LIMITED PARTNERSHIP AGREEMENT
LIMITED PARTNERSHIP AGREEMENT of WORLD FINANCIAL
PROPERTIES, L.P., dated as of , 1996, by and among
WORLD FINANCIAL PROPERTIES GP CORP., a Delaware corporation, as
general partner, and BATTERY PARK HOLDINGS INC. (together with
its successors and assigns, "BPHI"), OLYMPIA & YORK TOWER B
COMPANY (together with its successors and assigns, "OYTBC";
OYTBC, together with BPHI, "BPHI Partner"), [THE CANADIAN IMPE-
RIAL BANK OF COMMERCE OR ITS SUBSIDIARY] (together with its
successors and assigns, "CIBC Partner"), [DRAGON HOLDINGS LIM-
ITED SUBSIDIARY] (together with its successors and assigns,
"Dragon Partner"), [CITIBANK, N.A. SUBSIDIARY] (together with
its successors and assigns, "Citibank Partner"), JMB 000 XXXX
XXXXXX XXXXXXX COMPANY, LLC (together with its successors and
assigns, "JMB Partner"), and the other persons and entities
identified on Schedule I, as limited partners.
R E C I T A L :
In furtherance of the consummation of the transac-
tions contemplated in the Plan (as hereinafter defined), the
parties hereto desire to form a limited partnership (the "Part-
nership") pursuant and subject to the provisions of the Dela-
ware Revised Uniform Limited Partnership Act, as amended from
time to time (the "Act").
A G R E E M E N T :
The parties agree as follows:
ARTICLE 1 - DEFINITIONS
As used herein, the following terms have the meanings
assigned to them in this Article (except as otherwise expressly
provided) and include the plural as well as the singular, and
all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles as in effect from time to time:
Act: As defined in the Recital above.
Additional Equity Interests: As defined in
Section 4.02.
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Additional General Partner: Any additional general
partner admitted to the Partnership (upon conversion of
its Interest as a Limited Partner or otherwise) pursuant
to the provisions of subsection 4.02(c).
Affiliate: With reference to any Person, any other
Person that "Controls," is "Controlled by" or is under
"common Control with" such Person.
Arm's-length Basis: As to any transaction, agreement
or other arrangement, being on terms that would be reached
by unrelated parties not under any compulsion to contract.
Available Funds: As defined in Section 6.03.
Bank of Nova Scotia Settlement: The compromise and
settlement of certain claims of The Bank of Nova Scotia to
be effected in accordance with section 4.9 of the Plan.
Bankruptcy: The "Bankruptcy" of a Partner shall be
deemed to have occurred upon the happening of any of the
following:
(a) The valid appointment of a receiver or
trustee to administer all or a substantial portion of
a Partner's assets or a Partner's Interest in the
Partnership;
(b) The filing by a Partner of a voluntary
petition for relief under the Bankruptcy Code or of a
pleading in any court of record admitting in writing
its inability to pay its debts as they become due;
(c) The making by a Partner of a general
assignment for the benefit of creditors;
(d) The filing by a Partner of an answer admit-
ting the material allegations of, or its consenting
to or defaulting in answering, a petition for relief
filed against it in any proceeding under the Bank-
ruptcy Code; or
(e) The entry of an order, judgment or decree
of any court of competent jurisdiction, granting
relief against a Partner in a proceeding under the
Bankruptcy Code, and such order, judgment or decree
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continuing unstayed and in effect for a period of
thirty (30) days after such entry.
Bankruptcy Code: The Bankruptcy Reform Act of 1978,
as amended and as codified at title 11, United States
Code.
Bankruptcy Court: The United States District Court
for the Southern District of New York having jurisdiction
over the Reorganization Cases and, to the extent of any
reference under section 157, title 28, United States Code,
the unit of such District Court constituted under section
151, title 28, United States Code.
Business Day: Any day other than a Saturday, a Sun-
day or any other day on which banking institutions in New
York, New York are required or authorized to close by law
or executive order.
Capital Contribution: As defined in Section 4.01.
Certificate: The Partnership's Certificate of Lim-
ited Partnership filed in the office of the Secretary of
State of the State of Delaware, as amended from time to
time.
Change in Control: As to any Partner, a change,
shift or transfer of Control with respect to such Partner
including, without limitation, any change in the Control
of any Person Controlling such Partner; provided, however,
that no Change in Control shall be deemed to have occurred
upon any such change, shift or transfer of Control of
(i) in respect of BPHI Partner, Brookfield Properties,
Inc., (ii) in respect of CIBC Partner, CIBC, (iii) in
respect of Citibank Partner, Citibank, N.A., or (iv) in
respect of any other Limited Partner (including, without
limitation, any Limited Partner that acquires its Interest
from a Founding Limited Partner), any Person that directly
or indirectly Controls such Limited Partner if such Person
(a) has issued and outstanding at least one class of
equity securities that are listed on a national securities
exchange in the United States or (b) has net assets in
excess of $_____________ as of the end of its most
recently concluded fiscal year.
Class A Unit: A fractional interest in all the capi-
tal of the Partnership equal, on the date hereof, to one
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thousandth of one percent of all such capital as of the
date hereof (exclusive of capital, if any, attributable or
relating to the Disputed Realty Corp. Assets).
Class B Units: Collectively, the Class B-1 Units and
the Class B-2 Units.
Class B-1 Unit: A fractional interest in all the
interest and rights, if any, of the Partnership attribut-
able or related to the capital stock of SF Holdings equal
to one thousandth of one percent of all such interest and
rights.
Class B-2 Unit: A fractional interest in all the
interest and rights of the Partnership attributable or
related to the capital stock of Florida Equity Corp. equal
to one thousandth of one percent of all such interest and
rights.
Code: The Internal Revenue Code of 1986, as amended
from time to time, or any successor statute or statutes to
the Internal Revenue Code of 1986.
Control, Controlling, Controlled: As to any Person,
the possession, directly or indirectly, of the power to
direct or cause the direction of the management and poli-
cies of such Person, whether through ownership of voting
securities or partnership interests, by contract or
otherwise.
Conversion Notice: The notice required to be given
by a holder of one or more Convertible Notes in order to
exercise the Conversion Right.
Conversion Right: The right to convert the indebted-
ness evidenced by the Convertible Notes into Class A Units
(or a fraction of a Class A Unit).
Convertible Note Documents: The Convertible Notes,
together with the Convertible Note Indenture.
Convertible Note Indenture: The indenture (as from
time to time amended) pursuant to which the Convertible
Notes are being issued on the date hereof.
Convertible Notes: The Company's Increasing Rate
Convertible Notes due 2004.
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Coopers & Xxxxxxx OYDL: Collectively, Coopers &
Xxxxxxx OYDL, Inc. and Coopers & Xxxxxxx OYDL Limited, as
the trustee in the bankruptcy for Olympia & York Develop-
ments Limited, an Ontario corporation.
Core Properties: Those parcels of real property and
interests in Persons owning, directly or indirectly, any
parcels of real property owned by the Partnership or Per-
sons Controlled by the Partnership on the date hereof.
Disputed MCJV Recovery: The recovery that may be
realized by Florida Equity Corp. from the sale of the MCJV
Lands, the amount of which is dependent upon the resolu-
tion of the claims alleged in a suit captioned In re
Holywell Corp., Case No. 84-01590/94-BKC-PGH, before the
United States Bankruptcy Court for the Southern District
of Florida.
Disputed Realty Corp. Assets: The Disputed MCJV
Recovery and the Disputed SF Cash.
Disputed SF Cash: The cash of SF Holdings, subject
to a claim of ownership that has been made by Coopers &
Xxxxxxx OYDL in a case before the Ontario Court of Justice
captioned Coopers & Xxxxxxx OYDL Limited v. Olympia & York
Realty Corp. and Olympia & York SF Holdings Corporation,
Ontario Court Action No. 93-CQ-38609.
Equity Interest: With respect to each Partner at any
time, that portion of all the Class A Units then outstand-
ing that is owned by such Partner, being equal to the quo-
tient of the number of Class A Units owned by such Partner
at such time divided by the total number of all Class A
Units then outstanding.
Fair Market Value: As to any property, the price at
which a willing seller would sell and a willing buyer
would buy such property having full knowledge of the
facts, and assuming each party acts on an Arm's-length
Basis with the expectation of concluding the purchase or
sale within a reasonable time.
Florida Equity Corp.: A Florida corporation that
holds a 50% interest in MCJV.
Founding Limited Partners: BPHI Partner, CIBC Part-
ner, Dragon Partner and Citibank Partner; provided,
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however, that (i) no assignee or transferee of any of CIBC
Partner, Dragon Partner or Citibank Partner (other than a
Wholly-Owned Affiliate thereof) shall be a Founding
Limited Partner (the rights of each such Partner as a
Founding Limited Partner being personal to such Partner
and not assignable or otherwise transferable except to a
Wholly-Owned Affiliate thereof) and (ii) each of CIBC
Partner, Dragon Partner and Citibank Partner shall cease
to be a Founding Limited Partner upon (A) any Transfer of
its direct or indirect Interest after which such Partner
or its Controlling Affiliates shall own directly or
indirectly less than ___% (in the case of CIBC Partner or
Citibank Partner and their respective Controlling
Affiliates) or ____% (in the case of Dragon Partner and
its Controlling Affiliates) of the beneficial Equity
Interest in the Partnership and (B) the aggregate com-
mencement of any public offering of Class A Units in which
such Partner is permitted to participate as to all its
Class A Units and fails so to participate.
GAAP: As defined in Section 7.09.
General Partner: World Financial Properties GP
Corp., a Delaware corporation, unless and until such cor-
poration shall cease to be a general partner of the Part-
nership pursuant to Section 10.01(c) hereof, and there-
after any successor General Partner of the Partnership
admitted pursuant to Section 9.04 hereof.
Independent Accountants: As defined in Section 7.09.
Initial Unit Value: The deemed Fair Market Value of
a Class A Unit on the date hereof, being $
(viz., the product of .001% and the Partnership Reorgani-
zation Value).
Interest: As to each Partner, such Partner's rights
to participate in the income, gains, losses, deductions
and credits of the Partnership, together with all other
rights and obligations of such Partner under this
agreement.
JMB: XXX/000 Xxxx Xxxxxx Company or any Affiliate
thereof.
JMB Agreement: The agreement between the Partnership
and JMB pursuant to which the Partnership provides to JMB
the rights contemplated in Section 15.8 of the Plan.
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Limited Partners: BPHI Partner, CIBC Partner, Dragon
Partner, Citibank Partner, JMB Partner, the Persons listed
on Schedule I and any other Person that hereafter becomes
a limited partner of the Partnership in accordance with
the provisions of Article IX hereof.
Majority Interest: An interest, direct or indirect,
in any Person or group of Persons (including, without
limitation, the Partnership but excluding Brookfield Prop-
erties, Inc., CIBC, Citibank, N.A. and all Controlling
Affiliates of each such Person and each Person described
in clause (iv) of the definition of Change in Control)
which represents effective beneficial ownership of more
than 50% of the outstanding Equity Interests in the Part-
nership.
MCJV: Miami Center Joint Venture, a Florida joint
venture.
