AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
AEGIS OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS
ARTICLE I
DEFINED TERMS................................................................ 1
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION.................................. 8
2.01 CONTINUATION...................................................... 8
2.02 NAME, OFFICE AND REGISTERED AGENT................................. 8
2.03 PARTNERS.......................................................... 9
2.04 TERM AND DISSOLUTION.............................................. 9
2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP....... 10
2.06 CERTIFICATES DESCRIBING PARTNERSHIP UNITS......................... 10
ARTICLE III
BUSINESS OF THE PARTNERSHIP.................................................. 10
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS........................................... 11
4.01 CAPITAL CONTRIBUTIONS............................................. 11
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS............................................. 11
4.03 ADDITIONAL FUNDING................................................ 13
4.04 CAPITAL ACCOUNTS.................................................. 14
4.05 PERCENTAGE INTERESTS.............................................. 14
4.06 NO INTEREST ON CONTRIBUTIONS...................................... 14
4.07 RETURN OF CAPITAL CONTRIBUTIONS................................... 14
4.08 NO THIRD PARTY BENEFICIARY........................................ 15
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS............................................ 15
5.01 ALLOCATION OF PROFIT AND LOSS..................................... 15
5.02 DISTRIBUTION OF CASH.............................................. 17
5.03 REIT DISTRIBUTION REQUIREMENTS.................................... 18
5.04 DISTRIBUTIONS IN KIND............................................. 18
5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS.................... 18
5.06 DISTRIBUTIONS UPON LIQUIDATION.................................... 19
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5.07 SUBSTANTIAL ECONOMIC EFFECT....................................... 19
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER................................................ 19
6.01 MANAGEMENT OF THE PARTNERSHIP..................................... 19
6.02 DELEGATION OF AUTHORITY........................................... 22
6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.................... 22
6.04 LIABILITY OF THE GENERAL PARTNER.................................. 24
6.05 REIMBURSEMENT OF GENERAL PARTNER.................................. 25
6.06 OUTSIDE ACTIVITIES................................................ 25
6.07 EMPLOYMENT OR RETENTION OF AFFILIATES............................. 26
6.08 GENERAL PARTNER PARTICIPATION..................................... 26
6.09 TITLE TO PARTNERSHIP ASSETS....................................... 26
6.10 MISCELLANEOUS..................................................... 27
ARTICLE VII
CHANGES IN GENERAL PARTNER................................................... 27
7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST............ 27
7.02 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL................... 29
7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER................................................... 30
7.04 REMOVAL OF A GENERAL PARTNER...................................... 30
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS...................................................... 31
8.01 MANAGEMENT OF THE PARTNERSHIP..................................... 31
8.02 POWER OF ATTORNEY................................................. 32
8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS....................... 32
8.04 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
AFFILIATE......................................................... 32
8.05 REDEMPTION RIGHT.................................................. 32
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS................................... 35
9.01 PURCHASE FOR INVESTMENT........................................... 35
9.02 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS......... 35
9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER........................... 37
9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS...................... 38
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9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER................................................... 38
9.06 JOINT OWNERSHIP OF INTERESTS...................................... 39
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS................................... 39
10.01 BOOKS AND RECORDS................................................. 39
10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS....................... 39
10.03 FISCAL AND TAXABLE YEAR........................................... 40
10.04 ANNUAL TAX INFORMATION AND REPORT................................. 40
10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS..... 40
10.06 REPORTS TO LIMITED PARTNERS....................................... 41
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER............................................... 41
ARTICLE XII
GENERAL PROVISIONS........................................................... 42
12.01 NOTICES........................................................... 42
12.02 SURVIVAL OF RIGHTS................................................ 42
12.03 ADDITIONAL DOCUMENTS.............................................. 42
12.04 SEVERABILITY...................................................... 42
12.05 ENTIRE AGREEMENT.................................................. 42
12.06 PRONOUNS AND PLURALS.............................................. 42
12.07 HEADINGS.......................................................... 42
12.08 COUNTERPARTS...................................................... 43
12.09 GOVERNING LAW..................................................... 43
EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Redemption Right
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AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
AEGIS OPERATING PARTNERSHIP, L.P.
RECITALS
AEGIS Operating Partnership, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the State of Delaware pursuant to a
Certificate of Limited Partnership filed with the Office of the Secretary of
State of the State of Delaware effective as of August __, 1997. This Amended
and Restated Agreement of Limited Partnership is entered into this ___ day of
______ 1997 among AEGIS Investment Trust, a Maryland real estate investment
trust (the "General Partner") and the Limited Partners set forth on Exhibit A
hereto, for the purpose of amending and restating the Limited Partnership
Agreement (the "Initial Agreement").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Initial Agreement to read in its entirety as follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings
specified below:
"ACT" means the Delaware Revised Uniform Limited Partnership Act, as it may
be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other than REIT
Shares issued in connection with a redemption pursuant to Section 8.05 hereof)
or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.02(a)(ii).
"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, trustees, officers or
employees of the General Partner, and any accounting and legal expenses of the
General Partner, which expenses, the Partners have agreed, are expenses of the
Partnership and not the General Partner, and (iii) to the extent not included in
clause (ii) above, REIT Expenses; PROVIDED, HOWEVER, that Administrative
Expenses shall not include any administrative costs and expenses incurred by the
General Partner that are attributable to Properties or partnership interests in
a Subsidiary Partnership that are owned by the General Partner directly.
"AFFILIATE" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 10% or more of the
outstanding capital stock, shares or equity interests of such Person, or
(iii) any officer, director, trustee, employee, partner or trustee of such
Person or any Person controlling, controlled by or under common control with
such Person (excluding trustees and persons serving in similar capacities who
are not otherwise an Affiliate of such Person). For the purposes of this
definition, "control" (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such Person,
through the ownership of voting securities or partnership interests or
otherwise.
"AGREED VALUE" means the fair market value of a Partner's non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner. The names and addresses of the Partners, number of Partnership
Units issued to each Partner, and the Agreed Value of non-cash Capital
Contributions as of the date of contribution is set forth on EXHIBIT A.
"AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership.
"CAPITAL ACCOUNT" has the meaning provided in Section 4.04 hereof.
"CAPITAL CONTRIBUTION" means the total amount of cash, cash equivalents,
and the Agreed Value of any Property or other asset contributed or agreed to be
contributed, as the context requires, to the Partnership by each Partner
pursuant to the terms of the Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.
"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the
Value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Redemption.
"CERTIFICATE" means any instrument or document that is required under the
laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed or sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for
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recording in the appropriate public offices in the State of Delaware or such
other jurisdiction to perfect or maintain the Partnership as a limited
partnership, to effect the admission, withdrawal, or substitution of any Partner
of the Partnership, or to protect the limited liability of the Limited Partners
as limited partners under the laws of the State of Delaware or such other
jurisdiction.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"CONVERSION FACTOR" means 1.0, PROVIDED THAT, (a) in the event that the
General Partner (i) declares or pays a dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator of
which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date; and (b) in the event that the
General Partner declares or pays a dividend or other distribution on its
outstanding REIT Shares (other than (A) cash dividends payable in the ordinary
course of the General Partner's business or (B) dividends payable in REIT Shares
that give rise to an adjustment in the Conversion Factor under subsection (a)
hereof) and the Value of the REIT Shares on the 20th trading day following the
record date ("Record Date") for such dividend or distribution (the
"Post-Distribution Value") is less than the Value of the REIT Shares on the
business day immediately preceding such Record Date (the "Pre-Distribution
Value"), then the Conversion Factor in effect after the Record Date shall be
adjusted by multiplying the Conversion Factor in effect prior to the Record Date
by a fraction, the numerator of which is the Pre-Distribution Value and the
denominator of which is the Post-Distribution Value, PROVIDED, HOWEVER, that no
adjustment shall be made if (x) with respect to any cash dividend or
distribution with respect to REIT Shares, the Partnership distributes with
respect to each Partnership Unit an amount equal to the amount of such dividend
or distribution multiplied by the Conversion Factor or (y) with respect to any
dividend or distribution of securities or property other than cash, the
Partnership distributes with respect to each Partnership Unit an amount of
securities or other property equal to the amount distributed with respect to
each REIT Share multiplied by the Conversion Ratio or a partnership interest or
other security readily convertible into such securities or other property. Any
adjustment to the Conversion Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event; PROVIDED, HOWEVER, that if the General Partner receives a Notice of
Redemption after the record date, but prior to the effective date of
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such dividend, distribution, subdivision or combination, the Conversion Factor
shall be determined as if the General Partner had received the Notice of
Redemption immediately prior to the record date for such dividend, distribution,
subdivision or combination.
