stock, such Exchanging Partner will advise
the Company of such retention and, at the Company's request,
such Exchanging Partner shall, prior to or at delivery of the
REIT Stock hereunder,
(I) acknowledge in writing such representation
and
(II) cause such representative or advisor to
deliver a certificate to the Company containing such
representations as may be reasonably requested by the
Company.
(b) (i) Such Exchanging Partner understands that an investment in
the Company involves substantial risks.
(ii) Such Exchanging Partner has been given the opportunity to
make a thorough investigation of the activities of the Company and has
been furnished with materials relating to the Company and its
activities, including, without limitation, each Prospectus and the SEC
Reports.
(iii) Such Exchanging Partner has relied and is making its
investment decision based upon the Prospectus relating to the IPO and
any subsequent Prospectus, the SEC Reports and other written
information provided to the Exchanging Partner by or on behalf of the
Company and, as applicable, such Exchanging Partner's position as a
director or executive officer of the Company.
(c) (i) The REIT Stock to be issued to such Exchanging Partner
hereunder will be acquired by such Exchanging Partner for its own
account, for investment only and not with a view to, or with any
intention of, a distribution or resale thereof, in whole or in part,
or the grant of any participation therein.
(ii) Such Exchanging Partner was not formed for the specific
purpose of acquiring an interest in the Company.
(d) (i) Such Exchanging Partner acknowledges that
(A) the shares of REIT Stock to be issued to such
Exchanging Partner hereunder have not been registered under
the Securities Act or state securities laws by reason of a
specific exemption or exemptions from registration under the
Securities Act and applicable state securities laws and, the
certificates representing such shares of REIT Stock will bear
a legend to such effect,
(B) the Company's and the Operating Partnership's
reliance on such exemptions is predicated in part on the
accuracy and
F-6
123
completeness of the representations and warranties of such
Exchanging Partner contained herein,
(C) the REIT Stock to be issued to such Exchanging
Partner hereunder may not be resold or otherwise distributed
unless registered under the Securities Act and applicable
state securities laws, or unless an exemption from
registration is available,
(D) there may be no market for unregistered shares of
REIT Stock, and
(E) the Company has no obligation or intention to
register such REIT Stock under the Securities Act or any state
securities laws or to take any action that would make
available any exemption from the registration requirements of
such laws, except as provided in the Registration Rights
Agreement entered into by the Company and the Exchanging
Partner (the "Registration Rights Agreement").
(ii) Such Exchanging Partner acknowledges that because of the
restrictions on transfer or assignment of such REIT Stock to be issued
hereunder, such Exchanging Partner may have to bear the economic risk
of its investment in REIT Stock issued hereunder for an indefinite
period of time, although the holder of any such REIT Stock will be
afforded certain rights to have such REIT Stock registered under the
Securities Act and applicable state securities laws pursuant to the
Registration Rights Agreement.
(e) The address set forth under such Exchanging Partner's name in the
Notice of Exchange is the address of the Exchanging Partner's principal place
of business or, if a natural person, the address of the Exchanging Partner's
residence, and such Exchanging Partner has no present intention of becoming a
resident of any country, state or jurisdiction other than the country and state
in which such principal place of business or residence is situated.
ARTICLE IV
GENERAL PROVISIONS
4.1 Addresses and Notice. Any notice, demand, request or report
required or permitted to be given or made to the Operating Partnership, the
Company, a Limited Partner or Assignee, as the case may be, under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other similarly
reliable means of written communication to the Operating Partnership, the
Company, a Limited Partner or Assignee, as the case may be, (i) at the address
listed on the records of the Operating Partnership, with respect to a Limited
Partner or Assignee, and (ii) at 000 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000-0000, Attn: President, with respect to the Operating Partnership or the
Company.
4.2 Titles and Captions. All article or section titles or captions
in this Agreement are for convenience only. They shall not be deemed part of
this Agreement and in no way define, limit, extend or describe the scope or
intent of any provisions hereof. Except as specifically provided otherwise,
references to "Articles" and "Sections" are to Articles and Sections of this
Agreement.
F-7
124
4.3 Pronouns and Plurals. Whenever the context may require, any
pronoun used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.
4.4 Further Action and Additional Restrictions. The parties shall
execute and deliver all documents, provide all information and take or refrain
from taking action as may be necessary or appropriate to achieve the purposes
of this Agreement.