MCJV Lands: Those certain four parcels of real
estate located east of Southeast 2nd Avenue, west of
Biscayne Bay, north of the Miami River, and south of
Xxxxxxxxx 0xx Xxxxxx in Miami, Florida.
New 245 Park LP: The Delaware limited partnership
that owns 000 Xxxx Xxxxxx.
Partners: The General Partner, any Additional Gen-
eral Partners and the Limited Partners as a group.
Partnership Reorganization Value: $ .
Person: An individual or a corporation, partnership,
limited liability company, trust, unincorporated associa-
tion or other entity.
Plan: The Third Amended Joint Plan of Reorganization
of Olympia & York Realty Corp., et al., Chapter 11 case
number 92B42698 (JLG) (jointly administered), confirmed by
the Bankruptcy Court on , 1996, as such Plan may
be amended from time to time.
Qualifying Interest: An interest, direct or indi-
rect, in any Person or group of Persons (including, with-
out limitation, the Partnership but excluding Brookfield
Properties, Inc., CIBC, Citibank, N.A. and all Controlling
Affiliates of each such Person and each Person described
in clause (iv) of the definition of Change in Control)
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which represents effective beneficial ownership of 35% or
more, but not more than 50%, of the outstanding Equity
Interests in the Partnership.
Related Person: As to the General Partner, at any
time, any Person that is then (i) an Affiliate of the Gen-
eral Partner (other than a Person Controlled by the Part-
nership), (ii) the record or beneficial owner of Class A
Units representing 20% or more of all Class A Units then
outstanding, (iii) the record or beneficial owner of 10%
or more of the then outstanding equity securities (of any
class or series) of the General Partner or (iv) any Affil-
iate of a Person described in clause (ii) or clause (iii)
above (other than a Person Controlled by the Partnership).
Required Partners: As defined in subsection 9.06(b).
SF Holdings: Olympia & York SF Holdings Corpora-
tion, a New Brunswick corporation and a Debtor in the
Reorganization Cases.
Transfer: Any direct or indirect transfer, sale,
conveyance, pledge, hypothecation or other disposition,
including, without limitation, any of the foregoing that
occurs by virtue of any Change in Control.
Treasury Regulations: Regulations promulgated under
the Code and from time to time in effect.
000 Xxxx Xxxxxx: That certain parcel of real prop-
erty located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
together with the office building and other improvements
existing thereon.
245 Park Co.: 000 Xxxx Xxxxxx Company, a New York
general partnership.
Unit Value: As of any date, the Fair Market Value of
a Class A Unit, as determined in good faith by the General
Partner (taking account of all relevant considerations,
including, without limitation, the Fair Market Value of
the assets of the Partnership, the liabilities of the
Partnership and the terms of any Additional Equity Inter-
ests (including, without limitation, any Additional Equity
Interests that are exchangeable for or convertible into
Class A Units or different Additional Equity Interests)),
any such determination to be conclusive and binding for
all purposes of this agreement, except in any case where
Class A Units are to be issued to the General Partner or a
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Related Person of the General Partner (in which case such
determination shall not be effective unless (i) confirmed
in writing by an independent investment banking institu-
tion of national reputation selected by the General Part-
ner or (ii) in the same transaction and at the same time a
greater number of Class A Units are to be issued to Per-
sons that are neither the General Partner nor Related Per-
sons of the General Partner).
Unrestricted Units: Class A Units issued (i) on the
date hereof to a Limited Partner (including, without limi-
tation, JMB Partner) that is not a Founding Limited Part-
ner, (ii) upon exercise of the Conversion Right or (iii)
upon conversion of Class B Units, all of which Class A
Units shall retain their character as Unrestricted Units
notwithstanding any Transfer thereof.
Wholly-Owned Affiliate: With respect to any Person,
an Affiliate of such Person, the beneficial ownership of
which Affiliate is held by the same Persons and in the
same proportions as the beneficial ownership of such Per-
son is held.
Withholding Advance: As defined in Section 7.12.
ARTICLE 2 - FORMATION
2.01 Formation. The Partners hereby form the Part-
nership as a partnership subject to the provisions of the Act.
2.02 Filing; Publication. The General Partner shall
take all action required by law to create and maintain the
Partnership as a limited partnership under the Act and under
the laws of all jurisdictions in which the Partnership may
elect to conduct business, including, without limitation, the
filing of amendments to the Certificate with the Delaware Sec-
retary of State, and qualification of the Partnership as a for-
eign limited partnership in the jurisdictions in which such
qualification shall be required, as determined by the General
Partner. The General Partner shall also promptly register the
Partnership under applicable assumed or fictitious name stat-
utes or similar laws.
2.03 Name. The name of the Partnership shall be
World Financial Properties, L.P. The General Partner may adopt
such assumed or fictitious names as it deems appropriate in
connection with the qualifications and registrations referred
to in Section 2.02.
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2.04 Place of Business; Registered Agent. The loca-
tion of the principal office of the Partnership shall initially
be c/o Battery Park Holdings Inc., 000 Xxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000 and thereafter at such other location as the
General Partner may designate upon written notice to the other
Partners. The Partnership's registered agent in the State of
Delaware shall be The Corporation Trust Company, having an
address at 0000 Xxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxxx.
2.05 Partners. The name and address of each Partner
shall be as set forth in the books and records of the
Partnership.
ARTICLE 3 - BUSINESS PURPOSE
3.01 Character of Business.
(a) The business of the Partnership shall be to (i)
acquire, own, operate, manage, finance, lease, dispose of and
otherwise deal with interests in real estate and securities
related to or secured by interests in real estate, such inter-
ests to be owned directly or indirectly (as, for example,
through the ownership of equity securities in Persons that own
or otherwise deal with interests in real estate) and
(ii) transact any and all other businesses for which limited
partnerships may be formed under Delaware law.
(b) In furtherance of its business, the Partnership
may participate in other Persons and serve as general or lim-
ited partner, joint venturer, manager, agent or representative
for such other Person.
3.02 Authorized Activities. In carrying out the
purposes of the Partnership, but subject to all other provi-
sions of this agreement, the Partnership is authorized to
engage in any kind of lawful activity, and perform and carry
out contracts of any kind, necessary or advisable in connection
with the accomplishment of the purposes and business of the
Partnership described herein and for the protection and benefit
of the Partnership.
ARTICLE 4 - CAPITAL CONTRIBUTIONS
4.01 Initial Contributions. In accordance with all
applicable provisions of the Plan, each Partner initially shall
make a contribution of capital (a "Capital Contribution") to
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the Partnership. Each Partner on the date hereof shall own
that number of Class A Units and Class B Units as is set forth
on Schedule I.
4.02 Additional Contributions.
(a) No Partner shall be obligated to make any Capi-
tal Contribution other than as set forth in Section 4.01.
Without limiting any other right or power of the General Part-
ner hereunder or under applicable law, the General Partner may
at any time without notice to any other Partner accept Capital
Contributions of cash or property from and issue new Class A
Units or other equity securities of the Partnership (any such
other securities, "Additional Equity Interests") to any Part-
ners or admit new Partners to the Partnership in connection
with the making by such Partners of Capital Contributions con-
sisting of cash or property (including, without limitation, any
such Capital Contribution made in connection with the creation
of an umbrella partnership real estate investment trust or
similar investment vehicle) and may issue Class A Units or
Additional Equity Interests of the Partnership to such Part-
ners. Each Person that makes any such Capital Contribution
(other than any Persons entitled to Class A Units pursuant to
Article 5 or upon exercise of the Conversion Right) shall be
issued (i) Class A Units in a number equal to the quotient
obtained by dividing the amount or Fair Market Value of such
Capital Contribution (as determined by the General Partner in
its reasonable discretion) by the Unit Value in effect immedi-
ately preceding the making of such Capital Contribution or (ii)
such Additional Equity Interests of the Partnership as the Gen-
eral Partner shall, in good faith, deem to be equal in value to
the amount or Fair Market Value of such Capital Contribution
(taking account of all relevant considerations, including,
without limitation, the Fair Market Value of the assets of the
Partnership, the liabilities of the Partnership and the terms
of any Additional Equity Interests (including, without limita-
tion, any Additional Equity Interests that are exchangeable for
or convertible into Class A Units or different Additional
Equity Interests)), any such determination to be conclusive and
binding for all purposes of this agreement, except in any case
where Class A Units or Additional Equity Interests are to be
issued to the General Partner or a Related Person of the Gen-
eral Partner (in which case such determination shall not be
effective unless (A) confirmed in writing by an independent
investment banking institution of national reputation selected
by the General Partner or (B) in the same transaction and at
the same time a greater number of Class A Units or Additional
Equity Interests are to be issued to Persons that are neither
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the General Partner nor Related Persons of the General
Partner).
(b) Notwithstanding any contrary provision of this
agreement, the General Partner may not cause the Partnership to
issue any new Class A Units or Additional Equity Interests in
the Partnership unless after giving effect thereto (and any
contemporaneous issuance or Transfers of Class A Units or Addi-
tional Equity Interests to the General Partner) the General
Partner shall own at least a 1% general partner interest in the
capital of, and in all items of income, gain, loss, deduction
and credit of, the Partnership; provided, however, that, upon
the exercise of the Conversion Right by any holder of Convert-
ible Notes, the General Partner and the Founding Limited Part-
ners shall take such actions (including, without limitation,
the Transfer of Class A Units by the Founding Limited Partners
to the General Partner) as shall be necessary to cause the pro-
visions of this subsection to be complied with as of the time
of the issuance of any Class A Units in respect of such
exercise.
(c) The General Partner may, without the approval of
any Partner, admit Additional General Partners to the Partner-
ship in connection with the making of a Capital Contribution in
accordance with the provisions of subsection 4.02(a) or (with
the written approval of the affected Limited Partner) upon a
conversion of the Interest of any Limited Partner into a gen-
eral partner's Interest in the Partnership. All such Addi-
tional General Partners shall have such rights and authority to
act for the Partnership and the Limited Partners as shall be
determined by the General Partner; provided, however, that no
Person shall be admitted to the Partnership as an Additional
General Partner unless the rights and authority of such Person
to act for the Partnership and the Limited Partners do not
exceed the rights and authority of the General Partner so to
act and such Person shall agree to be bound by the provisions
of subsections 7.01(a) and 7.02(c) and Section 7.06 of this
agreement.
(d) The General Partner may, without the approval of
any Partner (other than the affected Additional General Part-
ner), convert the Interest of any Additional General Partner
into a limited partnership Interest in the Partnership.
4.03 Rights of Holders of Class B Units; Cancella-
tion by General Partner.
(a) The holders of Class B Units shall be given
credit (to be applied only to the issuance of Class A Units as
herein provided) for all the income and capital, if any, of the
Partnership with respect to the Disputed Realty Corp. Assets
during the period prior to any conversion of such Class B Units
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into Class A Units as herein contemplated. The holders of
Class B Units (in their capacities as such holders only) shall
not be entitled to any interest in the income or capital of the
Partnership with respect to any other asset of the Partnership.
Prior to conversion of any Class B Units into Class A Units
pursuant to Article 5 hereof, the holders of such Class B Units
(in their capacities as such) shall not have any right to vote
on any matters subject to the approval of the Partners or to
receive any distribution from the Partnership (other than (in
the event the Partnership shall be liquidated prior to the con-
versions contemplated in Article 5 of this agreement) a distri-
bution of the Disputed Realty Corp. Assets or the proceeds
thereof upon liquidation of the Partnership).