"DECLARATION OF TRUST" means the Declaration of Trust of the General
Partner filed with the Maryland State Department of Assessments and Taxation, as
amended or restated from time to time.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, PROVIDED that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
"GENERAL PARTNER" means AEGIS Investment Trust, a Maryland real estate
investment trust, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the
General Partner that is a general partnership interest.
"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of
its status as the General Partner or a director, trustee, officer or employee of
the Partnership or the General Partner, and (ii) such other Persons (including
Affiliates of the General Partner or the Partnership) as the General Partner may
designate from time to time, in its sole and absolute discretion.
"INDEPENDENT TRUSTEE" means a trustee of the General Partner who is not an
officer or employee of the General Partner, any Affiliate of an officer or
employee or any Affiliate of (i) any lessee of any property of the General
Partner or any Subsidiary of the General Partner, (ii) any Subsidiary of the
General Partner, or (iii) any partnership that is an Affiliate of the General
Partner.
"LIMITED PARTNER" means any Person named as a Limited Partner on EXHIBIT A
attached hereto, and any Person who becomes a Substitute or Additional Limited
Partner, in such Person's capacity as a Limited Partner in the Partnership.
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"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"LOSS" has the meaning provided in Section 5.01(f) hereof.
"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right
substantially in the form attached as EXHIBIT B hereto.
"NYSE" means the New York Stock Exchange.
"OFFER" has the meaning set forth in Section 7.01(c) hereof.
"OFFERING" means the initial offer and sale by the General Partner and the
purchase by the Underwriters (as defined in the Prospectus) of REIT Shares for
sale to the public.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held
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.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its shareholders of some or all of its portion of
such distribution.
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"PARTNERSHIP UNIT" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on EXHIBIT A, as may be amended from
time to time.
"PERCENTAGE INTEREST" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on EXHIBIT A, as
may be amended from time to time.
"PERSON" means any individual, partnership, corporation, joint venture,
trust or other entity.
"PROFIT" has the meaning provided in Section 5.01(f) hereof.
"PROPERTY" means any loan, real property or other investment in which the
Partnership holds an ownership interest.
"PROSPECTUS" means the final prospectus delivered to purchasers of REIT
Shares in the Offering.
"REDEEMING PARTNER" has the meaning provided in Section 8.05(a) hereof.
"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares Amount,
as selected by the General Partner in its sole and absolute discretion pursuant
to Section 8.05(b) hereof.
"REDEMPTION RIGHT" has the meaning provided in Section 8.05(a) hereof.
"REGULATIONS" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through 860
of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the formation and
continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included
within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
trustee, officer, or employee of the General Partner, (ii) costs and expenses
relating to any public offering and registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including, without limitation,
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underwriting discounts and selling commissions applicable to any such offering
of securities, and any costs and expenses associated with any claims made by any
holders of such securities or any underwriters or placement agents thereof,
(iii) costs and expenses associated with any repurchase of any securities by the
General Partner, (iv) costs and expenses associated with the preparation and
filing of any periodic or other reports and communications by the General
Partner under federal, state or local laws or regulations, including filings
with the Commission, (v) costs and expenses associated with compliance by the
General Partner with laws, rules and regulations promulgated by any regulatory
body, including the Commission and any securities exchange, (vi) costs and
expenses associated with any 401(k) plan, incentive plan, bonus plan or other
plan providing for compensation for the employees of the General Partner, (vii)
costs and expenses incurred by the General Partner relating to any issuing or
redemption of Partnership Interests, and (viii) all other operating or
administrative costs of the General Partner incurred in the ordinary course of
its business on behalf of or in connection with the Partnership.
"REIT SHARE" means a common share of beneficial interest in the General
Partner (or successor Entity, as the case may be).
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the product of
the number of Partnership Units offered for redemption by a Redeeming Partner,
multiplied by the Conversion Factor as adjusted to and including the Specified
Redemption Date; PROVIDED THAT in the event the General Partner issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the "rights"), and the rights
have not expired at the Specified Redemption Date, then the REIT Shares Amount
shall also include the rights issuable to a holder of the REIT Shares Amount of
REIT Shares on the record date fixed for purposes of determining the holders of
REIT Shares entitled to rights.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SERVICE" means the Internal Revenue Service.
"SHARE INCENTIVE PLANS" means the AEGIS Investment Trust 1997 Incentive
Plan, as amended from time to time, or any stock incentive plan adopted in the
future by the General Partner.
"SPECIFIED REDEMPTION DATE" means (i) with respect any Notice of Redemption
received by the General Partner after one year following the closing of the
Offering and before one year and one month following the closing of Offering,
the first business day that is at least 30 calendar days after the receipt by
the General Partner of the Notice of Redemption and (ii) with respect any Notice
of Redemption received by the General Partner after one year and one month
following the closing of Offering, the first business day that is at least 15
calendar days after the receipt by the General Partner of the Notice of
Redemption.
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"SUBSIDIARY" means, with respect to any Person, any corporation or other
entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership of which the partnership
interests therein are owned by the General Partner or a wholly-owned subsidiary
of the General Partner.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.03 hereof.
"SURVIVING GENERAL PARTNER" has the meaning set forth in Section 7.01(d)
hereof.
"TRANSACTION" has the meaning set forth in Section 7.01(c) hereof.
"TRANSFER" has the meaning set forth in Section 9.02(a) hereof.
"VALUE" means, with respect to any security, the average of the daily
market price of such security for the ten consecutive trading days immediately
preceding the date of such valuation. The market price for each such trading
day shall be: (i) if security is listed or admitted to trading on any securities
exchange or the NYSE, the last reported sale price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, (ii) if security is not listed or
admitted to trading on any securities exchange or the NYSE 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 General Partner, or (iii) if
security is not listed or admitted to trading on any securities exchange or the
NYSE and no such last reported sale price or closing bid and asked prices are
available, the average of the reported high bid and low asked prices on such
day, as reported by a reliable quotation source designated by the General
Partner, or if there shall be no bid and asked prices on such day, the average
of the high bid and low asked prices, as so reported, on the most recent day
(not more than ten days prior to the date in question) for which prices have
been so reported; PROVIDED THAT if there are no bid and asked prices reported
during the ten days prior to the date in question, the value of the security
shall be determined by the General Partner acting in good faith on the basis of
such quotations and other information as it considers, in its reasonable
judgment, appropriate. In the event the security includes any additional
rights, then the value of such rights shall be determined by the General Partner
acting in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.
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ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01 CONTINUATION. The Partners hereby agree to continue the
Partnership pursuant to the Act and upon the terms and conditions set forth in
this Agreement.
2.02 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership is
AEGIS Operating Partnership, L.P. The specified office and place of business of
the Partnership shall be 0000 XxxxXxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx
00000. The General Partner may at any time change the location of such office,
PROVIDED the General Partner gives notice to the Partners of any such change.
The initial registered agent is [The Corporation Trust Company, Corporation
Trust Center, 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxx Xxxxxx Xxxxxx, Xxxxxxxx
00000]. The sole duty of the registered agent as such is to forward to the
Partnership any notice that is served on him as registered agent.
2.03 PARTNERS.
(a) The General Partner of the Partnership is AEGIS Investment
Trust, a Maryland real estate investment trust. Its principal place of business
is the same as that of the Partnership.
(b) The Limited Partners are those Persons identified as Limited
Partners on EXHIBIT A hereto, as amended from time to time.
2.04 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in full force and
effect until December 31, 2050, except that the Partnership shall be dissolved
upon the first to occur of any of the following events:
(i) The occurrence of an Event of Bankruptcy as to a
General Partner or the dissolution, death, removal or withdrawal of
a General Partner unless the business of the Partnership is
continued pursuant to Section 7.03(b) hereof; PROVIDED THAT if a
General Partner is on the date of such occurrence a partnership,
the dissolution of such General Partner as a result of the
dissolution, death, withdrawal, removal or Event of Bankruptcy of a
partner in such partnership shall not be an event of dissolution of
the Partnership if the business of such General Partner is
continued by the remaining partner or partners, either alone or
with additional partners, and such General Partner and such
partners comply with any other applicable requirements of this
Agreement;
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(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (PROVIDED THAT if the Partnership receives an
installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner
dissolved under the provisions of this Agreement, until such time
as such note or notes are paid in full); or
(iii) At any time after 13 months following the closing of
the Offering, the election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business of
the Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request of a
Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of such Limited Partner's interest in the Partnership,
including the number of Partnership Units owned and the Percentage Interest
represented by such Partnership Units as of the date of such certificate. Any
such certificate (i) shall be in form and substance as approved by the General
Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the
following effect:
This certificate is not negotiable. The Partnership
Units represented by this certificate are governed by
and transferable only in accordance with the provisions
of the Agreement of Limited Partnership of AEGIS
Operating Partnership, L.P., as amended from time to
time.