4.5 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective heirs, executors,
administrators, successors, legal representatives and permitted assigns.
4.6 Waiver. No failure by any party to insist upon the strict
performance of any covenant, duty, agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
4.7 Counterparts. This Agreement may be executed in counterparts,
all of which together shall constitute one agreement binding on all of the
parties hereto, notwithstanding that all such parties are not signatories to
the original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.
4.8 Applicable Law. This Agreement shall be construed and enforced
in accordance with and governed by the laws of the State of Maryland, without
regard to the principles of conflicts of law thereof.
4.9 Invalidity of Provisions. If any provision of this Agreement
is or becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.
4.10 Entire Agreement. This Agreement contains the entire
understanding and agreement among the Limited Partners, the Operating
Partnership and the Company with respect to the subject matter hereof and
supersedes any other prior written or oral understandings or agreements among
them with respect thereto.
4.11 Amendment. This Agreement may be amended from time to time
with the consent of the Company by a vote of the Limited Partners in the same
manner as the Partnership Agreement (in accordance with Section 14.1(a)
thereof) may be amended as provided therein, provided, however, that the
Company shall vote its limited partnership interests in proportion to the votes
of the other Limited Partners.
F-8
125
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
THE COMPANY:
TOWER REALTY TRUST, INC.
By:
-------------------------------
Name:
Title:
OPERATING PARTNERSHIP:
TOWER REALTY OPERATING PARTNERSHIP, L.P.
BY: Tower Realty Trust, Inc.,
its general partner
By:
------------------------
Name:
Title:
LIMITED PARTNERS:
------------------------------------
Signature
------------------------------------
Name (Please Print or Type)
F-9
126
Exhibit A
Name and Address of Limited Partners
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
----------------------------
F-10
127
Exhibit B
Notice of Exchange
The undersigned Limited Partner hereby irrevocably (i) exchanges
___________ OP Units in Tower Realty Operating Partnership, L.P., in accordance
with the terms of the Exchange Rights Agreement, dated as of _________ __, 1997
(the "Exchange Rights Agreement"), and the Exchange Right referred to therein;
(ii) surrenders such OP Units and all right, title and interest therein; and
(iii) directs that the Cash Amount or REIT Stock Amount (as determined by the
Company) deliverable upon exercise of the Exchange Right be delivered to the
address specified below, and if REIT Stock is to be delivered, such REIT Stock
will be registered or placed in the name(s) and at the address(es) specified
below.
The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has marketable and unencumbered title to such OP Units, free
and clear, other than any encumbrance arising pursuant to the Partnership
Agreement, of the rights or interests of any other person or entity; (b) has
the full right, power, and authority to exchange and surrender such OP Units as
provided herein; and (c) has obtained the consent or approval of all persons or
entities, if any, (other than consent or approval that may be required of the
Company or the Operating Partnership) having the right to consent or approve
such exchange and surrender on the part of the undersigned.
The undersigned hereby makes the representations and warranties
contained in Section 3.3 of the Exchange Rights Agreement as if such
representations and warranties had been set forth in full in this Notice of
Exchange.
Dated:
--------------------------
------------------------------------
Name of Limited Partner (Please Print)
Signature guaranteed by:
------------------------------------
(Signature of Limited Partner)
------------------------------------
(Street Address)
------------------------------------
(City) (State) (Zip Code)
If REIT Stock is to be issued, issue to:
Name:
-----------------------------
Limited Partner's social security or
tax identification number: ___________
F-11
128
EXHIBIT G
Assignment and Assumption of Lease
See attached copy
129
EXHIBIT G
ASSIGNMENT AND ASSUMPTION OF LEASE
THIS ASSIGNMENT AND ASSUMPTION OF LEASE (this "Assignment") is
made as of the _____ day of May, 1997 by and between MAITLAND PROPERTY
INVESTORS, LTD., a Florida limited partnership, having an address at 000 Xxxx
00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx ("Assignor"), and TOWER REALTY OPERATING
PARTNERSHIP, L.P., a Delaware limited partnership, having an address at 000
Xxxx 00xx Xxxxxx Xxx Xxxx, Xxx Xxxx ("Assignee").