(b) The General Partner may, by written notice given
to the Partners at any time, cancel all or part of the Class B
Units, as appropriate, if (i) the General Partner shall have
determined in its reasonable discretion (based on facts or cir-
cumstances hereafter becoming known to the General Partner
(including, without limitation, the issuance of any rulings or
judgments in any proceedings related to the Disputed Realty
Corp. Assets)) that, notwithstanding commercially reasonable
efforts by the Partnership to enforce or negotiate its claims
with respect to the Disputed Realty Corp. Assets, the net value
to the Partnership of the Disputed SF Cash or the Disputed MCJV
Recovery is insufficient to justify the continued expenditure
of effort or funds by the Partnership to realize on its claims
with respect thereto or (ii) there shall have been issued a
final nonappealable ruling by a court of competent jurisdiction
denying the validity of the Partnership's claims to the Dis-
puted SF Cash or the Disputed MCJV Recovery.
(c) Nothing in this Section 4.03 shall limit the
Partnership's rights against Limited Partners holding Class B
Units under the provisions of Section 7.12 of this agreement
with respect to Withholding Advances or under Section 20 of the
Plan with respect to Tax Advances (as defined in the Plan).
4.04 Partner's Accounts.
(a) Separate capital accounts shall be maintained
for each Partner consisting of all Capital Contributions made
by such Partner increased by the amount of Partnership income
and gain allocated to it pursuant to this agreement and
decreased by (i) the Fair Market Value of property (net of any
liability secured by such property that the Partner is consid-
ered to assume or take subject to) and the amount of cash
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distributed to such Partner pursuant to this agreement and (ii)
the amount of Partnership losses and deductions allocated to it
pursuant to this agreement.
(b) If any Partner has a deficit balance in its cap-
ital account (after giving effect to all Capital Contributions,
distributions and allocations), such Partner shall have no
obligation to make any contribution to the capital of the Part-
nership by reason of such deficit.
4.05 Transfers or Conversions During Year. To avoid
an interim closing of the Partnership's books, the share of
profits and losses under this Article 4 of a Partner that
assigns or otherwise makes a direct Transfer of part or all of
its Interest during any calendar year or is the assignee or
transferee of such a Partner or is issued any Class A Units
pursuant to the provisions of Section 5.01 or 5.02 or the Con-
vertible Note Documents or is issued any Additional Equity
Interest pursuant to the provisions of subsection 4.02(a) dur-
ing such calendar year shall be determined by (i) in the case
of any such assignment or other direct Transfer, prorating (as
between the transferor Partner and its transferee) the total
amount of the profits and losses of the Partnership attribut-
able to the Interest so transferred for such year and (ii) in
the case of any such conversion, by allocating the total amount
of profits and losses of the Partnership (other than items
attributable to the Disputed Realty Corp. Assets, which shall
be allocated in accordance with the provisions of subsection
6.01(b)) on a per-day basis in accordance with each Partner's
Equity Interest in the Partnership (or otherwise as may be
required to give effect to the provisions of any Additional
Equity Interests) as of the end of such day.
ARTICLE 5 - CONVERSION RIGHTS
5.01 Class B-1 Unit Conversion. If and when SF
Holdings' ownership interest in the Disputed SF Cash ceases to
be disputed by reason of the entry of a final nonappealable
order of the Bankruptcy Court or another court of competent
jurisdiction either (i) confirming SF Holdings' ownership
interest in the Disputed SF Cash or (ii) approving an executed
and delivered settlement agreement with Coopers & Xxxxxxx, or
any successor in interest to Coopers & Xxxxxxx, and SF Holdings
shall have received payment of any funds in satisfaction of its
claim to the Disputed SF Cash, the General Partner shall deter-
mine (which determination shall be confirmed in writing by the
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Independent Accountants and shall, upon such confirmation, be
conclusive for all purposes hereof, absent manifest error) the
amount or Fair Market Value (using an appropriate discount rate
in the event any payments are deferred for more than 30 days)
of all funds to be received in respect of such claim after
deducting the total liabilities of SF Holdings, including,
without limitation, all applicable litigation costs and settle-
ment amounts (the "Net SF Cash"). Within thirty (30) Business
Days after the last to occur of the date such court order
becomes final and nonappealable and receipt of such funds (the
"SF Deadline"), the General Partner shall send a notice to each
other Partner setting forth such determination and confirming
the conversion that is contemplated in the following sentence.
Effective on and as of the SF Deadline, the then outstanding
Class B-1 Units shall, in the aggregate, automatically be con-
verted into that number of Class A Units (or that fraction of a
Class A Unit) determined by dividing (a) the Net SF Cash (sub-
ject to reduction pursuant to the provisions of subsection
5.03(a)), by (b) the Initial Unit Value, and each Partner that,
immediately preceding such conversion, held any Class B-1 Units
shall be allocated that number of such Class A Units determined
by multiplying the number of such Class A Units by a fraction,
the numerator of which is the number of Class B-1 Units held by
such Partner immediately prior to such conversion and the
denominator of which is the number of Class B-1 Units outstand-
ing immediately prior to such conversion.
5.02 Class B-2 Unit Conversion. If and when the
Disputed MCJV Recovery ceases to be disputed and there is exe-
cuted and delivered a contract of sale of the MCJV Lands and
Florida Equity Corp. shall have received its share of the clos-
ing proceeds in respect thereof, the General Partner shall
determine (which determination shall be confirmed in writing by
the Independent Accountants and shall, upon such confirmation,
be conclusive for all purposes hereof, absent manifest error)
the amount of the net cash closing proceeds of such sale, after
deducting the total liabilities of Florida Equity Corp.,
including, without limitation, (i) the amount required to be
paid by Florida Equity Corp. or the Partnership in accordance
with the Bank of Nova Scotia Settlement and (ii) any amounts
funded by the Partnership in respect of taxes, carrying costs
and other out of pocket expenses relating to the MCJV Lands
(including, without limitation, litigation expenses), together
with interest thereon at the rate of 10% per annum, compounded
annually (the "Net MCJV Proceeds"). Within thirty (30) Busi-
ness Days after the last to occur of the entry of a final and
nonappealable order of the Bankruptcy Court approving such sale
-16-
and receipt of such closing proceeds (the "MCJV Deadline"), the
General Partner shall send a notice to each other Partner set-
ting forth such determination and confirming the conversion
that is contemplated in the following sentence. Effective on
and as of the MCJV Deadline, the then outstanding Class B-2
Units, in the aggregate, shall automatically be converted into
that number of Class A Units (or that fraction of a Class A
Unit) determined by dividing (a) the Net MCJV Proceeds (subject
to reduction pursuant to the provisions of subsection 5.03(b)),
by (b) the Initial Unit Value, and each Partner that, immedi-
ately preceding such conversion, held any Class B-2 Units shall
be allocated that number of such Class A Units determined by
multiplying the number of such Class A Units by a fraction, the
numerator of which is the number of such Class B-2 Units held
by such Partner immediately prior to such conversion and the
denominator of which is the number of Class B-2 Units outstand-
ing immediately prior to such conversion.
5.03 Additional Conversion Adjustments.
(a) Notwithstanding the foregoing provisions of
Section 5.01, if, on the SF Deadline, a conversion of Class B-2
Units into Class A Units has not already occurred, the General
Partner shall deduct from the amount of Net SF Cash used in the
formula described in Section 5.01 above (i) the litigation
costs and other expenses of the Partnership expended in
attempting to settle or litigate claims relating to the Dis-
puted MCJV Recovery (including, without limitation, amounts
advanced by the Partnership to Florida Equity Corp.) and
(ii) the amount to be deposited in a reserve to fund future
litigation costs and other expenses of Florida Equity Corp. in
attempting to settle or litigate claims relating to the Dis-
puted MCJV Recovery based on the General Partner's reasonable
estimate of such costs and expenses. Any amounts to be
reserved pursuant to clause (ii) of the preceding sentence
shall be subject to the approval of the Bankruptcy Court in
connection with any order of the Bankruptcy Court confirming
the Partnership's ownership interest in the Disputed SF Cash or
approving an executed and delivered settlement agreement with
Coopers & Xxxxxxx OYDL.
(b) Notwithstanding the foregoing provisions of Sec-
tion 5.02, if, on the MCJV Deadline, a conversion of Class B-1
Units into Class A Units has not already occurred, the Partner-
ship shall deduct from the amount of Net MCJV Proceeds used in
the formula described in Section 5.02 above (i) the litigation
costs and other expenses of the Partnership expended in
-17-
attempting to settle or litigate claims relating to the Dis-
puted SF Cash (including, without limitation, amounts advanced
by the Partnership to SF Holdings) and (ii) the amount to be
deposited in a reserve to fund future litigation costs and
other expenses of SF Holdings in attempting to settle or liti-
gate claims relating to the Disputed SF Cash based on the Gen-
eral Partner's reasonable estimate of such costs and expenses.
Any amounts to be reserved pursuant to clause (ii) of the imme-
diately preceding sentence shall be subject to the approval of
the Bankruptcy Court in connection with any order of the Bank-
ruptcy Court approving the sale of the MCJV Lands.
5.04 Convertible Note Documents. Contemporaneously
with the execution of this agreement, the Partnership is exe-
cuting and delivering the Convertible Note Documents. Upon the
delivery of any Conversion Notice and the satisfaction of any
other conditions to exercise of the Conversion Right by any
holder of one or more Convertible Notes, the General Partner
shall execute such instruments and take such other actions as
shall be necessary to evidence the conversion and issuance of
Class A Units contemplated by the Convertible Note Documents
and such Conversion Notice.
5.05 Transfers Pursuant to the Plan. Each of the
Founding Limited Partners shall make Transfers of Class B Units
to JMB Partner at the times and in the amounts required pursu-
ant to the JMB Agreement and the provisions of Section 15.8.1
of the Plan.
ARTICLE 6 - PROFITS, LOSSES AND DISTRIBUTIONS
6.01 Profits and Losses.
(a) Subject to the provisions of subsection (b) of
this Section 6.01, the Partnership's net profits or net losses
shall be determined on an annual basis and shall be allocated
to the Partners in proportion to their Equity Interests; pro-
vided, however, that (i) to the extent that the terms of any
Additional Equity Interests require a different allocation, the
General Partner shall cause the allocations herein contemplated
to be in accordance with such terms and (ii) except as
expressly provided in subsection 7.02(b), no Limited Partner
(in its capacity as a Limited Partner) shall be personally lia-
ble for losses, costs, expenses, liabilities or obligations of
the Partnership in excess of its Capital Contributions under
Article 4 hereof.
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(b) Any income, gain, losses or deductions recog-
nized by the Partnership as a result of (i) the Disputed Realty
Corp. Assets ceasing to be disputed or as a result of any dis-
tribution with respect to, or disposition of, the stock of
Florida Equity Corp. shall be allocated to the holders of Class
B-2 Units, and (ii) the Disputed Realty Corp. Assets ceasing to
be disputed or as a result of any distribution with respect to,
or disposition of, the stock of SF Holdings shall be allocated
to the holders of Class B-1 Units.