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ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act, PROVIDED, HOWEVER, that such business
shall be limited to and conducted in such a manner as to permit the General
Partner at all times to qualify as a REIT, unless the General Partner otherwise
ceases to qualify as a REIT, (ii) to enter into any partnership, joint venture
or other similar arrangement to engage in any of the foregoing or the ownership
of interests in any entity engaged in any of the foregoing and (iii) to do
anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting the General Partner's right in its sole and
absolute discretion to cease qualifying as a REIT, the Partners acknowledge that
the General Partner's current status as a REIT and the avoidance of income and
excise taxes on the General Partner inures to the benefit of all the Partners
and not solely to the General Partner. Notwithstanding the foregoing, the
Limited Partners agree that the General Partner may terminate its status as a
REIT under the Code at any time to the full extent permitted under its
Declaration of Trust. The General Partner shall also be empowered to do any and
all acts and things necessary or prudent to ensure that the Partnership will not
be classified as a "publicly traded partnership" for purposes of Section 7704 of
the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 CAPITAL CONTRIBUTIONS. The General Partner and the Limited
Partners have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on EXHIBIT A, as amended
from time to time.
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in this Section 4.02 or in Section
4.03, the Partners shall have no right or obligation to make any additional
Capital Contributions or loans to the Partnership. The General Partner may
contribute additional capital to the Partnership, from time to time, and receive
additional Partnership Interests in respect thereof, in the manner contemplated
in this Section 4.02.
(a) ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(i) GENERAL. The General Partner is hereby authorized to
cause the Partnership to issue such additional Partnership Interests in the
form of Partnership Units for any Partnership purpose at any time or from
time to time, to the Partners (including the General Partner) or to other
Persons for such consideration and on such terms and conditions
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as shall be established by the General Partner in its sole and absolute
discretion, all without the approval of any Limited Partners. Any additional
Partnership Interests issued thereby may be issued in one or more classes, or
one or more series of any of such classes, with such designations, preferences
and relative, participating, optional or other special rights, powers and
duties, including rights, powers and duties senior to Limited Partnership
Interests, all as shall be determined by the General Partner in its sole and
absolute discretion and without the approval of any Limited Partner, subject to
Delaware law, including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; PROVIDED, HOWEVER, that no additional
Partnership Interests shall be issued to the General Partner unless:
(1)(A) the additional Partnership Interests are issued in
connection with an issuance of REIT Shares of or other interests in
the General Partner, which shares or interests have designations,
preferences and other rights, all such that the economic interests are
substantially similar to the designations, preferences and other
rights of the additional Partnership Interests issued to the General
Partner by the Partnership in accordance with this Section 4.02 and
(B) the General Partner shall make a Capital Contribution to the
Partnership in an amount equal to the proceeds raised in connection
with the issuance of such shares of stock of or other interests in the
General Partner;
(2) the additional Partnership Interests are issued in
exchange for property owned by the General Partner with a fair market
value, as determined by the General Partner, in good faith, equal to
the value of the Partnership Interests; or
(3) the additional Partnership Interests are issued to all Partners
in proportion to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such issuance
is in the best interests of the General Partner and the Partnership.
(ii) UPON ISSUANCE OF ADDITIONAL SECURITIES. The General
Partner shall not issue any additional REIT Shares (other than REIT Shares
issued in connection with a redemption pursuant to Section 8.05 hereof) or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase REIT Shares (collectively, "Additional
Securities") other than to all holders of REIT Shares, unless (A) the General
Partner shall cause the Partnership to issue to the General Partner Partnership
Interests or rights, options, warrants or convertible or exchangeable securities
of the
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Partnership having designations, preferences and other rights, all such that the
economic interests are substantially similar to those of the Additional
Securities, and (B) the General Partner contributes the proceeds from the
issuance of such Additional Securities and from any exercise of rights contained
in such Additional Securities to the Partnership; PROVIDED, HOWEVER, that the
General Partner is allowed to issue Additional Securities in connection with an
acquisition of a property to be held directly by the General Partner, but if and
only if, such direct acquisition and issuance of Additional Securities have been
approved and determined to be in the best interests of the General Partner and
the Partnership by a majority of the Independent Trustees. Without limiting the
foregoing, the General Partner is expressly authorized to issue Additional
Securities for less than fair market value, and to cause the Partnership to
issue to the General Partner corresponding Partnership Interests, so long as (x)
the General Partner concludes in good faith that such issuance is in the best
interests of the General Partner and the Partnership, including without
limitation, the issuance of REIT Shares and corresponding Partnership Units
pursuant to an employee share purchase plan providing for employee purchases of
REIT Shares at a discount from fair market value or employee stock options that
have an exercise price that is less than the fair market value of the REIT
Shares, either at the time of issuance or at the time of exercise, and (y) the
General Partner contributes all proceeds from such issuance to the Partnership.
For example, in the event the General Partner issues REIT Shares for a cash
purchase price and contributes all of the proceeds of such issuance to the
Partnership as required hereunder, the General Partner shall be issued a number
of additional Partnership Units equal to the product of (A) the number of such
REIT Shares issued by the General Partner, the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of which is 100%, and
the denominator of which is the Conversion Factor in effect on the date of such
contribution.
(b) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE OF REIT
SHARES. In connection with any and all issuances of REIT Shares, the General
Partner shall make Capital Contributions to the Partnership of the proceeds
therefrom, PROVIDED THAT if the proceeds actually received and contributed by
the General Partner, are less than the gross proceeds of such issuance as a
result of any underwriter's discount or other expenses paid or incurred in
connection with such issuance, then the General Partner shall be deemed to have
made Capital Contributions to the Partnership in the aggregate amount of the
gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such offering expenses in accordance with Section
6.05 hereof and in connection with the required issuance of additional
Partnership Units to the General Partner for such Capital Contributions pursuant
to Section 4.02(a) hereof.
(c) If the General Partner shall repurchase shares of any class of
the General Partner's capital stock, the purchase price thereof and all costs
incurred in connection with such repurchase shall be reimbursed to the General
Partner by the Partnership pursuant to Section 6.05 hereof and the General
Partner shall cause the Partnership to cancel a number of Partnership Interests
of the appropriate class held by the General Partner equal to the quotient
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of the number of such shares of the General Partner's capital stock divided by
the Conversion Factor.
4.03 ADDITIONAL FUNDING. If the General Partner determines that it is
in the best interests of the Partnership to provide for additional Partnership
funds ("Additional Funds") for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner provide such Additional Funds to the
Partnership through loans or otherwise.
4.04 CAPITAL ACCOUNTS. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner
acquires an additional Partnership Interest in exchange for more than a DE
MINIMIS Capital Contribution, (ii) the Partnership distributes to a Partner more
than a DE MINIMIS amount of Partnership property as consideration for a
Partnership Interest, or (iii) the Partnership is liquidated within the meaning
of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue
the property of the Partnership to its fair market value (as determined by the
General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the
General Partner, the Capital Accounts of the Partners shall be adjusted in
accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which
generally require such Capital Accounts to be adjusted to reflect the manner in
which the unrealized gain or loss inherent in such property (that has not been
reflected in the Capital Accounts previously) would be allocated among the
Partners pursuant to Section 5.01 if there were a taxable disposition of such
property for its fair market value (as determined by the General Partner, in its
sole and absolute discretion, and taking into account Section 7701(g) of the
Code) on the date of the revaluation.
4.05 PERCENTAGE INTERESTS. If the number of outstanding Partnership
Units increases or decreases during a taxable year, each Partner's Percentage
Interest shall be adjusted by the General Partner effective as of the effective
date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profits and Losses for the taxable year in which the adjustment occurs
shall be allocated between the part of the year ending on the day when the
Partnership's property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
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4.06 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to
interest on its Capital Contribution.
4.07 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08 NO THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation 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. None of the rights or obligations of the Partners
herein set forth to make Capital Contributions or loans to the Partnership shall
be deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) GENERAL. Profit and Loss of the Partnership for each fiscal
year of the Partnership shall be allocated among the Partners in accordance with
their respective Percentage Interests.
(b) MINIMUM GAIN CHARGEBACK. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a "nonrecourse deduction"
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated in
accordance with the Partners' respective Percentage Interests, (ii) any expense
of the Partnership that is a "partner
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nonrecourse deduction" within the meaning of Regulations Section 1.704-2(i)(2)
shall be allocated to the Partner that bears the "economic risk of loss" of such
deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there
is a net decrease in Partnership Minimum Gain within the meaning of Regulations
Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the
exceptions set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5),
items of gain and income shall be allocated among the Partners in accordance
with Regulations Section 1.704-2(f) and the ordering rules contained in
Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain within the meaning of Regulations Section
1.704-2(i)(4) for any Partnership taxable year, then, subject to the exceptions
set forth in Regulations Section 1.704(2)(g), items of gain and income shall be
allocated among the Partners in accordance with Regulations Section
1.704-2(i)(4) and the ordering rules contained in Regulations Section
1.704-2(j). A Partner's "interest in partnership profits" for purposes of
determining its share of the nonrecourse liabilities of the Partnership within
the meaning of Regulations Section 1.752-3(a)(3) shall be such Partner's
Percentage Interest.