FOR GOOD AND VALUABLE CONSIDERATION paid by Assignee to
Assignor, the receipt and sufficiency of which is hereby acknowledged, Assignor
hereby assigns, transfers, sets over and otherwise conveys to Assignee, its
successors and assigns, all of Assignor's right, title and interest in and to
that certain lease dated as of March 9, 1984 between Assignor and Maitland
Associates, Ltd., recorded August 3, 1984 in Official Records Book 4048, page
2422 and Official Records Book 4357, page 4877, in the Public Records of Orange
County, Florida (as amended, the "Lease"). A description of the real property
encumbered by the Lease is attached hereto as Exhibit A.
Assignee hereby accepts the foregoing assignment of the Lease
and agrees to assume, fulfill, perform and discharge all the various
commitments, obligations and liabilities of Assignor arising under and by
virtue of the Lease from and after the date hereof.
This Assignment shall inure to the benefit of and be binding
upon the parties hereto and their respective successors and assigns.
Assignee agrees to indemnify and hold Assignor harmless from
and against any and all claims, losses, suits, damages, costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Assignor
relating to the Lease arising from and after the date hereof.
Assignor agrees to indemnify and hold Assignee harmless from
and against any and all claims, losses, suits, damages, costs and expenses
(including reasonable attorneys' fees and disbursements) incurred by Assignee
relating to the Lease arising before the date hereof.
WITNESS the following signatures.
WITNESS: ASSIGNOR:
MAITLAND PROPERTY INVESTORS, LTD.
---------------------------------- By: Lake Success Realty Investors,
Print Name: Inc., its general partner
By:
---------------------------------- --------------------------------
Print Name: Xxxxxxxx X. Xxxxxxx
ASSIGNEE:
TOWER REALTY OPERATING PARTNERSHIP, L.P.
----------------------------------
Print Name:
By: Tower Realty Trust, Inc., general
partner
---------------------------------- By:
Print Name: ---------------------------------
Xxxxxxxx X. Xxxxxxx
President
X-0
000
XXXXX XX XXX XXXX )
) ss.
COUNTY OF NEW YORK )
I hereby certify that on this day, before me an officer duly
authorized to administer oaths and take acknowledgements, personally appeared
Xxxxxxxx X. Xxxxxxx, know to me to be the President of Tower Realty Trust,
Inc., the general partner of the partnership in whose name the foregoing
instrument was executed, and that he severally acknowledged the same for such
corporation on behalf of said partnership, freely and voluntarily under
authority duly vested in him by said corporation and said partnership, that I
relied upon the following form of identification of the above-named person:
_________________ and that an oath (was)(was not) taken.
Witnesseth my hand and official seal in the County and State
last aforesaid this _______ day of __________, A.D. 1997.
---------------------------------------
Notary Public
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
I hereby certify that on this day, before me an officer duly
authorized to administer oaths and take acknowledgements, personally appeared
Xxxxxxxx X. Xxxxxxx, know to me to be the ___________ of Lake Success Realty
Investors, Inc., the general partner of Maitland Property Investors, Ltd., the
partnership in whose name the foregoing instrument was executed, and that he
severally acknowledged the same for such partnership, freely and voluntarily
under authority duly vested in him by said partnership, and that I relied upon
the following form of identification of the above-named person:
_________________ and that an oath (was)(was not) taken.
Witnesseth my hand and official seal in the County and State
last aforesaid this _______ day of __________, A.D. 1997.
---------------------------------------
Notary Public
G-2
131
EXHIBIT A
LEGAL DESCRIPTION
See attached two (2) pages.