6.02 Allocations for Tax Purposes. (a) Subject to
the provisions of subsection (b) of this Section 6.02, for
income tax purposes, each item of income, gain, loss, deduction
and credit of the Partnership shall, subject to the provisions
of Section 4.05, be allocated among the Partners in proportion
to their Equity Interests; provided, however, that (i) to the
extent the terms of any Additional Equity Securities require a
different allocation, the General Partner shall cause the allo-
cations herein contemplated to be in accordance with such terms
and (ii) each such item with respect to property contributed to
the Partnership by a Partner or revalued pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) shall be allocated
among the Partners in a manner that takes into account the
variation between the adjusted tax basis of such property and
its book value, as required by Section 704(c) of the Internal
Revenue Code and Treasury Regulations Section 1.704-1(b)(4)(i),
using any method permitted by applicable Treasury Regulations.
Notwithstanding the foregoing, (A) if requested by JMB Partner,
the Partnership shall make or cause to be made with respect to
000 Xxxx Xxxxxx the allocations contemplated in subsection
7.11(e) and (B) until such time as JMB Partner shall have
Transferred all its Interest in the Partnership to a Person
other than JMB or shall have otherwise ceased to be a Partner,
the allocations, debt sharing and other income tax treatments
described in Section 15.8.1 of the Plan shall be complied with
by the Partnership.
(b) Any income or gain recognized by the Partnership
as a result of the Disputed Realty Corp. Assets ceasing to be
disputed or as a result of any distribution with respect to, or
disposition of, the stock of SF Holdings or of Florida Equity
Corp. shall be allocated to the holders of Class B-1 and Class
B-2 Units in accordance with the principles of section 704(c)
of the Code (it being understood that, for book purposes, the
initial Capital Contribution made by the holders of Class B-1
and Class B-2 Units shall be fixed at the net value of the
stock of SF Holdings and the stock of Florida Equity Corp.,
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respectively, as and when the dispute affecting the value of
each such asset is finally resolved and such Class B Units are
converted to Class A Units).
6.03 Distributions. Annually or at more frequent
intervals as determined by the General Partner, in its sole
discretion, the then Available Funds (as hereinafter defined)
shall be distributed to the Partners in proportion to their
Equity Interests; provided, however, that to the extent that
the terms of any Additional Securities require distribution of
Available Funds in a particular order, ranking or amount, the
General Partner shall cause the distribution of Available Funds
to be in accordance with such terms. "Available Funds" means
(i) the Partnership's gross cash receipts, less (ii) the Part-
nership's expenditures, less (iii) the amount that, in the Gen-
eral Partner's reasonable judgment, the Partnership should
retain or otherwise reserve in order to fulfill its business
purposes or to comply with the provisions of any debt or other
obligation of the Partnership, plus (iv) the amount by which,
in the General Partner's reasonable judgment, any such reserve
previously established and then existing shall be reduced after
taking into account the foregoing.
ARTICLE 7 - MANAGEMENT AND FINANCING MATTERS
7.01 Management of Business.
(a) Except as otherwise specifically provided to the
contrary herein, the General Partner shall have full, exclusive
and complete discretion to manage the business and affairs of
the Partnership and to take all such actions as it deems neces-
sary or appropriate to accomplish the purposes of the Partner-
ship as set forth herein; provided, however, that the actions
of the General Partner hereunder shall at all times be in com-
pliance with the provisions of Section 7.06. Nothing contained
in this Section 7.01 shall impose any obligation on any Person
doing business or dealing with the Partnership to inquire as to
whether the General Partner has exceeded its authority in exe-
cuting any contract, lease, mortgage, note, deed or other
instrument on behalf of the Partnership, and any such Person
shall be fully protected in relying upon the plenary authority
of the General Partner. Except as otherwise provided in
Article 8, the General Partner shall serve without compensation
for its services. The General Partner may delegate such of its
respective powers and authority to any Additional General Part-
ner or to managers, employees and agents of the General Partner
-20-
or of the Partnership as it shall deem necessary or appropriate
for the conduct of the Partnership's business; provided, how-
ever, that the General Partner shall not purport to authorize
any such Additional General Partner, manager, employee or agent
to take any action that the General Partner is itself prohib-
ited from taking under the provisions of this agreement.
(b) In carrying out the purposes of the Partnership,
among other things, the General Partner is authorized to exe-
cute and deliver (i) instruments evidencing the issuance of
Class A Units or Additional Equity Interests of the Partner-
ship, (ii) all contracts, conveyances, assignments, franchise
agreements, licensing agreements and management contracts cov-
ering or affecting the Partnership's assets, (iii) all checks,
drafts and other orders for the payment of the Partnership's
funds, (iv) all promissory notes, mortgages, deeds of trust,
security agreements and other similar documents and (v) all
other instruments of any kind or character relating to the
Partnership's affairs, whether like or unlike the foregoing.
No Partner other than the General Partner or any Additional
General Partner (to the extent the General Partner shall dele-
gate or otherwise authorize or permit such Additional General
Partner to do so) shall have management power over the business
and affairs of the Partnership or actual or apparent authority
to enter into contracts or bind the Partnership.
(c) Meetings of the Partners may be called by the
General Partner by giving ten (10) days prior written notice of
the time, date, location and purpose of the meeting; provided,
however, that in the event of any emergency affecting the Part-
nership or its assets, a meeting of the Partners may be called
by the General Partner on such shorter notice as the General
Partner shall deem appropriate in its reasonable judgment.
(d) Each Limited Partner may authorize any Person or
Persons, including, without limitation, the General Partner, to
act for it by proxy on all matters on which a Limited Partner
may participate. Every proxy (i) must be signed by the Limited
Partner or its attorney-in-fact, (ii) shall expire eleven (11)
months from the date thereof unless the proxy provides other-
wise and (iii) shall be revocable at the discretion of the Lim-
ited Partner granting such proxy.
(e) Any action required or permitted to be taken at
a meeting of the Partners may be taken without a meeting (and
without advance notice thereof) if a written consent setting
forth the action to be taken is signed by the Partners owning
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the percentage of the total Class A Interests of the Partner-
ship required to take such action, which written consent may be
evidenced in one or more instruments. Consents need not be
solicited from any other Partner if the written consent of
Partners owning such requisite percentage has been obtained to
take the action for which such solicitation was required.
(f) The General Partner shall cause the Partnership
to perform its obligations under the JMB Agreement in accor-
dance with the terms thereof.
7.02 No Management by Limited Partners; Limitation
of Liability.
(a) No Limited Partner, in its capacity as a limited
partner, shall take part in the day-to-day management, opera-
tion or control of the business and affairs of the Partnership
or have any right, power, or authority to act for or on behalf
of or to bind the Partnership or transact any business in the
name of the Partnership. Any approvals rendered or withheld by
any of the Limited Partners pursuant to this agreement shall be
deemed as consultation with or advice to the General Partner in
connection with the business of the Partnership and, in accor-
dance with the Act, shall not be deemed as participation by any
such Limited Partner in the business of the Partnership and are
not intended to create any inference that any such Limited
Partner should be classified as a general partner under the
Act.
(b) No Limited Partner shall have any liability
under this agreement except (i) with respect to withholding
under Section 7.12, (ii) in connection with a breach or xxxxx-
tion of any provision of this agreement by such Limited Partner
or (iii) as provided in the Act.
(c) The General Partner shall not take any action
that would subject any Limited Partner (in its capacity as Lim-
ited Partner) to liability as a general partner.
(d) No Limited Partner (in its capacity as such) may
commence or attempt to commence or join or attempt to join in
any voluntary or involuntary petition for bankruptcy or insol-
vency proceeding with respect to the Partnership pursuant to
the Bankruptcy Code. Neither the Partnership nor the General
Partner shall commence or consent to the commencement of any
such proceeding unless the commencement of such proceeding has
been authorized by due corporate action of the General Partner.
-22-
7.03 Appointment of Agents, Officers or Representa-
tives. The General Partner may appoint such agents, officers
or representatives as it deems appropriate, and may grant to
them such titles or designations, including that of President,
Vice President, Managing Agent or Managing Director, as it
deems necessary or appropriate.
7.04 Title to Property; Nominee. All property owned
by the Partnership, whether real or personal, tangible or
intangible, shall be deemed to be owned by the Partnership as
an entity, and no Partner, individually, shall have any owner-
ship of such property. Title to the Partnership's assets shall
be held in the Partnership's name or in the name of any nominee
that the General Partner may designate. The General Partner
shall have the power to enter into a nominee agreement with any
such Person, and such agreement may contain provisions indemni-
fying the nominee, except for his or its willful misconduct.
7.05 Time Devoted to Business; Business with Related
Persons.
(a) The General Partner shall devote such time to
the business of the Partnership as it in its discretion deems
necessary for the efficient operation of the Partnership's
business.
(b) The General Partner, in its discretion, may
cause the Partnership or any Person Controlled by the Partner-
ship to transact business with any Related Persons of the Gen-
eral Partner; provided, however, that, notwithstanding any pro-
vision to the contrary in this agreement, the General Partner
shall not cause or permit the Partnership or any Person Con-
trolled by the Partnership to enter into or suffer to exist any
transaction or series of related transactions with the General
Partner or any Related Person of the General Partner if such
transaction or series of related transactions is not on an
Arm's-length Basis.
7.06 Fiduciary Duty; Exculpation. The General Part-
ner shall act as a fiduciary for and in the best interests of
the Limited Partners and the Partnership; provided, however,
that (subject to the provisions of the proviso to subsection
7.05(b)) the General Partner and its Affiliates shall at all
times be free to engage for their own account in all aspects of
any business or investment in which the Partnership is involved
and may compete with the business and investments of the Part-
nership; and provided, further, that, notwithstanding any
-23-
contrary provision in this agreement, the acquisition of any
assets in addition to the Core Properties or any other expan-
sion of the business of the Partnership shall be within the
sole discretion of the General Partner. The General Partner
shall not be liable, responsible or accountable in damages or
otherwise to the Partnership or any of the other Partners for
any act or omission performed or omitted in good faith on
behalf of the Partnership and in a manner reasonably believed
to be (i) within the scope of the authority granted by this
agreement and (ii) in the best interests of the Partnership.
So long as the General Partner shall not have violated the pro-
visions of the proviso to subsection 7.01(a), the General Part-
ner shall not be responsible for any misconduct or negligence
on the part of any agent (other than direct employees of the
General Partner) if neither the General Partner nor any of its
Related Persons derived any improper personal benefit from such
misconduct or negligence.
7.07 Indemnification.
(a) The Partnership shall indemnify and hold harm-
less any Person acting on behalf of the Partnership (an "Indem-
nified Party") pursuant to the authority herein granted or
otherwise (to the extent such Person is authorized to act), to
the fullest extent as would be permitted by applicable law of
the State of Delaware affording indemnification to persons act-
ing on behalf of corporations organized in such State (includ-
ing, without limitation, any procedures set forth therein
regarding advancement of expenses to such Indemnified Party),
from and against any and all losses, claims, damages, liabili-
ties, joint and several, expenses (including, without limita-
tion, reasonable legal fees and expenses), judgments, fines,
penalties, interests, settlements and other amounts arising
from any and all claims, demands, actions, suits or proceed-
ings, whether civil, criminal, administrative or investigative,
relating to the activities of such Person acting on behalf of
the Partnership.