(c) QUALIFIED INCOME OFFSET. If a Partner receives in any taxable
year an adjustment, allocation, or distribution described in subparagraphs (4),
(5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases
a deficit balance in such Partner's Capital Account that exceeds the sum of such
Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)
and 1.704-2(i), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount
and manner sufficient to eliminate such deficit Capital Account balance as
quickly as possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d).
After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(c), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner
in an amount necessary to offset the income or gain previously allocated to such
Partner under this Section 5.01(c).
(d) CAPITAL ACCOUNT DEFICITS. Loss shall not be allocated to a
Limited Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(d), to the extent permitted by
Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in an
amount necessary to offset the Loss previously allocated to each Partner under
this Section 5.01(d).
(e) ALLOCATIONS BETWEEN TRANSFEROR AND TRANSFEREE. If a Partner
transfers any part or all of its Partnership Interest, the distributive shares
of the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated
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between the transferor and the transferee Partner either (i) as if the
Partnership's fiscal year had ended on the date of the transfer, or (ii) based
on the number of days of such fiscal year that each was a Partner without regard
to the results of Partnership activities in the respective portions of such
fiscal year in which the transferor and the transferee were Partners. The
General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate the distributive shares of the various items of
Profit and Loss between the transferor and the transferee Partner.
(f) DEFINITION OF PROFIT AND LOSS. "Profit" and "Loss" and any
items of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.01(b), 5.01(c), or 5.01(d). All allocations of income,
Profit, gain, Loss, and expense (and all items contained therein) for federal
income tax purposes shall be identical to all allocations of such items set
forth in this Section 5.01, except as otherwise required by Section 704(c) of
the Code and Regulations Section 1.704-1(b)(4). The General Partner shall have
the authority to elect the method to be used by the Partnership for allocating
items of income, gain, and expense as required by Section 704(c) of the Code
including a method that may result in a Partner receiving a disproportionately
larger share of the Partnership tax depreciation deductions, and such election
shall be binding on all Partners.
5.02 DISTRIBUTION OF CASH.
(a) The Partnership shall distribute cash on a quarterly (or, at
the election of the General Partner, more frequent) basis, in an amount
determined by the General Partner in its sole and absolute discretion, to the
Partners who are Partners on the Partnership Record Date with respect to such
quarter (or other distribution period) in accordance with their respective
Percentage Interests on the Partnership Record Date; PROVIDED, HOWEVER, that if
a new or existing Partner acquires an additional Partnership Interest in
exchange for a Capital Contribution on any date other than a Partnership Record
Date, the cash distribution attributable to such additional Partnership Interest
relating to the Partnership Record Date next following the issuance of such
additional Partnership Interest shall be reduced in the proportion to (i) the
number of days that such additional Partnership Interest is held by such Partner
bears to (ii) the number of days between such Partnership Record Date and the
immediately preceding Partnership Record Date. The General Partner shall use
its reasonable discretion to distribute an amount of cash on a quarterly (or, at
the election of the General Partner, more frequent) basis so that each Limited
Partner receives under this Section 5.02, with respect to each quarter or more
frequent period, a cash amount equal in value to the aggregate cash dividends
that would have been payable to such Limited Partner in the event that such
Limited Partner owned REIT Shares equal in number to the REIT Shares Amount
during such period of the Partnership (which REIT Shares Amount shall be
determined as if the Specified Redemption Date had occurred prior to the
dividends paid on any REIT Shares
- 17 -
during such period) reduced, as provided in the first sentence of this Section
5.02(a), to take into account cash distributions attributable to any Partnership
Interests acquired in exchange for a Capital Contribution on any date other than
a Partnership Record Date.
(b) Notwithstanding any other provision of this Agreement, the
General Partner is authorized to take any action that it determines to be
necessary or appropriate to cause the Partnership to comply with any withholding
requirements established under the Code or any other federal, state or local law
including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of
the Code. To the extent that the Partnership is required to withhold and pay
over to any taxing authority any amount resulting from the allocation or
distribution of income to the Partner or assignee (including by reason of
Section 1446 of the Code), either (i) if the actual amount to be distributed to
the Partner (the "Distributable Amount") equals or exceeds the amount required
to be withheld by the Partnership (the "Withheld Amount"), the Withheld Amount
withheld shall be treated as a distribution of cash in the amount of such
withholding to such Partner, or (ii) if the Distributable Amount is less than
the Withheld Amount no amount shall be distributed to the Partner, the
Distributable Amount shall be treated as a distribution of cash to such Partner,
and the excess of the Withheld Amount over the Distributable Amount shall be
treated as a loan (a "Partnership Loan") from the Partnership to the Partner on
the day the Partnership pays over such excess to a taxing authority. A
Partnership Loan may be repaid, at the election of the General Partner in its
sole discretion, either (i) through withholding by the Partnership with respect
to subsequent distributions to the applicable Partner or assignee, or (ii) at
any time more than 12 months after a Partnership Loan arises, by cancellation of
Partnership Units with a value equal to the unpaid balance of the Partnership
Loan (including accrued interest). Any amounts treated as a Partnership Loan
pursuant to this Section 5.02(b) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in THE WALL STREET JOURNAL (or an
equivalent successor publication), or (ii) the maximum lawful rate of interest
on such obligation, such interest to accrue from the date the Partnership is
deemed to extend the loan until such loan is repaid in full.
(c) In no event may a Partner receive a distribution of cash
with respect to a Partnership Unit if such Partner is entitled to receive a cash
dividend as the holder of record of a REIT Share for which all or part of such
Partnership Unit has been or will be redeemed.
5.03 REIT DISTRIBUTION REQUIREMENTS. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the General Partner to pay shareholder dividends that will allow the
General Partner to (i) meet its distribution requirement for qualification as a
REIT as set forth in Section 857 of the Code and (ii) avoid any federal income
or excise tax liability imposed by the Code.
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5.04 DISTRIBUTIONS IN KIND. (a) Subject to Subsection (b) hereof, no
Partner shall be entitled to demand property other than cash in connection with
any distributions by the Partnership.
(b) If the General Partner decides to securitize mortgage loans through
the issuance of collateralized mortgage obligations, the General Partner has the
right to redeem a portion of its Partnership Interest in exchange for the
mortgage loans to be securitized. The portion of a Partnership Interest
redeemed pursuant to this Section will be determined based on the fair market
value of the mortgage loans and/or leases distributed to the General Partner.
Such fair market value will be determined by the General Partner, but will be
subject to the review of the Independent Trustees.
5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding any
of the provisions of this Article V, no Partner shall have the right to receive
and the General Partner shall not have the right to make, a distribution that
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, the sum of all
Partnership liabilities, other than the liabilities to a Partner for the return
of his Capital Contribution, does not exceed the fair market value of the
Partnership's assets.
5.06 DISTRIBUTIONS UPON LIQUIDATION. Upon liquidation of the
Partnership, after payment of, or adequate provision for, debts and obligations
of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts
in accordance with their respective positive Capital Account balances. For
purposes of the preceding sentence, the Capital Account of each Partner shall be
determined after all adjustments made in accordance with Sections 5.01 and 5.02
resulting from Partnership operations and from all sales and dispositions of all
or any part of the Partnership's assets. Any distributions pursuant to this
Section 5.06 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). To the extent deemed advisable by the General Partner,
appropriate arrangements (including the use of a liquidating trust) may be made
to assure that adequate funds are available to pay any contingent debts or
obligations.
5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that
the allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
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ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 MANAGEMENT OF THE PARTNERSHIP.