G-3
132
Exhibit A
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
LEGAL DESCRIPTION
A portion of the Northeast 1/4 of the Southeast 1/4, Section 27, Township 21
South, Range 29 East; and Tract 10A Maitland Center Section Two as recorded in
Plat Book 10, Pages 76 and 77 of the Public Records of Orange County, Florida;
all lying in the City of Maitland, Orange County, Florida, and being more
particularly described as follows:
Begin at the Southeast corner of Tract 10A; thence S. 89 degrees 41'
55" W. along the South line of said Tract 10A, for 932.11 feet; thence continue
S. 89 degrees 41' 55" W. along the South line of the Northeast 1/4 of the
Southeast 1/4 of said Section 27 for 362.73 feet to the East right-of-way line
of Xxxxxx Road, being 30.00 feet Easterly of and parallel with the West line of
the Northeast 1/4 of the Southeast 1/4 of said Section 27; thence N. 00 degrees
10' 58" W. along said East right-of-way line for 869.86 feet to an intersection
with the Westerly prolongation of a curve concave Northeasterly and lying along
the North right-of-way line of Lake Lucien Drive, a radial line to said
intersection bearing S. 37 degrees 24' 32" W.; thence Southeasterly along the
arc of said curve, having a radius of 2034.86 feet through a central angle of
13 degrees 03' 44" for 463.91 feet to a point on the Westerly termination of
said Lake Lucien Drive; thence S. 24' 20" 48" W. along said Westerly
termination of said Lake Lucien Drive for 7.15 feet to a point on a curve
concave Easterly; thence Southwesterly along the arc of said curve, having a
radius of 50.00 feet; through a central angle of 81 degrees 04' 45", for 70.76
feet to a point on the said Westerly termination of said Lake Lucien Drive, a
radial line to said point bearing S. 73 degrees 48' 25" W.; thence S. 24
degrees 20' 48" W. for 7.85 feet to a point on a curve concave Northeasterly
and lying along the South right-of-way line of said Lake Lucien Drive, a radial
line to said point bearing S. 24 degrees 20' 48" W.; thence Southeasterly along
the arc of said curve, having a radius of 2114.86 feet, through a central angle
of 00 degrees 13' 44" for 8.45 feet to a point on a curve concave
Northeasterly, a radial line to said point bearing S. 24 degrees 07' 04" W.;
thence Southeasterly along the arc of said curve, having a radius of 50.00
feet, through a central angle of 63 degrees 43' 10", for 55.61 feet to a point
of reverse curvature of a curve concave Southwesterly; thence Southeasterly
along the arc of said curve, having a radius of 50.00 feet; through a central
angle of 25 degrees 15' 32", for 22.04 feet to a point of compound curvature of
a curve concave Northeasterly and lying along the South right-of-way of
said Lake Lucien Drive, a radial line to said point bearing N. 22 degrees 07'
08" E.; thence Southeasterly along the arc of 09" for 649.11 feet to the point
of reverse curvature of a curve concave Southerly and lying along said South
right-of-way line of said Lake Lucien Drive; thence Southeasterly along the arc
of said curve, having a radius of 841.47 feet and a central angle of 15 degrees
56' 41" for 234.17 feet to the East line of said Tract 10A, thence S. 00
degrees 07' 19" E. along said East line of Tract 10A for 320.59 feet to the
Point of Beginning.
Less the following:
The West 392.70 feet of the South 869.86 feet of the NE 1/4 of the SE 1/4 of
Section 27, township 21 South, Range 29 East, Orange County, Florida, lying
East of and within 45 feet of the survey line of Xxxxxx Road, Section 750.11,
between survey Stations 6+500.00 and 5+00.00; said survey line and said
Stations being located and described as follows:
Begin on the West line of the NE 1/4 of the SE 1/4 of Section 27, Township 21
South, Range 29 East, at a point 609.12 feet South 0 degrees 10' 12" East of
the Northwest corner of said NE 1/4 of SE 1/4; at Station 6+50; thence continue
South 0 degrees 10' 12" East a distance of 150 feet to survey Station 5+00.00;
being 556.65 feet North 0 degrees 10' 12" West of the Southwest corner of the
NE 1/4 of the SE 1/4 of said
133
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
Section 27 for the end of this described survey line.
AND
All rights of access, ingress, egress, light, air and view between the South
869.80 feet of the NE 1/4 of the SE 1/4 of said Section 27, and Xxxxxx Road
along the following described line:
Commence on the West line of the NE 1/4 of the SE 1/4 of said Section 27, at a
point 446.20 feet South 0 degrees 10' 12" East of the Northwest corner of the
said NE 1/4 of the SE 1/4; thence run North 89 degrees 58' 48" East a distance
of 30 feet to the East right of way line of Xxxxxx Road for the Point of
Beginning, thence run South 0 degrees 10' 12" East a distance of 162.92 feet,
thence run North 89 degrees 58' 48" East a distance of 15 feet, thence run
South 0 degrees 10' 12" East a distance of 150 feet, thence run South 89
degrees 58' 48" West a distance of 15 feet to the existing East right of way
line of said Xxxxxx Road for the end of this described access line.