(b) The Partnership shall have the authority to pur-
chase and maintain such insurance policies on behalf of the
Indemnified Parties as the General Partner shall determine,
which policies may cover those liabilities the General Partner
reasonably believes may be incurred by an Indemnified Party in
connection with the operation of the business of the Partner-
ship. The right to procure such insurance on behalf of the
Indemnified Parties shall in no way mitigate or otherwise
-24-
affect the right of any such Indemnified Party to indemnifica-
tion pursuant to subsection 7.07(a) hereof.
(c) The provisions of this Section 7.07 are for the
benefit of the Indemnified Parties, their heirs, successors,
assigns and administrators and shall not be deemed to create
any rights in or benefit to any other Person.
7.08 Books and Records at Principal Place of Busi-
ness. The General Partner shall cause the Partnership to main-
tain at its principal place of business full and accurate books
of the Partnership showing all receipts and expenditures,
assets and liabilities, profits and losses, and all other
records necessary for recording the Partnership's business and
affairs, including, without limitation, the following:
(a) a current list in alphabetical order of the full
name and last known business street address of each
Partner;
(b) a copy of the Certificate and all amendments
thereto, together with (i) receipts of filing thereof, and
(ii) executed copies of any powers of attorney pursuant to
which any amendment has been executed;
(c) copies of the Partnership's federal, state and
local income tax returns and reports, if any, for the
three most recent years; and
(d) copies of the Partnership's financial state-
ments, if any, for the three most recent years.
Such books shall be maintained separate from those of any other
Person. Each Partner or its authorized representative shall
have, upon reasonable advance notice in writing, at reasonable
times and at such Partner's expense, the right to review and
make copies of such books and records and to receive true and
complete information regarding Partnership matters to the
extent required (and subject to the limitations) under Delaware
law; provided, however, that the General Partner may impose
reasonable limitations on the access of a Limited Partner to
such books and records to protect against disclosure of propri-
etary or competitively sensitive information or to comply with
the confidentiality restrictions imposed in any agreement to
which the Partnership is a party. The Partnership shall not
impose any service, administrative or other charge upon any
Partner exercising its rights under this Section 7.08 except
-25-
for payment of the Partnership's reasonable costs of photocopy-
ing and postage.
7.09 Annual Audit and Accounting. The books and
records of the Partnership shall be kept on the accrual basis
of accounting in accordance with generally accepted accounting
principles ("GAAP"). The Partnership's accounting period shall
be the calendar year. The accounts of the Partnership shall be
audited annually by a nationally recognized accounting firm of
independent public accounts selected by the General Partner
(the "Independent Accountants"). JMB Partner and its designees
shall be entitled to confer with the Partnership's Independent
Accountants with respect to any and all tax matters that may
affect JMB Partner, including, without limitation, allocations
of indebtedness as contemplated in Section 6.02 and subsection
7.11(e).
7.10 Reports; Notices.
(a) The books of account shall be closed promptly
after the close of each calendar year, and the General Partner
shall prepare and send to each Partner:
(i) Within one hundred fifty (150) days after the
end of the fiscal year, each Partner shall be provided
with an Internal Revenue Service Schedule K-1 with respect
to its distributive share of income, gains, deductions,
losses and credits for income tax reporting purposes for
each Partnership year, together with any other information
concerning the Partnership reasonably necessary for the
preparation of a Partner's income tax return(s);
(ii) Within ninety (90) days after the end of each of
the first three (3) fiscal quarters, as of the last day of
the fiscal quarter, a report containing unaudited xxxxx-
cial statements of the Partnership and such other informa-
tion as may be legally required or determined to be appro-
priate by the General Partner; and
(iii) Within one hundred twenty (120) days after the
end of the fiscal year, as of the close of the fiscal
year, an annual report containing audited financial state-
ments of the Partnership, presented in accordance with
GAAP and certified by the Independent Accountants.
(b) The General Partner shall give prompt written
notice to each other Partner upon (i) the effectiveness of any
-26-
amendment to this agreement, (ii) the General Partner's obtain-
ing knowledge of any material default by the Partnership or a
Person Controlled by the Partnership in respect of any financ-
ing secured by any material real property of the Partnership or
any Person Controlled by the Partnership, (iii) the General
Partner's obtaining knowledge of any facts or circumstances
that constitute a dissolution of the Partnership, (iv) any
recapitalization, merger or consolidation transaction to which
the Partnership becomes or is contemplated to become a party,
(v) the taking of any action at a meeting of the Partners or by
a written consent signed by less than all the Partners and (vi)
the General Partner's obtaining knowledge of any other event or
circumstance that, in the reasonable judgment of the General
Partner, would be of material importance to the Partners.
7.11 Tax Matters.
(a) The General Partner shall be the Tax Matters
Partner of the Partnership for federal income tax matters pur-
suant to Code Section 6231(a)(7)(A). The Tax Matters Partner
shall cause to be prepared all federal, state and local income
tax returns required of the Partnership at the Partnership's
expense. The Tax Matters Partner shall represent the Partner-
ship (at the expense of the Partnership) in connection with all
examinations of the affairs of the Partnership by any federal,
state or local tax authorities, including, without limitation,
any resulting administrative and judicial proceedings, and may
expend funds of the Partnership for professional services and
costs associated therewith. The Partners shall, to the extent
reasonably requested by the General Partner, cooperate (in all
reasonable respects) with each other in connection with the
conduct of all proceedings pursuant to this Section 7.11(a).
(b) The Tax Matters Partner shall receive no compen-
sation for its services in such capacity. If the Tax Matters
Partner incurs any costs related to any tax audit, declaration
of any tax deficiency or any administrative proceeding or liti-
gation involving any Partnership tax matter, such amount shall
be an expense of the Partnership and the Tax Matters Partner
shall be entitled to full reimbursement therefor.
(c) Except as otherwise set forth in this agreement,
the Tax Matters Partner shall determine whether to make (and,
if necessary, revoke) any tax election available to the Part-
nership under the Code or any state tax law.
-27-
(d) In the event that Treasury Regulations are
adopted to replace or supplement, with an elective regime, the
existing Treasury Regulations for classifying certain business
organizations, the General Partner shall elect to be treated as
a partnership for federal income tax purposes and take such
other appropriate actions as shall be prescribed thereunder
consistent with such election.
(e) If requested by JMB, the Partnership shall cause
New 245 Park LP and/or its designee(s) to adopt the "remedial
allocation method" under Treasury Regulations section 1.704-3,
with respect to 000 Xxxx Xxxxxx. The Partnership shall not
permit any such remedial allocation to be revoked or withdrawn
so long as the Partnership continues to own the ultimate bene-
ficial ownership in 000 Xxxx Xxxxxx. If such remedial alloca-
tion method is adopted, the Partners intend that:
(i) JMB Partner's share of the Partnership's liabil-
ities secured by 000 Xxxx Xxxxxx will be approximately
$145,000,000 (assuming JMB's section 704(c) book/tax dif-
xxxxxxx is $155,000,000 upon consummation of the Plan) and
will be subsequently adjusted only for those reductions
required under the remedial allocation method under Trea-
sury Regulations section 1.704-3. To the extent that such
book/tax difference is a different amount, JMB Partner's
share of the Partnership's liabilities will be adjusted as
provided under applicable Treasury Regulations.
(ii) In accordance with the remedial allocation
method under Treasury Regulations section 1.704-3, JMB
Partner's share of the Partnership's section 752 liabili-
ties shall be equal to the product of (A) the total amount
of the Partnership's section 752 liabilities described
under Treasury Regulation section 1.752-3(a)(3) and (B)
JMB Partner's Interest in the Partnership.
(iii) All of the liabilities described in clauses (i)
and (ii) will constitute and be reported as "qualified
nonrecourse financing" within the meaning of
section 465(b)(6) of the Code. Based on existing law and
regulations, in preparing any income tax return of the
Partnership, JMB Partner and New 245 Park LP, the Partner-
ship shall not include, and shall cause JMB Partner and
New 245 Park LP not to include, any attachment or any
statement that indicates that there is more than one
activity for purposes of section 465 of the Code.
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7.12 Withholding of Certain Amounts.
(a) The General Partner may (in addition to amounts
that may be withheld pursuant to Section 9.11) withhold, in its
discretion, from any distribution of cash or property in kind
to any other Partner or its assignee, upon notice to such Part-
ner pursuant to this agreement, the following amounts:
(i) any amounts due from such Partner or assignee to
the Partnership or the General Partner under this agree-
ment; and
(ii) any amounts required (x) for the payment of any
taxes that the General Partner determines in good faith
must be withheld by the Partnership with respect to such
Partner or assignee or (y) to pay or reimburse the General
Partner for any advances made by the General Partner for
such purpose.
(b) Any amounts withheld pursuant to this
Section 7.12 shall be applied by the General Partner to dis-
charge the obligation in respect of which such amounts were
withheld. All amounts distributable to any Partner or assignee
that are withheld pursuant to this Section 7.12 shall be
treated as amounts distributed to such Partner or assignee. To
the extent that any amount paid over (or required to be paid
over) in satisfaction of any obligation described in clause (i)
or clause (ii) exceeds the amount, if any, actually withheld
from a distribution that otherwise would have been made to a
Partner or assignee, such excess shall be treated as an
interest-free advance to such Partner or assignee, secured by
such Partner's or assignee's Interest in the Partnership
("Withholding Advance"). Amounts treated as advanced to any
Partner or assignee pursuant to this Section 7.12 shall be
repaid by such Partner or assignee to the Partnership within
thirty (30) Business Days after the General Partner gives
notice to such Partner or assignee making demand therefor. If
any Partner or assignee of a Partner fails to pay a Withholding
Advance as provided in this subsection 7.12(b), the Partnership
(without limiting any other remedy that may be available to the
Partnership) shall collect any unpaid amounts from any Partner-
ship distributions to such Partner or assignee that otherwise
would be made to such Partner or assignee and/or permanently
adjust the Interest of such Partner or assignee accordingly.
Notwithstanding anything to the contrary set forth herein, in
the event of any failure by a Partner or assignee to perform
its obligations under this Section 7.12, in addition to all
-29-
other rights and remedies available hereunder or under appli-
cable law to the Partnership and the General Partner, the Gen-
eral Partner and the Partnership shall have all the rights and
remedies of a secured creditor under the Uniform Commercial
Code as in effect in the State of Delaware.
(c) If the General Partner determines that the Part-
nership would have insufficient funds (taking into account the
cash needs of its Controlled Affiliates) to make a Withholding
Advance, the General Partner shall be entitled to require the
Partner for which the withholding requirement applies to pay
the amount of such withholding requirement sufficiently in
advance of the payment date to permit the Partnership timely to
satisfy its withholding tax liability.
ARTICLE 8 - COMPENSATION
8.01 No Entitlement to Compensation. No Partner
acting on behalf of the Partnership shall be entitled to com-
pensation or remuneration from the Partnership except as may be
specifically provided in this agreement. The provisions of
this Section shall not limit any compensation or remuneration
that any Partner shall receive from any other Person with which
the Partnership may be an Affiliate or in which the Partnership
is a participant or partner.