(a) Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, lease and dispose of any
real property and any other property or assets including, but not
limited to notes and mortgages, that the General Partner determines
are necessary or appropriate or in the best interests of the
business of the Partnership;
(ii) to construct buildings and make other improvements on the
properties owned or leased by the Partnership;
(iii) to authorize, issue, sell, redeem or otherwise purchase
any Partnership Interests or any securities (including secured and
unsecured debt obligations of the Partnership, debt obligations of
the Partnership convertible into any class or series of Partnership
Interests, or options, rights, warrants or appreciation rights
relating to any Partnership Interests) of the Partnership;
(iv) to borrow or lend money for the Partnership, issue or
receive evidences of indebtedness in connection therewith,
refinance, increase the amount of, modify, amend or change the
terms of, or extend the time for the payment of, any such
indebtedness, and secure such indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership's assets;
(v) to pay, either directly or by reimbursement, for all
operating costs and general administrative expenses of the
Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement,
(vi) to guarantee or become a comaker of indebtedness of the
General Partner or any Subsidiary thereof, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time
for the payment of, any such guarantee or indebtedness, and secure
such guarantee or indebtedness by mortgage, deed of trust, pledge
or other lien on the Partnership's assets;
- 20 -
(vii) to use assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly
or by reimbursement, of all operating costs and general
administrative expenses of the General Partner, the Partnership or
any Subsidiary of either, to third parties or to the General
Partner as set forth in this Agreement;
(viii) to lease all or any portion of any of the Partnership's
assets, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion
of the Partnership's assets so leased are to be occupied by the
lessee, or, in turn, subleased in whole or in part to others, for
such consideration and on such terms as the General Partner may
determine;
(ix) to prosecute, defend, arbitrate, or compromise any and all
claims or liabilities in favor of or against the Partnership, on
such terms and in such manner as the General Partner may reasonably
determine, and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the Partnership's
assets; PROVIDED, HOWEVER, that the General Partner may not,
without the consent of all of the Partners, confess a judgment
against the Partnership that is in excess of $20,000 or is not
covered by insurance;
(x) to file applications, communicate, and otherwise deal with
any and all governmental agencies having jurisdiction over, or in
any way affecting, the Partnership's assets or any other aspect of
the Partnership business;
(xi) to make or revoke any election permitted or required of the
Partnership by any taxing authority;
(xii) to maintain such insurance coverage for public liability,
fire and casualty, and any and all other insurance for the
protection of the Partnership, for the conservation of Partnership
assets, or for any other purpose convenient or beneficial to the
Partnership, in such amounts and such types, as it shall determine
from time to time;
(xiii) to determine whether or not to apply any insurance
proceeds for any property to the restoration of such property or to
distribute the same;
(xiv) to establish one or more divisions of the Partnership, to
hire and dismiss employees of the Partnership or any division of
the Partnership, and to retain legal counsel, accountants,
consultants, real estate brokers, and such other persons, as the
General Partner may deem necessary or appropriate in
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connection with the Partnership business and to pay therefor such
reasonable remuneration as the General Partner may deem reasonable
and proper;
(xv) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xvi) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner;
(xvii) to maintain accurate accounting records and to file
promptly all federal, state and local income tax returns on behalf
of the Partnership;
(xviii) to distribute Partnership cash or other Partnership
assets in accordance with this Agreement;
(xix) to form or acquire an interest in, and contribute property
to, any further limited or general partnerships, joint ventures or
other relationships that it deems desirable (including, without
limitation, the acquisition of interests in, and the contributions
of property to, its Subsidiaries and any other Person in which it
has an equity interest from time to time);
(xx) to establish Partnership reserves for working capital,
capital expenditures, contingent liabilities, or any other valid
Partnership purpose; and
(xxi) to merge, consolidate or combine the Partnership with
or into another person (to the extent permitted by applicable law);
(xxii) to do any and all acts and things necessary or prudent
to ensure that the Partnership will not be classified as a
"publicly traded partnership" for purposes of Section 7704 of the
Code; and
(xxiii) to take such other action, execute, acknowledge, swear
to or deliver such other documents and instruments, and perform any
and all other acts that the General Partner deems necessary or
appropriate for the formation, continuation and conduct of the
business and affairs of the Partnership (including, without
limitation, all actions consistent with allowing the General
Partner at all times to qualify as a REIT unless the General
Partner voluntarily terminates its REIT status) and to possess and
enjoy all of the rights and powers of a general partner as provided
by the Act.
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(b) Except as otherwise provided herein, to the extent the duties
of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend its
individual funds for payment to third parties or to undertake any individual
liability or obligation on behalf of the Partnership.
6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person may, under supervision of the General Partner,
perform any acts or services for the Partnership as the General Partner may
approve.
6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a) The Partnership shall indemnify an Indemnitee from and against
any and all losses, claims, damages, liabilities, joint or several, expenses
(including reasonable legal fees and expenses), judgments, fines, settlements,
and other amounts arising from any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative, that relate to
the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that: (i) the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall
be made only out of the assets of the Partnership.
(b) The Partnership shall reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.03 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
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(c) The indemnification provided by this Section 6.03 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.
(d) The Partnership may purchase and maintain insurance, on behalf
of the Indemnitees and such other Persons as the General Partner shall
determine, against any liability that may be asserted against or expenses that
may be incurred by such Person in connection with the Partnership's activities,
regardless of whether the Partnership would have the power to indemnify such
Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall be
deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; 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 6.03; 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 the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or
in part under this Section 6.03 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) The provisions of this Section 6.03 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the General Partner
acted in good faith. The General Partner shall not be in breach of any duty
that the General Partner may owe to the Limited Partners or the Partnership or
any other Persons under this Agreement or of any duty stated or implied by law
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or equity provided the General Partner, acting in good faith, abides by the
terms of this Agreement.
(b) The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, the General Partner and the
General Partner's shareholders collectively, that the General Partner is under
no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the
tax consequences of same, but not all, of the Limited Partners) in deciding
whether to cause the Partnership to take (or decline to take) any actions. In
the event of a conflict between the interests of the shareholders of the General
Partner on one hand and the Limited Partners on the other, the General Partner
shall endeavor in good faith to resolve the conflict in a manner not adverse to
either the shareholders of the General Partner or the Limited Partners;
PROVIDED, HOWEVER, that for so long as the General Partner owns a controlling
interest in the Partnership, any such conflict that the General Partner, in its
sole and absolute discretion, determines cannot be resolved in a manner not
adverse to either the shareholders of the General Partner or the Limited
Partners shall be resolved in favor of the shareholders. 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.
(c) Subject to its obligations and duties as General Partner set
forth in Section 6.01 hereof, the General Partner may exercise any of the powers
granted to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.
(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 prevent the General Partner
from incurring any taxes under Section 857, Section 4981, or any other provision
of the Code, is expressly authorized under this Agreement and is deemed approved
by all of the Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.04 or
any provision hereof shall be prospective only and shall not in any way affect
the limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
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6.05 REIMBURSEMENT OF GENERAL PARTNER.
(a) Except as provided in this Section 6.05 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) In addition to the expenses that are directly attributable to
the Partnership, the REIT Expenses and Administrative Expenses shall be
obligations of the Partnership, and the Partnership shall pay the REIT Expenses
and Administrative Expenses. If any REIT Expenses or Administrative Expenses
are paid by the General Partner, the General Partner shall be reimbursed by the
Partnership therefor.
6.06 OUTSIDE ACTIVITIES. The Partners and any officer, director,
employee, agent, trustee, Affiliate, Subsidiary, or shareholder of any 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 substantially similar or identical to those of the
Partnership. Neither the Partnership nor any of the Limited Partners shall have
any rights by virtue of this Agreement in any such business ventures, interest
or activities. 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 such business ventures, interests or activities, and the General
Partner shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character
which, if presented to the Partnership or any Limited Partner, could be taken by
such Person.
6.07 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed or
retained by the Partnership and may otherwise deal with the Partnership (whether
as a buyer, lessor, lessee, manager, furnisher of goods or services, broker,
agent, lender or otherwise) and may receive from the Partnership any
compensation, price, or other payment therefor which the General Partner
determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries or
other Persons in which it has an equity investment, and such Persons may borrow
funds from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon
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such terms and subject to such conditions as the General Partner deems are
consistent with this Agreement and applicable law.
(d) 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 on terms that are fair and
reasonable to the Partnership.
6.08 GENERAL PARTNER PARTICIPATION. The General Partner agrees that all
business activities of the General Partner shall generally be conducted through
the Partnership or one or more Subsidiary Partnerships, unless otherwise
determined by the Independent Trustees.
6.09 TITLE TO PARTNERSHIP ASSETS. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; PROVIDED, HOWEVER, 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. 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.
6.10 MISCELLANEOUS. In the event the General Partner redeems any REIT
Shares, then the General Partner shall cause the Partnership to purchase from
the General Partner a number of Partnership Units as determined based on the
application of the Conversion Factor on the same terms that the General Partner
exchanged such REIT Shares. Moreover, if the General Partner makes a cash
tender offer or other offer to acquire REIT Shares, then the General Partner
shall cause the Partnership to make a corresponding offer to the General Partner
to acquire an equal number of Partnership Units held by the General Partner. In
the event any REIT Shares are exchanged by the General Partner pursuant to such
offer, the Partnership shall redeem an equivalent number of the General
Partner's Partnership Units for an equivalent purchase price based on the
application of the Conversion Factor.
ARTICLE VII
CHANGES IN GENERAL PARTNER
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7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) The General Partner shall not transfer all or any portion of
its General Partnership Interest or withdraw as General Partner except as
provided in or in connection with a transaction contemplated by Section 7.01(c),
(d) or (e).
(b) The General Partner agrees that its Percentage Interest will
at all times be at least 1%.