END OF LEGAL DESCRIPTION
134
EXHIBIT H
Omnibus Assignment and Xxxx of Sale
See attached copy
135
EXHIBIT H
OMNIBUS ASSIGNMENT AND XXXX OF SALE
KNOW ALL PERSONS BY THESE PRESENTS, that for good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
MAITLAND PROPERTY INVESTORS, LTD., a Florida limited partnership ("Assignor"),
does hereby convey, sell, grant, assign, transfer, set over and deliver to
TOWER REALTY OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, its
successors and assigns ("Assignee"):
all of Assignor's right, title and interest in, to and under those certain
space leases, security deposits, service, supply, security, maintenance,
employment and all other agreements, licenses and contracts, all certificates
of occupancy and other documents, permits, warranties, guarantees and approvals
and all the fixtures, furniture, furnishings, equipment and other personal
property owned by Assignor (collectively, the "Transferred Property"), if any,
used in connection with and/or relating to the real property described on
Exhibit A attached hereto and made a part hereof, effective as of the date
hereof. The aforesaid space leases are more particularly described on Exhibit
B attached hereto and made a part hereof.
TO HAVE AND TO HOLD said Transferred Property unto Assignee
forever.
The foregoing assignment is made without representation or
warranty or recourse, express or implied.
This Assignment shall be binding upon Assignor and upon
Assignor's respective successors and assigns and shall inure to the benefit of
Assignee and its successors and assigns.
Assignor further covenants and agrees to execute and deliver
to Assignee all such further and separate assignments, agreements, conveyances,
deeds and other instruments as Assignee may at any time reasonably request to
better secure to it title to the Transferred Property and the right, title and
interest of Assignor therein or thereto.
IN WITNESS WHEREOF, Assignor has duly executed this Omnibus
Assignment and Xxxx of Sale as of the ____ day of _______, 1997.
ASSIGNOR:
MAITLAND PROPERTY INVESTORS, LTD.
By: Lake Success Realty Investors, Inc., its
general partner
By:
------------------------------------------
Xxxxxxxx X. Xxxxxxx
H-1
136
Exhibit A
(Legal Description)
See attached two (2) pages.
H-2
137
Exhibit A
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
LEGAL DESCRIPTION
A portion of the Northeast 1/4 of the Southeast 1/4, Section 27, Township 21
South, Range 29 East; and Tract 10A Maitland Center Section Two as recorded in
Plat Book 10, Pages 76 and 77 of the Public Records of Orange County, Florida;
all lying in the City of Maitland, Orange County, Florida, and being more
particularly described as follows:
Begin at the Southeast corner of Tract 10A; thence S. 89 degrees 41'
55" W. along the South line of said Tract 10A, for 932.11 feet; thence continue
S. 89 degrees 41' 55" W. along the South line of the Northeast 1/4 of the
Southeast 1/4 of said Section 27 for 362.73 feet to the East right-of-way line
of Xxxxxx Road, being 30.00 feet Easterly of and parallel with the West line of
the Northeast 1/4 of the Southeast 1/4 of said Section 27; thence N. 00 degrees
10' 58" W. along said East right-of-way line for 869.86 feet to an intersection
with the Westerly prolongation of a curve concave Northeasterly and lying along
the North right-of-way line of Lake Lucien Drive, a radial line to said
intersection bearing S. 37 degrees 24' 32" W.; thence Southeasterly along the
arc of said curve, having a radius of 2034.86 feet through a central angle of
13 degrees 03' 44" for 463.91 feet to a point on the Westerly termination of
said Lake Lucien Drive; thence S. 24' 20" 48" W. along said Westerly
termination of said Lake Lucien Drive for 7.15 feet to a point on a curve
concave Easterly; thence Southwesterly along the arc of said curve, having a
radius of 50.00 feet; through a central angle of 81 degrees 04' 45", for 70.76
feet to a point on the said Westerly termination of said Lake Lucien Drive, a
radial line to said point bearing S. 73 degrees 48' 25" W.; thence S. 24
degrees 20' 48" W. for 7.85 feet to a point on a curve concave Northeasterly
and lying along the South right-of-way line of said Lake Lucien Drive, a radial
line to said point bearing S. 24 degrees 20' 48" W.; thence Southeasterly along
the arc of said curve, having a radius of 2114.86 feet, through a central angle
of 00 degrees 13' 44" for 8.45 feet to a point on a curve concave
Northeasterly, a radial line to said point bearing S. 24 degrees 07' 04" W.;
thence Southeasterly along the arc of said curve, having a radius of 50.00
feet, through a central angle of 63 degrees 43' 10", for 55.61 feet to a point
of reverse curvature of a curve concave Southwesterly; thence Southeasterly
along the arc of said curve, having a radius of 50.00 feet; through a central
angle of 25 degrees 15' 32", for 22.04 feet to a point of compound curvature of
a curve concave Northeasterly and lying along the South right-of-way line of
said Lake Lucien Drive, a radial line to said point bearing N. 22 degrees 07'
08" E.; thence Southeasterly along the arc of said curve, having a radius of
2114.96 feet, through a central angle of 17 degrees 35' 09" for 649.11 feet to
the point of reverse curvature of a curve concave Southerly and lying along
said South right-of-way line of said Lake Lucien Drive; thence Southeasterly
along the arc of said curve, having a radius of 841.47 feet and a central angle
of 15 degrees 56' 41" for 234.17 feet to the East line of said Tract 10A,
thence S. 00 degrees 07' 19" E. along said East line of Tract 10A for 320.59
feet to the Point of Beginning.