8.02 Reimbursement. The Partnership shall reimburse
the General Partner for all reasonable and customary out-of-
pocket expenses incurred by it in managing or otherwise acting
on behalf of the Partnership. If the General Partner shall
determine to engage the services of a general manager or agent
or advisor to provide management or advisory or similar ser-
vices to the Partnership, the reasonable and customary fees and
expenses of such manager, agent or advisor shall be paid by the
Partnership.
ARTICLE 9 - TRANSFERS
9.01 Certain Transfers Void. No Partner may Trans-
fer all or any part of its Interest in the Partnership except
in accordance with the provisions of this Article 9. Any pur-
ported Transfer in violation of this Article 9 shall not bind
the remaining Partners, who may continue to treat the original
Partner as the owner of such Interest for all purposes.
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9.02 Certain Prohibitions on Transfers. Except with
the prior written consent of all the Founding Limited Partners
(which may be withheld for any reason or no reason), no Found-
ing Limited Partner shall make or permit to occur any Transfer
of its Interest (other than (i) a Transfer required pursuant to
Section 5.05 hereof, (ii) a Transfer of any Unrestricted Units
that may be owned by it or (iii) a Transfer constituting, or
made in connection with (or in lieu of) the enforcement of, a
pledge or security interest) or enter into any contract there-
for during the period commencing on the date hereof and ending
on the third anniversary of the date hereof. Commencing after
the third anniversary of the date hereof, without the consent
of any other Partner, each Founding Partner may, at any time,
subject only to the provisions of Section 9.05, Section 9.08
and Section 9.09, Transfer to any Person all or any part of its
Interest; provided, however, that no assignee of a Founding
Partner (other than any assignee of Unrestricted Units acquired
in a transaction that complies with the provisions of Section
9.03) shall be admitted as a Partner of the Partnership except
in compliance with the provisions of Section 9.04. Without the
consent of any other Partner, each Partner that is the holder
of Unrestricted Units may, at any time, subject only to the
provisions of Section 9.05, Section 9.08 and Section 9.09,
Transfer to any Person all or any portion of such Unrestricted
Units.
9.03 Transfers by Certain Partners. Upon any
assignment or other direct Transfer by a Partner of Unre-
stricted Units that does not violate the provisions of
Section 9.05, Section 9.08 or Section 9.09, the transferee
thereof shall be admitted to the Partnership as a Partner upon
receipt of written notice of such Transfer by the General
Partner.
9.04 Approval of Partners.
(a) Other than as set forth in Section 9.03, no
assignee of a Partner's Interest (including, without limita-
tion, an assignee that is a non-United States person) shall be
admitted as a Partner without the consent of non-transferring
Partners owning more than 50% of all the Equity Interests and
more than 50% of any Additional Equity Interests, which consent
may be withheld in the sole and absolute discretion of each
non-transferring Partner. Pending such assignee's admission as
a substitute Partner of the Partnership, and upon receipt of
written notice by the General Partner of the Transfer, such
assignee shall be entitled to share in all allocations and
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distributions of the Partnership (including, without limita-
tion, liquidating distributions) on the same basis as the Part-
ner from which such assignee obtained its Interest. Unless and
until such assignee is admitted as a substitute Partner, such
assignee shall not be entitled to exercise any other rights of
a Partner, including, without limitation, the right to vote (to
the extent such right was available to such assignee's prede-
cessor) on any matter submitted to the Partners for approval,
and such predecessor shall retain the right, if any, to vote
the Interest so Transferred.
(b) The restriction on substitution with respect to
all permitted assignees contained in this Section 9.04 shall be
of no further force or effect if Treasury Regulations are
adopted to replace or supplement, with an elective regime, the
existing Treasury Regulations for classifying certain business
organizations, any required elections are made thereunder and
the elimination of such restriction does not (in the reasonable
judgment of the General Partner) adversely affect the partner-
ship status of the Partnership from its inception.
9.05 Certain Prohibited Transfers.
(a) No Partner shall assign its Interest to any Per-
son that is not a "United States person" within the meaning of
section 7701(a)(30) of the Code, without the prior written con-
sent of the General Partner, which consent shall be granted if
(i) such Person can demonstrate, to the reasonable satisfaction
of the General Partner, its ability to satisfy its potential
liabilities for any withholding tax that may be imposed on its
pro rata share of the Partnership's income and (ii) the General
Partner determines that the withholding obligations to which
the Partnership reasonably may be expected to be subject as a
result of the ownership of such Interest by such assignee, when
taken together with such withholding obligations with respect
to all other Partnership interests held by non-United States
persons, would not have a material adverse effect on the abil-
ity of the Partnership and its Affiliates to satisfy their debt
service requirements and other contractual obligations and
operational requirements. Notwithstanding the foregoing, the
General Partner shall consent to the distribution by Coopers &
Xxxxxxx OYDL of any Class A Units received by it to the Class
28 creditors of Olympia & York Developments Limited, pursuant
to the provisions of the Plan of Arrangement of Olympia & York
Developments Limited, et al. filed under the Companies' Credi-
tors Arrangement Act.
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(b) At least ten (10) Business Days prior to the
date scheduled for a Transfer of any Interest in the Partner-
ship (including, without limitation, a Transfer by any assignee
that has not been admitted as a substitute Partner), the trans-
feror shall provide to the General Partner written notice of
the proposed Transfer. No Transfer of any Class A Unit or
Additional Equity Interest shall be made without the approval
of the General Partner if the Class A Unit or Additional Equity
Interest sought to be Transferred, when added to the total of
all other Class A Units and/or Additional Equity Interests
Transferred (or approved for Transfer), would result in a "ter-
mination" of the Partnership under section 708 of the Code.
The General Partner shall be deemed to have granted approval to
the Transfer for purposes of this Section 9.05(b) unless it
notifies the transferor of its objection to such Transfer at
least four (4) Business Days prior to the date scheduled for
such Transfer, as set forth in such written notice. The Gen-
eral Partner shall give notice to all other Partners in the
event that sales or exchanges should be suspended for such rea-
son. Any sales or exchanges deferred by reason of any such
determination by the General Partner shall be made in chrono-
logical order to the extent practicable commencing on such date
as shall be determined by the General Partner. Notwithstanding
anything to the contrary contained in this agreement, each
Founding Limited Partner shall not, prior to the second anni-
versary of the date of this agreement, consent under the provi-
sions of subsection 9.04(a) to any Transfer that would cause
the provisions set forth in this subsection 9.05(b) to delay a
Transfer of any Unrestricted Units.
(c) No Transfer by the General Partner shall be per-
mitted that would cause the General Partner to have less than a
1% interest in the capital of, and in all items of income,
gain, loss, deduction and credit of, the Partnership.
9.06 Successor General Partner; Removal of General
Partner.
(a) Upon the occurrence of an event described in
subsection 10.01(c), the General Partner shall (i) remain lia-
ble for all obligations and liabilities (other than Partnership
liabilities payable solely from Partnership assets) incurred by
it as General Partner before the effective date of such event
and (ii) pay all costs associated with the admission of its
successor General Partner. The General Partner shall be free
of and held harmless by the Partnership against any obligation
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or liability incurred on account of the activities of the Part-
nership from and after the effective date of such event.
(b) A successor to all of the General Partner's
Interest that is proposed to be admitted to the Partnership as
a successor General Partner shall be admitted as the General
Partner, effective upon the assignment of such Interest to such
proposed successor, upon the approval of Partners (the
"Required Partners") constituting (i) all then existing Found-
ing Limited Partners and (ii) the holders of not less than 75%
of all the Equity Interests and 75% of all Additional Equity
Interests. Any such assignee shall carry on the business of
the Partnership without dissolution. Prior to its admission to
the Partnership, such assignee shall have provided to the Part-
ners such information as to the identity of its Affiliates and
its finances and business and those of its Affiliates as may be
reasonably requested in writing by any Partner. In connection
with the admission of such assignee to the Partnership, such
assignee shall agree in writing to be bound by all the terms
and provisions of this agreement.
(c) The General Partner may be removed and a
replacement General Partner admitted to the Partnership upon
the affirmative vote of the Required Partners; provided, how-
ever, that the rights of the Partners under this subsection (c)
to remove the General Partner and elect a replacement therefor
shall not be effective unless and until (A) the Partnership has
received an opinion of counsel, which counsel is satisfactory
to a majority in interest of the Limited Partners, as to the
legality of such action, and (B) either (x) the Partnership has
received an opinion of counsel, which counsel is satisfactory
to the Required Partners, that such action may be effected
without subjecting the Partners to liability as general
partners under the Act or under the laws of such other
jurisdictions in which the Partnership is formed, re-formed,
re-organized or otherwise qualified, or (y) a Delaware court
having original jurisdiction in the premises has entered a
judgment which has become final to the foregoing effect as to
the Act and an opinion of counsel as provided above has been
obtained as to the laws of such jurisdictions, other than Dela-
ware, in which the Partnership is formed, re-formed,
re-organized or otherwise qualified.
9.07 Successor Partners. In the event of a Bank-
ruptcy of a Limited Partner the bankruptcy trustee or adminis-
trator of such Limited Partner shall succeed to its Interest.
If an individual Limited Limited Partner dies, his executor or
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administrator shall succeed to his Interest. If an individual
Limited Partner shall be adjudicated insane, incompetent or
incapacitated, his committee, guardian or conservator shall
succeed to his Interest.
9.08 Tag-Along Provisions.
(a) If at any time any Partner alone or together
with any other Partners (such Partner or Partners, "Tag-Along
Sellers") propose to enter into an agreement (or substantially
contemporaneous agreements, whether or not with the same or
affiliated parties) to sell or otherwise dispose of for value
to any Person or Group (as such term is defined in Sections
13(d)(3) and 14(d)(2) of the Securities Exchange Act, as
amended and in effect as of the date hereof) other than a
Wholly-Owned Affiliate of the Tag-Along Sellers (a "Tag-Along
Purchaser") a Majority Interest in one or more related transac-
tions (such sale or other disposition for value being referred
to as a "Majority Tag-Along Sale"), then such Tag-Along Sellers
shall afford each other Partner that owns any Unrestricted
Units (each individually a "Tag-Along Partner" and, collec-
tively, the "Tag-Along Partners") the opportunity to partici-
xxxx proportionately with respect to its Unrestricted Units in
such Majority Tag-Along Sale in accordance with this Section
9.08. If at any time any Tag-Along Sellers propose to enter
into an agreement (or substantially contemporaneous agreements,
whether or not with the same or affiliated parties) to sell or
otherwise dispose of for value to any Tag-Along Purchaser a
Qualifying Interest in one or more related transactions (such
sale or other disposition for value being referred to as a
"Qualifying Tag-Along Sale", and, collectively with any Major-
ity Tag-Along Sale, each individually, a "Tag-Along Sale"),
then such Tag-Along Sellers shall afford each Tag-Along Partner
holding as of the close of business on the day immediately
prior to the Tag-Along Notice Date (as herein defined) Unre-
stricted Units representing at least 4% of the total Equity
Interests then outstanding the opportunity to participate pro-
portionately in such Qualifying Tag-Along Sale in accordance
with this Section 9.08; provided, however, that if any Partner
shall have at any time exercised its tag-along rights pursuant
to this Section 9.08, such exercise(s) resulting in the sale or
disposition of a portion, but not all, of such Partner's Unre-
stricted Units, such Partner shall thereafter continue to be
entitled to exercise its tag-along rights with respect to its
remaining Unrestricted Units in connection with any subsequent
Qualifying Tag-Along Sale notwithstanding that, as of the close
of business on the day immediately prior to the Tag-Along
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Notice Date relating to such subsequent Qualifying Tag-Along
Sale, such Partner no longer owns Unrestricted Units represent-
ing at least 4% of the total Equity Interests then outstanding;
and provided, further, that in negotiating a Tag-Along Sale,
the Tag-Along Sellers shall provide that no Tag-Along Partner
shall be required to make any representation, covenant or war-
ranty in connection with the Tag-Along Sale, other than repre-
sentations and warranties as to its valid existence and its
ownership and authority to sell, free of liens, claims or
encumbrances, the Unrestricted Units proposed to be sold by it.