(c) Except as otherwise provided in Section 6.04(b) or Section
7.01(d) or (e) hereof, 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, (other than in connection with a change in the
General Partner's state of incorporation or organizational form) in each case
which results in a change of control of the General Partner (a "Transaction"),
unless:
(i) the consent of Limited Partners (other than the General
Partner or any Subsidiary) holding more than 50% of the Percentage
Interests of the Limited Partners (other than those held by the
General Partner or any Subsidiary) is obtained;
(ii) as a result of such Transaction all Limited Partners will
receive for each Partnership Unit an amount of cash, securities, or
other property equal to the product of the Conversion Factor and
the greatest amount of cash, securities or other property paid in
the Transaction to a holder of one REIT Share in consideration of
one REIT Share, 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 Shares, each holder of Partnership Units shall
be given the option to exchange its Partnership Units for the
greatest amount of cash, securities, or other property which a
Limited Partner would have received had it (A) exercised its
Redemption Right and (B) sold, tendered or exchanged pursuant to
the Offer the REIT Shares received upon exercise of the Redemption
Right immediately prior to the expiration of the Offer; or
(iii) the General Partner is the surviving entity in the
Transaction and either (A) the holders of REIT Shares do not
receive cash, securities, or other property in the Transaction or
(B) all Limited Partners (other than the General Partner or any
Subsidiary) receive an amount of cash, securities, or other
property (expressed as an amount per REIT Share) that is no less
than the product of the Conversion Factor and the greatest amount
of cash, securities, or other property (expressed as an amount per
REIT Share) received in the Transaction by any holder of REIT
Shares.
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(d) Notwithstanding Section 7.01(c), the General Partner may merge
with or into or consolidate with another entity if immediately after such merger
or consolidation (i) substantially all of the assets of the successor or
surviving entity (the "Survivor"), other than Partnership Units held by the
General Partner, are contributed, directly or indirectly, to the Partnership as
a Capital Contribution in exchange for Partnership Units with a fair market
value equal to the value of the assets so contributed as determined by the
Survivor in good faith and (ii) the Survivor expressly agrees to assume all
obligations of the General Partner hereunder. Upon such contribution and
assumption, the Survivor shall have the right and duty to amend this Agreement
as set forth in this Section 7.01(d). The Survivor shall in good faith arrive
at a new method for the calculation of the Cash Amount, the REIT Shares Amount
and Conversion Factor for a Partnership Unit after any such merger or
consolidation so as to approximate the existing method for such calculation as
closely as reasonably possible. 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 Shares or
options, warrants or other rights relating thereto, and to which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. 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 Conversion Factor. The Survivor also shall in good
faith modify the definition of REIT Shares and make such amendments to Section
8.05 hereof so as to approximate the existing rights and obligations set forth
in Section 8.05 as closely as reasonably possible. The above provisions of this
Section 7.01(d) shall similarly apply to successive mergers or consolidations
permitted hereunder.
In respect of any transaction described in the preceding Paragraph,
the General Partner is required to use its commercially reasonable efforts to
structure such transaction to avoid causing the Limited Partners to recognize a
gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, PROVIDED such efforts are consistent with the
exercise of the Board of Trustees' fiduciary duties to the shareholders of the
General Partner under applicable law.
(e) Notwithstanding Section 7.01(c),
(i) a General Partner may transfer all or any portion of its
General Partnership Interest to (A) a wholly-owned Subsidiary of
such General Partner or (B) the owner of all of the ownership
interests of such General Partner, and following a transfer of all
of its General Partnership Interest, may withdraw as General
Partner; and
(ii) the General Partner may engage in a transaction not
required by law or by the rules of any national securities exchange
on which the REIT Shares are listed to be submitted to the vote of
the holders of the REIT Shares.
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7.02 ADMISSION OF A SUBSTITUTE OR ADDITIONAL GENERAL PARTNER. A Person
shall be admitted as a substitute or additional General Partner of the
Partnership only if the following terms and conditions are satisfied:
(a) 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 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, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;
(b) 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
(c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any other
jurisdiction 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 (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.
7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the death,
withdrawal, removal or dissolution of a General Partner (except that, if a
General Partner is on the date of such occurrence a partnership, the withdrawal,
death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.02 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.
(b) Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such
- 30 -
occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to, or removal of a partner in, such partnership shall be deemed
not to be a dissolution of such General Partner if the business of such General
Partner is continued by the remaining partner or partners), the Limited
Partners, within 90 days after such occurrence, may elect to continue the
business of the Partnership for the balance of the term specified in Section
2.04 hereof by selecting, subject to Section 7.02 hereof and any other
provisions of this Agreement, a substitute General Partner by consent of a
majority in interest of the Limited Partners. If the Limited Partners elect to
continue the business of the Partnership and admit a substitute General Partner,
the relationship with the Partners and of any Person who has acquired an
interest of a Partner in the Partnership shall be governed by this Agreement.
7.04 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; PROVIDED, HOWEVER, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.
(b) If a General Partner has been removed pursuant to this Section
7.04 and the Partnership is continued pursuant to Section 7.03 hereof, such
General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.02
hereof. At the time of assignment, the removed General Partner shall be
entitled to receive from the substitute General Partner the fair market value of
the General Partnership Interest of such removed General Partner as reduced by
any damages caused to the Partnership by such General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General
Partner and a majority in interest of the Limited Partners within 10 days
following the removal of the General Partner. In the event that the parties are
unable to agree upon an appraiser, the removed General Partner and a majority in
interest of the Limited Partners each shall select an appraiser. Each such
appraiser shall complete an appraisal of the fair market value of the removed
General Partner's General Partnership Interest within 30 days of the General
Partner's removal, and the fair market value of the removed General Partner's
General Partnership Interest shall be the average of the two appraisals;
PROVIDED, HOWEVER, that if the higher appraisal exceeds the lower appraisal by
more than 20% of the amount of the lower appraisal, the two appraisers, no later
than 40 days after the removal of the General Partner, shall select a third
appraiser who shall complete an appraisal of the fair market value of the
removed General Partner's General Partnership Interest no later than 60 days
after the removal of the General Partner. In such case, the fair market value
of the removed General
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Partner's General Partnership Interest shall be the average of the two
appraisals closest in value.
(c) The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section 7.04(b), shall be
converted to that of a special Limited Partner; PROVIDED, HOWEVER, such removed
General Partner shall not have any rights to participate in the management and
affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead,
such removed General Partner shall receive and be entitled only to retain
distributions or allocations of such items that it would have been entitled to
receive in its capacity as General Partner, until the transfer is effective
pursuant to Section 7.04(b).
(d) All Partners shall have given and hereby do give such
consents, shall take such actions and shall execute such documents as shall be
legally necessary and sufficient to effect all the foregoing provisions of this
Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
8.02 POWER OF ATTORNEY. Each Limited Partner hereby irrevocably appoints
the General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of its Partnership Interest.
8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner
shall be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of its Capital Contribution, if any, as and when due hereunder. After
its Capital Contribution is fully paid, no Limited Partner
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shall, except as otherwise required by the Act, be required to make any further
Capital Contributions or other payments or lend any funds to the Partnership.
8.04 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
AFFILIATE. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05 REDEMPTION RIGHT.
(a) Subject to Sections 8.05(b), 8.05(c), 8.05(d) and 8.05(e) and
the provisions of any agreements between the Partnership and one or more Limited
Partners with respect to Partnership Units held by them, on or after the date
which is one year after the closing of the Offering, each Limited Partner, other
than the General Partner, shall have the right (the "Redemption Right") to
require the Partnership to redeem on a Specified Redemption Date all or a
portion of the Partnership Units held by such Limited Partner at a redemption
price equal to and in the form of the Cash Amount to be paid by the Partnership.
The Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the Limited
Partner who is exercising the Redemption Right (the "Redeeming Partner");
PROVIDED, HOWEVER, that the Partnership shall not be obligated to satisfy such
Redemption Right if the Company and/or the General Partner elects to purchase,
and does purchase, the Partnership Units subject to the Notice of Redemption
pursuant to Section 8.05(b); and PROVIDED, FURTHER, that no Limited Partner may
deliver more than two Notices of Redemption during each calendar year. A
Limited Partner may not exercise the Redemption Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Redeeming Partner
shall have no right, with respect to any Partnership Units so redeemed, to
receive any distribution paid with respect to Partnership Units if the record
date for such distribution is on or after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 8.05(a), a Limited
Partner that exercises the Redemption Right shall be deemed to have offered to
sell the Partnership Units described in the Notice of Redemption to the General
Partner, and the General Partner may, in its sole and absolute discretion, elect
to purchase directly and acquire such Partnership Units by paying to the
Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected
by the General Partner (in its sole and absolute discretion), on the Specified
Redemption Date, whereupon the General Partner shall acquire for the Cash Amount
or the REIT Shares Amount, as determined by the General Partner (as set forth
above), the Partnership Units offered for redemption by the Redeeming Partner
and shall be treated for all
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purposes of this Agreement as the owner of such Partnership Units. If the
General Partner shall elect to exercise its right to purchase Partnership Units
under this Section 8.05(b) with respect to a Notice of Redemption, it shall so
notify the Redeeming Partner within five business days after the receipt by the
General Partner of such Notice of Redemption. Unless the General Partner (in
its sole and absolute discretion) shall exercise its right to purchase
Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b),
the General Partner shall have no obligation to the Redeeming Partner or the
Partnership with respect to the Redeeming Partner's exercise of the Redemption
Right. In the event the General Partner shall exercise its right to purchase,
and does purchase, Partnership Units with respect to the exercise of a
Redemption Right in the manner described in the first sentence of this
Section 8.05(b), the Partnership shall have no obligation to pay any amount to
the Redeeming Partner with respect to such Redeeming Partner's exercise of such
Redemption Right, and each of the Redeeming Partner, the Partnership, and the
General Partner shall treat the transaction between the General Partner and the
Redeeming Partner for federal income tax purposes as a sale of the Redeeming
Partner's Partnership Units to the General Partner. Each Redeeming Partner
agrees to execute such documents as the General Partner may reasonably require
in connection with the issuance of REIT Shares upon exercise of the Redemption
Right.
(c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b),
a Redeeming Partner shall be paid the Cash Amount if the delivery of REIT Shares
to such Partner on the Specified Redemption Date by the General Partner pursuant
to Section 8.05(b) (regardless of whether or not the General Partner would in
fact exercise its rights under Section 8.05(b)) would (i) result in such Partner
or any other person owning, directly or indirectly, REIT Shares in excess of the
Ownership Limitation (as defined in the Declaration of Trust) and calculated in
accordance therewith, except as provided in the Amended and Restated Articles of
Incorporation, (ii) result in REIT Shares being owned by fewer than 100 persons
(determined without reference to any rules of attribution), except as provided
in the Declaration of Trust, (iii) result in the General Partner being "closely
held" within the meaning of Section 856(h) of the Code, (iv) cause the General
Partner to own, directly or constructively, 10% or more of the ownership
interests in a tenant of the General Partner's, the Partnership's, or a
Subsidiary Partnership's, real property, within the meaning of Section
856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such
Partner to be "integrated" with any other distribution of REIT Shares for
purposes of complying with the registration provisions of the Securities Act of
1933, as amended (the "Securities Act").
(d) Any REIT Shares Amounts to be paid to a Redeeming Partner
pursuant to this Section 8.05 shall be paid on the Specified Redemption Date.
Any Cash Amount to be paid to a Redeeming Partner pursuant to this Section 8.05
shall be paid on the Specified Redemption Date; PROVIDED, HOWEVER, that, if the
Notice of Redemption is received by the General Partner after 13 months
following the closing of the Offering and if the Cash Amount is to be paid, the
General Partner may elect to cause the Specified Redemption Date to be delayed
for up to an additional 30 calendar days by providing notice to the Redeeming
Partner. If the General Partner elects to cause the Specified Redemption Date
to be delayed, the
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General Partner shall pay the Redeeming Partner interest for the period of the
delay at a rate equal to (i) 3-month LIBOR plus (ii) 250 basis points. For this
purpose, LIBOR shall mean "ISD-LIBOR-ISDA" as that term is defined in the 1991
ISDA Definitions published by the International Swap Dealers Association, Inc.
Notwithstanding the foregoing, the General Partner agrees to use its best
efforts to cause the closing of the acquisition of redeemed Partnership Units
hereunder to occur as quickly as reasonably possible.
(e) Notwithstanding any other provision of this Agreement, after
13 months following the closing of the Offering, the General Partner shall place
appropriate restrictions on the ability of the Limited Partners to exercise
their Redemption Rights as and if deemed necessary to ensure that the
Partnership does not constitute a "publicly traded partnership" under section
7704 of the Code. If and when the General Partner determines that imposing such
restrictions is necessary, the General Partner shall give prompt written notice
thereof (a "Restriction Notice") to each of the Limited Partners, which notice
shall be accompanied by a copy of an opinion of counsel to the Partnership which
states that, in the opinion of such counsel, restrictions are necessary in order
to avoid the Partnership being treated as a "publicly traded partnership" under
section 7704 of the Code.
8.06 REGISTRATION. Subject to the terms of any agreement between the
General Partner and one or more Limited Partners with respect to Partnership
Units held by them:
(a) REGISTRATION OF THE COMMON STOCK. If the General Partner
elects to pay the REIT Shares Amount to a Redeeming Partner, the General Partner
shall register such REIT Shares (the "Redemption Shares") under the Securities
Act before such Redemption Shares are issued to the Redeeming Partner so that,
upon receipt of such Redemption Shares, the Redeeming Partner may sell, exchange
or otherwise transfer such Redemption Shares without restriction whether by law,
agreement or otherwise (except for restrictions to which all shareholders of the
General Partner are subject, such as the transfer restrictions contained in the
Declaration of Trust); provided that such Redemption Shares must be delivered no
later than the Specified Redemption Date.
(b) LISTING ON SECURITIES EXCHANGE. If the General Partner
shall list or maintain the listing of any shares of Common Stock on any
securities exchange or national market system, it will at its expense and as
necessary to permit the registration and sale of the Redemption Shares
hereunder, use its best efforts to list thereon, to maintain and, when
necessary, to increase such listing to include such Redemption Shares.
(c) REGISTRATION NOT REQUIRED. Notwithstanding the foregoing,
the General Partner shall not be required to file or maintain the effectiveness
of a registration statement relating to Redemption Shares after the first date
upon which, in the opinion of counsel to the General Partner, all of the
Redemption Shares covered thereby could be sold by the holders thereof in any
period of three months pursuant to Rule 144 under the Securities Act, or any
successor rule thereto.
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ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner hereby represents and warrants to the
General Partner and to the Partnership that the acquisition of his Partnership
Interests is made as a principal for his account for investment purposes only
and not with a view to the resale or distribution of such Partnership Interest.
(b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.
9.02 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a) Subject to the provisions of 9.02(b), (c) and (d), no Limited
Partner may offer, sell, assign, or otherwise transfer all or any portion of his
Limited Partnership Interest, or any of such Limited Partner's economic rights
as a Limited Partner, whether voluntarily or by operation of law or at judicial
sale or otherwise (collectively, a "Transfer") without the consent of the
General Partner, which consent may be granted or withheld in its sole and
absolute discretion. Any such purported transfer undertaken without such
consent shall be considered to be null and void AB INITIO and shall not be given
effect. The General Partner may require, as a condition of any Transfer to
which it consents, that the transferor assume all costs incurred by the
Partnership in connection therewith. A Transfer shall not include any pledge,
grant of a security interest in, or other hypothecation of all or any portion of
a Limited Partnership Interest.
(b) No Limited Partner may withdraw from the Partnership other
than as a result of a permitted Transfer (I.E., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
9.05 below) of all of his Partnership Units pursuant to this Article IX or
pursuant to a redemption of all of his Partnership Units pursuant to 8.05. Upon
the permitted Transfer or redemption of all of a Limited Partner's Partnership
Units, such Limited Partner shall cease to be a Limited Partner.
(c) Subject to 9.02(d), (e) and (f) below, a Limited Partner may
Transfer, with the consent of the General Partner, all or a portion of his
Partnership Units to (i) a spouse, a parent or parent's spouse, natural or
adopted descendant or descendants, spouse of such
- 36 -
descendant, or brother or sister, or a trust created by such Limited Partner for
the benefit of such Limited Partner and/or any such person(s), of which trust
such Limited Partner or any such person(s) is a trustee, (ii) a corporation, a
general partnership, a limited partnership, or a limited liability company
controlled by a Person or Persons named in (i) above, or (iii) if the Limited
Partner is an entity, its beneficial owners.
(d) No Limited Partner may effect a Transfer of its Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Limited Partnership Interest under the Securities Act of 1933, as amended,
or would otherwise violate any applicable federal or state securities or blue
sky law (including investment suitability standards).
(e) No Transfer by a Limited Partner of its Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the
opinion of legal counsel for the Partnership, it would adversely affect the
ability of the General Partner to continue to qualify as a REIT or subject the
General Partner to any additional taxes under Section 857 or Section 4981 of the
Code, or (iii) such transfer is effectuated through an "established securities
market" or a "secondary market (or the substantial equivalent thereof)" within
the meaning of Section 7704 of the Code.
(f) No transfer of any Partnership 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 or redeem for the Cash Amount
any Partnership Units in which a security interest is held simultaneously with
the time at which such lender would be deemed to be a partner in the Partnership
for purposes of allocating liabilities to such lender under Section 752 of the
Code.
(g) Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.