Less the following:
The West 392.70 feet of the South 869.86 feet of the NE 1/4 of the SE 1/4 of
Section 27, township 21 South, Range 29 East, Orange County, Florida, lying
East of and within 45 feet of the survey line of Xxxxxx Road, Section 750.11,
between survey Stations 6+500.00 and 5+00.00; said survey line and said
Stations being located and described as follows:
Begin on the West line of the NE 1/4 of the SE 1/4 of Section 27, Township 21
South, Range 29 East, at a point 609.12 feet South 0 degrees 10' 12" East of
the Northwest corner of said NE 1/4 of SE 1/4; at Station 6+50; thence continue
South 0 degrees 10' 12" East a distance of 150 feet to survey Station 5+00.00;
being 556.65 feet North 0 degrees 10' 12" West of the Southwest corner of the
NE 1/4 of the SE 1/4 of said
138
Commitment No. 864-461405
Company File No. OR970820
Agent File No. 758-11
Section 27 for the end of this described survey line.
AND
All rights of access, ingress, egress, light, air and view between the South
869.86 feet of the NE 1/4 of the SE 1/4 of said Section 27, and Xxxxxx Road
along the following described line:
Commence on the West line of the NE 1/4 of the SE 1/4 of said Section 27, at a
point 446.20 feet South 0 degrees 10' 12" East of the Northwest corner of the
said NE 1/4 of the SE 1/4; thence run North 89 degrees 58' 48" East a distance
of 30 feet to the East right of way line of Xxxxxx Road for the Point of
Beginning, thence run South 0 degrees 10' 12" East a distance of 162.92 feet,
thence run North 89 degrees 58' 48" East a distance of 15 feet, thence run
South 0 degrees 10' 12" East a distance of 150 feet, thence run South 89
degrees 58' 48" West a distance of 15 feet to the existing East right of way
line of said Xxxxxx Road for the end of this described access line.
END OF LEGAL DESCRIPTION
139
Exhibit B
(List of Space Leases)
See attached ____ (_) pages.
H-5
140
EXHIBIT I
FIRPTA Certificate
See attached copy
141
EXHIBIT I
FIRPTA CERTIFICATE
Section 1445 of the Internal Revenue Code of 1986, as amended
(the "Code"), provides that a transferee of a U.S. real property interest must
withhold tax if the transferor is a foreign person. To inform the transferee
that withholding of tax is not required upon the disposition of a U.S. real
property interest by MAITLAND PROPERTY INVESTORS, LTD., a Florida limited
partnership ("Transferor"), Transferor hereby certifies to TOWER REALTY
OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, as follows:
1. Transferor is not a foreign person, foreign corporation,
foreign partnership, foreign trust, or foreign estate (as those terms are
defined in the Code and Treasury Regulations promulgated thereunder);
2. The U.S. employer identification number of Transferor is
00-0000000; and
3. Transferor's office address is 000 Xxxx 00xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx. Transferor understands that this certification may be
disclosed to the Internal Revenue Service by the transferee and that any false
statement contained herein could be punished by fine, imprisonment, or both.
Under penalties of perjury I declare that I have examined this
certification and to the best of my knowledge and belief it is true, correct,
and complete, and I further declare that I have authority to sign this document
on behalf of Transferor.
MAITLAND PROPERTY INVESTORS, LTD.
By: Lake Success Realty Investors, Inc., its
general partner
By:
-------------------------------------------
Xxxxxxxx X. Xxxxxxx
Dated as of , 1997
I-1