(b) The relevant Tag-Along Sellers shall provide
each Tag-Along Partner entitled to participate in such Tag-
Along Sale pursuant to Section 9.08(a) hereof and the General
Limited Partner with written notice (the "Tag-Along Sale
Notice") not more than sixty (60) days nor less than twenty
(20) days prior to (the date of such Tag-Along Sale Notice
being the "Tag-Along Notice Date") the proposed date of the
Tag-Along Sale (the "Tag-Along Sale Date"). Each Tag-Along
Sale Notice shall be accompanied by a copy of any written
agreement relating to the Tag-Along Sale (redacted to the
extent necessary to comply with any applicable confidentiality
restriction but not so as to eliminate any material information
otherwise required to be provided below) and shall set forth:
(i) the name and address of each proposed Tag-Along Purchaser
of Equity Interests in the Tag-Along Sale, (ii) the total per-
centage of Equity Interests proposed to be Transferred by such
Tag-Along Sellers (the "Original Sale Percentage"), (iii) the
proposed amount of consideration to be paid for such Equity
Interests, which consideration may only be paid in cash, and
the terms and conditions of payment offered by each proposed
Tag-Along Purchaser and (v) the Tag-Along Sale Date.
(c) Any Tag-Along Partner entitled to participate in
the relevant Tag-Along Sale pursuant to Section 9.08(a) hereof
wishing to participate in the Tag-Along Sale shall provide
written notice (the "Tag-Along Notice") to the relevant Tag-
Along Sellers no less than five (5) Business Days prior to the
Tag-Along Sale Date. The Tag-Along Notice shall set forth the
maximum percentage of Equity Interests that such Tag-Along
Partner elects to include in the Tag-Along Sale (such Limited
Partner's "Tag-Along Sale Percentage"). The Tag-Along Notice
given by any Tag-Along Partner shall constitute such Tag-Along
Partner's binding agreement to sell the Unrestricted Units
specified in the Tag-Along Notice on the terms and conditions
applicable to the Tag-Along Sale; provided, however, that in
the event that there is any material change in the terms and
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conditions of such Tag-Along Sale applicable to the Tag-Along
Partner (including, without limitation, any decrease in the
purchase price that occurs other than pursuant to an adjustment
mechanism set forth in the agreement relating to the Tag-Along
Sale) after such Tag-Along Partner gives its Tag-Along Notice,
then, notwithstanding anything herein to the contrary, the Tag-
Along Partner shall have the right to withdraw from participa-
tion in the Tag-Along Sale with respect to all of its Unre-
stricted Units affected thereby. If the proposed Tag-Along
Purchaser does not agree to consummate the purchase for cash
consideration of all of the Unrestricted Units requested to be
included in the Tag-Along Sale by the Tag-Along Partners on the
same terms and conditions applicable to the proposed purchase
of the Original Sale Percentage of the Tag-Along Sellers, then
such Tag-Along Sellers shall not consummate the Tag-Along Sale
of any of its Equity Interests to such Tag-Along Purchaser,
unless the percentages of Equity Interests to be included in
such Tag-Along Sale by such Tag-Along Sellers and the partici-
pating Tag-Along Partners are reduced or limited pro rata, in
proportion to their respective Original Sale Percentages and
Tag-Along Sale Percentages, to the total percentage of Equity
Interests agreed to be purchased by such Tag-Along Purchaser
(which total percentage shall not in any case be less than the
Original Sale Percentage), and all other terms and conditions
of the Tag-Along Sale are the same for such Tag-Along Sellers
and the Tag-Along Partners (except as otherwise provided in the
proviso to subsection 9.08(a)).
If a Tag-Along Notice from any Tag-Along Partner is
not received by such Tag-Along Sellers prior to the five (5)
Business Day period specified above, such Tag-Along Sellers
shall have the right to consummate the Tag-Along Sale without
the participation of such Tag-Along Partner, but only on terms
and conditions which are no more favorable in any material
respect to such Tag-Along Sellers (and in any event, at no
greater a purchase price, except as the purchase price may be
adjusted pursuant to the agreement relating to the relevant
Tag-Along Sale) than as stated in the Tag-Along Sale Notice and
only if such Tag-Along Sale is consummated on a date within
sixty (60) days of the Tag-Along Sale Date. If such Tag-Along
Sale is not consummated within such sixty (60) day period, the
Equity Interests that were to be subject to such Tag-Along Sale
thereafter shall continue to be subject to all of the restric-
tions contained in this Section 9.08.
(d) On the Tag-Along Sale Date, each Tag-Along Part-
ner shall deliver such documentation, certificates or other
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instruments with respect to the Unrestricted Units to be sold
by it in connection with the Tag-Along Sale as reasonably
required for the Transfer of such Unrestricted Units to the
relevant Tag-Along Purchaser, against delivery of the purchase
price for such Unrestricted Units.
(e) The percentages of Unrestricted Units to be sold
by each Limited Partner in a Tag-Along Sale under this Section
9.08 shall be subject to reduction on a pro rata basis to the
extent necessary to permit the Partnership to perform its obli-
gations under the Convertible Note Documents and to enable each
holder of a Convertible Note to obtain, on a ratable basis
(based on the number of Class A Units into which such holder's
Convertible Note is convertible) with the Limited Partners
entitled to participate in any sale transaction subject to this
Section 9.08, the same tag-along rights that are available to
such Limited Partners holding Unrestricted Units under this
Section 9.08.
(f) The closing of any Transfer of any Unrestricted
Units pursuant to this Section 9.08 shall take place at the
offices of the Partnership (or at such other location as shall
reasonably be designated by the General Partner) concurrently
with the closing of any sale by the Tag-Along Sellers to the
Tag-Along Purchaser.
9.09 Transfers to Comply with Laws. Notwithstanding
any contrary provision herein, no Limited Partner may Transfer
or offer to Transfer any Interest (or solicit any offers to
Transfer any Interest), and no Transfer, offer to Transfer or
solicitation of offers to Transfer an Interest permitted here-
under shall be permitted, except in compliance with the Securi-
ties Act of 1933, as amended, and rules and regulations promul-
gated thereunder and in compliance with any applicable state
securities laws and rules and regulations promulgated thereun-
der.
9.10 Assumption by Transferee. The Transfer of an
Interest pursuant to this Article 9 to a Person that is not a
Partner and the admission of such Person as a Partner of the
Partnership under Section 9.04 shall be conditioned on such
Person executing documents reasonably required by the General
Partner for such Person to assume the obligations, if any, of
the Selling Partner hereunder.
9.11 Remedies for Impermissible Transfer. Without
limiting any other remedies available to the Partnership or any
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of the other Partners, upon any breach by a Partner of its
obligations under this Article 9, the General Partner may, and,
upon written demand of Partners owning Equity Interests aggre-
gating at least 20% of all the Equity Interests in the Partner-
ship, shall, so long as any breach by such Limited Partner of
its obligations under such Article shall be continuing, with-
hold distributions of Available Funds to such Partner.
ARTICLE 10 - DISSOLUTION AND TERMINATION
10.01 Events of Dissolution. The Partnership shall
continue until December 31, 2095 unless sooner dissolved by:
(a) the affirmative vote of Partners constituting
(i) all the then existing Founding Limited Partners and
(ii) the holders of not less than two-thirds of all the
Equity Interests and not less than two-thirds of all Addi-
tional Equity Interests;
(b) any event which makes it unlawful for the busi-
ness of the Partnership to be carried on by the Partners;
(c) the death, retirement, resignation, expulsion,
Bankruptcy, liquidation or dissolution of the General
Partner or the occurrence of any other event that termi-
nates the continued membership of the General Partner in
the Partnership; provided, however, that the General Part-
ner shall not withdraw, retire or resign from the Partner-
ship unless a successor general partner shall have been,
or contemporaneously is being, admitted to the Partnership
in accordance with Section 10.02 of this agreement;
(d) the entry of a decree of judicial dissolution of
the Partnership under the Act; or
(e) the sale, exchange or other disposition of all
or substantially all of the Partnership's assets.
10.02 Continuance of the Partnership. Notwithstand-
ing the foregoing provisions of Section 10.01, upon the occur-
rence of an event described in subsection 10.01(c) hereof, the
remaining Partners shall have the right to continue the busi-
ness of the Partnership. Such right may be exercised only by
the affirmative vote of Partners constituting (i) all the then
existing Founding Limited Partners and (ii) the holders of not
less than two-thirds of all the Equity Interests and not less
-39-
than two-thirds of all Additional Equity Interests, within 90
days after the occurrence of an event described in subsection
10.01(c) hereof, to continue the business of the Partnership
and the selection of a successor General Partner under the
terms of Section 9.06. If not so exercised, the right of the
Partners to continue the business of the Partnership shall
expire and the Partnership's affairs shall be wound up as pro-
vided in Section 10.03.
10.03 Liquidation of Partnership Assets.
(a) Subject to the provisions of subsection
10.03(e), in the event of dissolution pursuant to Section
10.01, the Partnership shall continue solely for purposes of
winding up the affairs of, achieving a final termination of,
and satisfaction of the creditors of, the Partnership. The
General Partner (or, if there is no General Partner remaining,
any Person elected by the affirmative vote of Partners consti-
tuting (i) all the then existing Founding Limited Partners and
(ii) the holders of not less than two-thirds of all the Equity
Interests and not less than two-thirds of all Additional Equity
Interests (the "Liquidator")) shall be responsible for over-
sight of the winding up and dissolution of the Partnership.
The Liquidator shall obtain a full accounting of the assets and
liabilities of the Partnership and such Partnership assets
shall be liquidated as promptly as the Liquidator is able to do
so without any undue loss in value, with the proceeds therefrom
applied and distributed in the following order:
(1) First, to the discharge of Partnership debts and
liabilities to creditors other than Limited
Partners;
(2) Second, to the discharge of Partnership debts
and liabilities to the Partners;
(3) The balance, if any, to the Partners in propor-
tion to their Equity Interests.
(b) In accordance with subsection 10.03(a), the
Liquidator shall proceed without any unnecessary delay to sell
and otherwise liquidate the Partnership assets; provided, how-
ever, that if the Liquidator shall determine that an immediate
sale of part or all of the Partnership assets would cause undue
loss to the Partners, the Liquidator may defer the liquidation
except (i) to the extent provided by the Act or (ii) as may be
-40-
necessary to satisfy the debts and liabilities of the Partner-
ship to Persons other than the Partners.
(c) If, in the sole and absolute discretion of the
Liquidator, there are Partnership assets that the Liquidator
will not be able to liquidate, or if the liquidation of such
assets would result in undue loss to the Partners, the Liquida-
tor may distribute such Partnership assets to the Partners
in-kind, in lieu of cash, as tenants-in-common (each having an
interest therein proportionate to its Equity Interest (as
adjusted to reflect the terms of any Additional Equity Inter-
ests owned by such Partner)) in accordance with the provisions
of subsection 10.03(a). The foregoing notwithstanding, such
in-kind distributions shall only be made if in the Liquidator's
good faith judgment that is in the best interest of the
Partners.
(d) Upon the complete liquidation and distribution
of the Partnership assets, the Partners shall cease to be Part-
ners of the Partnership, and the Liquidator shall execute,
acknowledge and cause to be filed all certificates and notices
required by law to terminate the Partnership. Upon the disso-
lution of the Partnership pursuant to Section 10.01, the Liqui-
dator shall cause to be prepared, and shall furnish to each of
the Partners, a statement setting forth the assets and liabili-
ties of the Partnership. Promptly following the complete
liquidation and distribution of the Partnership assets, the
Liquidator shall furnish to each Partner a statement showing
the manner in which the Partnership assets were liquidated and
distributed.
10.04 Time for Winding-Up. Anything in this
Article 10 notwithstanding, a reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the
Partnership and the liquidation of the Partnership assets in
order to minimize any potential for losses as a result of such
process. During the period of winding-up, this agreement shall
remain in full force and effect and shall govern the rights and
relationships of the Partners inter se.
ARTICLE 11 - GENERAL PROVISIONS
11.01 Entire Agreement; Amendments and Waivers.
(a) This agreement contains the entire agreement
among the parties and supersedes all prior written or oral
-41-
agreements among them respecting the subject matter hereof.
Without limiting the generality of the immediately preceding
sentence, in the event of any inconsistency between the Plan
and this agreement, the provisions of this agreement shall
govern.
(b) Except for amendments authorized under subsec-
tion 11.01(c), this agreement may not be amended without the
approval in writing of Partners constituting (i) all then
existing Founding Limited Partners and (ii) the holders of not
less than two-thirds of all the Equity Interests and not less
than two-thirds of all Additional Equity Interests; provided,
however, that, without the written consent of each Partner
affected thereby, no amendment hereto may have the effect of
(i) converting a Limited Partner's Interest into a general
partner interest, (ii) imposing any personal liability on any
Limited Partner, (iii) altering the Equity Interest of any
Partner (other than pursuant to subsection 7.12(c) or in con-
nection with the issuance of Additional Equity Interests pursu-
ant to subsection 4.02(a)), (iv) impairing any Partner's rights
under Section 9.08, (v) amending Article 6 or the definition of
any term used in Article 6, (vi) amending Section 9.03 or
otherwise imposing (except as may hereafter be required by vir-
tue of any change in applicable law) any additional restric-
tions on the Transfer of any Unrestricted Units, (vii) amending
this subsection 11.01(b) or subsection 11.01(c) or the defini-
tion of any term used in this subsection 11.01(b) or subsection
11.01(c) or (viii) amending subsection 11.09(b) or the defini-
tion of any term used in such subsection. In addition, amend-
ments (A) to Article 5, (B) that provide for additional excul-
pations or greater rights of indemnification of the General
Partner, (C) to the definition of Unit Value, (D) to Sections
7.07 through 7.10, (E) to subsection 11.09(b) or the proviso to
Section 7.05(b) or (F) of any terms defined in such articles,
sections or provisions shall require the approval of holders of
not less than a majority of the Equity Interests and a majority
of all Additional Equity Interests, in each case not held,
directly or indirectly, by the General Partner or by any
Related Person of the General Partner.
(c) In addition to any amendments otherwise autho-
rized herein, amendments may be made to this agreement from
time to time by the General Partner, without the consent of any
of the Limited Partners, (i) to add to the representations,
duties or obligations of the General Partner or surrender any
right or power granted to the General Partner herein, for the
benefit of the Limited Partners, (ii) to cure any ambiguity, to
-42-
correct or supplement any provision herein that may be incon-
sistent with any other provision herein, or to make any other
provisions with respect to matters or questions arising under
this agreement that will not be inconsistent with the provi-
sions of this agreement, (iii) to reflect the conversion to
Class A Units of any Class B Units, (iv) to reflect the cancel-
lation of any Class B Units as contemplated in Section 4.03,
(v) to amend Schedule I hereto to reflect the addition or sub-
stitution of Partners, (vi) to adjust the Equity Interest of a
Partner pursuant to subsection 7.12(c), (vii) to admit any
Additional General Partner and provide for rights and obliga-
tions of such Additional General Partner in accordance with the
provisions of subsection 4.02(c) or to convert the Interest of
any Additional General Partner into a limited partnership
Interest pursuant to the provisions of subsection 4.02(d) or
(viii) to document the issuance of Class A Units or Additional
Equity Interests pursuant to Section 4.02 or any exercise of
the Conversion Right or any similar conversion right; provided,
however, that no amendment made pursuant to this subsection
11.01(c) shall (x) have any of the effects referred in the pro-
viso to the first sentence of subsection 11.01(b) or (y) effect
any amendment referred to in the last sentence of subsection
11.01(b).
(d) No Partner may be charged with any waiver of its
rights hereunder unless such waiver shall be in writing signed
by such Partner.
(e) This agreement shall be binding upon and shall
inure to the benefit of the parties and their respective per-
xxxxx representatives, successors and assigns.
11.02 Appointment of Attorney or Agent. (a) Each
Partner by its execution hereof or any assumption instrument
contemplated in Section 9.10 does irrevocably constitute and
appoint the General Partner (which term shall include the
Liquidator, in the event of a liquidation, for purposes of this
Section 11.02) as attorney-in-fact with full power of substitu-
tion, as its true and lawful attorney, in its name, place and
stead to make, execute, acknowledge, swear to and file in the
appropriate public offices (i) the Certificate, (ii) all amend-
ments to this agreement or to the Certificate required by law
or authorized or required by the provisions of this agreement
or the Certificate, (iii) all certificates and other instru-
ments necessary to qualify or continue the Partnership as a
limited partnership in the states or countries where the Part-
nership is doing or intends to do business, (iv) any other
-43-
instrument which may be required to be filed by the Partnership
under the laws of any state or governmental agency, or which
the General Partner deems advisable to file, and (v) all con-
veyances and other instruments necessary to effect the continu-
ation of the Partnership or the admission, withdrawal or sub-
stitution of any Partner pursuant to Article 9 or to effect the
Partnership's dissolution and termination pursuant to
Article 10.
(b) The powers of attorney granted herein shall be
deemed to be coupled with an interest and shall be irrevocable
and survive the dissolution, death or incompetency of the Part-
ners. In the event of any conflict between this agreement and
any instruments filed by such attorney pursuant to the power of
attorney granted in this Section 11.02, this agreement shall
control.
11.03 Construction. The singular shall be deemed to
include the plural and vice versa. The section headings and
paragraph titles are for convenience of reference only and
shall have no significance in the interpretation of this
agreement.
11.04 Governing Law. This agreement is governed by
and shall be construed in accordance with the law of the State
of Delaware.
11.05 Further Assurances. The parties agree to exe-
cute and deliver all such documents, provide all such informa-
tion and take or refrain from taking any action as may be nec-
xxxxxx or desirable to achieve the purposes of this agreement
and the Partnership.
11.06 Titles and Captions. All articles or section
titles or captions in this agreement are solely for convenience
and shall not be deemed to be part of this agreement or other-
wise define, limit or extend the scope or intent of any provi-
sion hereof.
11.07 Binding Agreement. This agreement shall be
binding upon the parties hereto, their heirs, executors, per-
xxxxx representatives, successors and assigns.
11.08 Waiver of Partition; Appraisal Rights.
(a) Each of the parties hereto irrevocably waives
during the term of the Partnership any right that it may have
-44-
to maintain any action for partition with respect to any prop-
erty of the Partnership.
(b) The Limited Partners shall each have, in respect
of the Class A Units only, the appraisal rights contemplated in
Section 17-212 of the Act to the same extent as would be avail-
able to a shareholder of a corporation organized under the laws
of the State of Delaware.
11.09 Counterparts and Effectiveness. This agree-
ment may be executed in several counterparts, which shall be
treated as originals for all purposes, and all so executed
shall constitute one agreement, binding on all of the parties
hereto, notwithstanding that all the parties are not signatory
to the original or the same counterpart. Any such counterpart
shall be admissible into evidence as an original hereof against
each Person who executed it. The execution of this agreement
and delivery thereof by facsimile shall be sufficient for all
purposes, and shall be binding upon any party who so executes.
11.10 Waiver of Trial by Jury. Each Partner, by its
execution and delivery of this agreement, waives any and all
rights it may have to trial by jury of any matter, cause, dis-
pute or other claim arising under this agreement or otherwise
relating to the Partnership.
-45-
IN WITNESS WHEREOF, each of the undersigned has
signed this agreement as set forth below to be effective as of
the date first above written.
WORLD FINANCIAL PROPERTIES GP CORP.,
as General Partner
By:
---------------------------------
Name:
Title:
BATTERY PARK HOLDINGS INC.,
as a Limited Partner
By:
---------------------------------
Name:
Title:
[THE CANADIAN IMPERIAL BANK
OF COMMERCE OR ITS SUB], as a
Limited Partner
By:
---------------------------------
Name:
Title:
[DRAGON HOLDINGS LIMITED SUB],
as a Limited Partner
By:
---------------------------------
Name:
Title:
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[CITIBANK, N.A. SUB], as a
Limited Partner
By:
---------------------------------
Name:
Title:
[OLYMPIA & YORK 245 PARK HOLDING
CO. L.P.], as a Limited Partner
By:
---------------------------------
Name:
Title:
WORLD FINANCIAL PROPERTIES GP CORP.,
as authorized signatory for the
Limited Partners identified on
Schedule I annexed hereto
By:
---------------------------------
Name:
Title:
SCHEDULE I
Partners
Partner
_______ _________ _________
Class A Class B-1 Class B-2
General Partner Units Units Units
World Financial Properties GP Corp.
Limited Partners
BATTERY PARK HOLDINGS
INC.
----- ----- -----
[CANADIAN IMPERIAL BANK
OF COMMERCE SUB]
----- ----- -----
[DRAGON HOLDINGS
LIMITED SUB]
----- ----- -----
[CITIBANK, N.A. SUB]
----- ----- -----
[OLYMPIA & YORK 245 PARK
HOLDING COMPANY L.P.]
----- ----- -----
[UNSECURED CREDITOR]
----- ----- -----
[UNSECURED CREDITOR]
----- ----- -----
[UNSECURED CREDITOR]
----- ----- -----
[UNSECURED CREDITOR]
----- ----- -----
[UNSECURED CREDITOR]
----- ----- -----
[UNSECURED CREDITOR] _____ _____ _____
----- ----- -----