(h) Prior to the consummation of any Transfer under this
Article IX, the transferor and/or the transferee shall deliver to the General
Partner such opinions, certificates and other documents as the General Partner
shall request in connection with such Transfer.
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9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article IX, an
assignee of the Limited Partnership Interest of a Limited Partner (which shall
be understood to include any purchaser, transferee, donee, or other recipient of
any disposition of such Limited Partnership Interest) shall be deemed admitted
as a Limited Partner of the Partnership only with the consent of the General
Partner and upon the satisfactory completion of the following:
(i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a
counterpart or an amendment thereof, including a revised EXHIBIT A,
and such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a
Limited Partner.
(ii) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have been
signed, acknowledged and filed for record in accordance with the
Act.
(iii) The assignee shall have delivered a letter containing the
representation set forth in Section 9.01(a) hereof and the
agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or trust, the
assignee shall have provided the General Partner with evidence
satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and
provisions of this Agreement.
(v) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section 8.02
hereof.
(vi) The assignee shall have paid all legal fees and other
expenses of the Partnership and the General Partner and filing and
publication costs in connection with its substitution as a Limited
Partner.
(vii) The assignee has obtained the prior written consent of the
General Partner to its admission as a Substitute Limited Partner,
which consent may be given or denied in the exercise of the General
Partner's sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the
date
- 38 -
specified in the transfer documents or the date on which the General Partner has
received all necessary instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and making all official filings and publications. The Partnership
shall take all such action as promptly as practicable after the satisfaction of
the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.
9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.01 and 9.02 hereof,
except as required by operation of law, the Partnership shall not be obligated
for any purposes whatsoever to recognize the assignment by any Limited Partner
of its Partnership Interest until the Partnership has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited Partner's Limited Partnership Interest, but does not become a Substitute
Limited Partner and desires to make a further assignment of such Limited
Partnership Interest, shall be subject to all the provisions of this Article IX
to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of its Limited Partnership Interest.
9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term shall include, but not be limited to,
insanity) shall not cause the termination or dissolution of the Partnership, and
the business of the Partnership shall continue if an order for relief in a
bankruptcy proceeding is entered against a Limited Partner, the trustee or
receiver of his estate or, if he dies, his executor, administrator or trustee,
or, if he is finally adjudicated incompetent, his committee, guardian or
conservator, shall have the rights of such Limited Partner for the purpose of
settling or managing his estate property and such power as the bankrupt,
deceased or incompetent Limited Partner possessed to assign all or any part of
his Partnership Interest and to join with the assignee in satisfying conditions
precedent to the admission of the assignee as a Substitute Limited Partner.
9.06 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
PROVIDED that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; PROVIDED, HOWEVER, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership that
the actions of a single joint owner can bind both owners under the applicable
laws of the state of residence of such joint owners.
- 39 -
Upon the death of one owner of a Partnership Interest held in a joint tenancy
with a right of survivorship, the Partnership Interest shall become owned solely
by the survivor as a Limited Partner and not as an assignee. The Partnership
need not recognize the death of one of the owners of a jointly-held Partnership
Interest until it shall have received notice of such death. Upon notice to the
General Partner from either owner, the General Partner shall cause the
Partnership Interest to be divided into two equal Partnership Interests, which
shall thereafter be owned separately by each of the former owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports,
(d) copies of the Agreement and any financial statements of the Partnership for
the three most recent years and (e) all documents and information required under
the Act. Any Partner or its duly authorized representative, upon paying the
costs of collection, duplication and mailing, shall be entitled to inspect or
copy such records during ordinary business hours.
10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation of
the business of the Partnership may be invested by the General Partner in
investment grade instruments (or investment companies whose portfolio consists
primarily thereof), government obligations, certificates of deposit, bankers'
acceptances and municipal notes and bonds. The funds of the Partnership shall
not be commingled with the funds of any other Person except for such commingling
as may necessarily result from an investment in those investment companies
permitted by this Section 10.02(b).
10.03 FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar year.
- 40 -
10.04 ANNUAL TAX INFORMATION AND REPORT. Within 75 days after the end of
each fiscal year of the Partnership, the General Partner shall furnish to each
person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax
Matters Partner, the General Partner shall have the right and obligation to take
all actions authorized and required, respectively, by the Code for the Tax
Matters Partner. The General Partner shall have the right to retain
professional assistance in respect of any audit of the Partnership by the
Service and all out-of-pocket expenses and fees incurred by the General Partner
on behalf of the Partnership as Tax Matters Partner shall constitute Partnership
expenses. In the event the General Partner receives notice of a final
Partnership adjustment under Section 6223(a)(2) of the Code, the General Partner
shall either (i) file a court petition for judicial review of such final
adjustment within the period provided under Section 6226(a) of the Code, a copy
of which petition shall be mailed to all Limited Partners on the date such
petition is filed, or (ii) mail a written notice to all Limited Partners, within
such period, that describes the General Partner's reasons for determining not to
file such a petition.
(b) All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.
(c) In the event of a transfer of all or any part of the
Partnership Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to adjust the
basis of the Properties. Notwithstanding anything contained in Article V of
this Agreement, any adjustments made pursuant to Section 754 shall affect only
the successor in interest to the transferring Partner and in no event shall be
taken into account in establishing, maintaining or computing Capital Accounts
for the other Partners for any purpose under this Agreement. Each Partner will
furnish the Partnership with all information necessary to give effect to such
election.
10.06 REPORTS TO LIMITED PARTNERS.
(a) As soon as practicable after the close of each fiscal quarter
(other than the last quarter of the fiscal year), the General Partner shall
cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General Partner,
for such fiscal quarter, presented in accordance with generally accepted
accounting principles. As soon as practicable after the close of each fiscal
year, the General Partner shall cause to be mailed to each Limited Partner an
annual report containing financial statements of the
- 41 -
Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such fiscal year, presented
in accordance with generally accepted accounting principles. The annual
financial statements shall be audited by accountants selected by the General
Partner.
(b) Any Partner shall further have the right to a private audit of
the books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
The General Partner's consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners,
may amend this Agreement in any respect or merge or consolidate the Partnership
with or into any other partnership or business entity (as defined in Section
17-211 of the Act) in a transaction pursuant to Section 7.01(c), (d) or (e)
hereof; PROVIDED, HOWEVER, that the following amendments shall require the
unanimous consent of Limited Partners (other than the General Partner):
(a) any amendment affecting the operation of the Conversion
Factor or the Redemption Right (except as provided in Section 8.05(e) or
7.01(d), as in effect on the date hereof) in a manner adverse to the Limited
Partners;
(b) any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them hereunder, other
than with respect to the issuance of additional Partnership Units pursuant to
Section 4.02 hereof;
(c) any amendment that would alter the Partnership's allocations
of Profit and Loss to the Limited Partners, other than with respect to the
issuance of additional Partnership Units pursuant to Section 4.02 hereof;
(d) any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership; or
(e) any amendment to Section 2.03(a)(iii), 8.06, 9.02, or Article
XI hereof.
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ARTICLE XII
GENERAL PROVISIONS
12.01 NOTICES. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in EXHIBIT A attached hereto; PROVIDED, HOWEVER, that any Partner may
specify a different address by notifying the General Partner in writing of such
different address. Notices to the Partnership shall be delivered at or mailed
to its specified office.
12.02 SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
12.03 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further
acts and execute, swear to, acknowledge and deliver all further documents which
may be reasonable, necessary, appropriate or desirable to carry out the
provisions of this Agreement or the Act.
12.04 SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
12.05 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 PRONOUNS AND PLURALS. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.
12.07 HEADINGS. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
12.08 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
- 43 -
12.09 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware.
- 44 -
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Amended and Restated Agreement of Limited Partnership, all as
of the ___ day of ________ 1997.
AEGIS INVESTMENT TRUST
By:
-------------------------------------------
Name:
Title:
- 45 -
EXHIBIT A
Agreed
Value of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------- ------------ ------------ ----- --------
GENERAL PARTNER:
AEGIS Investment Trust
0000 XxxxXxxx Xxxxxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Agreed
Value of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------- ------------ ------------ ----- --------
LIMITED PARTNERS:
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.05 of the Amended and Restated Agreement of
Limited Partnership (the "Agreement") of AEGIS Operating Partnership, L.P., the
undersigned hereby irrevocably (i) presents for redemption ________ Partnership
Units in AEGIS Operating Partnership, L.P. in accordance with the terms of the
Agreement and the Redemption Right referred to in Section 8.05 thereof, (ii)
surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Cash Amount or REIT Shares Amount (as defined in the
Agreement) as determined by the General Partner deliverable upon exercise of the
Redemption Right be delivered to the address specified below, and if REIT Shares
(as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.
Dated: ,
-------- -- -----
Name of Limited Partner:
------------------------------
(Signature of Limited Partner)
------------------------------
(Mailing Address)
------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name: