\n Section 15.13 No Rights as Shareholders………………………………………………..59
\n Section 15.14 Limitation to Preserve REIT Status………………………………………..60
\n<\/c><\/s><\/table>\n -iii-
\n 5
\n EXHIBIT A
\n PARTNERS AND PARTNERSHIP INTERESTS<\/p>\n
EXHIBIT B
\n CAPITAL ACCOUNT MAINTENANCE<\/p>\n
EXHIBIT C
\n SPECIAL ALLOCATION RULES<\/p>\n
EXHIBIT D
\n NOTICE OF REDEMPTION<\/p>\n
EXHIBIT E
\n VALUE OF CONTRIBUTED PROPERTY<\/p>\n
-iv-
\n 6
\n AGREEMENT OF LIMITED PARTNERSHIP
\n OF
\n EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of July 3,
\n1997, is entered into by and among Zell\/Merrill Lynch Real Estate Opportunity
\nPartners Limited Partnership II, an Illinois limited partnership, and Equity
\nOffice Properties Trust, a Maryland real estate investment trust, as the General
\nPartners, and the Persons whose names are set forth on Exhibit A hereto as
\nLimited Partners, together with any other Persons who become Partners in the
\nPartnership as provided herein.<\/p>\n
NOW, THEREFORE, in consideration of the mutual covenants set
\nforth herein, and for other good and valuable consideration, the receipt and
\nsufficiency of which are hereby acknowledged, the parties hereto hereby agree to
\nform the Partnership as a limited partnership under the Delaware Revised Uniform
\nLimited Partnership Act, as amended from time to time, as follows:<\/p>\n
ARTICLE I
\n DEFINED TERMS<\/p>\n
The following definitions shall be for all purposes, unless
\notherwise clearly indicated to the contrary, applied to the terms used in this
\nAgreement.<\/p>\n
“Act” means the Delaware Revised Uniform Limited Partnership
\nAct, as it may be amended from time to time, and any successor to such statute.<\/p>\n
“Additional Limited Partner” means a Person admitted to the
\nPartnership as a Limited Partner pursuant to Section 12.2 hereof and who is
\nshown as such on the books and records of the Partnership.<\/p>\n
“Adjusted Capital Account” means the Capital Account
\nmaintained for each Partner as of the end of each Partnership Year (i) increased
\nby any amounts which such Partner is obligated to restore pursuant to any
\nprovision of this Agreement or is deemed to be obligated to restore pursuant to
\nthe penultimate sentences of Regulations Sections 1.704-2(g)(1) and
\n1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections
\n1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).
\nThe foregoing definition of Adjusted Capital Account is intended to comply with
\nthe provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
\ninterpreted consistently therewith.<\/p>\n
“Adjusted Capital Account Deficit” means, with respect to any
\nPartner, the deficit balance, if any, in such Partner’s Adjusted Capital Account
\nas of the end of the relevant Partnership Year.<\/p>\n
“Adjusted Property” means any property the Carrying Value of
\nwhich has been adjusted pursuant to Exhibit B.<\/p>\n
“Adjustment Date” has the meaning set forth in Section 4.2.B.
\n 7
\n “Affiliate” means, with respect to any Person, (i) any Person
\ndirectly or indirectly controlling, controlled by or under common control with
\nsuch Person, (ii) any Person owning or controlling ten percent (10%) or more of
\nthe outstanding voting interests of such Person, (iii) any Person of which such
\nPerson owns or controls ten percent (10%) or more of the voting interests or
\n(iv) any officer, director, general partner or trustee of such Person or any
\nPerson referred to in clauses (i), (ii), and (iii) above. For purposes of this
\ndefinition, “control,” when used with respect to any Person, means the power to
\ndirect the management and policies of such Person, directly or indirectly,
\nwhether through the ownership of voting securities, by contract or otherwise,
\nand the terms “controlling” and “controlled” have meanings correlative to the
\nforegoing.<\/p>\n
“Agreed Value” means (i) in the case of any Contributed
\nProperty contributed to the Partnership as part of or in connection with the
\nConsolidation, the amount set forth on Exhibit E as the Agreed Value of such
\nProperty; (ii) in the case of any other Contributed Property, the 704(c) Value
\nof such property as of the time of its contribution to the Partnership, reduced
\nby any liabilities either assumed by the Partnership upon such contribution or
\nto which such property is subject when contributed; and (iii) in the case of any
\nproperty distributed to a Partner by the Partnership, the Partnership’s Carrying
\nValue of such property at the time such property is distributed, reduced by any
\nindebtedness either assumed by such Partner upon such distribution or to which
\nsuch property is subject at the time of distribution as determined under Section
\n752 of the Code and the regulations thereunder.<\/p>\n
“Agreement” means this Agreement of Limited Partnership, as it
\nmay be amended, supplemented or restated from time to time.<\/p>\n
“Assignee” means a Person to whom one or more Partnership
\nUnits have been transferred in a manner permitted under this Agreement, but who
\nhas not become a Substituted Limited Partner, and who has the rights set forth
\nin Section 11.5.<\/p>\n
“Available Cash” means, with respect to any period for which
\nsuch calculation is being made:<\/p>\n
(a) all cash revenues and funds received by the Partnership
\nfrom whatever source (excluding the proceeds of any Capital Contribution) plus
\nthe amount of any reduction (including, without limitation, a reduction
\nresulting because the Managing General Partner determines such amounts are no
\nlonger necessary) in reserves of the Partnership, which reserves are referred to
\nin clause (b)(iv) below;<\/p>\n
(b) less the sum of the following (except to the extent made
\nwith the proceeds of any Capital Contribution):<\/p>\n
(i) all interest, principal and other debt payments
\nmade during such period by the Partnership,<\/p>\n
(ii) all cash expenditures (including capital
\nexpenditures) made by the Partnership during such period,<\/p>\n
(iii) investments in any entity (including loans made
\nthereto) to the extent that such investments are permitted under this Agreement
\nand are not otherwise described in clauses (b)(i) or (ii), and<\/p>\n
-2-
\n 8
\n (iv) the amount of any increase in reserves
\nestablished during such period which the Managing General Partner determines is
\nnecessary or appropriate in its sole and absolute discretion.<\/p>\n
Notwithstanding the foregoing, Available Cash shall not
\ninclude any cash received or reductions in reserves, or take into account any
\ndisbursements made or reserves established, after commencement of the
\ndissolution and liquidation of the Partnership.<\/p>\n
“Book-Tax Disparities” means, with respect to any item of
\nContributed Property or Adjusted Property, as of the date of any determination,
\nthe difference between the Carrying Value of such Contributed Property or
\nAdjusted Property and the adjusted basis thereof for federal income tax purposes
\nas of such date. A Partner’s share of the Partnership’s Book-Tax Disparities in
\nall of its Contributed Property and Adjusted Property will be reflected by the
\ndifference between such Partner’s Capital Account balance as maintained pursuant
\nto Exhibit B and the hypothetical balance of such Partner’s Capital Account
\ncomputed as if it had been maintained strictly in accordance with federal income
\ntax accounting principles.<\/p>\n
“Business Day” means any day except a Saturday, Sunday or
\nother day on which commercial banks in Chicago, Illinois are authorized or
\nrequired by law to close.<\/p>\n
“Capital Account” means the Capital Account maintained for a
\nPartner pursuant to Exhibit B.<\/p>\n
“Capital Contribution” means, with respect to any Partner, any
\ncash, cash equivalents or the Agreed Value of Contributed Property which such
\nPartner contributes or is deemed to contribute to the Partnership pursuant to
\nSection 4.1 or 4.2.<\/p>\n
“Carrying Value” means (i) with respect to a Contributed
\nProperty or Adjusted Property, the 704(c) Value of such property reduced (but
\nnot below zero) by all Depreciation with respect to such Contributed Property or
\nAdjusted Property, as the case may be, charged to the Partners’ Capital Accounts
\nand (ii) with respect to any other Partnership property, the adjusted basis of
\nsuch property for federal income tax purposes, all as of the time of
\ndetermination. The Carrying Value of any property shall be adjusted from time to
\ntime in accordance with Exhibit B, and to reflect changes, additions (including
\ncapital improvements thereto) or other adjustments to the Carrying Value for
\ndispositions and acquisitions of Partnership properties, as deemed appropriate
\nby the Managing General Partner.<\/p>\n
“Cash Amount” means an amount of cash equal to the Value on
\nthe Valuation Date of the Shares Amount.<\/p>\n
“Certificate” means the Certificate of Limited Partnership
\nrelating to the Partnership filed in the office of the Delaware Secretary of
\nState, as amended from time to time in accordance with the terms hereof and the
\nAct.<\/p>\n
“Class A” has the meaning set forth in Section 5.1.C.<\/p>\n
“Class A Share” has the meaning set forth in Section 5.1.C.<\/p>\n
-3-
\n 9
\n “Class A Unit” means any Partnership Unit that is not
\nspecifically designated by the Managing General Partner as being of another
\nspecified class of Partnership Units.<\/p>\n
“Class B” has the meaning set forth in Section 5.1.C.<\/p>\n
“Class B Share” has the meaning set forth in Section 5.1.C.<\/p>\n
“Class B Unit” means a Partnership Unit that is specifically
\ndesignated by the Managing General Partner as being a Class B Unit.<\/p>\n
“Code” means the Internal Revenue Code of 1986, as amended and
\nin effect from time to time, as interpreted by the applicable regulations
\nthereunder. Any reference herein to a specific section or sections of the Code
\nshall be deemed to include a reference to any corresponding provision of future
\nlaw.<\/p>\n
“Consent” means the consent or approval of a proposed action
\nby a Partner given in accordance with Section 14.2.<\/p>\n
“Consent of the Outside Limited Partners” means the Consent of
\nLimited Partners (excluding for this purpose any Limited Partnership Interests
\nheld by the Managing General Partner, any of the Opportunity Partnerships, any
\nother Person of which the Managing General Partner owns or controls more than
\nfifty percent (50%) of the voting interests and any Person directly or
\nindirectly owning or controlling more than fifty percent (50%) of the
\noutstanding voting interests of the Managing General Partner) holding Percentage
\nInterests that are greater than fifty percent (50%) of the aggregate Percentage
\nInterest of all Limited Partners who are not excluded for the purposes hereof.<\/p>\n
“Consolidation” means (i) the transactions whereby the
\nPartnership will acquire interests in certain office properties owned by the
\nOpportunity Partnerships and certain asset management and property management
\nbusinesses which provide services to those properties and to other office
\nproperties, in exchange for Partnership Units, and (ii) the merger of the ZML
\nInvestors, Inc., ZML Investors II, Inc., Zell\/Merrill Lynch Real Estate
\nOpportunity Partners III Trust and Zell\/Merrill Lynch Real Estate Opportunity
\nPartners IV Trust with and into Equity Office Holdings Trust, all as described
\nin a Joint Proxy Statement\/Offering Memorandum dated March 25, 1997.<\/p>\n
“Contributed Property” means each property or other asset
\ncontributed to the Partnership, in such form as may be permitted by the Act, but
\nexcluding cash contributed or deemed contributed to the Partnership. Once the
\nCarrying Value of a Contributed Property is adjusted pursuant to Exhibit B, such
\nproperty shall no longer constitute a Contributed Property for purposes of
\nExhibit B, but shall be deemed an Adjusted Property for such purposes.<\/p>\n
“Conversion Factor” means 1.0; provided that, if the General
\nPartner Entity (i) declares or pays a dividend on its outstanding Shares in
\nShares or makes a distribution to all holders of its outstanding Shares in
\nShares, (ii) subdivides its outstanding Shares or (iii) combines its outstanding
\nShares into a smaller number of Shares, the Conversion Factor shall be adjusted
\nby multiplying the Conversion Factor by a fraction, the numerator of which shall
\nbe the number of Shares issued and outstanding on the record date for such
\ndividend, distribution, subdivision or combination (assuming for such purposes
\nthat such dividend, distribution, subdivision or combination has occurred as of
\nsuch time) and the denominator of which shall be the actual number of Shares
\n(determined without the above assumption) issued and outstanding on the record
\ndate for such dividend, distribution, subdivision or <\/p>\n
-4-
\n 10
\ncombination; and provided further that if an entity shall cease to be the
\nGeneral Partner Entity (the “Predecessor Entity”) and another entity shall
\nbecome the General Partner Entity (the “Successor Entity”), the Conversion
\nFactor shall be adjusted by multiplying the Conversion Factor by a fraction, the
\nnumerator of which is the Value of one Share of the Predecessor Entity,
\ndetermined as of the date when the Successor Entity becomes the General Partner
\nEntity, and the denominator of which is the Value of one Share of the Successor
\nEntity, determined as of that same date. (For purposes of the second proviso in
\nthe preceding sentence, if any shareholders of the Predecessor Entity will
\nreceive consideration in connection with the transaction in which the Successor
\nEntity becomes the General Partner Entity, the numerator in the fraction
\ndescribed above for determining the adjustment to the Conversion Factor (that
\nis, the Value of one Share of the Predecessor Entity) shall be the sum of the
\ngreatest amount of cash and the fair market value (as determined in good faith
\nby the Managing General Partner) of any securities and other consideration that
\nthe holder of one Share in the Predecessor Entity could have received in such
\ntransaction (determined without regard to any provisions governing fractional
\nshares).) Any adjustment to the Conversion Factor shall become effective
\nimmediately after the effective date of the event retroactive to the record
\ndate, if any, for the event giving rise thereto, it being intended that (x)
\nadjustments to the Conversion Factor are to be made to avoid unintended dilution
\nor anti-dilution as a result of transactions in which Shares are issued,
\nredeemed or exchanged without a corresponding issuance, redemption or exchange
\nof Partnership Units and (y) if a Specified Redemption Date shall fall between
\nthe record date and the effective date of any event of the type described above,
\nthat the Conversion Factor applicable to such redemption shall be adjusted to
\ntake into account such event.<\/p>\n
“Convertible Funding Debt” has the meaning set forth in
\nSection 7.5.F.<\/p>\n
“Debt” means, as to any Person, as of any date of
\ndetermination, (i) all indebtedness of such Person for borrowed money or for the
\ndeferred purchase price of property or services, (ii) all amounts owed by such
\nPerson to banks or other Persons in respect of reimbursement obligations under
\nletters of credit, surety bonds and other similar instruments guaranteeing
\npayment or other performance of obligations by such Person, (iii) all
\nindebtedness for borrowed money or for the deferred purchase price of property
\nor services secured by any lien on any property owned by such Person, to the
\nextent attributable to such Person’s interest in such property, even though such
\nPerson has not assumed or become liable for the payment thereof, and (iv)
\nobligations of such Person incurred in connection with entering into a lease
\nwhich, in accordance with generally accepted accounting principles, should be
\ncapitalized.<\/p>\n
“Declaration of Trust” means the Declaration of Trust of
\nEquity Office Properties Trust filed in the State of Maryland on October 9 1996,
\nas amended or restated from time to time.<\/p>\n
“Deemed Partnership Interest Value” means, as of any date with
\nrespect to any class of Partnership Interests, the Deemed Value of the
\nPartnership Interest of such class multiplied by the applicable Partner’s
\nPercentage Interest of such class.<\/p>\n
“Deemed Value of the Partnership Interest” means, as of any
\ndate with respect to any class of Partnership Interests, (a) if the common
\nshares of beneficial interest (or other comparable equity interests) of the
\nGeneral Partner Entity are Publicly Traded (i) the total number of shares of
\nbeneficial interest (or other comparable equity interest) of the General Partner
\nEntity corresponding to such class of Partnership Interest (as provided for in
\nSection 4.2.B) issued and outstanding as of the close of business on such date
\n(excluding any treasury shares) multiplied by the Value of a share of such
\nbeneficial interest (or other comparable equity interest) on such date divided
\nby (ii) the Percentage Interest of the Managing General Partner in such class of
\nPartnership Interests on such date, and (b) otherwise, the aggregate <\/p>\n
-5-
\n 11
\nValue of such class of Partnership Interests determined as set forth in the
\nfourth and fifth sentences of the definition of Value.<\/p>\n
“Depreciation” means, for each fiscal year, an amount equal to
\nthe federal income tax depreciation, amortization, or other cost recovery
\ndeduction allowable with respect to an asset for such year, except that if the
\nCarrying Value of an asset differs from its adjusted basis for federal income
\ntax purposes at the beginning of such year or other period, Depreciation shall
\nbe an amount which bears the same ratio to such beginning Carrying Value as the
\nfederal income tax depreciation, amortization, or other cost recovery deduction
\nfor such year bears to such beginning adjusted tax basis; provided, however,
\nthat if the federal income tax depreciation, amortization, or other cost
\nrecovery deduction for such year is zero, Depreciation shall be determined with
\nreference to such beginning Carrying Value using any reasonable method selected
\nby the Managing General Partner.<\/p>\n
“Distribution Period” has the meaning set forth in Section
\n5.1.C.<\/p>\n
“Effective Date” means the date of the closing of the
\nConsolidation.<\/p>\n
“ERISA” means the Employee Retirement Income Security Act of
\n1974, as amended.<\/p>\n
“ERISA Partner” means either any (a) Limited Partner or (b)
\nholder of shares of beneficial interest in the Managing General Partner that
\nreceived such Shares in the mergers of ZML Investors, Inc., ZML Investors II,
\nInc., Zell\/Merrill Lynch Real Estate Opportunity Partners III Trust, and
\nZell\/Merrill Lynch Real Estate Opportunity Partners IV Trust into the Managing
\nGeneral Partner, and which Limited Partner or shareholder is either (i) an
\nemployee benefit plan subject to Title I of ERISA or section 4975 of the Code,
\nor (ii) a nominee for or a trust established pursuant to such employee benefit
\nplan, or (iii) which is an entity whose underlying assets include assets of such
\nemployee benefit plan by reason of such plan’s investment in such entity.<\/p>\n
“ERISA Plan” means an “employee benefit plan” as that term is
\ndefined in 29 U.S.C. ss. 1002(3), and which is not exempt from regulation under
\nERISA by virtue of 29 U.S.C. ss. 1003(b).<\/p>\n
“Exchange Act” means the Securities Exchange Act of 1934, as
\namended.<\/p>\n
“Fair Value” shall have the meaning described in Section
\n7.09E(iv).<\/p>\n
“Funding Debt” means the incurrence of any Debt by or on
\nbehalf of the General Partner Entity for the purpose of providing funds to the
\nPartnership.<\/p>\n
“General Partner” means Zell\/Merrill Lynch Real Estate
\nOpportunity Partners Limited Partnership II, or the Managing General Partner or
\nany of their successors as a general partner of the Partnership, and “General
\nPartners” means the Zell\/Merrill Lynch Real Estate Opportunity Partners Limited
\nPartnership II, and the Managing General Partner or their successors as general
\npartners.<\/p>\n
“General Partner Entity” means the Managing General Partner;
\nprovided, however, that if (i) the common shares of beneficial interest (or
\nother comparable equity interests) of the Managing General Partner are at any
\ntime not Publicly Traded and (ii) the common shares of beneficial interest (or
\nother comparable equity interests) of an entity that owns, directly or
\nindirectly, fifty percent (50%) or more of the common shares of beneficial
\ninterest (or other comparable equity interests) of the Managing General Partner
\nare Publicly Traded, the term “General Partner Entity” shall refer to such
\nentity whose <\/p>\n
-6-
\n 12
\ncommon shares of beneficial interest (or other comparable equity securities) are
\nPublicly Traded. If both requirements set forth in clauses (i) and (ii) above
\nare not satisfied, then the term “General Partner Entity” shall mean the
\nManaging General Partner.<\/p>\n
“General Partnership Interest” means a Partnership Interest
\nheld by a General Partner that is a general partnership interest. A General
\nPartnership Interest may be expressed as a number of Partnership Units.<\/p>\n
“IRS” means the Internal Revenue Service, which administers
\nthe internal revenue laws of the United States.<\/p>\n
“Immediate Family” means, with respect to any natural Person,
\nsuch natural Person’s spouse, parents, descendants, nephews, nieces, brothers,
\nand sisters.<\/p>\n
“Incapacity” or “Incapacitated” means, (i) as to any
\nindividual Partner, death, total physical disability or entry by a court of
\ncompetent jurisdiction adjudicating such Partner incompetent to manage his or
\nher Person or estate, (ii) as to any corporation which is a Partner, the filing
\nof a certificate of dissolution, or its equivalent, for the corporation or the
\nrevocation of its charter, (iii) as to any partnership or limited liability
\ncompany which is a Partner, the dissolution and commencement of winding up of
\nthe partnership or limited liability company, (iv) as to any estate which is a
\nPartner, the distribution by the fiduciary of the estate’s entire interest in
\nthe Partnership, (v) as to any trustee of a trust which is a Partner, the
\ntermination of the trust (but not the substitution of a new trustee) or (vi) as
\nto any Partner, the bankruptcy of such Partner. For purposes of this definition,
\nbankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
\ncommences a voluntary proceeding seeking liquidation, reorganization or other
\nrelief under any bankruptcy, insolvency or other similar law now or hereafter in
\neffect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
\nnonappealable order for relief under any bankruptcy, insolvency or similar law
\nnow or hereafter in effect has been entered against the Partner, (c) the Partner
\nexecutes and delivers a general assignment for the benefit of the Partner’s
\ncreditors, (d) the Partner files an answer or other pleading admitting or
\nfailing to contest the material allegations of a petition filed against the
\nPartner in any proceeding of the nature described in clause (b) above, (e) the
\nPartner seeks, consents to or acquiesces in the appointment of a trustee,
\nreceiver or liquidator for the Partner or for all or any substantial part of the
\nPartner’s properties, (f) any proceeding seeking liquidation, reorganization or
\nother relief under any bankruptcy, insolvency or other similar law now or
\nhereafter in effect has not been dismissed within one hundred twenty (120) days
\nafter the commencement thereof, (g) the appointment without the Partner’s
\nconsent or acquiescence of a trustee, receiver of liquidator has not been
\nvacated or stayed within ninety (90) days of such appointment or (h) an
\nappointment referred to in clause (g) is not vacated within ninety (90) days
\nafter the expiration of any such stay.<\/p>\n
“Indemnitee” means (i) any Person made a party to a proceeding
\nby reason of its status as (A) a General Partner, (B) a Limited Partner, or (C)
\na trustee, director or officer of the Partnership, or any General Partner and
\n(ii) such other Persons (including Affiliates of any General Partner, a Limited
\nPartner or the Partnership) as the Managing General Partner may designate from
\ntime to time (whether before or after the event giving rise to potential
\nliability), in its sole and absolute discretion.<\/p>\n
-7-
\n 13
\n “Limited Partner” means any Person named as a Limited Partner
\nin Exhibit A, as such Exhibit may be amended from time to time, or any
\nSubstituted Limited Partner or Additional Limited Partner, in such Person’s
\ncapacity as a Limited Partner in the Partnership.<\/p>\n
“Limited Partnership Interest” means a Partnership Interest of
\na Limited Partner in the Partnership representing a fractional part of the
\nPartnership Interests of all Limited Partners and includes any and all benefits
\nto which the holder of such a Partnership Interest may be entitled as provided
\nin this Agreement, together with all obligations of such Person to comply with
\nthe terms and provisions of this Agreement. A Limited Partnership Interest may
\nbe expressed as a number of Partnership Units.<\/p>\n
“Liquidating Event” has the meaning set forth in Section 13.1.<\/p>\n
“Liquidator” has the meaning set forth in Section 13.2.A.<\/p>\n
“Managing General Partner” means Equity Office Properties
\nTrust, a Maryland real estate investment trust, or its successors, as managing
\ngeneral partner of the Partnership.<\/p>\n
“Managing General Partner Payment” has the meaning set forth
\nin Section 15.14 hereof.<\/p>\n
“Net Income” means, for any taxable period, the excess, if
\nany, of the Partnership’s items of income and gain for such taxable period over
\nthe Partnership’s items of loss and deduction for such taxable period. The items
\nincluded in the calculation of Net Income shall be determined in accordance with
\nExhibit B. If an item of income, gain, loss or deduction that has been included
\nin the initial computation of Net Income is subjected to the special allocation
\nrules in Exhibit C, Net Income or the resulting Net Loss, whichever the case may
\nbe, shall be recomputed without regard to such item.<\/p>\n
“Net Loss” means, for any taxable period, the excess, if any,
\nof the Partnership’s items of loss and deduction for such taxable period over
\nthe Partnership’s items of income and gain for such taxable period. The items
\nincluded in the calculation of Net Loss shall be determined in accordance with
\nExhibit B. If an item of income, gain, loss or deduction that has been included
\nin the initial computation of Net Loss is subjected to the special allocation
\nrules in Exhibit C, Net Loss or the resulting Net Income, whichever the case may
\nbe, shall be recomputed without regard to such item.<\/p>\n
“New Securities” means (i) any rights, options, warrants or
\nconvertible or exchangeable securities having the right to subscribe for or
\npurchase shares of beneficial interest (or other comparable equity interest) of
\nthe Managing General Partner, excluding grants under any Share Option Plan, or
\n(ii) any Debt issued by the Managing General Partner that provides any of the
\nrights described in clause (i).<\/p>\n
“Nonrecourse Built-in Gain” means, with respect to any
\nContributed Properties or Adjusted Properties that are subject to a mortgage or
\nnegative pledge securing a Nonrecourse Liability, the amount of any taxable gain
\nthat would be allocated to the Partners pursuant to Section 2.B of Exhibit C if
\nsuch properties were disposed of in a taxable transaction in full satisfaction
\nof such liabilities and for no other consideration.<\/p>\n
“Nonrecourse Deductions” has the meaning set forth in
\nRegulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
\na Partnership Year shall be determined in accordance with the rules of
\nRegulations Section 1.704-2(c).<\/p>\n
-8-
\n 14
\n “Nonrecourse Liability” has the meaning set forth in
\nRegulations Section 1.752-1(a)(2).<\/p>\n
“Notice of Redemption” means a Notice of Redemption
\nsubstantially in the form of Exhibit D.<\/p>\n
“Opportunity Partnerships” means, Zell\/Merrill Lynch Real
\nEstate Opportunity Partners Limited Partnership, Zell\/Merrill Lynch Real Estate
\nOpportunity Partners Limited Partnership II, Zell\/Merrill Lynch Real Estate
\nOpportunity Partners Limited Partnership III, and Zell\/Merrill Lynch Real Estate
\nOpportunity Partners Limited Partnership IV.<\/p>\n
“Partner” means a General Partner or a Limited Partner, and
\n“Partners” means the General Partners and the Limited Partners.<\/p>\n
“Partner Minimum Gain” means an amount, with respect to each
\nPartner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
\nresult if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
\ndetermined in accordance with Regulations Section 1.704-2(i)(3).<\/p>\n
“Partner Nonrecourse Debt” has the meaning set forth in
\nRegulations Section 1.704-2(b)(4).<\/p>\n
“Partner Nonrecourse Deductions” has the meaning set forth in
\nRegulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
\nDeductions with respect to a Partner Nonrecourse Debt for a Partnership Year
\nshall be determined in accordance with the rules of Regulations Section
\n1.704-2(i)(2).<\/p>\n
“Partnership” means the limited partnership formed under the
\nAct upon the terms and conditions set forth in this Agreement, or any successor
\nto such limited partnership.<\/p>\n
“Partnership Interest” means a Limited Partnership Interest or
\na General Partnership Interest and includes any and all benefits to which the
\nholder of such a Partnership Interest may be entitled as provided in this
\nAgreement, together with all obligations of such Person to comply with the terms
\nand provisions of this Agreement. A Partnership Interest may be expressed as a
\nnumber of Partnership Units.<\/p>\n
“Partnership Minimum Gain” has the meaning set forth in
\nRegulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
\nas well as any net increase or decrease in Partnership Minimum Gain, for a
\nPartnership Year shall be determined in accordance with the rules of Regulations
\nSection 1.704-2(d).<\/p>\n
“Partnership Record Date” means the record date established by
\nthe Managing General Partner either (i) for the distribution of Available Cash
\npursuant to Section 5.1 hereof, which record date shall be the same as the
\nrecord date established by the General Partner Entity for a distribution to its
\nshareholders of some or all of its portion of such distribution, or (ii) if
\napplicable, for determining the Partners entitled to vote on or consent to any
\nproposed action for which the consent or approval of the Partners is sought
\npursuant to Section 14.2 hereof.<\/p>\n
“Partnership Unit” means a fractional, undivided share of the
\nPartnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2,
\nand includes Class A Units, Class B Units and any other classes or series of
\nPartnership Units established after the date hereof. The number of Partnership
\nUnits <\/p>\n
-9-
\n 15
\noutstanding and the Percentage Interests in the Partnership represented by such
\nPartnership Units are set forth in Exhibit A, as such Exhibit may be amended
\nfrom time to time.<\/p>\n
“Partnership Year” means the fiscal year of the Partnership,
\nwhich shall be the calendar year.<\/p>\n
“Percentage Interest” means, as to a Partner holding a class
\nof Partnership Interests, its interest in such class, determined by dividing the
\nPartnership Units of such class owned by such Partner by the total number of
\nPartnership Units of such class then outstanding as specified in Exhibit A, as
\nsuch exhibit may be amended from time to time, multiplied by the aggregate
\nPercentage Interest allocable to such class of Partnership Interests. If the
\nPartnership shall at any time have outstanding more than one class of
\nPartnership Interests, the Percentage Interest attributable to each class of
\nPartnership Interests shall be determined as set forth in Section 4.2.B.<\/p>\n
“Person” means a natural person, partnership (whether general
\nor limited), trust, estate, association, corporation, limited liability company,
\nunincorporated organization, custodian, nominee or any other individual or
\nentity in its own or any representative capacity.<\/p>\n
“Predecessor Entity” has the meaning set forth in the
\ndefinition of “Conversion Factor” herein.<\/p>\n
“Publicly Traded” means listed or admitted to trading on the
\nNew York Stock Exchange, the American Stock Exchange or another national
\nsecurities exchange or designated for quotation on the NASDAQ National Market,
\nor any successor to any of the foregoing.<\/p>\n
“Qualified REIT Subsidiary” means any Subsidiary of the
\nManaging General Partner that is a “qualified REIT subsidiary” within the
\nmeaning of Section 856(i) of the Code.<\/p>\n
“Qualified Transferee” means an “Accredited Investor” as
\ndefined in Rule 501 promulgated under the Securities Act.<\/p>\n
“Recapture Income” means any gain recognized by the
\nPartnership (computed without regard to any adjustment required by Section 734
\nor Section 743 of the Code) upon the disposition of any property or asset of the
\nPartnership, which gain is characterized as ordinary income because it
\nrepresents the recapture of deductions previously taken with respect to such
\nproperty or asset.<\/p>\n
“Redeeming Partner” has the meaning set forth in Section
\n8.6.A.<\/p>\n
“Redemption Amount” means either the Cash Amount or the Shares
\nAmount, as determined by the Managing General Partner, in its sole and absolute
\ndiscretion; provided that if the Shares are not Publicly Traded at the time a
\nRedeeming Partner exercises its Redemption Right, the Redemption Amount shall be
\npaid only in the form of the Cash Amount unless the Redeeming Partner, in its
\nsole and absolute discretion, consents to payment of the Redemption Amount in
\nthe form of the Shares Amount. A Redeeming Partner shall have no right, without
\nthe Managing General Partner’s consent, in its sole and absolute discretion, to
\nreceive the Redemption Amount in the form of the Shares Amount.<\/p>\n
“Redemption Right” has the meaning set forth in Section 8.6.A.<\/p>\n
-10-
\n 16
\n “Regulation” or “Regulations” means the Income Tax Regulations
\npromulgated under the Code, as such regulations may be amended from time to time
\n(including corresponding provisions of succeeding regulations).<\/p>\n
“REIT” means a real estate investment trust under Section 856
\nof the Code.<\/p>\n
“REIT Requirements” has the meaning set forth in Section
\n5.1.A.<\/p>\n
“Residual Gain” or “Residual Loss” means any item of gain or
\nloss, as the case may be, of the Partnership recognized for federal income tax
\npurposes resulting from a sale, exchange or other disposition of Contributed
\nProperty or Adjusted Property, to the extent such item of gain or loss is not
\nallocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate
\nBook-Tax Disparities.<\/p>\n
“Safe Harbor” has the meaning set forth in Section 11.6.F.<\/p>\n
“Securities Act” means the Securities Act of 1933, as amended.<\/p>\n
“704(c) Value” of any Contributed Property means the fair
\nmarket value of such property at the time of contribution as determined by the
\nGeneral Partners using such reasonable method of valuation as they may adopt;
\nprovided, however, subject to Exhibit B, the General Partners shall, in their
\nsole and absolute discretion, use such method as they deem reasonable and
\nappropriate to allocate the aggregate of the 704(c) Value of Contributed
\nProperties in a single or integrated transaction among each separate property on
\na basis proportional to its fair market values. The 704(c) Values of the
\nContributed Properties contributed to the Partnership as part of or in
\nconnection with the Consolidation are set forth on Exhibit E.<\/p>\n
“Share” means a share of beneficial interest (or other
\ncomparable equity interest) of the General Partner Entity. Shares may be issued
\nin one or more classes or series in accordance with the terms of the Declaration
\nof Trust (or, if the Managing General Partner is not the General Partner Entity,
\nthe organizational documents of the General Partner Entity). If there is more
\nthan one class or series of Shares, the term “Shares” shall, as the context
\nrequires, be deemed to refer to the class or series of Shares that correspond to
\nthe class or series of Partnership Interests for which the reference to Shares
\nis made. When used with reference to Class A Units, the term “Shares” refers to
\ncommon shares of beneficial interest (or other comparable equity interest) of
\nthe General Partner Entity.<\/p>\n
“Shares Amount” means a number of Shares equal to the product
\nof the number of Partnership Units offered for redemption by a Redeeming Partner
\ntimes the Conversion Factor; provided that, if the General Partner Entity issues
\nto all holders of Shares rights, options, warrants or convertible or
\nexchangeable securities entitling such holders to subscribe for or purchase
\nShares or any other securities or property (collectively, the “rights”), then
\nthe Shares Amount shall also include such rights that a holder of that number of
\nShares would be entitled to receive.<\/p>\n
“Share Option Plan” means any equity incentive plan of the
\nManaging General Partner, the Partnership and\/or any Affiliate of the
\nPartnership.<\/p>\n
“Specified Redemption Date” means the tenth Business Day after
\nreceipt by the Managing General Partner of a Notice of Redemption; provided
\nthat, if the Shares are not Publicly Traded, the Specified Redemption Date means
\nthe thirtieth Business Day after receipt by the Managing General Partner of a
\nNotice of Redemption.<\/p>\n
-11-
\n 17
\n “Subsidiary” means, with respect to any Person, any
\ncorporation, limited liability company, trust, partnership or joint venture, or
\nother entity of which a majority of (i) the voting power of the voting equity
\nsecurities or (ii) the outstanding equity interests is owned, directly or
\nindirectly, by such Person.<\/p>\n
“Substituted Limited Partner” means a Person who is admitted
\nas a Limited Partner to the Partnership pursuant to Section 11.4.<\/p>\n
“Successor Entity” has the meaning set forth in the definition
\nof “Conversion Factor” herein.<\/p>\n
“Terminating Capital Transaction” means any sale or other
\ndisposition of all or substantially all of the assets of the Partnership for
\ncash or a related series of transactions that, taken together, result in the
\nsale or other disposition of all or substantially all of the assets of the
\nPartnership for cash.<\/p>\n
“Termination Transaction” has the meaning set forth in Section
\n11.2.B.<\/p>\n
“Unrealized Gain” attributable to any item of Partnership
\nproperty means, as of any date of determination, the excess, if any, of (i) the
\nfair market value of such property (as determined under Exhibit B) as of such
\ndate, over (ii) the Carrying Value of such property (prior to any adjustment to
\nbe made pursuant to Exhibit B) as of such date.<\/p>\n
“Unrealized Loss” attributable to any item of Partnership
\nproperty means, as of any date of determination, the excess, if any, of (i) the
\nCarrying Value of such property (prior to any adjustment to be made pursuant to
\nExhibit B) as of such date, over (ii) the fair market value of such property (as
\ndetermined under Exhibit B) as of such date.<\/p>\n
“Valuation Date” means the date of receipt by the Managing
\nGeneral Partner of a Notice of Redemption or, if such date is not a Business
\nDay, the first Business Day thereafter.<\/p>\n
“Value” means, with respect to any outstanding Shares of the
\nGeneral Partner Entity that are Publicly Traded, the average of the daily market
\nprice for the ten consecutive trading days immediately preceding the date with
\nrespect to which value must be determined. The market price for each such
\ntrading day shall be the closing price, regular way, on such day, or if no such
\nsale takes place on such day, the average of the closing bid and asked prices on
\nsuch day. If the outstanding Shares of the General Partner Entity are Publicly
\nTraded and the Shares Amount includes rights that a holder of Shares would be
\nentitled to receive, then the Value of such rights shall be determined by the
\nManaging General Partner acting in good faith on the basis of such quotations
\nand other information as it considers, in its reasonable judgment, appropriate.
\nIf the Shares of the General Partner Entity are not Publicly Traded, the Value
\nof the Shares Amount per Partnership Unit offered for redemption (which will be
\nthe Cash Amount per Partnership Unit offered for redemption payable pursuant to
\nSection 8.6.A) means the amount that a holder of one Partnership Unit would
\nreceive if each of the assets of the Partnership were to be sold for its fair
\nmarket value on the Specified Redemption Date, the Partnership were to pay all
\nof its outstanding liabilities, and the remaining proceeds were to be
\ndistributed to the Partners in accordance with the terms of this Agreement. Such
\nValue shall be determined by the Managing General Partner, acting in good faith
\nand based upon a commercially reasonable estimate of the amount that would be
\nrealized by the Partnership if each asset of the Partnership (and each asset of
\neach partnership, limited liability company, trust, joint venture or other
\nentity in which the Partnership owns a direct or indirect <\/p>\n
-12-
\n 18
\ninterest) were sold to an unrelated purchaser in an arms’ length transaction
\nwhere neither the purchaser nor the seller were under economic compulsion to
\nenter into the transaction (without regard to any discount in value as a result
\nof the Partnership’s minority interest in any property or any illiquidity of the
\nPartnership’s interest in any property). In connection with determining the
\nDeemed Value of the Partnership Interest for purposes of determining the number
\nof additional Partnership Units issuable upon a Capital Contribution funded by
\nan underwritten public offering or an arm’s length private placement of shares
\nof beneficial interest (or other comparable equity interest) of the Managing
\nGeneral Partner, the Value of such shares shall be the public offering or arm’s
\nlength private placement price per share of such class of beneficial interest
\n(or other comparable equity interest) sold.<\/p>\n
ARTICLE II
\n ORGANIZATIONAL MATTERS<\/p>\n
SECTION 2.1 ORGANIZATION<\/p>\n
The Partnership is a limited partnership organized pursuant to
\nthe provisions of the Act and upon the terms and conditions set forth in this
\nAgreement. Except as expressly provided herein to the contrary, the rights and
\nobligations of the Partners and the administration and termination of the
\nPartnership shall be governed by the Act. The Partnership Interest of each
\nPartner shall be personal property for all purposes.<\/p>\n
SECTION 2.2 NAME<\/p>\n
The name of the Partnership is EOP Operating Limited
\nPartnership. The Partnership’s business may be conducted under any other name or
\nnames deemed advisable by the General Partners, including the name of any of the
\nGeneral Partners or any Affiliate thereof. The words “Limited Partnership,”
\n“L.P.,” “Ltd.” or similar words or letters shall be included in the
\nPartnership’s name where necessary for the purposes of complying with the laws
\nof any jurisdiction that so requires. The General Partners in their sole and
\nabsolute discretion may change the name of the Partnership at any time and from
\ntime to time and shall notify the Limited Partners of such change in the next
\nregular communication to the Limited Partners.<\/p>\n
SECTION 2.3 REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE<\/p>\n
The address of the registered office of the Partnership in the
\nState of Delaware shall be located at Corporation Trust Center, 1209 Orange
\nStreet, Wilmington, County of New Castle, Delaware 19801, and the registered
\nagent for service of process on the Partnership in the State of Delaware at such
\nregistered office shall be Corporation Trust Company. The principal office of
\nthe Partnership shall be Two North Riverside Plaza, Suite 2200, Chicago,
\nIllinois 60606, or such other place as the General Partners may from time to
\ntime designate by notice to the Limited Partners. The Partnership may maintain
\noffices at such other place or places within or outside the State of Delaware as
\nthe General Partners deem advisable.<\/p>\n
-13-
\n 19
\nSECTION 2.4 TERM<\/p>\n
The term of the Partnership shall commence on November 1,
\n1996, and shall continue until December 31, 2095, unless it is dissolved sooner
\npursuant to the provisions of Article XIII or as otherwise provided by law.<\/p>\n
ARTICLE III
\n PURPOSE<\/p>\n
SECTION 3.1 PURPOSE AND BUSINESS<\/p>\n
The purpose and nature of the business to be conducted by the
\nPartnership is (i) to conduct any business that may be lawfully conducted by a
\nlimited partnership organized pursuant to the Act; provided, however, that such
\nbusiness shall be limited to and conducted in such a manner as to permit the
\nGeneral Partner Entity at all times to be classified as a REIT, unless the
\nGeneral Partner Entity ceases to qualify or is not qualified as a REIT for any
\nreason or reasons not related to the business conducted by the Partnership, (ii)
\nto enter into any corporation, partnership, joint venture, trust, limited
\nliability company or other similar arrangement to engage in any of the foregoing
\nor the ownership of interests in any entity engaged, directly or indirectly, in
\nany of the foregoing and (iii) to do anything necessary or incidental to the
\nforegoing. In connection with the foregoing, the Partners acknowledge that the
\nstatus of the General Partner Entity as a REIT inures to the benefit of all the
\nPartners and not solely to the General Partner Entity or its Affiliates.<\/p>\n
SECTION 3.2 POWERS<\/p>\n
The Partnership is empowered to do any and all acts and things
\nnecessary, appropriate, proper, advisable, incidental to or convenient for the
\nfurtherance and accomplishment of the purposes and business described herein and
\nfor the protection and benefit of the Partnership, including, without
\nlimitation, full power and authority, directly or through its ownership interest
\nin other entities, to enter into, perform and carry out contracts of any kind,
\nborrow money and issue evidences of indebtedness, whether or not secured by
\nmortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and
\ndevelop real property, and lease, sell, transfer and dispose of real property;
\nprovided, however, that the Partnership shall not take, or refrain from taking,
\nany action which, in the judgment of the Managing General Partner, in its sole
\nand absolute discretion, (i) could adversely affect the ability of the General
\nPartner Entity to continue to qualify as a REIT, (ii) could subject the General
\nPartner Entity to any additional taxes under Section 857 or Section 4981 of the
\nCode or (iii) could violate any law or regulation of any governmental body or
\nagency having jurisdiction over any General Partner or its securities, unless
\nsuch action (or inaction) shall have been specifically consented to by the
\nGeneral Partner in writing.<\/p>\n
ARTICLE IV
\n CAPITAL CONTRIBUTIONS AND ISSUANCES
\n OF PARTNERSHIP INTERESTS<\/p>\n
SECTION 4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS<\/p>\n
At the time of the execution of this Agreement, the Partners
\nshall make or shall have made the Capital Contributions as set forth in Exhibit
\nA. The Partners shall own Partnership Units in the <\/p>\n
-14-
\n 20
\namounts set forth in Exhibit A and shall have a Percentage Interest in the
\nPartnership as set forth in Exhibit A, which Percentage Interest shall be
\nadjusted in Exhibit A from time to time by the Managing General Partner to the
\nextent necessary to reflect accurately redemptions, Capital Contributions, the
\nissuance of additional Partnership Units or similar events having an effect on a
\nPartner’s Percentage Interest. To the extent the Partnership is acquiring any
\nproperty by the merger of any other Person into the Partnership, Persons who
\nreceive Partnership Interests in exchange for their interests in the Person
\nmerging into the Partnership shall become Partners and shall be deemed to have
\nmade Capital Contributions as provided in the applicable merger agreement and as
\nset forth in Exhibit A. A number of Partnership Units held by each of the
\nGeneral Partners equal to one percent (1%) of all outstanding Partnership Units
\n(as of the closing date of the Consolidation) shall be deemed to be the General
\nPartner Partnership Units and shall be the General Partnership Interest of such
\nGeneral Partner. All other Partnership Units held by the General Partners shall
\nbe deemed to be Limited Partnership Interests and shall be held by the General
\nPartners in their capacity as Limited Partners in the Partnership. Except as
\nprovided in Sections 7.5 and 10.5 hereof, the Partners shall have no obligation
\nto make any additional Capital Contributions or provide any additional funding
\nto the Partnership (whether in the form of loans, repayments of loans or
\notherwise). No Partner shall have any obligation to restore any deficit that may
\nexist in its Capital Account, either upon a liquidation of the Partnership or
\notherwise.<\/p>\n
SECTION 4.2 ISSUANCES OF PARTNERSHIP INTERESTS<\/p>\n
A. General. The Managing General Partner is hereby authorized
\nto cause the Partnership from time to time to issue to Partners (including the
\nManaging General Partner and its Affiliates) or other Persons (including,
\nwithout limitation, in connection with the contribution of property to the
\nPartnership) Partnership Units or other Partnership Interests in one or more
\nclasses, or in one or more series of any of such classes, with such
\ndesignations, preferences and relative, participating, optional or other special
\nrights, powers and duties, including rights, powers and duties senior to Limited
\nPartnership Interests, all as shall be determined, subject to applicable
\nDelaware law, by the Managing General Partner in its sole and absolute
\ndiscretion, including, without limitation, (i) the allocations of items of
\nPartnership income, gain, loss, deduction and credit to each such class or
\nseries of Partnership Interests, (ii) the right of each such class or series of
\nPartnership Interests to share in Partnership distributions and (iii) the rights
\nof each such class or series of Partnership Interests upon dissolution and
\nliquidation of the Partnership; provided that, no such Partnership Units or
\nother Partnership Interests shall be issued to the Managing General Partner
\nunless either (a) the Partnership Interests are issued in connection with the
\ngrant, award or issuance of Shares or other equity interests in the Managing
\nGeneral Partner having designations, preferences and other rights such that the
\neconomic interests attributable to such Shares or other equity interests are
\nsubstantially similar to the designations, preferences and other rights (except
\nvoting rights) of the Partnership Interests issued to the Managing General
\nPartner in accordance with this Section 4.2.A or (b) the additional Partnership
\nInterests are issued to all Partners holding Partnership Interests in the same
\nclass in proportion to their respective Percentage Interests in such class. If
\nthe Partnership issues Partnership Interests pursuant to this Section 4.2.A, the
\nManaging General Partner shall make such revisions to this Agreement (including
\nbut not limited to the revisions described in Section 5.4, Section 6.2 and
\nSection 8.6) as it deems necessary to reflect the issuance of such Partnership
\nInterests.<\/p>\n
B. Percentage Interest Adjustments in the Case of Capital
\nContributions for Partnership Units. Upon the acceptance of additional Capital
\nContributions in exchange for Partnership Units and if the Partnership shall
\nhave outstanding more than one class of Partnership Interests, the Percentage
\nInterest related thereto shall be equal to a fraction, the numerator of which is
\nequal to the <\/p>\n
-15-
\n 21
\namount of cash, if any, plus the Agreed Value of Contributed Property, if any,
\ncontributed with respect to such additional Partnership Units and the
\ndenominator of which is equal to the sum of (i) the Deemed Value of the
\nPartnership Interests for all outstanding classes (computed as of the Business
\nDay immediately preceding the date on which the additional Capital Contributions
\nare made (an “Adjustment Date”)) plus (ii) the aggregate amount of additional
\nCapital Contributions contributed to the Partnership on such Adjustment Date in
\nrespect of such additional Partnership Units. The Percentage Interest of each
\nother Partner holding Partnership Interests not making a full pro rata Capital
\nContribution shall be adjusted to a fraction the numerator of which is equal to
\nthe sum of (i) the Deemed Partnership Interest Value of such Limited Partner
\n(computed as of the Business Day immediately preceding the Adjustment Date) plus
\n(ii) the amount of additional Capital Contributions (such amount being equal to
\nthe amount of cash, if any, plus the Agreed Value of Contributed Property, if
\nany, so contributed), if any, made by such Partner to the Partnership in respect
\nof such Partnership Interest as of such Adjustment Date and the denominator of
\nwhich is equal to the sum of (i) the Deemed Value of the Partnership Interests
\nof all outstanding classes (computed as of the Business Day immediately
\npreceding such Adjustment Date) plus (ii) the aggregate amount of the additional
\nCapital Contributions contributed to the Partnership on such Adjustment Date in
\nrespect of such additional Partnership Interests. For purposes of calculating a
\nPartner’s Percentage Interest pursuant to this Section 4.2.B, cash Capital
\nContributions by a General Partner will be deemed to equal the cash contributed
\nby such General Partner plus (a) in the case of cash contributions funded by an
\noffering of any equity interests in or other securities of the Managing General
\nPartner, the offering costs attributable to the cash contributed to the
\nPartnership, and (b) in the case of Partnership Units issued pursuant to Section
\n7.5.E, an amount equal to the difference between the Value of the Shares sold
\npursuant to any Share Option Plan and the net proceeds of such sale.<\/p>\n
C. Classes of Partnership Units. From and after the Effective
\nDate, subject to Section 4.2.A above, the Partnership shall have two classes of
\nPartnership Units entitled “Class A Units” and “Class B Units.” Either Class A
\nUnits or Class B Units, at the election of the Managing General Partner, in its
\nsole and absolute discretion, may be issued to newly admitted Partners in
\nexchange for the contribution by such Partners of cash, real estate partnership
\ninterests, stock, notes or other assets or consideration; provided, that all
\nPartnership Units issued to Partners in connection with the Consolidation shall
\nbe Class A Units; and, provided further, that any Partnership Unit that is not
\nspecifically designated by the General Partner as being of a particular class
\nshall be deemed to be a Class A Unit. Each Class B Unit shall be converted
\nautomatically into a Class A Unit on the day immediately following the
\nPartnership Record Date for the Distribution Period (as defined in Section
\n5.1.C) in which such Class B Unit was issued, without the requirement for any
\naction by either the Partnership or the Partner holding the Class B Unit.<\/p>\n
SECTION 4.3 NO PREEMPTIVE RIGHTS<\/p>\n
Except to the extent expressly granted by the Partnership
\npursuant to another agreement, no Person shall have any preemptive, preferential
\nor other similar right with respect to (i) additional Capital Contributions or
\nloans to the Partnership or (ii) issuance or sale of any Partnership Units or
\nother Partnership Interests.<\/p>\n
SECTION 4.4 OTHER CONTRIBUTION PROVISIONS<\/p>\n
If any Partner is admitted to the Partnership and is given a
\nCapital Account in exchange for services rendered to the Partnership, such
\ntransaction shall be treated by the Partnership and the <\/p>\n
-16-
\n 22
\naffected Partner as if the Partnership had compensated such Partner in cash, and
\nthe Partner had contributed such cash to the capital of the Partnership.<\/p>\n
SECTION 4.5 NO INTEREST ON CAPITAL<\/p>\n
No Partner shall be entitled to interest on its Capital
\nContributions or its Capital Account.<\/p>\n
ARTICLE V
\n DISTRIBUTIONS<\/p>\n
SECTION 5.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS<\/p>\n
A. General. The General Partners shall distribute at least
\nquarterly an amount equal to one hundred percent (100%) of Available Cash
\ngenerated by the Partnership during such quarter or shorter period to the
\nPartners who are Partners on the Partnership Record Date with respect to such
\nquarter or shorter period as provided in Sections 5.1.B, 5.1.C and 5.1.D.
\nNotwithstanding anything to the contrary contained herein, in no event may a
\nPartner receive a distribution of Available Cash with respect to a Partnership
\nUnit for a quarter or shorter period if such Partner is entitled to receive a
\ndistribution with respect to a Share for which such Partnership Unit has been
\nredeemed or exchanged. Unless otherwise expressly provided for herein or in an
\nagreement at the time a new class of Partnership Interests is created in
\naccordance with Article IV hereof, no Partnership Interest shall be entitled to
\na distribution in preference to any other Partnership Interest. The General
\nPartners shall make such reasonable efforts, as determined by them in their sole
\nand absolute discretion and consistent with the qualification of the General
\nPartner Entity as a REIT, to distribute Available Cash (a) to Limited Partners
\nso as to preclude any such distribution or portion thereof from being treated as
\npart of a sale of property of the Partnership by a Limited Partner under Section
\n707 of the Code or the Regulations thereunder; provided that, the General
\nPartners and the Partnership shall not have liability to a Limited Partner under
\nany circumstances as a result of any distribution to a Limited Partner being so
\ntreated, and (b) to the General Partners in an amount sufficient to enable the
\nGeneral Partner Entity to pay shareholder dividends that will (1) satisfy the
\nrequirements for qualification as a REIT under the Code and the Regulations (the
\n“REIT Requirements”) of, and (2) avoid any federal income or excise tax
\nliability for, the General Partner Entity.<\/p>\n
B. Method. (i) Each holder of Partnership Interests that is
\nentitled to any preference in distribution shall be entitled to a distribution
\nin accordance with the rights of any such class of Partnership Interests (and,
\nwithin such class, pro rata in proportion to the respective Percentage Interests
\non such Partnership Record Date); and<\/p>\n
(ii) To the extent there is Available Cash remaining after the
\npayment of any preference in distribution in accordance with the foregoing
\nclause (i), with respect to Partnership Interests that are not entitled to any
\npreference in distribution, pro rata to each such class in accordance with the
\nterms of such class (and, within each such class, pro rata in proportion to the
\nrespective Percentage Interests on such Partnership Record Date).<\/p>\n
C. Distributions When Class B Units Are Outstanding. If for
\nany quarter or shorter period with respect to which a distribution is to be made
\n(a “Distribution Period”) Class B Units are outstanding on the Partnership
\nRecord Date for such Distribution Period, the General Partners shall <\/p>\n
-17-
\n 23
\nallocate the Available Cash with respect to such Distribution Period available
\nfor distribution with respect to the Class A Units and Class B Units
\ncollectively between the Partners who are holders of Class A Units (“Class A”)
\nand the Partners who are holders of Class B Units (“Class B”) as follows:<\/p>\n
(1) Class A shall receive that
\n portion of the Available Cash (the “Class A Share”)
\n determined by multiplying the amount of Available
\n Cash by the following fraction:<\/p>\n
A x Y
\n ————————–
\n (A x Y)+(B x X)<\/p>\n
(2) Class B shall receive that
\n portion of the Available Cash (the “Class B Share”)
\n determined by multiplying the amount of Available
\n Cash by the following fraction:<\/p>\n
B x X
\n ————————–
\n (A x Y)+(B x X)<\/p>\n
(3) For purposes of the foregoing
\n formulas, (i) “A” equals the number of Class A Units
\n outstanding on the Partnership Record Date for such
\n Distribution Period; (ii) “B” equals the number of
\n Class B Units outstanding on the Partnership Record
\n Date for such Distribution Period; (iii) “Y” equals
\n the number of days in the Distribution Period; and
\n (iv) “X” equals the number of days in the
\n Distribution Period for which the Class B Units were
\n issued and outstanding.<\/p>\n
The Class A Share shall be distributed among Partners holding
\nClass A Units on the Partnership Record Date for the Distribution Period in
\naccordance with the number of Class A Units held by each Partner on such
\nPartnership Record Date; provided that, in no event may a Partner receive a
\ndistribution of Available Cash with respect to a Class A Unit if a Partner is
\nentitled to receive a distribution out of such Available Cash with respect to a
\nShare for which such Class A Unit has been redeemed or exchanged. The Class B
\nShares shall be distributed among the Partners holding Class B Units on the
\nPartnership Record Date for the Distribution Period in accordance with the
\nnumber of Class B Units held by each Partner on such Partnership Record Date. In
\nno event shall any Class B Units <\/p>\n
-18-
\n 24
\nbe entitled to receive any distribution of Available Cash for any Distribution
\nPeriod ending prior to the date on which such Class B Units are issued.<\/p>\n
D. Distributions When Class B Units Have Been Issued on
\nDifferent Dates. If Class B Units which have been issued on different dates are
\noutstanding on the Partnership Record Date for any Distribution Period, then the
\nClass B Units issued on each particular date shall be treated as a separate
\nseries of Partnership Units for purposes of making the allocation of Available
\nCash for such Distribution Period among the holders of Partnership Units (and
\nthe formula for making such allocation, and the definitions of variables used
\ntherein, shall be modified accordingly). Thus, for example, if two series of
\nClass B Units are outstanding on the Partnership Record Date for any
\nDistribution Period, the allocation formula for each series, “Series B(1)” and
\n“Series B(2)” would be as follows:<\/p>\n
(1) Series B(1) shall receive that
\n portion of the Available Cash determined by
\n multiplying the amount of Available Cash by the
\n following fraction:<\/p>\n
B(1) x X(1)
\n ————————————–
\n (A x Y)+(B(1) x X(1))+(B(2) x X(2))<\/p>\n
(2) Series B(2) shall receive that
\n portion of the Available Cash determined by
\n multiplying the amount of Available Cash by the
\n following fraction:<\/p>\n
B(2) x X(2)
\n ————————————–
\n (A x Y)+(B(1) x X(1))+(B(2) x X(2))<\/p>\n
(3) For purposes of the foregoing
\n formulas the definitions set forth in Section 5.1.C.3
\n remain the same except that (i) “B(1)” equals the
\n number of Partnership Units in Series B(1)
\n outstanding on the Partnership Record Date for such
\n Distribution Period; (ii) “B(2)” equals the number of
\n Partnership Units in Series B(2) outstanding on the
\n Partnership Record Date for such Distribution Period;
\n (iii) “X(1)” equals the number of days in the
\n Distribution Period for which the Partnership Units
\n in Series B(1) were issued and outstanding; and (iv)
\n “X(2)” equals the number of days in <\/p>\n
-19-
\n 25
\n the Distribution Period for which the Partnership
\n Units in Series B(2) were issued and outstanding.<\/p>\n
E. Minimum Distributions if Shares Not Publicly Traded. In
\naddition (and without regard to the amount of Available Cash), if the Shares of
\nthe General Partner Entity are not Publicly Traded, the Managing General Partner
\nshall make cash distributions with respect to the Class A Units at least
\nannually for each taxable year of the Partnership beginning prior to the
\nfifteenth (15th) anniversary of the Effective Date in an aggregate amount with
\nrespect to each such taxable year at least equal to 95% of the Partnership’s
\ntaxable income for such year allocable to the Class A Units, with such
\ndistributions to be made not later than 60 days after the end of such year.<\/p>\n
SECTION 5.2 AMOUNTS WITHHELD<\/p>\n
All amounts withheld pursuant to the Code or any provisions of
\nany state or local tax law and Section 10.5 with respect to any allocation,
\npayment or distribution to the General Partners, the Limited Partners or
\nAssignees shall be treated as amounts distributed to the General Partners,
\nLimited Partners or Assignees pursuant to Section 5.1 for all purposes under
\nthis Agreement.<\/p>\n
SECTION 5.3 DISTRIBUTIONS UPON LIQUIDATION<\/p>\n
Proceeds from a Terminating Capital Transaction shall be
\ndistributed to the Partners in accordance with Section 13.2.<\/p>\n
SECTION 5.4 REVISIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS<\/p>\n
If the Partnership issues Partnership Interests to the General
\nPartners or any Additional Limited Partner pursuant to Article IV hereof, the
\nManaging General Partner shall make such revisions to this Article V and Exhibit
\nA as it deems necessary to reflect the issuance of such additional Partnership
\nInterests without the requirements for any other consents or approvals.<\/p>\n
ARTICLE VI
\n ALLOCATIONS<\/p>\n
SECTION 6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES<\/p>\n
For purposes of maintaining the Capital Accounts and in
\ndetermining the rights of the Partners among themselves, the Partnership’s items
\nof income, gain, loss and deduction (computed in accordance with Exhibit B)
\nshall be allocated among the Partners in each taxable year (or portion thereof)
\nas provided herein below.<\/p>\n
A. Net Income. After giving effect to the special allocations
\nset forth in Section 1 of Exhibit C, Net Income shall be allocated (i) first, to
\nthe General Partners to the extent that Net Losses previously allocated to the
\nGeneral Partners pursuant to the last sentence of Section 6.1.B exceed Net
\nIncome previously allocated to the General Partners pursuant to this clause (i)
\nof Section 6.1.A, (ii) second, to the holders of any Partnership Interests that
\nare entitled to any preference in distribution in accordance with the rights of
\nany such class of Partnership Interests until each such Partnership Interest has
\nbeen allocated, on a cumulative basis pursuant to this clause (ii), Net Income
\nequal to the amount of <\/p>\n
-20-
\n 26
\ndistributions received which are attributable to the preference of such class of
\nPartnership Interests (and, within such class, pro rata in proportion to the
\nrespective Percentage Interests as of the last day of the period for which such
\nallocation is being made) and (iii) third, with respect to Partnership Interests
\nthat are not entitled to any preference in the allocation of Net Income, pro
\nrata to each such class in accordance with the terms of such class (and, within
\nsuch class, pro rata in proportion to the respective Percentage Interests as of
\nthe last day of the period for which such allocation is being made).<\/p>\n
B. Net Losses. After giving effect to the special allocations
\nset forth in Section 1 of Exhibit C, Net Losses shall be allocated (i) first, to
\nthe holders of any Partnership Interests that are entitled to any preference in
\ndistribution in accordance with the rights of any such class of Partnership
\nInterests to the extent that any prior allocations of Net Income to such class
\nof Partnership Interests pursuant to Section 6.1.A(ii) exceed, on a cumulative
\nbasis, distributions with respect to such Partnership Interests pursuant to
\nclause (i) of Section 5.1.B (and, within such class, pro rata in proportion to
\nthe respective Percentage Interests as of the last day of the period for which
\nsuch allocation is being made) and (ii) second, with respect to classes of
\nPartnership Interests that are not entitled to any preference in distribution,
\npro rata to each such class in accordance with the terms of such class (and,
\nwithin such class, pro rata in proportion to the respective Percentage Interests
\nas of the last day of the period for which such allocation is being made);
\nprovided that Net Losses shall not be allocated to any Limited Partner pursuant
\nto this Section 6.1.B to the extent that such allocation would cause such
\nLimited Partner to have an Adjusted Capital Account Deficit (or increase any
\nexisting Adjusted Capital Account Deficit) at the end of such taxable year (or
\nportion thereof). All Net Losses in excess of the limitations set forth in this
\nSection 6.1.B shall be allocated to the General Partners.<\/p>\n
C. Allocation of Nonrecourse Debt. For purposes of Regulation
\nSection 1.752-3(a), the Partners agree that Nonrecourse Liabilities of the
\nPartnership in excess of the sum of (i) the amount of Partnership Minimum Gain
\nand (ii) the total amount of Nonrecourse Built-in Gain shall be allocated among
\nthe Partners in accordance with their respective Percentage Interests.<\/p>\n
D. Recapture Income. Any gain allocated to the Partners upon
\nthe sale or other taxable disposition of any Partnership asset shall, to the
\nextent possible after taking into account other required allocations of gain
\npursuant to Exhibit C, be characterized as Recapture Income in the same
\nproportions and to the same extent as such Partners have been allocated any
\ndeductions directly or indirectly giving rise to the treatment of such gains as
\nRecapture Income.<\/p>\n
SECTION 6.2 REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF
\n PARTNERSHIP INTERESTS<\/p>\n
If the Partnership issues Partnership Interests to the General
\nPartners or any Additional Limited Partner pursuant to Article IV hereof, the
\nManaging General Partner shall make such revisions to this Article VI and
\nExhibit A as it deems necessary to reflect the terms of the issuance of such
\nPartnership Interests, including making preferential allocations to classes of
\nPartnership Interests that are entitled thereto. Such revisions shall not
\nrequire the consent or approval of any other Partner.<\/p>\n
-21-
\n 27
\n ARTICLE VII
\n MANAGEMENT AND OPERATIONS OF BUSINESS<\/p>\n
SECTION 7.1 MANAGEMENT<\/p>\n
A. Powers of General Partners. Except as otherwise expressly
\nprovided in this Agreement, all management powers over the business and affairs
\nof the Partnership are and shall be exclusively vested in the General Partners,
\nand no Limited Partner shall have any right to participate in or exercise
\ncontrol or management power over the business and affairs of the Partnership.
\nThe General Partners may not be removed by the Limited Partners with or without
\ncause. In addition to the powers now or hereafter granted a general partner of a
\nlimited partnership under applicable law or which are granted to the General
\nPartners under any other provision of this Agreement, the Managing General
\nPartner, subject to Section 7.11, shall have full power and authority to do all
\nthings deemed necessary or desirable by it to conduct the business of the
\nPartnership, to exercise all powers set forth in Section 3.2 and to effectuate
\nthe purposes set forth in Section 3.1, including, without limitation:<\/p>\n
(1) the making of any expenditures, the lending
\n or borrowing of money (including, without
\n limitation, making prepayments on loans and
\n borrowing money to permit the Partnership to
\n make distributions to its Partners in such
\n amounts as are required under Section 5.1.E
\n or will permit the General Partner Entity
\n (so long as the General Partner Entity
\n qualifies as REIT) to avoid the payment of
\n any federal income tax (including, for this
\n purpose, any excise tax pursuant to Section
\n 4981 of the Code) and to make distributions
\n to its shareholders sufficient to permit the
\n General Partner Entity to maintain REIT
\n status), the assumption or guarantee of, or
\n other contracting for, indebtedness and
\n other liabilities, the issuance of evidences
\n of indebtedness (including the securing of
\n same by mortgage, deed of trust or other
\n lien or encumbrance on the Partnership’s
\n assets) and the incurring of any obligations
\n the General Partner Entity deems necessary
\n for the conduct of the activities of the
\n Partnership;<\/p>\n
(2) the making of tax, regulatory and other
\n filings, or rendering of periodic or other
\n reports to governmental or other agencies
\n having jurisdiction over the business or
\n assets of the Partnership;<\/p>\n
(3) the acquisition, disposition, mortgage,
\n pledge, encumbrance, hypothecation or
\n exchange of any or all of the assets of the
\n Partnership (including the exercise or grant
\n of any conversion, option, privilege or
\n subscription right or other right available
\n in connection with any assets at any time
\n held by the Partnership) or the merger or
\n other combination of the Partnership with or
\n into another entity on such terms as the
\n Managing General Partner deems proper;<\/p>\n
(4) the use of the assets of the Partnership
\n (including, without limitation, cash on
\n hand) for any purpose consistent with the
\n terms of this Agreement and on any terms it
\n sees fit, including, without limitation, the
\n financing of the conduct of the operations
\n of the General Partners, the <\/p>\n
-22-
\n 28
\n Partnership or any of the Partnership’s
\n Subsidiaries, the lending of funds to other
\n Persons (including, without limitation, the
\n Managing General Partner, its Subsidiaries
\n and the Partnership’s Subsidiaries) and the
\n repayment of obligations of the Partnership
\n and its Subsidiaries and any other Person in
\n which the Partnership has an equity
\n investment and the making of capital
\n contributions to its Subsidiaries;<\/p>\n
(5) the management, operation, leasing,
\n landscaping, repair, alteration, demolition
\n or improvement of any real property or
\n improvements owned by the Partnership or any
\n Subsidiary of the Partnership or any Person
\n in which the Partnership has made a direct
\n or indirect equity investment;<\/p>\n
(6) the negotiation, execution, and performance
\n of any contracts, conveyances or other
\n instruments that the Managing General
\n Partner considers useful or necessary to the
\n conduct of the Partnership’s operations or
\n the implementation of the Managing General
\n Partner’s powers under this Agreement,
\n including contracting with contractors,
\n developers, consultants, accountants, legal
\n counsel, other professional advisors and
\n other agents and the payment of their
\n expenses and compensation out of the
\n Partnership’s assets;<\/p>\n
(7) the mortgage, pledge, encumbrance or
\n hypothecation of any assets of the
\n Partnership, and the use of the assets of
\n the Partnership (including, without
\n limitation, cash on hand) for any purpose
\n consistent with the terms of this Agreement
\n and on any terms it sees fit, including,
\n without limitation, the financing of the
\n conduct or the operations of the General
\n Partners or the Partnership, the lending of
\n funds to other Persons (including, without
\n limitation, any Subsidiaries of the
\n Partnership) and the repayment of
\n obligations of the Partnership, any of its
\n Subsidiaries and any other Person in which
\n it has an equity investment;<\/p>\n
(8) the distribution of Partnership cash or
\n other Partnership assets in accordance with
\n this Agreement;<\/p>\n
(9) the holding, managing, investing and
\n reinvesting of cash and other assets of the
\n Partnership;<\/p>\n
(10) the collection and receipt of revenues and
\n income of the Partnership;<\/p>\n
(11) the selection, designation of powers,
\n authority and duties and the dismal of
\n employees of the Partnership (including,
\n without limitation, employees having titles
\n such as “president,” “vice president,”
\n “secretary” and “treasurer”) and agents,
\n outside attorneys, accountants, consultants
\n and contractors of the Partnership and the
\n determination of their compensation and
\n other terms of employment or hiring;<\/p>\n
(12) the maintenance of such insurance for the
\n benefit of the Partnership and the Partners
\n as it deems necessary or appropriate;<\/p>\n
-23-
\n 29
\n (13) the formation of, or acquisition of an
\n interest (including non-voting interests in
\n entities controlled by Affiliates of the
\n Partnership or third parties) in, and the
\n contribution of property to, any further
\n limited or general partnerships, joint
\n ventures, limited liability companies or
\n other relationships that it deems desirable
\n (including, without limitation, the
\n acquisition of interests in, and the
\n contributions of funds or property to, or
\n making of loans to, its Subsidiaries and any
\n other Person in which it has an equity
\n investment from time to time, or the
\n incurrence of indebtedness on behalf of such
\n Persons or the guarantee of the obligations
\n of such Persons); provided that, as long as
\n the Managing General Partner has determined
\n to continue to qualify as a REIT, the
\n Partnership may not engage in any such
\n formation, acquisition or contribution that
\n would cause the Managing General Partner to
\n fail to qualify as a REIT;<\/p>\n
(14) the control of any matters affecting the
\n rights and obligations of the Partnership,
\n including the settlement, compromise,
\n submission to arbitration or any other form
\n of dispute resolution or abandonment of any
\n claim, cause of action, liability, debt or
\n damages due or owing to or from the
\n Partnership, the commencement or defense of
\n suits, legal proceedings, administrative
\n proceedings, arbitrations or other forms of
\n dispute resolution, the representation of
\n the Partnership in all suits or legal
\n proceedings, administrative proceedings,
\n arbitrations or other forms of dispute
\n resolution, the incurring of legal expense
\n and the indemnification of any Person
\n against liabilities and contingencies to the
\n extent permitted by law;<\/p>\n
(15) the determination of the fair market value
\n of any Partnership property distributed in
\n kind, using such reasonable method of
\n valuation as the Managing General Partner
\n may adopt;<\/p>\n
(16) the exercise, directly or indirectly,
\n through any attorney-in-fact acting under a
\n general or limited power of attorney, of any
\n right, including the right to vote,
\n appurtenant to any assets or investment held
\n by the Partnership;<\/p>\n
(17) the exercise of any of the powers of the
\n General Partners enumerated in this
\n Agreement on behalf of or in connection with
\n any Subsidiary of the Partnership or any
\n other Person in which the Partnership has a
\n direct or indirect interest, individually or
\n jointly with any such Subsidiary or other
\n Person;<\/p>\n
(18) the exercise of any of the powers of the
\n General Partners enumerated in this
\n Agreement on behalf of any Person in which
\n the Partnership does not have any interest
\n pursuant to contractual or other
\n arrangements with such Person;<\/p>\n
(19) the making, executing and delivering of any
\n and all deeds, leases, notes, deeds to
\n secure debt, mortgages, deeds of trust,
\n security agreements, <\/p>\n
-24-
\n 30
\n conveyances, contracts, guarantees,
\n warranties, indemnities, waivers, releases
\n or other legal instruments or agreements in
\n writing necessary or appropriate in the
\n judgment of the Managing General Partner for
\n the accomplishment of any of the powers of
\n the General Partners enumerated in this
\n Agreement; and<\/p>\n
(20) the distribution of cash to acquire
\n Partnership Units held by a Limited Partner
\n in connection with a Limited Partner’s
\n exercise of its Redemption Right under
\n Section 8.6; and<\/p>\n
(21) the amendment and restatement of Exhibit A
\n to reflect accurately at all times the
\n Capital Contributions and Percentage
\n Interests of the Partners as the same are
\n adjusted from time to time to the extent
\n necessary to reflect redemptions, Capital
\n Contributions, the issuance of Partnership
\n Units, the admission of any Additional
\n Limited Partner or any Substituted Limited
\n Partner or otherwise, which amendment and
\n restatement, notwithstanding anything in
\n this Agreement to the contrary, shall not be
\n deemed an amendment of this Agreement, as
\n long as the matter or event being reflected
\n in Exhibit A otherwise is authorized by this
\n Agreement.<\/p>\n
B. No Approval by Limited Partners. Except as provided in
\nSection 7.11, each of the Limited Partners and the other General Partners agrees
\nthat the Managing General Partner is authorized to execute, deliver and perform
\nthe above-mentioned agreements and transactions on behalf of the Partnership
\nwithout any further act, approval or vote of the Partners, notwithstanding any
\nother provision of this Agreement, the Act or any applicable law, rule or
\nregulation, to the full extent permitted under the Act or other applicable law.
\nThe execution, delivery or performance by the Managing General Partner or the
\nPartnership of any agreement authorized or permitted under this Agreement shall
\nnot constitute a breach by the Managing General Partner of any duty that the
\nManaging General Partner may owe the Partnership or the Limited Partners or any
\nother Persons under this Agreement or of any duty stated or implied by law or
\nequity.<\/p>\n
C. Insurance. At all times from and after the date hereof, the
\nManaging General Partner may cause the Partnership to obtain and maintain (i)
\ncasualty, liability and other insurance on the properties of the Partnership and
\n(ii) liability insurance for the Indemnitees hereunder and (iii) such other
\ninsurance as the Managing General Partner, in its sole and absolute discretion,
\ndetermines to be necessary.<\/p>\n
D. Working Capital and Other Reserves. At all times from and
\nafter the date hereof, the Managing General Partner may cause the Partnership to
\nestablish and maintain working capital reserves in such amounts as the Managing
\nGeneral Partner, in its sole and absolute discretion, deems appropriate and
\nreasonable from time to time, including upon liquidation of the Partnership
\nunder Section 13.<\/p>\n
E. No Obligations to Consider Tax Consequences of Limited
\nPartners. In exercising their authority under this Agreement, the General
\nPartners may, but shall be under no obligation to, take into account the tax
\nconsequences to any Partner (including the General Partners) of any action taken
\n(or not taken) by any of them. The General Partners and the Partnership shall
\nnot have liability to a Limited Partner for monetary damages or otherwise for
\nlosses sustained, liabilities incurred <\/p>\n
-25-
\n 31
\nor benefits not derived by such Limited Partner in connection with such
\ndecisions, provided that the General Partners have acted in good faith and
\npursuant to their authority under this Agreement.<\/p>\n
SECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP<\/p>\n
The General Partners have previously filed the Certificate
\nwith the Secretary of State of Delaware. To the extent that such action is
\ndetermined by the General Partners to be reasonable and necessary or
\nappropriate, the General Partners shall file amendments to and restatements of
\nthe Certificate and do all the things to maintain the Partnership as a limited
\npartnership (or a partnership in which the limited partners have limited
\nliability) under the laws of the State of Delaware and each other state, the
\nDistrict of Columbia or other jurisdiction in which the Partnership may elect to
\ndo business or own property. Subject to the terms of Section 8.5.A(4), the
\nGeneral Partners shall not be required, before or after filing, to deliver or
\nmail a copy of the Certificate or any amendment thereto to any Limited Partner.
\nThe Managing General Partner shall use all reasonable efforts to cause to be
\nfiled such other certificates or documents as may be reasonable and necessary or
\nappropriate for the formation, continuation, qualification and operation of a
\nlimited partnership (or a partnership in which the limited partners have limited
\nliability) in the State of Delaware and any other state, the District of
\nColumbia or other jurisdiction in which the Partnership may elect to do business
\nor own property.<\/p>\n
SECTION 7.3 TITLE TO PARTNERSHIP ASSETS<\/p>\n
Title to Partnership assets, whether real, personal or mixed
\nand whether tangible or intangible, shall be deemed to be owned by the
\nPartnership as an entity, and no Partners, individually or collectively, shall
\nhave any ownership interest in such Partnership assets or any portion thereof.
\nTitle to any or all of the Partnership assets may be held in the name of the
\nPartnership, any General Partner or one or more nominees, as the Managing
\nGeneral Partner may determine, including Affiliates of the General Partners. The
\nGeneral Partners hereby declare and warrant that any Partnership assets for
\nwhich legal title is held in the name of any General Partner or any nominee or
\nAffiliate of the General Partners shall be held by that General Partner for the
\nuse and benefit of the Partnership in accordance with the provisions of this
\nAgreement. All Partnership assets shall be recorded as the property of the
\nPartnership in its books and records, irrespective of the name in which legal
\ntitle to such Partnership assets is held.<\/p>\n
SECTION 7.4 REIMBURSEMENT OF THE GENERAL PARTNERS<\/p>\n
A. No Compensation. Except as provided in this Section 7.4 and
\nelsewhere in this Agreement (including the provisions of Articles V and VI
\nregarding distributions, payments and allocations to which it may be entitled),
\nthe General Partners shall not be compensated for their services as general
\npartners of the Partnership.<\/p>\n
B. Responsibility for Partnership Expenses. The Partnership
\nshall be responsible for and shall pay all expenses relating to the
\nPartnership’s organization, the ownership of its assets and its operations. The
\nManaging General Partner shall be reimbursed on a monthly basis, or such other
\nbasis as the Managing General Partner may determine in its sole and absolute
\ndiscretion, for all expenses it incurs relating to the ownership and operation
\nof, or for the benefit of, the Partnership (including, without limitation,
\nexpenses related to the operations of the General Partners and to the management
\nand administration of any Subsidiaries of the Managing General Partner or the
\nPartnership or Affiliates of the Partnership, such as auditing expenses and
\nfiling fees); provided that, the amount of any such <\/p>\n
-26-
\n 32
\nreimbursement shall be reduced by (i) any interest earned by the Managing
\nGeneral Partner with respect to bank accounts or other instruments or accounts
\nheld by it on behalf of the Partnership as permitted in Section 7.5.A (which
\ninterest is considered to belong to the Partnership and shall be paid over to
\nthe Partnership to the extent not applied to reimburse the Managing General
\nPartner for expenses hereunder); and (ii) any amount derived by the Managing
\nGeneral Partner from any investments permitted in Section 7.5.A. The Managing
\nGeneral Partner shall determine in good faith the amount of expenses incurred by
\nit related to the ownership and operation of, or for the benefit of, the
\nPartnership. If certain expenses are incurred for the benefit of the Partnership
\nand other entities (including the Managing General Partner), such expenses will
\nbe allocated to the Partnership and such other entities in such a manner as the
\nManaging General Partner in its sole and absolute discretion deems fair and
\nreasonable. Such reimbursements shall be in addition to any reimbursement to the
\nManaging General Partner pursuant to Section 10.3.C and as a result of
\nindemnification pursuant to Section 7.7. All payments and reimbursements
\nhereunder shall be characterized for federal income tax purposes as expenses of
\nthe Partnership incurred on its behalf, and not as expenses of the Managing
\nGeneral Partner.<\/p>\n
C. Partnership Interest Issuance Expenses. The Managing
\nGeneral Partner shall also be reimbursed for all expenses it incurs relating to
\nany issuance of Partnership Interests, Shares, Debt of the Partnership or the
\nManaging General Partner or rights, options, warrants or convertible or
\nexchangeable securities pursuant to Article IV (including, without limitation,
\nall costs, expenses, damages and other payments resulting from or arising in
\nconnection with litigation related to any of the foregoing), all of which
\nexpenses are considered by the Partners to constitute expenses of, and for the
\nbenefit of, the Partnership.<\/p>\n
D. Purchases of Shares by the Managing General Partner. If the
\nManaging General Partner exercises its rights under the Declaration of Trust to
\npurchase Shares or otherwise elects to purchase from its shareholders Shares in
\nconnection with a share repurchase or similar program or for the purpose of
\ndelivering such Shares to satisfy an obligation under any dividend reinvestment
\nor equity purchase program adopted by the Managing General Partner, any employee
\nequity purchase plan adopted by the Managing General Partner or any similar
\nobligation or arrangement undertaken by the Managing General Partner in the
\nfuture, the purchase price paid by the Managing General Partner for those Shares
\nand any other expenses incurred by the Managing General Partner in connection
\nwith such purchase shall be considered expenses of the Partnership and shall be
\nreimbursable to the Managing General Partner, subject to the conditions that:
\n(i) if those Shares subsequently are to be sold by the Managing General Partner,
\nthe Managing General Partner shall pay to the Partnership any proceeds received
\nby the Managing General Partner for those Shares (provided that a transfer of
\nShares for Partnership Units pursuant to Section 8.6 would not be considered a
\nsale for such purposes); and (ii) if such Shares are not retransferred by the
\nManaging General Partner within thirty (30) days after the purchase thereof, the
\nManaging General Partner shall cause the Partnership to cancel a number of
\nPartnership Units (rounded to the nearest whole Partnership Unit) held by the
\nManaging General Partner equal to the product attained by multiplying the number
\nof those Shares by a fraction, the numerator of which is one and the denominator
\nof which is the Conversion Factor.<\/p>\n
E. Reimbursement not a Distribution. If and to the extent any
\nreimbursement made pursuant to this Section 7.4 is determined for federal income
\ntax purposes not to constitute a payment of expenses of the Partnership, the
\namount so determined shall constitute a guaranteed payment with respect to
\ncapital within the meaning of Section 707(c) of the Code, shall be treated
\nconsistently therewith by the Partnership and all Partners and shall not be
\ntreated as a distribution for purposes of computing the Partners’ Capital
\nAccounts.<\/p>\n
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\nSECTION 7.5 OUTSIDE ACTIVITIES OF THE GENERAL PARTNERS; RELATIONSHIP
\n OF SHARES TO PARTNERSHIP UNITS; FUNDING DEBT<\/p>\n
A. General. Without the Consent of the Outside Limited
\nPartners, the General Partners shall not, directly or indirectly, enter into or
\nconduct any business other than in connection with the ownership, acquisition
\nand disposition of Partnership Interests as a General Partner or Limited Partner
\nand the management of the business of the Partnership and such activities as are
\nincidental thereto. Without the Consent of the Outside Limited Partners, the
\nassets of the Managing General Partner shall be limited to Partnership Interests
\nand permitted debt obligations of the Partnership (as contemplated by Section
\n7.5.F), so that Shares and Partnership Units are completely fungible except as
\notherwise specifically provided herein; provided, that the Managing General
\nPartner shall be permitted to hold such bank accounts or similar instruments or
\naccounts in its name as it deems necessary to carry out its responsibilities and
\npurposes as contemplated under this Agreement and its organizational documents
\n(provided that accounts held on behalf of the Partnership to permit the Managing
\nGeneral Partner to carry out its responsibilities under this Agreement shall be
\nconsidered to belong to the Partnership and the interest earned thereon shall,
\nsubject to Section 7.4.B, be applied for the benefit of the Partnership); and,
\nprovided further, that the General Partners shall be permitted to acquire,
\ndirectly or through a Qualified REIT Subsidiary or limited liability company, up
\nto a one percent (1%) interest in any partnership or limited liability company
\nat least ninety-nine percent (99%) of the equity of which is owned, directly or
\nindirectly, by the Partnership. The Managing General Partner and any of its
\nAffiliates may acquire Limited Partnership Interests and shall be entitled to
\nexercise all rights of a Limited Partner relating to such Limited Partnership
\nInterests.<\/p>\n
B. Repurchase of Shares. If the Managing General Partner
\nexercises its rights under the Declaration of Trust to purchase Shares or
\notherwise elects to purchase from its shareholders Shares in connection with a
\nshare repurchase or similar program or for the purpose of delivering such shares
\nto satisfy an obligation under any dividend reinvestment or share purchase
\nprogram adopted by the Managing General Partner, any employee share purchase
\nplan adopted by the Managing General Partner or any similar obligation or
\narrangement undertaken by the Managing General Partner in the future, then the
\nManaging General Partner shall cause the Partnership to purchase from the
\nManaging General Partner that number of Partnership Units of the appropriate
\nclass equal to the product obtained by multiplying the number of Shares
\npurchased by the Managing General Partner times a fraction, the numerator of
\nwhich is one and the denominator of which is the Conversion Factor, on the same
\nterms and for the same aggregate price that the Managing General Partner
\npurchased such Shares.<\/p>\n
C. Forfeiture of Shares. If the Partnership or the Managing
\nGeneral Partner acquires Shares as a result of the forfeiture of such Shares
\nunder a restricted or similar share plan, then the Managing General Partner
\nshall cause the Partnership to cancel that number of Partnership Units equal to
\nthe number of Shares so acquired, and, if the Partnership acquired such Shares,
\nit shall transfer such Shares to the Managing General Partner for cancellation.<\/p>\n
D. Issuances of Shares. After the Effective Date, the Managing
\nGeneral Partner shall not grant, award, or issue any additional Shares (other
\nthan Shares issued pursuant to Section 8.6 hereof, pursuant to a dividend or
\ndistribution (including any share split) of Shares to all of its shareholders,
\nor in connection with any acquisition permitted by Section 7.5.A hereof of up to
\na one percent (1%) interest in any partnership or limited liability company at
\nleast ninety-nine percent (99%) of the equity of which is owned, directly or
\nindirectly, by the Partnership), other equity securities of the Managing General
\nPartner, New Securities or Convertible Funding Debt unless (i) the Managing
\nGeneral Partner shall cause, pursuant to Section 4.2.A hereof, the Partnership
\nto issue to the Managing General Partner Partnership Interests or rights,
\noptions, warrants or convertible or exchangeable securities of the <\/p>\n
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\n 34
\nPartnership having designations, preferences and other rights, all such that the
\neconomic interests are substantially the same as those of such additional
\nShares, other equity securities, New Securities or Convertible Funding Debt, as
\nthe case may be, and (ii) the Managing General Partner transfers to the
\nPartnership, as an additional Capital Contribution, the proceeds from the grant,
\naward, or issuance of such additional Shares, other equity securities, New
\nSecurities or Convertible Funding Debt, as the case may be, or from the exercise
\nof rights contained in such additional Shares, other equity securities, New
\nSecurities or Convertible Funding Debt, as the case may be. Without limiting the
\nforegoing, the Managing General Partner is expressly authorized to issue
\nadditional Shares, other equity securities, New Securities or Convertible
\nFunding Debt, as the case may be, for less than fair market value, and the
\nManaging General Partner is expressly authorized, pursuant to Section 4.2.A
\nhereof, to cause the Partnership to issue to the Managing General Partner
\ncorresponding Partnership Interests, as long as (a) the Managing General Partner
\nconcludes in good faith that such issuance is in the interests of the Managing
\nGeneral Partner and the Partnership (for example, and not by way of limitation,
\nthe issuance of Shares and corresponding Partnership Units pursuant to a share
\npurchase plan providing for purchases of Shares, either by employees or
\nshareholders, at a discount from fair market value or pursuant to employee share
\noptions that have an exercise price that is less than the fair market value of
\nthe Shares, either at the time of issuance or at the time of exercise) and (b)
\nthe Managing General Partner transfers all proceeds from any such issuance or
\nexercise to the Partnership as an additional Capital Contribution.<\/p>\n
E. Share Option Plan. If at any time or from time to time, the
\nManaging General Partner sells Shares pursuant to any Share Option Plan, the
\nManaging General Partner shall transfer the net proceeds of the sale of such
\nShares to the Partnership as an additional Capital Contribution in exchange for
\nan amount of additional Partnership Units equal to the number of Shares so sold
\ndivided by the Conversion Factor.<\/p>\n
F. Funding Debt. The Managing General Partner may incur a
\nFunding Debt, including, without limitation, a Funding Debt that is convertible
\ninto Shares or otherwise constitutes a class of New Securities (“Convertible
\nFunding Debt”), subject to the condition that the Managing General Partner lend
\nto the Partnership the net proceeds of such Funding Debt; provided, that
\nConvertible Funding Debt shall be issued pursuant to Section 7.5.D above; and,
\nprovided further, that the Managing General Partner shall not be obligated to
\nlend the net proceeds of any Funding Debt to the Partnership in a manner that
\nwould be inconsistent with the Managing General Partner’s ability to remain
\nqualified as a REIT. If the Managing General Partner enters into any Funding
\nDebt, the loan to the Partnership shall be on comparable terms and conditions,
\nincluding interest rate, repayment schedule and costs and expenses, as are
\napplicable with respect to or incurred in connection with such Funding Debt.<\/p>\n
SECTION 7.6 TRANSACTIONS WITH AFFILIATES<\/p>\n
A. Transactions with Certain Affiliates. Except as expressly
\npermitted by this Agreement, the Partnership shall not, directly or indirectly,
\nsell, transfer or convey any property to, or purchase any property from, or
\nborrow funds from, or lend funds to, any Partner or any Affiliate of the
\nPartnership that is not also a Subsidiary of the Partnership, except pursuant to
\ntransactions that are on terms that are fair and reasonable and no less
\nfavorable to the Partnership than would be obtained from an unaffiliated third
\nparty.<\/p>\n
B. Conflict Avoidance. The General Partners are expressly
\nauthorized to enter into, in the name and on behalf of the Partnership, a right
\nof first opportunity arrangement and other conflict avoidance agreements with
\nvarious Affiliates of the Partnership and General Partners on such terms as the
\nGeneral Partners, in their sole and absolute discretion, believe are advisable.<\/p>\n
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\n 35
\n C. Benefit Plans Sponsored by the Partnership. The Managing
\nGeneral Partner in its sole and absolute discretion and without the approval of
\nthe Limited Partners, may propose and adopt on behalf of the Partnership
\nemployee benefit plans funded by the Partnership for the benefit of employees of
\nthe Managing General Partner, the Partnership, Subsidiaries of the Partnership
\nor any Affiliate of any of them.<\/p>\n
SECTION 7.7 INDEMNIFICATION<\/p>\n
A. General. The Partnership shall indemnify each Indemnitee to
\nthe fullest extent provided by the Act from and against any and all losses,
\nclaims, damages, liabilities, joint or several, expenses (including, without
\nlimitation, attorneys fees and other legal fees and expenses), judgments, fines,
\nsettlements and other amounts arising from or in connection with any and all
\nclaims, demands, actions, suits or proceedings, civil, criminal, administrative
\nor investigative, incurred by the Indemnitee and relating to the Partnership or
\nthe General Partners or the operation of, or the ownership of property by, any
\nof them as set forth in this Agreement in which any such Indemnitee may be
\ninvolved, or is threatened to be involved, as a party or otherwise, unless it is
\nestablished by a final determination of a court of competent jurisdiction that:
\n(i) the act or omission of the Indemnitee was material to the matter giving rise
\nto the proceeding and either was committed in bad faith or was the result of
\nactive and deliberate dishonesty, (ii) the Indemnitee actually received an
\nimproper personal benefit in money, property or services or (iii) in the case of
\nany criminal proceeding, the Indemnitee had reasonable cause to believe that the
\nact or omission was unlawful. Without limitation, the foregoing indemnity shall
\nextend to any liability of any Indemnitee, pursuant to a loan guarantee,
\ncontractual obligation for any indebtedness or other obligation or otherwise,
\nfor any indebtedness of the Partnership or any Subsidiary of the Partnership
\n(including, without limitation, any indebtedness which the Partnership or any
\nSubsidiary of the Partnership has assumed or taken subject to), and the Managing
\nGeneral Partner is hereby authorized and empowered, on behalf of the
\nPartnership, to enter into one or more indemnity agreements consistent with the
\nprovisions of this Section 7.7 in favor of any Indemnitee having or potentially
\nhaving liability for any such indebtedness. The termination of any proceeding by
\njudgment, order or settlement does not create a presumption that the Indemnitee
\ndid not meet the requisite standard of conduct set forth in this Section 7.7.A.
\nThe termination of any proceeding by conviction or upon a plea of nolo
\ncontendere or its equivalent, or an entry of an order of probation prior to
\njudgment, creates a rebuttable presumption that the Indemnitee acted in a manner
\ncontrary to that specified in this Section 7.7.A with respect to the subject
\nmatter of such proceeding. Any indemnification pursuant to this Section 7.7
\nshall be made only out of the assets of the Partnership, and any insurance
\nproceeds from the liability policy covering the General Partners and any
\nIndemnitee, and neither a General Partner nor any Limited Partner shall have any
\nobligation to contribute to the capital of the Partnership or otherwise provide
\nfunds to enable the Partnership to fund its obligations under this Section 7.7.<\/p>\n
B. Advancement of Expenses. Reasonable expenses expected to be
\nincurred by an Indemnitee shall be paid or reimbursed by the Partnership in
\nadvance of the final disposition of any and all claims, demands, actions, suits
\nor proceedings, civil, criminal, administrative or investigative made or
\nthreatened against an Indemnitee upon receipt by the Partnership of (i) a
\nwritten affirmation by the Indemnitee of the Indemnitee’s good faith belief that
\nthe standard of conduct necessary for indemnification by the Partnership as
\nauthorized in this Section 7.7.A has been met and (ii) a written undertaking by
\nor on behalf of the Indemnitee to repay the amount if it shall ultimately be
\ndetermined that the standard of conduct has not been met.<\/p>\n
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\n 36
\n C. No Limitation of Rights. The indemnification provided by
\nthis Section 7.7 shall be in addition to any other rights to which an Indemnitee
\nor any other Person may be entitled under any agreement, pursuant to any vote of
\nthe Partners, as a matter of law or otherwise, and shall continue as to an
\nIndemnitee who has ceased to serve in such capacity unless otherwise provided in
\na written agreement pursuant to which such Indemnitee is indemnified.<\/p>\n
D. Insurance. The Partnership may purchase and maintain
\ninsurance on behalf of the Indemnitees and such other Persons as the Managing
\nGeneral Partner shall determine against any liability that may be asserted
\nagainst or expenses that may be incurred by such Person in connection with the
\nPartnership’s activities, regardless of whether the Partnership would have the
\npower to indemnify such Person against such liability under the provisions of
\nthis Agreement.<\/p>\n
E. Benefit Plan Fiduciary. For purposes of this Section 7.7,
\n(i) excise taxes assessed on an Indemnitee, of for which the Indemnitee is
\notherwise found liable, with respect to an ERISA Plan pursuant to applicable law
\nshall constitute fines within the meaning of this Section 7.7 and (iii) actions
\ntaken or omitted by the Indemnitee with respect to an ERISA Plan in the
\nperformance of its duties for a purpose reasonably believed by it to be in the
\ninterest of the participants and beneficiaries of such ERISA Plan shall be
\ndeemed to be for a purpose which is not opposed to the best interests of the
\nPartnership.<\/p>\n
F. No Personal Liability for Limited Partners. In no event may
\nan Indemnitee subject any of the Partners to personal liability by reason of the
\nindemnification provisions set forth in this Agreement.<\/p>\n
G. Interested Transactions. An Indemnitee shall not be denied
\nindemnification in whole or in part under this Section 7.7 because the
\nIndemnitee had an interest in the transaction with respect to which the
\nindemnification applies if the transaction was otherwise permitted by the terms
\nof this Agreement.<\/p>\n
H. Benefit. The provisions of this Section 7.7 are for the
\nbenefit of the Indemnitees, their employees, officers, directors, trustees,
\nheirs, successors, assigns and administrators and shall not be deemed to create
\nany rights for the benefit of any other Persons. Any amendment, modification or
\nrepeal of this Section 7.7, or any provision hereof, shall be prospective only
\nand shall not in any way affect the limitation on the Partnership’s liability to
\nany Indemnitee under this Section 7.7 as in effect immediately prior to such
\namendment, modification or repeal with respect to claims arising from or related
\nto matters occurring, in whole or in part, prior to such amendment, modification
\nor repeal, regardless of when such claims may arise or be asserted.<\/p>\n
I. Indemnification Payments Not Distributions. If and to the
\nextent any payments to the General Partners pursuant to this Section 7.7
\nconstitute gross income to the General Partners (as opposed to the repayment of
\nadvances made on behalf of the Partnership), such amounts shall constitute
\nguaranteed payments within the meaning of Section 707(c) of the Code, shall be
\ntreated consistently therewith by the Partnership and all Partners, and shall
\nnot be treated as distributions for purposes of computing the Partners’ Capital
\nAccounts.<\/p>\n
J. Exception to Indemnification. Notwithstanding anything to
\nthe contrary in this Agreement, a General Partner shall not be entitled to
\nindemnification hereunder for any loss, claim, damage, liability or expense for
\nwhich such General Partner is obligated to indemnify the Partnership under any
\nother agreement between such General Partner and the Partnership.<\/p>\n
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\n 37
\nSECTION 7.8 LIABILITY OF THE GENERAL PARTNERS<\/p>\n
A. General. Notwithstanding anything to the contrary set forth
\nin this Agreement, no General Partner shall be liable for monetary damages to
\nthe Partnership, any Partners or any Assignees for losses sustained, liabilities
\nincurred or benefits not derived as a result of errors in judgment or mistakes
\nof fact or law or of any act or omission unless that General Partner acted in
\nbad faith and the act or omission was material to the matter giving rise to the
\nloss, liability or benefit not derived.<\/p>\n
B. No Obligation to Consider Separate Interests of Limited
\nPartners or Shareholders. The Limited Partners expressly acknowledge that the
\nGeneral Partners are acting on behalf of the Partnership, that the General
\nPartners are under no obligation to consider the separate interests of the
\nLimited Partners (including, without limitation, the tax consequences to Limited
\nPartners or Assignees) in deciding whether to cause the Partnership to take (or
\ndecline to take) any actions, and that the General Partners shall not be liable
\nfor monetary damages for losses sustained, liabilities incurred or benefits not
\nderived by Limited Partners in connection with such decisions, provided that the
\nGeneral Partners have acted in good faith.<\/p>\n
C. Actions of Agents. Subject to their obligations and duties
\nas General Partners set forth in Section 7.1.A, the General Partners may
\nexercise any of the powers granted to them by this Agreement and perform any of
\nthe duties imposed upon them hereunder either directly or by or through their
\nagents. The General Partners shall not be responsible for any misconduct or
\nnegligence on the part of any such agent appointed by a General Partner in good
\nfaith.<\/p>\n
D. Effect of Amendment. Notwithstanding any other provision
\ncontained herein, any amendment, modification or repeal of this Section 7.8 or
\nany provision hereof shall be prospective only and shall not in any way affect
\nthe limitations on a General Partner’s liability to the Partnership and the
\nLimited Partners under this Section 7.8 as in effect immediately prior to such
\namendment, modification or repeal with respect to claims arising from or
\nrelating to matters occurring, in whole or in part, prior to such amendment,
\nmodification or repeal, regardless of when such claims may arise or be asserted.<\/p>\n
SECTION 7.9 OTHER MATTERS CONCERNING THE GENERAL PARTNERS<\/p>\n
A. Reliance on Documents. A General Partner may rely and shall
\nbe protected in acting or refraining from acting upon any resolution,
\ncertificate, statement, instrument, opinion, report, notice, request, consent,
\norder, bond, debenture or other paper or document believed by it in good faith
\nto be genuine and to have been signed or presented by the proper party or
\nparties.<\/p>\n
B. Reliance on Advisors. The General Partners may consult with
\nlegal counsel, accountants, appraisers, management consultants, investment
\nbankers and other consultants and advisers selected by them, and any act taken
\nor omitted to be taken in reliance upon the opinion of such Persons as to
\nmatters which the General Partners reasonably believe to be within such Person’s
\nprofessional or expert competence shall be conclusively presumed to have been
\ndone or omitted in good faith and in accordance with such opinion.<\/p>\n
C. Action Through Agents. The General Partners shall have the
\nright, in respect of any of their powers or obligations hereunder, to act
\nthrough any of their duly authorized officers and a duly appointed attorney or
\nattorneys-in-fact. Each such attorney shall, to the extent provided by the<\/p>\n
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\n 38
\nGeneral Partners in the power of attorney, have full power and authority to do
\nand perform all and every act and duty which is permitted or required to be done
\nby the General Partners hereunder.<\/p>\n
D. Actions to Maintain REIT Status or Avoid Taxation of the
\nGeneral Partner Entity. Notwithstanding any other provisions of this Agreement
\nor the Act, any action of the General Partners on behalf of the Partnership or
\nany decision of a General Partner to refrain from acting on behalf of the
\nPartnership undertaken in the good faith belief that such action or omission is
\nnecessary or advisable in order (i) to protect the ability of the General
\nPartner Entity to continue to qualify as a REIT or (ii) to allow the General
\nPartner Entity to avoid incurring any liability for taxes under Section 857 or
\n4981 of the Code, is expressly authorized under this Agreement and is deemed
\napproved by all of the Limited Partners.<\/p>\n
E. Actions to Maintain REOC Status. If and so long as the
\nPartnership Interests of “benefit plan investors” are “significant” (as such
\nterm or terms succeeding thereto with the same objective are used in 29 C.F.R.
\nSection 2510.3-101(f) (such regulation or successor regulation being known as
\nthe “Plan Assets Regulation”)), or if necessary so that the underlying assets of
\nthe Managing General Partner will not be “plan assets ” (as such term is defined
\nin the Plan Assets Regulations) of any ERISA Partner, then the Managing General
\nPartner shall conduct the affairs of the Partnership in such manner so that the
\nPartnership shall qualify as a “real estate operating company” (“REOC”), as that
\nterm is used in the Plan Assets Regulations, and so that the assets of the
\nPartnership will not be plan assets of any ERISA Partner.<\/p>\n
(i) If the Managing General Partner, pursuant to this
\nSection 7.09.E, intends to conduct the affairs of the Partnership as a REOC, the
\nManaging General Partner shall deliver to each ERISA Partner an opinion of
\ncounsel reasonably acceptable to each ERISA Partner and upon which such ERISA
\nPartner may rely with respect to the Partnership’s REOC status as of the
\n“initial valuation date” and, if requested in writing by an ERISA Partner, as of
\neach “annual valuation period” (as those terms, or terms succeeding thereto with
\nthe same objective, are defined in the Plan Assets Regulation). Such opinion of
\ncounsel shall state, (A) as to the opinion respecting the “initial valuation
\ndate,” that the Partnership shall qualify as a REOC for the period beginning on
\nsuch “initial valuation date” and ending on the last day of the first “annual
\nvaluation period,” and (B) as to each annual opinion respecting each “annual
\nvaluation period,” that the Partnership shall qualify as a REOC for the 12-month
\nperiod following the last day of such “annual valuation period.” Such opinion of
\ncounsel may rely upon, among other things, a certificate of the Managing General
\nPartner as to the exercise of management rights with respect to one or more
\ninvestments (other than short-term investments pending long-term commitment or
\ndistribution to investors) during the appropriate period, and as to a
\ndescription of such investments, and also shall state whether the Partnership
\nhas included in a certification to the opinion a statement to the effect that on
\nsuch “initial valuation date” or during such “annual valuation period” at least
\n50 percent of Partnership assets (other than short-term investments pending
\nlong-term commitment or distribution to investors), valued at cost, were
\ninvested in real estate investments as described in the Plan Assets Regulation.<\/p>\n
(ii) If the opinion described in this subsection is
\nnot provided in the affirmative, or if any ERISA Partner shall obtain and
\ndeliver to the Managing General Partner an opinion of counsel to such ERISA
\nPartner (which opinion shall be reasonably satisfactory to the Managing General
\nPartner) that there is a reasonable probability that the Partnership was not or
\nwill not be a REOC for a period in which either (i) participation by benefit
\nplan investors in the Partnership is significant or (ii) REOC status is
\nnecessary so that the underlying assets of the Managing General Partner will not
\nbe <\/p>\n
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\n 39
\nplan assets and the Managing General Partner does not obtain an opinion to the
\ncontrary reasonably acceptable to each such ERISA Partner within fifteen (15)
\ndays of its receipt of the opinion delivered by the ERISA Partner (it being
\nunderstood that the existence or reaffirmation of the opinion delivered by the
\nERISA Partner to the Managing General Partner shall not constitute the sole
\nbasis of any ERISA Partner’s determination that the opinion delivered within
\nfifteen days by the Managing General Partner is not reasonably satisfactory),
\nthen the Managing General Partner is hereby authorized and empowered to take
\nsuch actions as it deems necessary and appropriate to mitigate, prevent, or cure
\nsuch adverse consequences as might result to an ERISA Partner from the
\nunderlying assets of the Partnership being assets of an ERISA Partner or the
\nunderlying assets of the Managing General Partner being assets of any ERISA
\nPartner.<\/p>\n
SECTION 7.10 RELIANCE BY THIRD PARTIES<\/p>\n
Notwithstanding anything to the contrary in this Agreement,
\nany Person dealing with the Partnership shall be entitled to assume that the
\nManaging General Partner has full power and authority, without consent or
\napproval of any other Partner or Person, to encumber, sell or otherwise use in
\nany manner any and all assets of the Partnership, to enter into any contracts on
\nbehalf of the Partnership and to take any and all actions on behalf of the
\nPartnership, and such Person shall be entitled to deal with the Managing General
\nPartner as if the Managing General Partner were the Partnership’s sole party in
\ninterest, both legally and beneficially. Each Limited Partner hereby waives any
\nand all defenses or other remedies which may be available against such Person to
\ncontest, negate or disaffirm any action of the Managing General Partner in
\nconnection with any such dealing. In no event shall any Person dealing with the
\nManaging General Partner or its representatives be obligated to ascertain that
\nthe terms of this Agreement have been complied with or to inquire into the
\nnecessity or expedience of any act or action of the Managing General Partner or
\nits representatives. Each and every certificate, document or other instrument
\nexecuted on behalf of the Partnership by the Managing General Partner or its
\nrepresentatives shall be conclusive evidence in favor of any and every Person
\nrelying thereon or claiming thereunder that (i) at the time of the execution and
\ndelivery of such certificate, document or instrument, this Agreement was in full
\nforce and effect, (ii) the Person executing and delivering such certificate,
\ndocument or instrument was duly authorized and empowered to do so for and on
\nbehalf of the Partnership, and (iii) such certificate, document or instrument
\nwas duly executed and delivered in accordance with the terms and provisions of
\nthis Agreement and is binding upon the Partnership.<\/p>\n
SECTION 7.11 RESTRICTIONS ON GENERAL PARTNERS’ AUTHORITY<\/p>\n
A. Consent Required. The General Partners may not take any
\naction in contravention of an express prohibition or limitation of this
\nAgreement without the written Consent of (i) all Partners adversely affected or
\n(ii) such lower percentage of the Limited Partnership Interests as may be
\nspecifically provided for under a provision of this Agreement or the Act.<\/p>\n
B. Sale of All Assets of the Partnership. Except as provided
\nin Article XIII, the General Partners may not, directly or indirectly, cause the
\nPartnership to sell, exchange, transfer or otherwise dispose of all or
\nsubstantially all of the Partnership’s assets in a single transaction or a
\nseries of related transactions (including by way of merger (including a
\ntriangular merger), consolidation or other combination with any other Persons)
\n(i) if such merger, sale or other transaction is in connection with a
\nTermination Transaction permitted under Section 11.2.B hereof, without the
\nConsent of the Partners holding at least a majority of the then outstanding
\nPartnership Units (including any Partnership Units held by the General
\nPartners), or (ii) otherwise, without the Consent of the Outside Limited
\nPartners.<\/p>\n
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\n 40
\n C. Communications Act Investor. Unless otherwise approved in
\nwriting by each affected Communications Act Investor (hereinafter defined), the
\nGeneral Partners may not, directly or indirectly, cause the Partnership to
\ninvest in any Property or otherwise take any action that (i) would result in the
\nCommunications Act Investor being placed in a position whereby it would have or
\nbe deemed to have the right to act for any third party in selecting or dealing
\nwith any interexchange carrier (which, for purposes hereof, shall include
\nsatellite telecommunication service) in providing long distance service between
\nlocal access and transport areas which originates in any State within the region
\nin which the affected Communications Act Investor (or the operating company
\naffiliate thereof) provides wireline telephone local exchange service, (but in
\nno event shall the foregoing be deemed to prohibit the Partnership from
\ncontracting with a third party to perform such functions on a discretionary
\nbasis as part of its property management duties where such activity is a
\nnecessary adjunct to an investment and such activities, in the aggregate, are
\nnot significant in relation to the Partnership’s business activities taken as a
\nwhole), or (ii) would cause a significant percentage of the Partnership’s gross
\nincome from any Property to be attributable to either the provision or resale of
\nlong distance service between local access and transport areas which originates
\nin any State within the region in which the affected Communications Act Investor
\n(or the operating company affiliate thereof) provides wireline telephone local
\nexchange service, or the manufacture of telecommunications, customer premises or
\nrelated equipment. In addition, the Partnership will not engage in any
\ntelecommunications activities other than those that may be ancillary to the
\nownership or operation of its investments or make an investment in a cable
\ntelevision system that would violate the cable-telephone cross-ownership
\nrestriction in the Communications Act of 1934, as amended, with regard to the
\nlocal exchange service area of a Communications Act Investor (or the operating
\ncompany affiliate thereof). Notwithstanding the foregoing, the Partnership is
\nnot precluded from engaging in any telecommunications business or cable business
\nunless such business is found to place the Communications Act Investor in
\nviolation of law. The Managing General Partner shall have a period of 120 days
\nfollowing a finding by a court or regulatory body that such a violation exists
\nto use its reasonable best efforts to prevent or eliminate such violation,
\nincluding, but not limited to, correction of the condition giving rise to the
\nviolation, amendment to this Agreement or sale of the relevant property or the
\ninterest of the Communications Act Investor therein. A “Communications Act
\nInvestor” is a Partner or shareholder of the Managing General Partner that has
\nnotified the Managing General Partner that it is subject to the Communications
\nAct of 1934, as amended.<\/p>\n
SECTION 7.12 LOANS BY THIRD PARTIES<\/p>\n
The Partnership may incur Debt, or enter into similar credit,
\nguarantee, financing or refinancing arrangements for any purpose (including,
\nwithout limitation, in connection with any acquisition of property) with any
\nPerson that is not a General Partner upon such terms as the Managing General
\nPartner determines appropriate; provided that, the Partnership shall not incur
\nany Debt that is recourse to a General Partner, except to the extent otherwise
\nagreed to by such General Partner in its sole discretion.<\/p>\n
SECTION 7.13 ACTIONS OF THE GENERAL PARTNERS<\/p>\n
Any act (including, without limitation, execution of any
\ndocument), determination or judgment required by this Agreement to be performed
\nor made by the General Partners (as opposed to by the Managing General Partner
\nacting alone), may be performed or made by the Managing General Partner,
\nprovided it has obtained the consent of a majority in number of all of the
\nGeneral Partners (including the Managing General Partner).<\/p>\n
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\n ARTICLE VIII
\n RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS<\/p>\n
SECTION 8.1 LIMITATION OF LIABILITY<\/p>\n
The Limited Partners shall have no liability under this
\nAgreement except as expressly provided in this Agreement, including Section
\n10.5, or under the Act.<\/p>\n
SECTION 8.2 MANAGEMENT OF BUSINESS<\/p>\n
No Limited Partner or Assignee (other than the General
\nPartners, any of their Affiliates or any officer, director, employee, partner,
\nagent or trustee of a General Partner, the Partnership or any of their
\nAffiliates, in their capacity as such) shall take part in the operation,
\nmanagement or control (within the meaning of the Act) of the Partnership’s
\nbusiness, transact any business in the Partnership’s name or have the power to
\nsign documents for or otherwise bind the Partnership. The transaction of any
\nsuch business by a General Partner, any of its Affiliates or any officer,
\ndirector, employee, partner, agent or trustee of a General Partner, the
\nPartnership or any of their Affiliates, in their capacity as such, shall not
\naffect, impair or eliminate the limitations on the liability of the Limited
\nPartners or Assignees under this Agreement.<\/p>\n
SECTION 8.3 OUTSIDE ACTIVITIES OF LIMITED PARTNERS<\/p>\n
Subject to Section 7.5 hereof, and subject to any agreements
\nentered into pursuant to Section 7.6.C hereof and to any other agreements
\nentered into by a Limited Partner or its Affiliates with the Partnership or a
\nSubsidiary, any Limited Partner (other than a General Partner) and any officer,
\ndirector, employee, agent, trustee, Affiliate or shareholder of any Limited
\nPartner shall be entitled to and may have business interests and engage in
\nbusiness activities in addition to those relating to the Partnership, including
\nbusiness interests and activities in direct or indirect competition with the
\nPartnership. Neither the Partnership nor any Partners shall have any rights by
\nvirtue of this Agreement in any business ventures of any Limited Partner or
\nAssignee. None of the Limited Partners (other than the General Partners) nor any
\nother Person shall have any rights by virtue of this Agreement or the
\npartnership relationship established hereby in any business ventures of any
\nother Person (other than the Managing General Partner to the extent expressly
\nprovided herein), and such Person shall have no obligation pursuant to this
\nAgreement to offer any interest in any such business ventures to the
\nPartnership, any Limited Partner or any such other Person, even if such
\nopportunity is of a character which, if presented to the Partnership, any
\nLimited Partner or such other Person, could be taken by such Person.<\/p>\n
SECTION 8.4 RETURN OF CAPITAL<\/p>\n
Except pursuant to the right of redemption set forth in
\nSection 8.6, no Limited Partner shall be entitled to the withdrawal or return of
\nits Capital Contribution, except to the extent of distributions made pursuant to
\nthis Agreement or upon termination of the Partnership as provided herein. No
\nLimited Partner or Assignee shall have priority over any other Limited Partner
\nor Assignee either as to the return of Capital Contributions (except as
\npermitted by Section 4.2.A) or, except to the extent provided by Exhibit C or as
\npermitted by Sections 4.2.A, 5.1.B(i), 6.1.A(ii) and 6.1.B(i), or otherwise
\nexpressly provided in this Agreement, as to profits, losses, distributions or
\ncredits.<\/p>\n
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\n 42
\nSECTION 8.5 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP<\/p>\n
A. General. In addition to other rights provided by this
\nAgreement or by the Act, and except as limited by Section 8.5.D, each Limited
\nPartner shall have the right, for a purpose reasonably related to such Limited
\nPartner’s interest as a limited partner in the Partnership, upon written demand
\nwith a statement of the purpose of such demand and at such Limited Partner’s own
\nexpense:<\/p>\n
(1) to obtain a copy of the most recent annual
\n and quarterly reports filed with the
\n Securities and Exchange Commission by the
\n General Partner Entity pursuant to the
\n Exchange Act;<\/p>\n
(2) to obtain a copy of the Partnership’s
\n federal, state and local income tax returns
\n for each Partnership Year;<\/p>\n
(3) to obtain a current list of the name and
\n last known business, residence or mailing
\n address of each Partner;<\/p>\n
(4) to obtain a copy of this Agreement and the
\n Certificate and all amendments thereto,
\n together with executed copies of all powers
\n of attorney pursuant to which this
\n Agreement, the Certificate and all
\n amendments thereto have been executed; and<\/p>\n
(5) to obtain true and full information
\n regarding the amount of cash and a
\n description and statement of any other
\n property or services contributed by each
\n Partner and which each Partner has agreed to
\n contribute in the future, and the date on
\n which each became a Partner.<\/p>\n
B. Notice of Conversion Factor. The Partnership shall notify
\neach Limited Partner upon request of the then current Conversion Factor and any
\nchanges that have been made thereto.<\/p>\n
C. Notice of Extraordinary Transaction of the General Partner
\nEntity. The General Partner Entity shall not make any extraordinary
\ndistributions of cash or property to its shareholders or effect a merger
\n(including, without limitation, a triangular merger), a sale of all or
\nsubstantially all of its assets or any other similar extraordinary transaction
\nwithout notifying the Limited Partners of its intention to make such
\ndistribution or effect such merger, sale or other extraordinary transaction at
\nleast twenty (20) Business Days prior to the record date to determine
\nshareholders eligible to receive such distribution or to vote upon the approval
\nof such merger, sale or other extraordinary transaction (or, if no such record
\ndate is applicable, at least twenty (20) business days before consummation of
\nsuch merger, sale or other extraordinary transaction). This provision for such
\nnotice shall not be deemed (i) to permit any transaction that otherwise is
\nprohibited by this Agreement or requires a Consent of the Partners or (ii) to
\nrequire a Consent of the Limited Partners to a transaction that does not
\notherwise require Consent under this Agreement. Each Limited Partner agrees, as
\na condition to the receipt of the notice pursuant hereto, to keep confidential
\nthe information set forth therein until such time as the General Partner Entity
\nhas made public disclosure thereof and to use such information during such
\nperiod of confidentiality solely for purposes of determining whether to exercise
\nthe Redemption Right; provided, however, that a Limited Partner may disclose
\nsuch information to its attorney, accountant and\/or financial advisor for
\npurposes of obtaining advice with respect to such exercise so long as such
\nattorney, accountant and\/or financial advisor agrees to receive and hold such
\ninformation subject to this confidentiality requirement.<\/p>\n
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\n 43
\n D. Confidentiality. Notwithstanding any other provision of
\nthis Section 8.5, the General Partners may keep confidential from the Limited
\nPartners, for such period of time as the General Partners determine in their
\nsole and absolute discretion to be reasonable, any information that (i) the
\nGeneral Partners reasonably believe to be in the nature of trade secrets or
\nother information the disclosure of which the General Partners in good faith
\nbelieve is not in the best interests of the Partnership or could damage the
\nPartnership or its business or (ii) the Partnership is required by law or by
\nagreements with unaffiliated third parties to keep confidential.<\/p>\n
SECTION 8.6 REDEMPTION RIGHT<\/p>\n
A. General. (i) Subject to Section 8.6.C, at any time on or
\nafter the first anniversary date of the issuance of a Partnership Unit to a
\nLimited Partner pursuant to Article IV hereof (which one-year period shall
\ncommence upon the issuance of such Partnership Unit regardless of whether such
\nPartnership Unit is designated upon issuance as a Class A Unit, a Class B Unit
\nor otherwise and shall include the period of time from the date such Partnership
\nUnit is issued to such Limited Partner as other than a Class A Unit until the
\ndate such Partnership Unit is converted automatically to a Class A Unit pursuant
\nto Section 4.2.C hereof), or on or after such date prior to the expiration of
\nsuch one-year period as the Managing General Partner, in its sole and absolute
\ndiscretion, designates with respect to any or all Class A Units then
\noutstanding, the holder of a Partnership Unit (if other than the Managing
\nGeneral Partner or the General Partner Entity or any Subsidiary of either the
\nManaging General Partner or the General Partner Entity) shall have the right
\n(the “Redemption Right”) to require the Partnership to redeem such Partnership
\nUnit, with such redemption to occur on the Specified Redemption Date and at a
\nredemption price equal to and in the form of the Cash Amount to be paid by the
\nPartnership; provided, however, that solely with respect to Partnership Units
\nissued to the Opportunity Partnerships in the Consolidation and ultimately
\ndistributed by the Opportunity Partnerships to their respective limited
\npartners, the Redemption Right only shall be exercisable commencing on or after
\nthe second anniversary date of the issuance of such Partnership Units. Any such
\nRedemption Right shall be exercised pursuant to a Notice of Redemption delivered
\nto the Partnership (with a copy to the Managing General Partner) by the Limited
\nPartner who is exercising the Redemption Right (the “Redeeming Partner”). A
\nLimited Partner may exercise the Redemption Right from time to time, without
\nlimitation as to frequency, with respect to part or all of the Units that it
\nowns, as selected by the Limited Partner, provided that a Limited Partner may
\nnot exercise the Redemption Right for less than one thousand (1,000) Partnership
\nUnits unless such Redeeming Partner then holds less than one thousand (1,000)
\nPartnership Units, in which event the Redeeming Partner must exercise the
\nRedemption Right for all of the Partnership Units held by such Redeeming
\nPartner.<\/p>\n
(ii) The Redeeming Partner shall have no right with
\nrespect to any Partnership Units so redeemed to receive any distributions paid
\nafter the Specified Redemption Date with respect to such Partnership Units.<\/p>\n
(iii) The Assignee of any Limited Partner may
\nexercise the rights of such Limited Partner pursuant to this Section 8.6, and
\nsuch Limited Partner shall be deemed to have assigned such rights to such
\nAssignee and shall be bound by the exercise of such rights by such Limited
\nPartner’s Assignee. In connection with any exercise of such rights by such
\nAssignee on behalf of such Limited Partner, the Cash Amount shall be paid by the
\nPartnership directly to such Assignee and not to such Limited Partner.<\/p>\n
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\n 44
\n (iv) If the Managing General Partner provides notice
\nto the Limited Partners, pursuant to Section 8.5.C hereof, the Redemption Right
\nshall be exercisable, without regard to whether the Partnership Units have been
\noutstanding for any specified period, during the period commencing on the date
\non which the Managing General Partner provides such notice and ending on the
\nrecord date to determine shareholders eligible to receive such distribution or
\nto vote upon the approval of such merger, sale or other extraordinary
\ntransaction (or, if no such record date is applicable, at least twenty (20)
\nbusiness days before the consummation of such merger, sale or other
\nextraordinary transaction). If this subparagraph (iv) applies, the Specified
\nRedemption Date is the date on which the Partnership and the Managing General
\nPartner receive notice of exercise of the Redemption Right, rather than ten (10)
\nBusiness Days after receipt of the notice of redemption.<\/p>\n
B. Managing General Partner Assumption of Right. (i) If a
\nLimited Partner has delivered a Notice of Redemption, the Managing General
\nPartner may, in its sole and absolute discretion (subject to the limitations on
\nownership and transfer of Shares set forth in the Declaration of Trust), elect
\nto assume directly and satisfy a Redemption Right by paying to the Redeeming
\nPartner either the Cash Amount or the Shares Amount, as the Managing General
\nPartner determines in its sole and absolute discretion (provided that payment of
\nthe Redemption Amount in the form of Shares shall be in Shares registered for
\nresale under Section 12 of the Exchange Act and listed for trading on the
\nexchange or national market on which the Shares are Publicly Traded, and
\nprovided further that, if the Shares are not Publicly Traded at the time a
\nRedeeming Partner exercises its Redemption Right, the Redemption Amount shall be
\npaid only in the form of the Cash Amount unless the Redeeming Partner, in its
\nsole and absolute discretion, consents to payment of the Redemption Amount in
\nthe form of the Shares Amount), on the Specified Redemption Date, whereupon the
\nManaging General Partner shall acquire the Partnership Units offered for
\nredemption by the Redeeming Partner and shall be treated for all purposes of
\nthis Agreement as the owner of such Partnership Units. Unless the Managing
\nGeneral Partner, in its sole and absolute discretion, shall exercise its right
\nto assume directly and satisfy the Redemption Right, the Managing General
\nPartner shall not have any obligation to the Redeeming Partner or to the
\nPartnership with respect to the Redeeming Partner’s exercise of the Redemption
\nRight. If the Managing General Partner shall exercise its right to satisfy the
\nRedemption Right in the manner described in the first sentence of this Section
\n8.6B and shall fully perform its obligations in connection therewith, the
\nPartnership shall have no right or obligation to pay any amount to the Redeeming
\nPartner with respect to such Redeeming Partner’s exercise of the Redemption
\nRight, and each of the Redeeming Partner, the Partnership and the Managing
\nGeneral Partner shall, for federal income tax purposes, treat the transaction
\nbetween the General Partner and the Redeeming Partner as a sale of the Redeeming
\nPartner’s Partnership Units to the Managing General Partner. Nothing contained
\nin this Section 8.6.B shall imply any right of the Managing General Partner to
\nrequire any Limited Partner to exercise the Redemption Right afforded to such
\nLimited Partner pursuant to Section 8.6.A.<\/p>\n
(ii) If the Managing General Partner determines to
\npay the Redeeming Partner the Redemption Amount in the form of Shares, the total
\nnumber of Shares to be paid to the Redeeming Partner in exchange for the
\nRedeeming Partner’s Partnership Units shall be the applicable Shares Amount. If
\nthis amount is not a whole number of Shares, the Redeeming Partner shall be paid
\n(i) that number of Shares which equals the nearest whole number less than such
\namount plus (ii) an amount of cash which the Managing General Partner
\ndetermines, in its reasonable discretion, to represent the fair value of the
\nremaining fractional Share which would otherwise be payable to the Redeeming
\nPartner.<\/p>\n
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\n 45
\n (iii) Each Redeeming Partner agrees to execute such
\ndocuments as the Managing General Partner may reasonably require in connection
\nwith the issuance of Shares upon exercise of the Redemption Right.<\/p>\n
C. Exceptions to Exercise of Redemption Right. Notwithstanding
\nthe provisions of Sections 8.6.A and 8.6.B, a Partner shall not be entitled to
\nexercise the Redemption Right pursuant to Section 8.6.A if (but only as long as)
\nthe delivery of Shares to such Partner on the Specified Redemption Date (i)
\nwould be prohibited under the Declaration of Trust or (ii) would be prohibited
\nunder applicable federal or state securities laws or regulations (in each case
\nregardless of whether the Managing General Partner would in fact assume and
\nsatisfy the Redemption Right).<\/p>\n
D. No Liens on Partnership Units Delivered for Redemption.
\nEach Limited Partner covenants and agrees with the Managing General Partner that
\nall Partnership Units delivered for redemption shall be delivered to the
\nPartnership or the Managing General Partner, as the case may be, free and clear
\nof all liens, and, notwithstanding anything contained herein to the contrary,
\nneither the Managing General Partner nor the Partnership shall be under any
\nobligation to acquire Partnership Units which are or may be subject to any
\nliens. Each Limited Partner further agrees that, if any state or local property
\ntransfer tax is payable as a result of the transfer of its Partnership Units to
\nthe Partnership or the Managing General Partner, such Limited Partner shall
\nassume and pay such transfer tax.<\/p>\n
E. Additional Partnership Interests. If the Partnership issues
\nPartnership Interests to any Additional Limited Partner pursuant to Article IV,
\nthe Managing General Partner shall make such revisions to this Section 8.6 as it
\ndetermines are necessary to reflect the issuance of such Partnership Interests
\n(including setting forth any restrictions on the exercise of the Redemption
\nRight with respect to such Partnership Interests).<\/p>\n
ARTICLE IX
\n BOOKS, RECORDS, ACCOUNTING AND REPORTS<\/p>\n
SECTION 9.1 RECORDS AND ACCOUNTING<\/p>\n
The Managing General Partner shall keep or cause to be kept at
\nthe principal office of the Partnership appropriate books and records with
\nrespect to the Partnership’s business, including, without limitation, all books
\nand records necessary to provide to the Limited Partners any information, lists
\nand copies of documents required to be provided pursuant to Section 9.3. Any
\nrecords maintained by or on behalf of the Partnership in the regular course of
\nits business may be kept on, or be in the form of, punch cards, magnetic tape,
\nphotographs, micrographics or any other information storage device, provided
\nthat the records so maintained are convertible into clearly legible written form
\nwithin a reasonable period of time. The books of the Partnership shall be
\nmaintained, for financial and tax reporting purposes, on an accrual basis in
\naccordance with generally accepted accounting principles.<\/p>\n
SECTION 9.2 FISCAL YEAR<\/p>\n
The fiscal year of the Partnership shall be the calendar year.<\/p>\n
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\n 46
\nSECTION 9.3 REPORTS<\/p>\n
A. Annual Reports. As soon as practicable, but in no event
\nlater than the date on which the General Partner Entity mails its annual report
\nto its shareholders, the General Partner Entity shall cause to be mailed to each
\nLimited Partner an annual report, as of the close of the most recently ended
\nPartnership Year, containing financial statements of the Partnership, or of the
\nGeneral Partner Entity if such statements are prepared solely on a consolidated
\nbasis with the Partnership, for such Partnership Year, presented in accordance
\nwith generally accepted accounting principles, such statements to be audited by
\na nationally recognized firm of independent public accountants selected by the
\nGeneral Partner Entity.<\/p>\n
B. Quarterly Reports. If and to the extent that the General
\nPartner Entity mails quarterly reports to its shareholders, as soon as
\npracticable, but in no event later than the date on such reports are mailed, the
\nGeneral Partner Entity shall cause to be mailed to each Limited Partner a report
\ncontaining unaudited financial statements, as of the last day of such calendar
\nquarter, of the Partnership, or of the General Partner Entity if such statements
\nare prepared solely on a consolidated basis with the Partnership, and such other
\ninformation as may be required by applicable law or regulation, or as the
\nManaging General Partner determines to be appropriate.<\/p>\n
ARTICLE X
\n TAX MATTERS<\/p>\n
SECTION 10.1 PREPARATION OF TAX RETURNS<\/p>\n
The General Partners shall arrange for the preparation and
\ntimely filing of all returns of Partnership income, gains, deductions, losses
\nand other items required of the Partnership for federal and state income tax
\npurposes and shall use all reasonable efforts to furnish, within ninety (90)
\ndays of the close of each taxable year, the tax information reasonably required
\nby Limited Partners for federal and state income tax reporting purposes.<\/p>\n
SECTION 10.2 TAX ELECTIONS<\/p>\n
Except as otherwise provided herein, the General Partners
\nshall, in their sole and absolute discretion, determine whether to make any
\navailable election pursuant to the Code; provided, however, that the General
\nPartners shall make the election under Section 754 of the Code in accordance
\nwith applicable regulations thereunder. The General Partners shall have the
\nright to seek to revoke any such election (including, without limitation, the
\nelection under Section 754 of the Code) upon the General Partners’ determination
\nin their sole and absolute discretion that such revocation is in the best
\ninterests of the Partners.<\/p>\n
SECTION 10.3 TAX MATTERS PARTNER<\/p>\n
A. General. The Managing General Partner shall be the “tax
\nmatters partner” of the Partnership for federal income tax purposes. Pursuant to
\nSection 6223(c)(3) of the Code, upon receipt of notice from the IRS of the
\nbeginning of an administrative proceeding with respect to the Partnership, the
\ntax matters partner shall furnish the IRS with the name, address, tax payer
\nidentification number and profit interest of each of the Limited Partners and
\nany Assignees; provided, however, that such information is provided to the
\nPartnership by the Limited Partners.<\/p>\n
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\n 47
\n B. Powers. The tax matters partner is authorized, but not
\nrequired:<\/p>\n
(1) to enter into any settlement with the IRS
\n with respect to any administrative or
\n judicial proceedings for the adjustment of
\n Partnership items required to be taken into
\n account by a Partner for income tax purposes
\n (such administrative proceedings being
\n referred to as a “tax audit” and such
\n judicial proceedings being referred to as
\n “judicial review”), and in the settlement
\n agreement the tax matters partner may
\n expressly state that such agreement shall
\n bind all Partners, except that such
\n settlement agreement shall not bind any
\n Partner (i) who (within the time prescribed
\n pursuant to the Code and Regulations) files
\n a statement with the IRS providing that the
\n tax matters partner shall not have the
\n authority to enter into a settlement
\n agreement on behalf of such Partner or (ii)
\n who is a “notice partner” (as defined in
\n Section 6231(a)(8) of the Code) or a member
\n of a “notice group” (as defined in Section
\n 6223(b)(2) of the Code);<\/p>\n
(2) if a notice of a final administrative
\n adjustment at the Partnership level of any
\n item required to be taken into account by a
\n Partner for tax purposes (a “final
\n adjustment”) is mailed to the tax matters
\n partner, to seek judicial review of such
\n final adjustment, including the filing of a
\n petition for readjustment with the Tax Court
\n or the filing of a complaint for refund with
\n the United States Claims Court or the
\n District Court of the United States for the
\n district in which the Partnership’s
\n principal place of business is located;<\/p>\n
(3) to intervene in any action brought by any
\n other Partner for judicial review of a final
\n adjustment;<\/p>\n
(4) to file a request for an administrative
\n adjustment with the IRS at any time and, if
\n any part of such request is not allowed by
\n the IRS, to file an appropriate pleading
\n (petition or complaint) for judicial review
\n with respect to such request;<\/p>\n
(5) to enter into an agreement with the IRS to
\n extend the period for assessing any tax
\n which is attributable to any item required
\n to be taken into account by a Partner for
\n tax purposes, or an item affected by such
\n item; and<\/p>\n
(6) to take any other action on behalf of the
\n Partners of the Partnership in connection
\n with any tax audit or judicial review
\n proceeding to the extent permitted by
\n applicable law or regulations.<\/p>\n
The taking of any action and the incurring of any expense by
\nthe tax matters partner in connection with any such proceeding, except to the
\nextent required by law, is a matter in the sole and absolute discretion of the
\ntax matters partner and the provisions relating to indemnification of the
\nManaging General Partner set forth in Section 7.7 shall be fully applicable to
\nthe tax matters partner in its capacity as such.<\/p>\n
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\n 48
\n C. Reimbursement. The tax matters partner shall receive no
\ncompensation for its services. All third party costs and expenses incurred by
\nthe tax matters partner in performing its duties as such (including legal and
\naccounting fees and expenses) shall be borne by the Partnership. Nothing herein
\nshall be construed to restrict the Partnership from engaging an accounting firm
\nand\/or law firm to assist the tax matters partner in discharging its duties
\nhereunder, so long as the compensation paid by the Partnership for such services
\nis reasonable.<\/p>\n
SECTION 10.4 ORGANIZATIONAL EXPENSES<\/p>\n
The Partnership shall elect to deduct expenses, if any,
\nincurred by it in organizing the Partnership ratably over a sixty (60) month
\nperiod as provided in Section 709 of the Code.<\/p>\n
SECTION 10.5 WITHHOLDING<\/p>\n
Each Limited Partner hereby authorizes the Partnership to
\nwithhold from or pay on behalf of or with respect to such Limited Partner any
\namount of federal, state, local, or foreign taxes that the Managing General
\nPartner determines that the Partnership is required to withhold or pay with
\nrespect to any amount distributable or allocable to such Limited Partner
\npursuant to this Agreement, including, without limitation, any taxes required to
\nbe withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445, or
\n1446 of the Code. Any amount paid on behalf of or with respect to a Limited
\nPartner shall constitute a loan by the Partnership to such Limited Partner,
\nwhich loan shall be repaid by such Limited Partner within fifteen (15) days
\nafter notice from the Managing General Partner that such payment must be made
\nunless (i) the Partnership withholds such payment from a distribution which
\nwould otherwise be made to the Limited Partner or (ii) the Managing General
\nPartner determines, in its sole and absolute discretion, that such payment may
\nbe satisfied out of the available funds of the Partnership which would, but for
\nsuch payment, be distributed to the Limited Partner. Any amounts withheld
\npursuant to the foregoing clauses (i) or (ii) shall be treated as having been
\ndistributed to such Limited Partner. Each Limited Partner hereby unconditionally
\nand irrevocably grants to the Partnership a security interest in such Limited
\nPartner’s Partnership Interest to secure such Limited Partner’s obligation to
\npay to the Partnership any amounts required to be paid pursuant to this Section
\n10.5. If a Limited Partner fails to pay any amounts owed to the Partnership
\npursuant to this Section 10.5 when due, the Managing General Partner may, in its
\nsole and absolute discretion, elect to make the payment to the Partnership on
\nbehalf of such defaulting Limited Partner, and in such event shall be deemed to
\nhave loaned such amount to such defaulting Limited Partner and shall succeed to
\nall rights and remedies of the Partnership as against such defaulting Limited
\nPartner (including, without limitation, the right to receive distributions). Any
\namounts payable by a Limited Partner hereunder shall bear interest at the base
\nrate on corporate loans at large United States money center commercial banks, as
\npublished from time to time in the Wall Street Journal, plus four (4) percentage
\npoints (but not higher than the maximum lawful rate under the laws of the State
\nof Illinois) from the date such amount is due (i.e., fifteen (15) days after
\ndemand) until such amount is paid in full. Each Limited Partner shall take such
\nactions as the Partnership or the Managing General Partner shall request to
\nperfect or enforce the security interest created hereunder.<\/p>\n
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\n 49
\n ARTICLE XI
\n TRANSFERS AND WITHDRAWALS<\/p>\n
SECTION 11.1 TRANSFER<\/p>\n
A. Definition. The term “transfer,” when used in this Article
\nXI with respect to a Partnership Interest or a Partnership Unit, shall be deemed
\nto refer to a transaction by which a General Partner purports to assign all or
\nany part of its General Partnership Interest to another Person or by which a
\nLimited Partner purports to assign all or any part of its Limited Partnership
\nInterest to another Person, and includes a sale, assignment, gift, pledge,
\nencumbrance, hypothecation, mortgage, exchange or any other disposition by law
\nor otherwise. The term “transfer” when used in this Article XI does not include
\nany redemption or repurchase of Partnership Units by the Partnership from a
\nPartner or acquisition of Partnership Units from a Limited Partner by the
\nManaging General Partner pursuant to Section 8.6 or otherwise. No part of the
\ninterest of a Limited Partner shall be subject to the claims of any creditor,
\nany spouse for alimony or support, or to legal process, and may not be
\nvoluntarily or involuntarily alienated or encumbered except as may be
\nspecifically provided for in this Agreement.<\/p>\n
B. General. No Partnership Interest shall be transferred, in
\nwhole or in part, except in accordance with the terms and conditions set forth
\nin this Article XI. Any transfer or purported transfer of a Partnership Interest
\nnot made in accordance with this Article XI shall be null and void.<\/p>\n
SECTION 11.2 TRANSFERS OF PARTNERSHIP INTERESTS OF GENERAL PARTNERS<\/p>\n
A. Except for transfers of Partnership Units to the
\nPartnership as provided in Section 7.5 or Section 8.6, the Managing General
\nPartner may not transfer any of its Partnership Interest (including both its
\nGeneral Partnership Interest and its Limited Partnership Interest) except in
\nconnection with a transaction described in Section 11.2.B or as otherwise
\nexpressly permitted under this Agreement, nor shall the Managing General Partner
\nwithdraw as a General Partner except in connection with a transaction described
\nin Section 11.2.B. A General Partner, other than the Managing General Partner,
\nmay not transfer any of its Partnership Interests or withdraw as a General
\nPartner except (i) in connection with a transaction described in Section 11.2.B,
\n(ii) as set forth in Section 11.2.C, (iii) as set forth in Section 7.9.E. or
\n(iv) with the consent of the Managing General Partner, in its sole and absolute
\ndiscretion.<\/p>\n
B. The Managing General Partner shall not engage in any merger
\n(including a triangular merger), consolidation or other combination with or into
\nanother person, sale of all or substantially all of its assets or any
\nreclassification, recapitalization or change of outstanding Shares (other than a
\nchange in par value, or from par value to no par value, or as a result of a
\nsubdivision or combination as described in the definition of “Conversion
\nFactor”) (“Termination Transaction”), unless the Termination Transaction has
\nbeen approved by the Consent of the Partners holding at least a majority of the
\nthen outstanding Partnership Units (including any Partnership Units held by the
\nGeneral Partners) and in connection with which all Limited Partners either will
\nreceive, or will have the right to elect to receive, for each Partnership Unit
\nan amount of cash, securities, or other property equal to the product of the
\nConversion Factor multiplied by the greatest amount of cash, securities or other
\nproperty paid to a holder of Shares corresponding to such Partnership Unit in
\nconsideration of one such Share at any time during the period from and after the
\ndate on which the Termination Transaction is consummated; provided that, if, in
\nconnection with the Termination Transaction, a purchase, tender or exchange
\noffer shall have been made to and accepted by the holders of more than fifty
\npercent (50%) of the outstanding <\/p>\n
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\n 50
\nShares, each holder of Partnership Units shall receive, or shall have the right
\nto elect to receive without any right of Consent set forth above in this
\nsubsection B, the greatest amount of cash, securities, or other property which
\nsuch holder would have received had it exercised the Redemption Right and
\nreceived Shares in exchange for its Partnership Units immediately prior to the
\nexpiration of such purchase, tender or exchange offer and had thereupon accepted
\nsuch purchase, tender or exchange offer.<\/p>\n
C. In accordance with its Plan of Dissolution and Liquidation
\nto be entered into on July 11, 1997 (the “Plan of Liquidation”), each of the
\nGeneral Partners, other than the Managing General Partner, shall dissolve and
\nliquidate on the second anniversary date of the consummation of the
\nConsolidation. On such date, (i) each liquidating General Partner shall be
\ndeemed to have withdrawn as a general partner from the Partnership and (ii) the
\nGeneral Partnership Interest of such General Partner shall be converted into a
\nLimited Partnership Interest and distributed to such General Partner’s partners
\nin accordance with the Plan of Liquidation.<\/p>\n
SECTION 11.3 LIMITED PARTNERS’ RIGHTS TO TRANSFER<\/p>\n
A. General. Subject to the provisions of Sections 11.3.C,
\n11.3.D, 11.3.E, 11.4 and 11.6, a Limited Partner (other than a General Partner)
\nmay transfer with or without the consent of the General Partners, all or any
\nportion of its Partnership Interest, or any of such Limited Partner’s rights as
\na Limited Partner, provided that prior written notice of such proposed transfer
\nis delivered to the Managing General Partner. Notwithstanding the foregoing, any
\nLimited Partner may, at any time, without the consent of the General Partners,
\n(i) transfer all or any portion of its Partnership Interest to any General
\nPartner, (ii) transfer all or any portion of its Partnership Interest to an
\nAffiliate, another original Limited Partner or to an Immediate Family member,
\nsubject to the provisions of Section 11.6, (iii) transfer all or any portion of
\nits Partnership Interest to a trust for the benefit of a charitable beneficiary
\nor to a charitable foundation, subject to the provisions of Section 11.6, and
\n(iv) subject to the provisions of Section 11.6, pledge (a “Pledge”) all or any
\nportion of its Partnership Interest to a lending institution, which is not an
\nAffiliate of such Limited Partner, as collateral or security for a bona fide
\nloan or other extension of credit, and transfer such pledged Partnership
\nInterest to such lending institution in connection with the exercise of remedies
\nunder such loan or extension or credit. Each Limited Partner or Assignee
\n(resulting from a transfer made pursuant to clauses (i) -(iv) of the proviso of
\nthe preceding sentence) shall have the right to transfer all or any portion of
\nits Partnership Interest, subject to the provisions of Section 11.6 and the
\nsatisfaction of each of the following conditions (in addition to the right of
\neach such Limited Partner or Assignee to continue to make any such transfer
\npermitted by clauses (i) – (iv) of such proviso without satisfying either of the
\nfollowing conditions):<\/p>\n
(a) GENERAL PARTNER RIGHT OF FIRST REFUSAL. The
\n transferring Partner shall give written notice of the
\n proposed transfer to the General Partner, which
\n notice shall state (i) the identity of the proposed
\n transferee, and (ii) the amount and type of
\n consideration proposed to be received for the
\n transferred Partnership Units. The General Partner
\n shall have ten (10) days upon which to give the
\n transferring Partner notice of its election to
\n acquire the Partnership Units on the proposed terms.
\n If it so elects, it shall purchase the Partnership
\n Units on such terms within ten (10) days after giving
\n notice of such election. If it does not so elect, the
\n transferring Partner may transfer such Partnership
\n Units to a third party, on economic terms no more
\n favorable to the <\/p>\n
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\n 51
\n transferee than the proposed terms, subject to the
\n other condition of this Section 11.3.<\/p>\n
(b) QUALIFIED TRANSFEREE. Any transfer of a Partnership
\n Interest shall be made only to Qualified Transferees.<\/p>\n
It is a condition to any transfer otherwise permitted
\nhereunder (excluding Pledges of a Partnership Interest, but including any
\ntransfer of the pledged Partnership Interest, whether to the secured party or
\notherwise, pursuant to the secured party’s exercise of its remedies under such
\nPledge or the related loan or extension of credit) that the transferee assumes
\nby operation of law or express agreement all of the obligations of the
\ntransferor Limited Partner under this Agreement with respect to such transferred
\nPartnership Interest and no such transfer (other than pursuant to a statutory
\nmerger or consolidation wherein all obligations and liabilities of the
\ntransferor Partner are assumed by a successor corporation by operation of law)
\nshall relieve the transferor Partner of its obligations under this Agreement
\nwithout the approval of the General Partner, in its reasonable discretion.
\nNotwithstanding the foregoing, any transferee of any transferred Partnership
\nInterest shall be subject to any and all ownership limitations contained in the
\nDeclaration of Trust. Any transferee, whether or not admitted as a Substituted
\nLimited Partner, shall take subject to the obligations of the transferor
\nhereunder. Unless admitted as a Substitute Limited Partner, no transferee,
\nwhether by a voluntary transfer, by operation of law or otherwise, shall have
\nrights hereunder, other than the rights of an Assignee as provided in Section
\n11.5.<\/p>\n
B. Incapacitated Limited Partners. If a Limited Partner is
\nsubject to Incapacity, the executor, administrator, trustee, committee,
\nguardian, conservator or receiver of such Limited Partner’s estate shall have
\nall the rights of a Limited Partner, but not more rights than those enjoyed by
\nother Limited Partners for the purpose of settling or managing the estate and
\nsuch power as the Incapacitated Limited Partner possessed to transfer all or any
\npart of its interest in the Partnership. The Incapacity of a Limited Partner, in
\nand of itself, shall not dissolve or terminate the Partnership.<\/p>\n
C. No Transfers Violating Securities Laws. The Managing
\nGeneral Partner may prohibit any transfer of Partnership Units by a Limited
\nPartner unless it receives a written opinion of legal counsel (which opinion and
\ncounsel shall be reasonably satisfactory to the Partnership) to such Limited
\nPartner that such transfer would not require filing of a registration statement
\nunder the Securities Act or would not otherwise violate any federal, or state
\nsecurities laws or regulations applicable to the Partnership or the Partnership
\nUnit or, at the option of the Partnership, an opinion of legal counsel to the
\nPartnership to the same effect.<\/p>\n
D. No Transfers Affecting Tax Status of Partnership. No
\ntransfer of Partnership Units by a Limited Partner (including a redemption or
\nexchange pursuant to Section 8.6) may be made to any Person if (i) in the
\nopinion of legal counsel for the Partnership, it would result in the Partnership
\nbeing treated as an association taxable as a corporation for federal income tax
\npurposes or would result in a termination of the Partnership for federal income
\ntax purposes (except as a result of the redemption or exchange for Shares of all
\nPartnership Units held by all Limited Partners other than the General Partners
\nor the General Partner Entity or any Subsidiary of either the Managing General
\nPartner or the General Partner Entity or pursuant to a transaction expressly
\npermitted under Section 7.11.B or Section 11.2), (ii) in the opinion of legal
\ncounsel for the Partnership, it would adversely affect the ability of the
\nGeneral Partner Entity to continue to qualify as a REIT or would subject the
\nGeneral Partner Entity to any additional taxes under Section 857 or Section 4981
\nof the Code or (iii) such transfer is effectuated <\/p>\n
-46-
\n 52
\nthrough an “established securities market” or a “secondary market (or the
\nsubstantial equivalent thereof)” within the meaning of Section 7704 of the Code.<\/p>\n
E. No Transfers to Holders of Nonrecourse Liabilities. No
\nPledge or transfer of any Partnership Units may be made to a lender to the
\nPartnership or any Person who is related (within the meaning of Section
\n1.752-4(b) of the Regulations) to any lender to the Partnership whose loan
\nconstitutes a Nonrecourse Liability unless (i) the Managing General Partner is
\nprovided notice thereof and (ii) the lender enters into an arrangement with the
\nPartnership and the Managing General Partner to exchange or redeem for the
\nRedemption Amount any Partnership Units in which a security interest is held
\nsimultaneously with the time at which such lender would be deemed to be a
\npartner in the Partnership for purposes of allocating liabilities to such lender
\nunder Section 752 of the Code.<\/p>\n
SECTION 11.4 SUBSTITUTED LIMITED PARTNERS<\/p>\n
A. Consent of General Partners. No Limited Partner shall have
\nthe right to substitute a transferee as a Limited Partner in its place. The
\nManaging General Partner shall, however, have the right to consent to the
\nadmission of a transferee of the interest of a Limited Partner pursuant to this
\nSection 11.4 as a Substituted Limited Partner, which consent may be, given or
\nwithheld by the Managing General Partner in its sole and absolute discretion.
\nThe Managing General Partner’s failure or refusal to permit a transferee of any
\nsuch interests to become a Substituted Limited Partner shall not give rise to
\nany cause of action against the Partnership or any Partner. The Managing General
\nPartner hereby grants its consent to the admission as a Substituted Limited
\nPartner to any bona fide financial institution that loans money or otherwise
\nextends credit to a holder of Units and thereafter becomes the owner of such
\nUnits pursuant to the exercise by such financial institution of its rights under
\na Pledge of such Units granted in connection with such loan or extension of
\ncredit.<\/p>\n
B. Rights of Substituted Limited Partner. A transferee who has
\nbeen admitted as a Substituted Limited Partner in accordance with this Article
\nXI shall have all the rights and powers and be subject to all the restrictions
\nand liabilities of a Limited Partner under this Agreement. The admission of any
\ntransferee as a Substituted Limited Partner shall be conditioned upon the
\ntransferee executing and delivering to the Partnership an acceptance of all the
\nterms and conditions of this Agreement (including, without limitation, the
\nprovisions of Section 15.11) and such other documents or instruments as may be
\nrequired to effect the admission.<\/p>\n
C. Amendment of Exhibit A. Upon the admission of a Substituted
\nLimited Partner, the Managing General Partner shall amend Exhibit A to reflect
\nthe name, address, Capital Account, number of Partnership Units, and Percentage
\nInterest of such Substituted Limited Partner and to eliminate or adjust, if
\nnecessary, the name, address, Capital Account and Percentage Interest and
\ninterest of the predecessor of such Substituted Limited Partner.<\/p>\n
SECTION 11.5 ASSIGNEES<\/p>\n
If the Managing General Partner, in its sole and absolute
\ndiscretion, does not consent to the admission of any permitted transferee under
\nSection 11.3 as a Substituted Limited Partner, as described in Section 11.4,
\nsuch transferee shall be considered an Assignee for purposes of this Agreement.
\nAn Assignee shall be entitled to all the rights of an assignee of a limited
\npartnership interest under the Act, including the right to receive distributions
\nfrom the Partnership and the share of Net Income, Net Losses, gain, loss and
\nRecapture Income attributable to the Partnership Units assigned to <\/p>\n
-47-
\n 53
\nsuch transferee, and shall have the rights granted to the Limited Partners under
\nSection 8.6, but shall not be deemed to be a holder of Partnership Units for any
\nother purpose under this Agreement, and shall not be entitled to vote such
\nPartnership Units in any matter presented to the Limited Partners for a vote
\n(such Partnership Units being deemed to have been voted on such matter in the
\nsame proportion as all other Partnership Units held by Limited Partners are
\nvoted). If any such transferee desires to make a further assignment of any such
\nPartnership Units, such transferee shall be subject to all the provisions of
\nthis Article XI to the same extent and in the same manner as any Limited Partner
\ndesiring to make an assignment of Partnership Units.<\/p>\n
SECTION 11.6 GENERAL PROVISIONS<\/p>\n
A. Withdrawal of Limited Partner. No Limited Partner may
\nwithdraw from the Partnership other than as a result of a permitted transfer of
\nall of such Limited Partner’s Partnership Units in accordance with this Article
\nXI or pursuant to redemption of all of its Partnership Units under Section 8.6.<\/p>\n
B. Termination of Status as Limited Partner. Any Limited
\nPartner who shall transfer all of its Partnership Units in a transfer permitted
\npursuant to this Article XI or pursuant to redemption of all of its Partnership
\nUnits under Section 8.6 shall cease to be a Limited Partner.<\/p>\n
C. Timing of Transfers. Transfers pursuant to this Article XI
\nmay only be made upon three business days prior notice, unless the Managing
\nGeneral Partner otherwise agrees.<\/p>\n
D. Allocations. If any Partnership Interest is transferred
\nduring any quarterly segment of the Partnership’s fiscal year in compliance with
\nthe provisions of this Article XI or redeemed or transferred pursuant to Section
\n8.6, Net Income, Net Losses, each item thereof and all other items attributable
\nto such interest for such fiscal year shall be divided and allocated between the
\ntransferor Partner and the transferee Partner by taking into account their
\nvarying interests during the fiscal year in accordance with Section 706(d) of
\nthe Code, using the interim closing of the books method (unless the Managing
\nGeneral Partner, in its sole and absolute discretion, elects to adopt a daily,
\nweekly, or a monthly proration period, in which event Net Income, Net Losses,
\neach item thereof and all other items attributable to such interest for such
\nfiscal year shall be prorated based upon the applicable method selected by the
\nManaging General Partner). Solely for purposes of making such allocations, each
\nof such items for the calendar month in which the transfer or redemption occurs
\nshall be allocated to the Person who is a Partner as of midnight on the last day
\nof said month. All distributions of Available Cash attributable to any
\nPartnership Unit with respect to which the Partnership Record Date is before the
\ndate of such transfer, assignment or redemption shall be made to the transferor
\nPartner or the Redeeming Partner, as the case may be, and, in the case of a
\ntransfer or assignment other than a redemption, all distributions of Available
\nCash thereafter attributable to such Partnership Unit shall be made to the
\ntransferee Partner.<\/p>\n
E. Additional Restrictions. In addition to any other
\nrestrictions on transfer herein contained, including without limitation the
\nprovisions of this Article XI, in no event may any transfer or assignment of a
\nPartnership Interest by any Partner (including pursuant to Section 8.6) be made
\nwithout the express consent of the Managing General Partner, in its sole and
\nabsolute discretion, (i) to any person or entity who lacks the legal right,
\npower or capacity to own a Partnership Interest; (ii) in violation of applicable
\nlaw; (iii) of any component portion of a Partnership Interest, such as the
\nCapital Account, or rights to distributions, separate and apart from all other
\ncomponents of a Partnership Interest; (iv) if in <\/p>\n
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\n 54
\nthe opinion of legal counsel to the Partnership such transfer would cause a
\ntermination of the Partnership for federal or state income tax purposes (except
\nas a result of the redemption or exchange for Shares of all Partnership Units
\nheld by all Limited Partners or pursuant to a transaction expressly permitted
\nunder Section 7.11.B or Section 11.2); (v) if in the opinion of counsel to the
\nPartnership, such transfer would cause the Partnership to cease to be classified
\nas a partnership for federal income tax purposes (except as a result of the
\nredemption or exchange for Shares of all Partnership Units held by all Limited
\nPartners or pursuant to a transaction expressly permitted under Section 7.11.B
\nor Section 11.2); (vi) if such transfer would cause the Partnership Interests of
\n“benefit plan investors” to become “significant,” as those terms are used in
\nSection 7.9.E., or would cause the Partnership to become, with respect to any
\nemployee benefit plan subject to Title I of ERISA, a “party-in-interest” (as
\ndefined in Section 3(14) of ERISA) or a “disqualified person” (as defined in
\nSection 4975(c) of the Code); (vii) if such transfer would, in the opinion of
\ncounsel to the Partnership, cause any portion of the assets of the Partnership
\nto constitute assets of any employee benefit plan pursuant to Department of
\nLabor Regulations Section 2510.1-101; (viii) if such transfer requires the
\nregistration of such Partnership Interest pursuant to any applicable federal or
\nstate securities laws; (ix) if such transfer is effectuated through an
\n“established securities market” or a “secondary market” (or the substantial
\nequivalent thereof) within the meaning of Section 7704 of the Code or such
\ntransfer causes the Partnership to become a “publicly traded partnership,” as
\nsuch term is defined in Section 469(k)(2) or Section 7704(b) of the Code
\n(provided that this clause (ix) shall not be the basis for limiting or
\nrestricting in any manner the exercise of the Redemption Right under Section 8.6
\nunless, and only to the extent that, outside tax counsel provides to the
\nManaging General Partner an opinion to the effect that, in the absence of such
\nlimitation or restriction, there is a significant risk that the Partnership will
\nbe treated as a “publicly traded partnership” and, by reason thereof, taxable as
\na corporation); (x) if such transfer subjects the Partnership to regulation
\nunder the Investment Company Act of 1940, the Investment Advisors Act of 1940 or
\nERISA, each as amended; (xi) such transfer could adversely affect the ability of
\nthe General Partner Entity to remain qualified as a REIT; or (xii) if in the
\nopinion of legal counsel for the transferring Partner (which opinion and counsel
\nshall be reasonably satisfactory to the Partnership) or legal counsel for the
\nPartnership, such transfer would adversely affect the ability of the General
\nPartner Entity to continue to qualify as a REIT or subject the General Partner
\nEntity to any additional taxes under Section 857 or Section 4981 of the Code.<\/p>\n
F. Avoidance of “Publicly Traded Partnership” Status. The
\nManaging General Partner shall monitor the transfers of interests in the
\nPartnership to determine (i) if such interests are being traded on an
\n“established securities market” or a “secondary market (or the substantial
\nequivalent thereof)” within the meaning of Section 7704 of the Code and (ii)
\nwhether additional transfers of interests would result in the Partnership being
\nunable to qualify for at least one of the “safe harbors” set forth in
\nRegulations Section 1.7704-1 (or such other guidance subsequently published by
\nthe IRS setting forth safe harbors under which interests will not be treated as
\n“readily tradable on a secondary market (or the substantial equivalent thereof)”
\nwithin the meaning of Section 7704 of the Code) (the “Safe Harbors”). The
\nManaging General Partner shall take all steps reasonably necessary or
\nappropriate to prevent any trading of interests or any recognition by the
\nPartnership of transfers made on such markets and, except as otherwise provided
\nherein, to insure that at least one of the Safe Harbors is met; provided,
\nhowever, that the foregoing shall not authorize the Managing General Partner to
\nlimit or restrict in any manner the right of any holder of a Partnership Unit to
\nexercise the Redemption Right in accordance with the terms of Section 8.6
\nunless, and only to the extent that, outside tax counsel provides to the
\nManaging General Partner an opinion to the effect that, in the absence of such
\nlimitation or restriction, there is a significant risk that the Partnership will
\nbe treated as a “publicly traded partnership” and, by reason thereof, taxable as
\na corporation.<\/p>\n
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\n 55
\n ARTICLE XII
\n ADMISSION OF PARTNERS<\/p>\n
SECTION 12.1 ADMISSION OF A SUCCESSOR GENERAL PARTNER<\/p>\n
A successor to all of a General Partner’s General Partnership
\nInterest pursuant to Section 11.2 who is proposed to be admitted as a successor
\nGeneral Partner shall be admitted to the Partnership as a General Partner,
\neffective upon such transfer. Any such transferee shall carry on the business of
\nthe Partnership without dissolution. In each case, the admission shall be
\nsubject to such successor General Partner executing and delivering to the
\nPartnership an acceptance of all of the terms and conditions of this Agreement
\nand such other documents or instruments as may be required to effect the
\nadmission.<\/p>\n
SECTION 12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS<\/p>\n
A. General. No Person shall be admitted as an Additional
\nLimited Partner without the consent of the Managing General Partner, which
\nconsent shall be given or withheld in the Managing General Partner’s sole and
\nabsolute discretion. A Person who makes a Capital Contribution to the
\nPartnership in accordance with this Agreement, including without limitation,
\nunder Section 4.1.C, or who exercises an option to receive Partnership Units
\nshall be admitted to the Partnership as an Additional Limited Partner only with
\nthe consent of the Managing General Partner and only upon furnishing to the
\nManaging General Partner (i) evidence of acceptance in form satisfactory to the
\nManaging General Partner of all of the terms and conditions of this Agreement,
\nincluding, without limitation, the power of attorney granted in Section 15.11
\nand (ii) such other documents or instruments as may be required in the
\ndiscretion of the Managing General Partner to effect such Person’s admission as
\nan Additional Limited Partner. The admission of any Person as an Additional
\nLimited Partner shall become effective on the date upon which the name of such
\nPerson is recorded on the books and records of the Partnership, following the
\nconsent of the Managing General Partner to such admission.<\/p>\n
B. Allocations to Additional Limited Partners. If any
\nAdditional Limited Partner is admitted to the Partnership on any day other than
\nthe first day of a Partnership Year, then Net Income, Net Losses, each item
\nthereof and all other items allocable among Partners and Assignees for such
\nPartnership Year shall be allocated among such Additional Limited Partner and
\nall other Partners and Assignees by taking into account their varying interests
\nduring the Partnership Year in accordance with Section 706(d) of the Code, using
\nthe interim closing of the books method (unless the Managing General Partner, in
\nits sole and absolute discretion, elects to adopt a daily, weekly or monthly
\nproration method, in which event Net Income, Net Losses, and each item thereof
\nwould be prorated based upon the applicable period selected by the Managing
\nGeneral Partner). Solely for purposes of making such allocations, each of such
\nitems for the calendar month in which an admission of any Additional Limited
\nPartner occurs shall be allocated among all the Partners and Assignees including
\nsuch Additional Limited Partner. All distributions of Available Cash with
\nrespect to which the Partnership Record Date is before the date of such
\nadmission shall be made solely to Partners and Assignees other than the
\nAdditional Limited Partner, and all distributions of Available Cash thereafter
\nshall be made to all the Partners and Assignees including such Additional
\nLimited Partner.<\/p>\n
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\n 56
\nSECTION 12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED
\n PARTNERSHIP<\/p>\n
For the admission to the Partnership of any Partner, the
\nManaging General Partner shall take all steps necessary and appropriate under
\nthe Act to amend the records of the Partnership and, if necessary, to prepare as
\nsoon as practical an amendment of this Agreement (including an amendment of
\nExhibit A) and, if required by law, shall prepare and file an amendment to the
\nCertificate and may for this purpose exercise the power of attorney granted
\npursuant to Section 15.11 hereof.<\/p>\n
ARTICLE XIII
\n DISSOLUTION AND LIQUIDATION<\/p>\n
SECTION 13.1 DISSOLUTION<\/p>\n
The Partnership shall not be dissolved by the admission of
\nSubstituted Limited Partners or Additional Limited Partners or by the admission
\nof a successor General Partner in accordance with the terms of this Agreement.
\nUpon the withdrawal of a General Partner, the remaining General Partners and any
\nsuccessor General Partner shall continue the business of the Partnership. The
\nPartnership shall dissolve, and its affairs shall be wound up, upon the first to
\noccur of any of the following (“Liquidating Events”) :<\/p>\n
(i) the expiration of its term as provided in Section
\n2.4 hereof;<\/p>\n
(ii) an event of withdrawal of a General Partner, as
\ndefined in the Act (other than an event of bankruptcy), unless (1) there is at
\nleast one other General Partner, in which case the remaining General Partners
\nshall continue the business of the Partnership, or (2) within ninety (90) days
\nafter the withdrawal a “majority in interest” (as defined below) of the
\nremaining Partners Consent in writing to continue the business of the
\nPartnership and to the appointment, effective as of the date of withdrawal, of a
\nsubstitute General Partner;<\/p>\n
(iii) through December 31, 2046, an election to
\ndissolve the Partnership made by the Managing General Partner with the consent
\nof Limited Partners who hold ninety percent (90%) of the outstanding Units held
\nby Limited Partners (including Units held by the General Partners);<\/p>\n
(iv) an election to dissolve the Partnership made by
\nthe Managing General Partner, in its sole and absolute discretion after December
\n31, 2046;<\/p>\n
(v) entry of a decree of judicial dissolution of the
\nPartnership pursuant to the provisions of the Act;<\/p>\n
(vi) the sale of all or substantially all of the
\nassets and properties of the Partnership for cash or for marketable securities;
\nor<\/p>\n
(vii) a final and non-appealable judgment is entered
\nby a court of competent jurisdiction ruling that the remaining General
\nPartner(s) is bankrupt or insolvent, or a final and non-appealable order for
\nrelief is entered by a court with appropriate jurisdiction against the remaining
\nGeneral Partner(s), in each case under any federal or state bankruptcy or
\ninsolvency laws as now or hereafter in effect, unless prior to or at the time of
\nthe entry of such order or judgment a “majority in interest” (as defined below)
\nof the remaining Partners Consent in writing to continue the business of the<\/p>\n
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\n 57
\nPartnership and to the appointment, effective as of a date prior to the date of
\nsuch order or judgment, of a substitute General Partner.<\/p>\n
As used herein, a “majority in interest” shall refer to
\nPartners (excluding the General Partners) who hold more than fifty percent (50%)
\nof the outstanding Percentage Interests not held by the General Partners.<\/p>\n
SECTION 13.2 WINDING UP<\/p>\n
A. General. Upon the occurrence of a Liquidating Event, the
\nPartnership shall continue solely for the purposes of winding up its affairs in
\nan orderly manner, liquidating its assets, and satisfying the claims of its
\ncreditors and Partners. No Partner shall take any action that is inconsistent
\nwith, or not necessary to or appropriate for, the winding up of the
\nPartnership’s business and affairs. The General Partners (or, if there is no
\nremaining General Partner, any Person elected by a majority in interest of the
\nLimited Partners (the “Liquidator”)) shall be responsible for overseeing the
\nwinding up and dissolution of the Partnership and shall take full account of the
\nPartnership’s liabilities and property and the Partnership property shall be
\nliquidated as promptly as is consistent with obtaining the fair value thereof,
\nand the proceeds therefrom (which may, to the extent determined by the General
\nPartners, include equity or other securities of the General Partners or any
\nother entity) shall be applied and distributed in the following order:<\/p>\n
(1) First, to the payment and discharge of all
\n of the Partnership’s debts and liabilities
\n to creditors other than the Partners;<\/p>\n
(2) Second, to the payment and discharge of all
\n of the Partnership’s debts and liabilities
\n to the General Partners;<\/p>\n
(3) Third, to the payment and discharge of all
\n of the Partnership’s debts and liabilities
\n to the Limited Partners; and<\/p>\n
(4) The balance, if any, to the Partners in
\n accordance with their Capital Accounts,
\n after giving effect to all contributions,
\n distributions, and allocations for all
\n periods.<\/p>\n
The General Partners shall not receive any additional
\ncompensation for any services performed pursuant to this Article XIII.<\/p>\n
B. Deferred Liquidation. Notwithstanding the provisions of
\nSection 13.2.A which require liquidation of the assets of the Partnership, but
\nsubject to the order of priorities set forth therein, if prior to or upon
\ndissolution of the Partnership the Liquidator determines that an immediate sale
\nof part or all of the Partnership’s assets would be impractical or would cause
\nundue loss to the Partners, the Liquidator may, in its sole and absolute
\ndiscretion, defer for a reasonable time the liquidation of any assets except
\nthose necessary to satisfy liabilities of the Partnership (including to those
\nPartners as creditors) or distribute to the Partners, in lieu of cash, as
\ntenants in common and in accordance with the provisions of Section 13.2.A,
\nundivided interests in such Partnership assets as the Liquidator deems not
\nsuitable for liquidation. Any such distributions in kind shall be made only if,
\nin the good faith judgment of the Liquidator, such distributions in kind are in
\nthe best interest of the Partners, and shall be subject to such conditions
\nrelating to the disposition and management of such properties as the Liquidator
\ndeems <\/p>\n
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\n 58
\nreasonable and equitable and to any agreements governing the operation of such
\nproperties at such time. The Liquidator shall determine the fair market value of
\nany property distributed in kind using such reasonable method of valuation as it
\nmay adopt.<\/p>\n
SECTION 13.3 COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS<\/p>\n
Subject to Section 13.4, if the Partnership is “liquidated”
\nwithin the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions
\nshall be made under this Article XIII to the General Partners and Limited
\nPartners who have positive Capital Accounts in compliance with Regulations
\nSection 1.704-1(b)(2)(ii)(b)(2). If any Partner has a deficit balance in its
\nCapital Account (after giving effect to all contributions, distributions and
\nallocations for all taxable years, including the year during which such
\nliquidation occurs), such Partner shall have no obligation to make any
\ncontribution to the capital of the Partnership with respect to such deficit, and
\nsuch deficit shall not be considered a debt owed to the Partnership or to any
\nother Person for any purpose whatsoever. In the discretion of the Managing
\nGeneral Partner, a pro rata portion of the distributions that would otherwise be
\nmade to the General Partners and Limited Partners pursuant to this Article XIII
\nmay be: (A) distributed to a trust established for the benefit of the General
\nPartners and Limited Partners for the purposes of liquidating Partnership
\nassets, collecting amounts owed to the Partnership and paying any contingent or
\nunforeseen liabilities or obligations of the Partnership or of the General
\nPartners arising out of or in connection with the Partnership (in which case the
\nassets of any such trust shall be distributed to the General Partners and
\nLimited Partners from time to time, in the reasonable discretion of the Managing
\nGeneral Partner, in the same proportions as the amount distributed to such trust
\nby the Partnership would otherwise have been distributed to the General Partners
\nand Limited Partners pursuant to this Agreement); or (B) withheld to provide a
\nreasonable reserve for Partnership liabilities (contingent or otherwise) and to
\nreflect the unrealized portion of any installment obligations owed to the
\nPartnership, provided that such withheld amounts shall be distributed to the
\nGeneral Partners and Limited Partners as soon as practicable.<\/p>\n
SECTION 13.4 DEEMED DISTRIBUTION AND RECONTRIBUTION<\/p>\n
Notwithstanding any other provision of this Article XIII, if
\nthe Partnership is deemed liquidated within the meaning of Regulations Section
\n1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership’s
\nproperty shall not be liquidated, the Partnership’s liabilities shall not be
\npaid or discharged and the Partnership’s affairs shall not be wound up. Instead,
\nfor federal income tax purposes and for purposes of maintaining Capital Accounts
\npursuant to Exhibit B, the Partnership shall be deemed to have distributed its
\nassets in kind to the General Partners and Limited Partners, who shall be deemed
\nto have assumed and taken such assets subject to all Partnership liabilities,
\nall in accordance with their respective Capital Accounts. Immediately
\nthereafter, the General Partners and Limited Partners shall be deemed to have
\nrecontributed the Partnership assets in kind to the Partnership, which shall be
\ndeemed to have assumed and taken such assets subject to all such liabilities.<\/p>\n
SECTION 13.5 RIGHTS OF LIMITED PARTNERS<\/p>\n
Except as otherwise provided in this Agreement, each Limited
\nPartner shall look solely to the assets of the Partnership for the return of its
\nCapital Contributions and shall have no right or power to demand or receive
\nproperty other than cash from the Partnership. Except as otherwise expressly<\/p>\n
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\n 59
\nprovided in this Agreement, no Limited Partner shall have priority over any
\nother Limited Partner as to the return of its Capital Contributions,
\ndistributions, or allocations.<\/p>\n
SECTION 13.6 NOTICE OF DISSOLUTION<\/p>\n
If a Liquidating Event occurs or an event occurs that would,
\nbut for provisions of an election or objection by one or more Partners pursuant
\nto Section 13.1, result in a dissolution of the Partnership, the Managing
\nGeneral Partner shall, within thirty (30) days thereafter, provide written
\nnotice thereof to each of the Partners and to all other parties with whom the
\nPartnership regularly conducts business (as determined in the discretion of the
\nManaging General Partner).<\/p>\n
SECTION 13.7 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP<\/p>\n
Upon the completion of the liquidation of the Partnership cash
\nand property as provided in Section 13.2, the Partnership shall be terminated
\nand the Certificate and all qualifications of the Partnership as a foreign
\nlimited partnership in jurisdictions other than the State of Delaware shall be
\ncanceled and such other actions as may be necessary to terminate the Partnership
\nshall be taken.<\/p>\n
SECTION 13.8 REASONABLE TIME FOR WINDING UP<\/p>\n
A reasonable time shall be allowed for the orderly winding up
\nof the business and affairs of the Partnership and the liquidation of its assets
\npursuant to Section 13.2, to minimize any losses otherwise attendant upon such
\nwinding-up, and the provisions of this Agreement shall remain in effect among
\nthe Partners during the period of liquidation.<\/p>\n
SECTION 13.9 WAIVER OF PARTITION<\/p>\n
Each Partner hereby waives any right to partition of the
\nPartnership property.<\/p>\n
SECTION 13.10 LIABILITY OF LIQUIDATOR<\/p>\n
The Liquidator shall be indemnified and held harmless by the
\nPartnership in the same manner and to the same degree as an Indemnitee may be
\nindemnified pursuant to Section 7.7.<\/p>\n
ARTICLE XIV
\n AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS<\/p>\n
SECTION 14.1 AMENDMENTS<\/p>\n
A. General. Amendments to this Agreement may be proposed by a
\nGeneral Partner or by any Limited Partners holding twenty-five percent (25%) or
\nmore of the Partnership Interests. Following such proposal (except an amendment
\npursuant to Section 14.1.B), the Managing General Partner shall submit any
\nproposed amendment to the Limited Partners. The Managing General Partner shall
\nseek the written vote of the Partners on the proposed amendment or shall call a
\nmeeting to vote thereon and to transact any other business that it may deem
\nappropriate. For purposes of obtaining a written vote, the Managing General
\nPartner may require a response within a reasonable specified time, but not less
\nthan fifteen (15) days, and failure to respond in such time period shall
\nconstitute a vote which <\/p>\n
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\n 60
\nis consistent with the Managing General Partner’s recommendation with respect to
\nthe proposal. Except as provided in Section 14.1.B, 14.1.C or 14.1.D, a proposed
\namendment shall be adopted and be effective as an amendment hereto if it is
\napproved by the General Partners and it receives the Consent of Partners holding
\na majority of the Percentage Interests of the Limited Partners (including
\nLimited Partnership Interests held by the General Partners).<\/p>\n
B. Amendments Not Requiring Limited Partner Approval.
\nNotwithstanding Section 14.1.A or 14.1.C, the Managing General Partner shall
\nhave the power, without the consent of the Limited Partners, to amend this
\nAgreement as may be required to facilitate or implement any of the following
\npurposes:<\/p>\n
(1) to add to the obligations of the General
\n Partners or surrender any right or power
\n granted to the General Partners or any
\n Affiliate of a General Partner for the
\n benefit of the Limited Partners;<\/p>\n
(2) to reflect the admission, substitution,
\n termination, or withdrawal of Partners in
\n accordance with this Agreement (which may be
\n effected through the replacement of Exhibit
\n A with an amended Exhibit A);<\/p>\n
(3) to set forth the designations, rights,
\n powers, duties, and preferences of the
\n holders of any additional Partnership
\n Interests issued pursuant to Article IV;<\/p>\n
(4) to reflect a change that does not adversely
\n affect the Limited Partners in any material
\n respect, or to cure any ambiguity, correct
\n or supplement any provision in this
\n Agreement not inconsistent with law or with
\n other provisions of this Agreement, or make
\n other changes with respect to matters
\n arising under this Agreement that will not
\n be inconsistent with law or with the
\n provisions of this Agreement; and<\/p>\n
(5) to satisfy any requirements, conditions, or
\n guidelines contained in any order,
\n directive, opinion, ruling or regulation of
\n a federal, state or local agency or
\n contained in federal, state or local law.<\/p>\n
The Managing General Partner shall notify the Limited Partners
\nwhen any action under this Section 14.1.B is taken in the next regular
\ncommunication to the Limited Partners.<\/p>\n
C. Amendments Requiring Limited Partner Approval (Excluding
\nGeneral Partners). Notwithstanding Section 14.1.A, without the Consent of the
\nOutside Limited Partners, the General Partners shall not amend Section 4.2.A,
\nSection 5.1.E, Section 7.1.A (second sentence only), Section 7.5, Section 7.6,
\nSection 7.8, Section 7.11.B, Section 11.2, Section 13.1 (other than Section
\n13.1(iii) which can be amended only with a Consent of 90% of the Partnership
\nUnits (including Partnership Units held by the General Partners), the last
\nsentence of Section 11.4 (provided that no such amendment shall in any event
\nadversely affect the rights of any lender who made a loan or who extended credit
\nand received in connection therewith a Pledge of Units prior to the date such
\namendment is adopted unless, and only to the extent such lender consents
\nthereto, this Section 14.1.C or Section 14.2.<\/p>\n
D. Other Amendments Requiring Certain Limited Partner
\nApproval. Notwithstanding anything in this Section 14.1 to the contrary, this
\nAgreement shall not be amended with <\/p>\n
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\n 61
\nrespect to any Partner adversely affected without the Consent of such Partner,
\nor any Assignee who is a bona fide financial institution that loans money or
\notherwise extends credit to a holder of Units, adversely affected if such
\namendment would (i) convert a Limited Partner’s interest in the Partnership into
\na general partner’s interest, (ii) modify the limited liability of a Limited
\nPartner, (iii) amend Section 7.11.A, (iv) amend Article V or Article VI (except
\nas permitted pursuant to Sections 4.2, 5.1.E, 5.4, 6.2 and 14.1.B(3)), (v) amend
\nSection 8.6 or any defined terms set forth in Article I that relate to the
\nRedemption Right (except as permitted in Section 8.6.E), or (vi) amend Sections
\n11.3 or 11.5, or any additional restrictions to Section 11.6.E, or amend
\nSections 14.1.B(4) or 14.1.D. This Section 14.1.D does not require unanimous
\nconsent of all Partners adversely affected unless the amendment is to be
\neffective against all Partners adversely affected.<\/p>\n
SECTION 14.2 MEETINGS OF THE PARTNERS<\/p>\n
A. General. Meetings of the Partners may be called by the
\nManaging General Partner and shall be called upon the receipt by the Managing
\nGeneral Partner of a written request by Limited Partners holding twenty-five
\npercent (25%) or more of the Partnership Interests. The call shall state the
\nnature of the business to be transacted. Notice of any such meeting shall be
\ngiven to all Partners not less than seven (7) days nor more than thirty (30)
\ndays prior to the date of such meeting. Partners may vote in person or by proxy
\nat such meeting. Whenever the vote or Consent of Partners is permitted or
\nrequired under this Agreement, such vote or Consent may be given at a meeting of
\nPartners or may be given in accordance with the procedure prescribed in Section
\n14.1.A. Except as otherwise expressly provided in this Agreement, the Consent of
\nholders of a majority of the Percentage Interests held by Limited Partners
\n(including Limited Partnership Interests held by the General Partners) shall
\ncontrol.<\/p>\n
B. Actions Without a Meeting. Any action required or permitted
\nto be taken at a meeting of the Partners may be taken without a meeting if a
\nwritten consent setting forth the action so taken is signed by a majority of the
\nPercentage Interests of the Partners (or such other percentage as is expressly
\nrequired by this Agreement). Such consent may be in one instrument or in several
\ninstruments, and shall have the same force and effect as a vote of a majority of
\nthe Percentage Interests of the Partners (or such other percentage as is
\nexpressly required by this Agreement). Such consent shall be filed with the
\nManaging General Partner. An action so taken shall be deemed to have been taken
\nat a meeting held on the effective date so certified.<\/p>\n
C. Proxy. Each Limited Partner may authorize any Person or
\nPersons to act for him by proxy on all matters in which a Limited Partner is
\nentitled to participate, including waiving notice of any meeting, or voting or
\nparticipating at a meeting. Every proxy must be signed by the Limited Partner or
\nits attorney-in-fact. No proxy shall be valid after the expiration of eleven
\n(11) months from the date thereof unless otherwise provided in the proxy. Every
\nproxy shall be revocable at the pleasure of the Limited Partner executing it,
\nsuch revocation to be effective upon the Partnership’s receipt of written notice
\nthereof.<\/p>\n
D. Conduct of Meeting. Each meeting of Partners shall be
\nconducted by the Managing General Partner or such other Person as the Managing
\nGeneral Partner may appoint pursuant to such rules for the conduct of the
\nmeeting as the Managing General Partner or such other Person deem appropriate.<\/p>\n
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\n ARTICLE XV
\n GENERAL PROVISIONS<\/p>\n
SECTION 15.1 ADDRESSES AND NOTICE<\/p>\n
Any notice, demand, request or report required or permitted to
\nbe given or made to a Partner or Assignee under this Agreement shall be in
\nwriting and shall be deemed given or made when delivered in person or when sent
\nby first class United States mail or by other means of written communication to
\nthe Partner or Assignee at the address set forth in Exhibit A or such other
\naddress as the Partners shall notify the Managing General Partner in writing.<\/p>\n
SECTION 15.2 TITLES AND CAPTIONS<\/p>\n
All article or section titles or captions in this Agreement
\nare for convenience only. They shall not be deemed part of this Agreement and in
\nno way define, limit, extend or describe the scope or intent of any provisions
\nhereof. Except as specifically provided otherwise, references to “Articles”
\n“Sections” and “Exhibits” are to Articles, Sections and Exhibits of this
\nAgreement.<\/p>\n
SECTION 15.3 PRONOUNS AND PLURALS<\/p>\n
Whenever the context may require, any pronoun used in this
\nAgreement shall include the corresponding masculine, feminine or neuter forms,
\nand the singular form of nouns, pronouns and verbs shall include the plural and
\nvice versa.<\/p>\n
SECTION 15.4 FURTHER ACTION<\/p>\n
The parties shall execute and deliver all documents, provide
\nall information and take or refrain from taking action as may be necessary or
\nappropriate to achieve the purposes of this Agreement.<\/p>\n
SECTION 15.5 BINDING EFFECT<\/p>\n
This Agreement shall be binding upon and inure to the benefit
\nof the parties hereto and their heirs, executors, administrators, successors,
\nlegal representatives and permitted assigns.<\/p>\n
SECTION 15.6 CREDITORS<\/p>\n
Other than as expressly set forth herein with regard to any
\nIndemnitee, none of the provisions of this Agreement shall be for the benefit
\nof, or shall be enforceable by, any creditor of the Partnership.<\/p>\n
SECTION 15.7 WAIVER<\/p>\n
No failure by any party to insist upon the strict performance
\nof any covenant, duty, agreement or condition of this Agreement or to exercise
\nany right or remedy consequent upon a breach thereof shall constitute waiver of
\nany such breach or any other covenant, duty, agreement or condition.<\/p>\n
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\n 63
\nSECTION 15.8 COUNTERPARTS<\/p>\n
This Agreement may be executed in counterparts, all of which
\ntogether shall constitute one agreement binding on all the parties hereto,
\nnotwithstanding that all such parties are not signatories to the original or the
\nsame counterpart. Each party shall become bound by this Agreement immediately
\nupon affixing its signature hereto.<\/p>\n
SECTION 15.9 APPLICABLE LAW<\/p>\n
This Agreement shall be construed and enforced in accordance
\nwith and governed by the laws of the State of Delaware, without regard to the
\nprinciples of conflicts of law.<\/p>\n
SECTION 15.10 INVALIDITY OF PROVISIONS<\/p>\n
If any provision of this Agreement is or becomes invalid,
\nillegal or unenforceable in any respect, the validity, legality and
\nenforceability of the remaining provisions contained herein shall not be
\naffected thereby.<\/p>\n
SECTION 15.11 POWER OF ATTORNEY<\/p>\n
A. General. Each Limited Partner and each Assignee who accepts
\nPartnership Units (or any rights, benefits or privileges associated therewith)
\nis deemed to irrevocably constitute and appoint the Managing General Partner,
\nany Liquidator and authorized officers and attorneys-in-fact of each, and each
\nof those acting singly, in each case with full power of substitution, as its
\ntrue and lawful agent and attorney-in-fact, with full power and authority in its
\nname, place and stead to:<\/p>\n
(1) execute, swear to, acknowledge, deliver,
\n file and record in the appropriate public
\n offices (a) all certificates, documents and
\n other instruments (including, without
\n limitation, this Agreement and the
\n Certificate and all amendments or
\n restatements thereof) that the Managing
\n General Partner or any Liquidator deems
\n appropriate or necessary to form, qualify or
\n continue the existence or qualification of
\n the Partnership as a limited partnership (or
\n a partnership in which the limited partners
\n have limited liability) in the State of
\n Delaware and in all other jurisdictions in
\n which the Partnership may conduct business
\n or own property, (b) all instruments that
\n the Managing General Partner or any
\n Liquidator deem appropriate or necessary to
\n reflect any amendment, change, modification
\n or restatement of this Agreement in
\n accordance with its terms, (c) all
\n conveyances and other instruments or
\n documents that the Managing General Partner
\n or any Liquidator deems appropriate or
\n necessary to reflect the dissolution and
\n liquidation of the Partnership pursuant to
\n the terms of this Agreement, including,
\n without limitation, a certificate of
\n cancellation, (d) all instruments relating
\n to the admission, withdrawal, removal or
\n substitution of any Partner pursuant to, or
\n other events described in, Article XI, XII
\n or XIII hereof or the Capital Contribution
\n of any Partner and (e) all certificates,
\n documents and other <\/p>\n
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\n 64
\n instruments relating to the determination of
\n the rights, preferences and privileges of
\n Partnership Interests; and<\/p>\n
(2) execute, swear to, acknowledge and file all
\n ballots, consents, approvals, waivers,
\n certificates and other instruments
\n appropriate or necessary, in the sole and
\n absolute discretion of the Managing General
\n Partner or any Liquidator, to make,
\n evidence, give, confirm or ratify any vote,
\n consent, approval, agreement or other action
\n which is made or given by the Partners
\n hereunder or is consistent with the terms of
\n this Agreement or appropriate or necessary,
\n in the sole discretion of the Managing
\n General Partner or any Liquidator, to
\n effectuate the terms or intent of this
\n Agreement.<\/p>\n
Nothing contained in this Section 15.11 shall be construed as
\nauthorizing the Managing General Partner or any Liquidator to amend this
\nAgreement except in accordance with Article XIV hereof or as may be otherwise
\nexpressly provided for in this Agreement.<\/p>\n
B. Irrevocable Nature. The foregoing power of attorney is
\nhereby declared to be irrevocable and a power coupled with an interest, in
\nrecognition of the fact that each of the Partners will be relying upon the power
\nof the Managing General Partner or any Liquidator to act as contemplated by this
\nAgreement in any filing or other action by it on behalf of the Partnership, and
\nit shall survive and not be affected by the subsequent Incapacity of any Limited
\nPartner or Assignee and the transfer of all or any portion of such Limited
\nPartner’s or Assignee’s Partnership Units and shall extend to such Limited
\nPartner’s or Assignee’s heirs, successors, assigns and personal representatives.
\nEach such Limited Partner or Assignee hereby agrees to be bound by any
\nrepresentation made by the Managing General Partner or any Liquidator, acting in
\ngood faith pursuant to such power of attorney; and each such Limited Partner or
\nAssignee hereby waives any and all defenses which may be available to contest,
\nnegate or disaffirm the action of the Managing General Partner or any
\nLiquidator, taken in good faith under such power of attorney. Each Limited
\nPartner or Assignee shall execute and deliver to the Managing General Partner or
\nthe Liquidator, within fifteen (15) days after receipt of the Managing General
\nPartner’s or Liquidator’s request therefor, such further designation, powers of
\nattorney and other instruments as the Managing General Partner or the
\nLiquidator, as the case may be, deems necessary to effectuate this Agreement and
\nthe purposes of the Partnership.<\/p>\n
SECTION 15.12 ENTIRE AGREEMENT<\/p>\n
This Agreement contains the entire understanding and agreement
\namong the Partners with respect to the subject matter hereof and supersedes any
\nprior written oral understandings or agreements among them with respect thereto.<\/p>\n
SECTION 15.13 NO RIGHTS AS SHAREHOLDERS<\/p>\n
Nothing contained in this Agreement shall be construed as
\nconferring upon the holders of the Partnership Units any rights whatsoever as
\npartners or shareholders of any of the General Partners, including, without
\nlimitation, any right to receive dividends or other distributions made to
\nshareholders of the Managing General Partner or partners of the other General
\nPartners or to vote or to consent or receive notice as (i) shareholders in
\nrespect to any meeting of shareholders for the election of trustees of <\/p>\n
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\n 65
\nthe Managing General Partner or partners of the other General Partners or any
\nother matter or (ii) partners in respect to any meeting of partners of the other
\nGeneral Partners or any other matter.<\/p>\n
SECTION 15.14 LIMITATION TO PRESERVE REIT STATUS<\/p>\n
To the extent that any amount paid or credited to the General
\nPartners or any of their officers, directors, trustees, employees or agents
\npursuant to Section 7.4 or Section 7.7 would constitute gross income to the
\nManaging General Partner for purposes of Section 856(c)(2) or 856(c)(3) of the
\nCode (a “Managing General Partner Payment”) then, notwithstanding any other
\nprovision of this Agreement, the amount of such Managing General Partner Payment
\nfor any fiscal year shall not exceed the lesser of:<\/p>\n
(i) an amount equal to the excess, if any, of (a)
\n4.20% of the Managing General Partner’s total gross income (but not including
\nthe amount of any Managing General Partner Payments) for the fiscal year which
\nis described in subsections (A) though (H) of Section 856(c)(2) of the Code over
\n(b) the amount of gross income (within the meaning of Section 856(c)(2) of the
\nCode) derived by the Managing General Partner from sources other than those
\ndescribed in subsections (A) through (H) of Section 856(c)(2) of the Code (but
\nnot including the amount of any Managing General Partner Payments); or<\/p>\n
(ii) an amount equal to the excess, if any of (a) 25%
\nof the Managing General Partner’s total gross income (but not including the
\namount of any Managing General Partner Payments) for the fiscal year which is
\ndescribed in subsections (A) through (I) of Section 856(c)(3) of the Code over
\n(b) the amount of gross income (within the meaning of Section 856(c)(3) of the
\nCode) derived by the Managing General Partner from sources other than those
\ndescribed in subsections (A) through (I) of Section 856(c)(3) of the Code (but
\nnot including the amount of any Managing General Partner Payments); provided,
\nhowever, that Managing General Partner Payments in excess of the amounts set
\nforth in subparagraphs (i) and (ii) above may be made if the Managing General
\nPartner, as a condition precedent, obtains an opinion of tax counsel that the
\nreceipt of such excess amounts would not adversely affect the Managing General
\nPartner’s ability to qualify as a REIT. To the extent Managing General Partner
\nPayments may not be made in a year due to the foregoing limitations, such
\nManaging General Partner Payments shall carry over and be treated as arising in
\nthe following year, provided, however, that such amounts shall not carry over
\nfor more than five years, and if not paid within such five year period, shall
\nexpire; provided further, that (i) as Managing General Partner Payments are
\nmade, such payments shall be applied first to carry over amounts outstanding, if
\nany, and (ii) with respect to carry over amounts for more than one Partnership
\nYear, such payments shall be applied to the earliest Partnership Year first.<\/p>\n
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\n 66
\n IN WITNESS WHEREOF, the parties hereto have executed this
\nAgreement as of the date first written above.<\/p>\n
GENERAL PARTNERS:<\/p>\n
EQUITY OFFICE PROPERTIES TRUST<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ————————————-
\n Name: Timothy H. Callahan
\n Title: President and Chief Executive Officer<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE OPPORTUNITY
\n PARTNERS LIMITED PARTNERSHIP II<\/p>\n
By: Equity Office Properties Trust, its
\n managing general partner<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ——————————–
\n Name: Timothy H. Callahan
\n Title: President and Chief Executive
\n Officer<\/p>\n
LIMITED PARTNERS:<\/p>\n
By: Equity Office Properties Trust, as
\n Attorney-in-Fact for the Limited Partners<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ——————————–
\n Name: Timothy H. Callahan
\n Title: President and Chief Executive
\n Officer<\/p>\n
For purposes of Section 8.6 hereof:
\n EQUITY OFFICE PROPERTIES TRUST<\/p>\n
By: \/s\/ Timothy H. Callahan
\n ——————————–
\n Name: Timothy H. Callahan
\n Title: President and Chief Executive
\n Officer<\/p>\n
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\n 67
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, and as part of a prorata distribution to its
\nmembers of “Partnership Units”, EQUITY OFFICE HOLDINGS, L.L.C. (“Assignor”) does
\nhereby assign, transfer and deliver unto ALPHABET PARTNERS (“Assignee”) all
\nright, title and interest of Assignor in and to 1,155,346 Partnership Units (and
\nAssignor’s Limited Partnership Interest related thereto) in that certain limited
\npartnership (the “Partnership”) known as EOP Operating Limited Partnership, and
\nAssignor hereby authorizes the substitution of Assignee as a limited partner in
\nthe Partnership with respect thereto. As used herein, the terms “Partnership
\nUnits” and “Limited Partnership Interest” each has the meaning ascribed to it in
\nthe Agreement of Limited Partnership for the Partnership (the “Partnership
\nAgreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,155,346 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
EQUITY OFFICE HOLDINGS, L.L.C.<\/p>\n
By: \/s\/ Sheli Z. Rosenberg
\n ———————————–
\n Name: Sheli Z. Rosenberg
\n Title: Vice President<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,155,346 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
By: ALPHABET PARTNERS, an Illinois general
\n partnership<\/p>\n
By: SZA Trust, an Illinois trust
\n SZG Trust, an Illinois trust
\n SZI Trust, an Illinois trust<\/p>\n
By: \/s\/ Arthur A. Greenberg
\n ———————————-
\n Arthur A. Greenberg, Trustee
\n 68
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, ALPHABET PARTNERS (“Assignor”) does hereby assign,
\ntransfer and deliver unto SAMSTOCK\/ALPHA, L.L.C. (“Assignee”), as a contribution
\nof capital thereto, all right, title and interest of Assignor in and to
\n1,155,346 Partnership Units (and Assignor’s Limited Partnership Interest related
\nthereto) in that certain limited partnership (the “Partnership”) known as EOP
\nOperating Limited Partnership, and Assignor hereby authorizes the substitution
\nof Assignee as a limited partner in the Partnership with respect thereto. As
\nused herein, the terms “Partnership Units” and “Limited Partnership Interest”
\neach has the meaning ascribed to it in the Agreement of Limited Partnership for
\nthe Partnership (the “Partnership Agreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,155,346 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
By: ALPHABET PARTNERS, an Illinois general
\n partnership<\/p>\n
By: SZA Trust, an Illinois trust
\n SZG Trust, an Illinois trust
\n SZI Trust, an Illinois trust<\/p>\n
By: \/s\/ Arthur A. Greenberg
\n —————————-
\n Arthur A. Greenberg, Trustee<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,155,346 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
SAMSTOCK\/ALPHA, L.L.C.<\/p>\n
By: \/s\/ Donald J. Liebentritt
\n ————————————
\n Name: Donald J. Liebentritt
\n Title: Vice President
\n 69
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, and as part of a prorata distribution to its
\nmembers of “Partnership Units”, EQUITY OFFICE HOLDINGS, L.L.C. (“Assignor”) does
\nhereby assign, transfer and deliver unto ZFT PARTNERSHIP (“Assignee”) all right,
\ntitle and interest of Assignor in and to 1,155,346 Partnership Units (and
\nAssignor’s Limited Partnership Interest related thereto) in that certain limited
\npartnership (the “Partnership”) known as EOP Operating Limited Partnership, and
\nAssignor hereby authorizes the substitution of Assignee as a limited partner in
\nthe Partnership with respect thereto. As used herein, the terms “Partnership
\nUnits” and “Limited Partnership Interest” each has the meaning ascribed to it in
\nthe Agreement of Limited Partnership for the Partnership (the “Partnership
\nAgreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,155,346 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
EQUITY OFFICE HOLDINGS, L.L.C.<\/p>\n
By: \/s\/ Sheli Z. Rosenberg
\n ————————————
\n Name: Sheli Z. Rosenberg
\n Title: Vice President<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,155,346 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
ZFT PARTNERSHIP, an Illinois general partnership<\/p>\n
By: Joann Zell Trust, an Illinois trust
\n Joann’s Child’s A Trust, an Illinois trust
\n Joann’s Child Trust, an Illinois trust<\/p>\n
By: \/s\/ Sheli Z. Rosenberg
\n ————————————-
\n Sheli Z. Rosenberg, Trustee
\n 70
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, ZFT PARTNERSHIP (“Assignor”) does hereby assign,
\ntransfer and deliver unto SAMSTOCK\/ZFT, L.L.C. (“Assignee”), and as a
\ncontribution of capital thereto, all right, title and interest of Assignor in
\nand to 1,155,346 Partnership Units (and Assignor’s Limited Partnership Interest
\nrelated thereto) in that certain limited partnership (the “Partnership”) known
\nas EOP Operating Limited Partnership, and Assignor hereby authorizes the
\nsubstitution of Assignee as a limited partner in the Partnership with respect
\nthereto. As used herein, the terms “Partnership Units” and “Limited Partnership
\nInterest” each has the meaning ascribed to it in the Agreement of Limited
\nPartnership for the Partnership (the “Partnership Agreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,155,346 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
By: ZFT PARTNERSHIP, an Illinois general
\n partnership<\/p>\n
By: Joann Zell Trust, an Illinois trust
\n Joann’s Child’s A Trust, an Illinois trust
\n Joann’s Child Trust, an Illinois trust<\/p>\n
By: \/s\/ Sheli Z. Rosenberg
\n ————————————
\n Sheli Z. Rosenberg, Trustee<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,155,346 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
SAMSTOCK\/ZFT, L.L.C.<\/p>\n
By: \/s\/ Donald J. Liebentritt
\n ————————————
\n Name: Donald J. Liebentritt
\n Title: Vice President
\n 71
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, and as part of a prorata distribution to its
\nmembers of “Partnership Units”, EQUITY OFFICE HOLDINGS, L.L.C. (“Assignor”) does
\nhereby assign, transfer and deliver unto ANDA PARTNERSHIP (“Assignee”) all
\nright, title and interest of Assignor in and to 2,310,692 Partnership Units (and
\nAssignor’s Limited Partnership Interest related thereto) in that certain limited
\npartnership (the “Partnership”) known as EOP Operating Limited Partnership, and
\nAssignor hereby authorizes the substitution of Assignee as a limited partner in
\nthe Partnership with respect thereto. As used herein, the terms “Partnership
\nUnits” and “Limited Partnership Interest” each has the meaning ascribed to it in
\nthe Agreement of Limited Partnership for the Partnership (the “Partnership
\nAgreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n2,310,692 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
EQUITY OFFICE HOLDINGS, L.L.C.<\/p>\n
By: \/s\/ Sheli Z. Rosenberg
\n ————————————-
\n Name: Sheli Z. Rosenberg
\n Title: Vice President<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 2,310,692 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
By: ANDA PARTNERSHIP<\/p>\n
By: Ann Only Trust, an Illinois trust<\/p>\n
By: \/s\/ Mark Slezak
\n —————————–
\n Mark Slezak, Trustee<\/p>\n
By: Ann\/Jessee Trust, an Illinois trust<\/p>\n
By: \/s\/ Mark Slezak
\n —————————–
\n Mark Slezak, Trustee
\n 72
\n ACKNOWLEDGEMENT<\/p>\n
The undersigned being the managing general partner of EOP Operating
\nLimited Partnership (the “Partnership”), for and on behalf of the Partnership,
\nhereby acknowledges the following transfers of interests in the Partnership:<\/p>\n
\n\n ASSIGNOR ASSIGNEE PARTNERSHIP UNITS
\n ——– ——– —————–
\n
\nEquity Office Holdings, L.L.C. Alphabet Partners 1,155,346<\/p>\nEquity Office Holdings, L.L.C. ZFT Partnership 1,155,346<\/p>\n
Equity Office Holdings, L.L.C. Anda Partnership 2,310,692<\/p>\n
Alphabet Partners Samstock\/Alpha, L.L.C. 1,155,346<\/p>\n
ZFT Partnership Samstock\/ZFT, L.L.C. 1,155,346
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
The undersigned further acknowledges that, as a result of the foregoing
\ntransfers, each of the following has been substituted as a limited partner in
\nthe Partnership in lieu of Equity Office Holdings, L.L.C. as to the interest
\nindicated:<\/p>\n
Anda Partnership 2,310,692 Partnership Units<\/p>\n
Samstock\/Alpha, L.L.C. 1,155,346 Partnership Units<\/p>\n
Samstock\/ZFT, L.L.C. 1,155,346 Partnership Units<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, as
\n managing general partner of EOP Operating
\n Limited Partnership<\/p>\n
Dated as of August 1, 1997
\n By: \/s\/ Stanley M. Stevens
\n ———————————–
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 73
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, EQUITY GROUP INVESTMENTS, INC. (“Assignor”) does
\nhereby assign, transfer and deliver unto EGI HOLDINGS, INC. (“Assignee”), its
\nwholly owned subsidiary and as a contribution of capital thereto, all right,
\ntitle and interest of Assignor in and to 1,868,719 Partnership Units (and
\nAssignor’s Limited Partnership Interest related thereto) in that certain limited
\npartnership (the “Partnership”) known as EOP Operating Limited Partnership, and
\nAssignor hereby authorizes the substitution of Assignee as a limited partner in
\nthe Partnership with respect thereto. As used herein, the terms “Partnership
\nUnits” and “Limited Partnership Interest” each has the meaning ascribed to it in
\nthe Agreement of Limited Partnership for the Partnership (the “Partnership
\nAgreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,868,719 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
EQUITY GROUP INVESTMENTS, INC.<\/p>\n
By: \/s\/ Donald J. Liebentritt
\n ———————————-
\n Name: Donald J. Liebentitt
\n Title: Executive Vice President<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,868,719 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
EGI HOLDINGS, INC.<\/p>\n
By: \/s\/ Donald J. Liebentritt
\n ———————————-
\n Name: Donald J. Liebentitt
\n Title: Executive Vice President
\n 74
\n ACKNOWLEDGEMENT<\/p>\n
The undersigned being the managing general partner of EOP Operating
\nLimited Partnership (the “Partnership”), for and on behalf of the Partnership,
\nhereby acknowledges a transfer of interest in the Partnership from Equity Group
\nInvestments, Inc., as assignor to EGI Holdings, Inc. as assignee of 1,868,719
\nPartnership Units.<\/p>\n
The undersigned further acknowledges that, as a result of the foregoing
\ntransfer, EGI Holdings, Inc. has been substituted as a limited partner in the
\nPartnership in lieu of Equity Group Investments, Inc. as to the interest
\nindicated above.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, as
\n managing general partner of EOP Operating
\n Limited Partnership<\/p>\n
Dated as of August 1, 1997
\n By: \/s\/ Stanley M. Stevens
\n ——————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 75
\n PARTNERSHIP INTEREST TRANSFER<\/p>\n
FOR VALUE RECEIVED, EQUITY GROUP INVESTMENTS, INC. (“Assignor”) does
\nhereby assign, transfer and deliver unto EGIL Investments, Inc. (“Assignee”),
\nits wholly owned subsidiary and as a contribution of capital thereto, all right,
\ntitle and interest of Assignor in and to 1,868,719 Partnership Units (and
\nAssignor’s Limited Partnership Interest related thereto) in that certain limited
\npartnership (the “Partnership”) known as EOP Operating Limited Partnership, and
\nAssignor hereby authorizes the substitution of Assignee as a limited partner in
\nthe Partnership with respect thereto. As used herein, the terms “Partnership
\nUnits” and “Limited Partnership Interest” each has the meaning ascribed to it in
\nthe Agreement of Limited Partnership for the Partnership (the “Partnership
\nAgreement”).<\/p>\n
Assignor hereby represents and warrants that it owns title to said
\n1,868,719 Partnership Units in the Partnership (and the Limited Partnership
\nInterest related thereto) free and clear of any liens or encumbrances.<\/p>\n
IN WITNESS THEREOF, Assignor has executed this Assignment to be
\neffective as of August 1, 1997.<\/p>\n
ASSIGNOR:<\/p>\n
EQUITY GROUP INVESTMENTS, INC.<\/p>\n
By: \/s\/ Donald J. Liebentritt
\n ———————————-
\n Name: Donald J. Liebentritt
\n Title: Executive Vice President<\/p>\n
ACCEPTANCE<\/p>\n
In consideration of the foregoing Assignment, the undersigned hereby
\naccepts the aforesaid 1,868,719 Partnership Units (and the Limited Partnership
\nInterest related thereto) and hereby assumes and agrees to perform and be bound
\nby all of the terms, covenants and conditions of the Partnership Agreement
\nrelating thereto.<\/p>\n
ASSIGNEE:<\/p>\n
EGIL INVESTMENTS, INC.<\/p>\n
By: \/s\/ Mark Slezak
\n ———————————
\n Name: Mark Slezak
\n Title: Vice President and Treasurer
\n 76
\n ACKNOWLEDGEMENT<\/p>\n
The undersigned being the managing general partner of EOP Operating
\nLimited Partnership (the “Partnership”), for and on behalf of the Partnership,
\nhereby acknowledges a transfer of interest in the Partnership from Equity Group
\nInvestments, Inc., as assignor to EGIL Investments, Inc. as assignee of
\n1,868,719 Partnership Units.<\/p>\n
The undersigned further acknowledges that, as a result of the foregoing
\ntransfer, EGIL Investments, Inc. has been substituted as a limited partner in
\nthe Partnership in lieu of Equity Group Investments, Inc. as to the interest
\nindicated above.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, as
\n managing general partner of EOP Operating
\n Limited Partnership<\/p>\n
Dated as of August 1, 1997
\n By: \/s\/ Stanley M. Stevens
\n ——————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President<\/p>\n
77
\n 500 Marquette – Step 2, No. 10<\/p>\n
ASSIGNMENT AND ASSUMPTION AGREEMENT<\/p>\n
Assignment and Assumption Agreement, dated July 11, 1997,
\nbetween Zell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership,
\nan Illinois limited partnership (“ZML OP”), and EOP Operating Limited
\nPartnership, a Delaware limited partnership (“EOP OP”).<\/p>\n
WHEREAS, pursuant to a Contribution Agreement, dated as of May
\n30, 1997 among ZML OP, EOP OP and various other parties (the “Contribution
\nAgreement”), ZML OP has agreed to contribute certain property interests of ZML
\nOP (the “Property Interests”) to EOP OP; and<\/p>\n
WHEREAS, pursuant to the Contribution Agreement, in exchange
\nfor such contribution, EOP OP has agreed to (a) issue certain partnership
\ninterests in EOP OP (“OP Units”) to ZML OP and (b) assume certain liabilities of
\nZML OP.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and for
\nother good and valuable consideration (receipt of which is hereby acknowledged),
\nthe parties hereto, intending to be legally bound hereby, agree as follows:<\/p>\n
1. Pursuant to and in accordance with the Contribution
\nAgreement, ZML OP hereby sells, conveys, assigns, transfers and delivers over
\nunto EOP OP, its successors and assigns, all of the right, title and interest of
\nZML OP in each of the Property Interests described on Exhibit A attached hereto.<\/p>\n
2. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby sells, conveys, assigns, transfers and delivers over
\nunto ZML OP, its successors and assigns, 21,072,687 OP Units, which OP Units are
\nhereby accepted by ZML OP.<\/p>\n
3. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby assumes (a) all of the right, title and interest of ZML
\nOP in each of the Property Interests and (b) all liabilities and obligations,
\nsecured or unsecured, whether absolute, accrued, contingent or otherwise,
\nwhether known or unknown and whether or not due, arising from, relating to or
\notherwise in respect of each of the Property Interests, whether arising prior
\nto, as of or following the execution of this Agreement.<\/p>\n
4. ZML OP and EOP OP, from time to time, shall execute,
\nacknowledge, deliver and perform, or cause to be executed, acknowledged,
\ndelivered and performed, all such further acts, assignments, transfers,
\nconveyances, powers of attorney and assurances as may be necessary or proper to
\ncarry out the provisions and intent of the Contribution Agreement and this
\nAgreement.<\/p>\n
5. This Agreement shall be governed by the internal laws of
\nthe State of Illinois, without regard to the choice of laws provisions thereof.
\n 78<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Agreement
\nas of the date first above written.<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE OPPORTUNITY
\n PARTNERS LIMITED PARTNERSHIP, an Illinois
\n limited partnership<\/p>\n
By: ZML Partners Limited Partnership, an
\n Illinois limited partnership, its
\n general partner<\/p>\n
By: ZM Investors Limited Partnership,
\n an Illinois limited partnership,
\n its general partner<\/p>\n
By: ZM, Inc., an Illinois corporation,
\n its general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ————————-
\n Name: Stanley M. Stevens
\n Title: Vice President<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP, a Delaware
\n limited partnership<\/p>\n
By: Equity Office Properties Trust, its general
\n partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ————————————
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 79
\n 28 State – Step 3, No. 17<\/p>\n
ASSIGNMENT AND ASSUMPTION AGREEMENT<\/p>\n
Assignment and Assumption Agreement, dated July 11, 1997,
\nbetween Zell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership
\nII, an Illinois limited partnership (“ZML OP II”), and EOP Operating Limited
\nPartnership, a Delaware limited partnership (“EOP OP”).<\/p>\n
WHEREAS, pursuant to a Contribution Agreement, dated as of May
\n30, 1997 among ZML OP II, EOP OP and various other parties (the “Contribution
\nAgreement”), ZML OP II has agreed to contribute certain property interests of
\nZML OP II (the “Property Interests”) to EOP OP; and<\/p>\n
WHEREAS, pursuant to the Contribution Agreement, in exchange
\nfor such contribution, EOP OP has agreed to (a) issue certain partnership
\ninterests in EOP OP (“OP Units”) to ZML OP II and (b) assume certain liabilities
\nof ZML OP II.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and for
\nother good and valuable consideration (receipt of which is hereby acknowledged),
\nthe parties hereto, intending to be legally bound hereby, agree as follows:<\/p>\n
1. Pursuant to and in accordance with the Contribution
\nAgreement, ZML OP II hereby sells, conveys, assigns, transfers and delivers over
\nunto EOP OP, its successors and assigns, all of the right, title and interest of
\nZML OP II in each of the Property Interests described on Exhibit A attached
\nhereto.<\/p>\n
2. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby sells, conveys, assigns, transfers and delivers over
\nunto ZML OP II, its successors and assigns, 23,279,014 OP Units, which OP Units
\nare hereby accepted by ZML OP II.<\/p>\n
3. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby assumes (a) all of the right, title and interest of ZML
\nOP II in each of the Property Interests and (b) all liabilities and obligations,
\nsecured or unsecured, whether absolute, accrued, contingent or otherwise,
\nwhether known or unknown and whether or not due, arising from, relating to or
\notherwise in respect of each of the Property Interests, whether arising prior
\nto, as of or following the execution of this Agreement.<\/p>\n
4. ZML OP II and EOP OP, from time to time, shall execute,
\nacknowledge, deliver and perform, or cause to be executed, acknowledged,
\ndelivered and performed, all such further acts, assignments, transfers,
\nconveyances, powers of attorney and assurances as may be necessary or proper to
\ncarry out the provisions and intent of the Contribution Agreement and this
\nAgreement.<\/p>\n
5. This Agreement shall be governed by the internal laws of
\nthe State of Illinois, without regard to the choice of laws provisions thereof.
\n 80
\n IN WITNESS WHEREOF, the parties have executed this Agreement
\nas of the date first above written.<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE OPPORTUNITY PARTNERS
\n LIMITED PARTNERSHIP II, an Illinois limited partnership<\/p>\n
By: ZML Partners Limited Partnership II, an Illinois
\n limited partnership, its general partner<\/p>\n
By: ZM Investors Limited Partnership II, an
\n Illinois limited partnership, its
\n general partner<\/p>\n
By: Zell\/Merrill II, Inc., an Illinois
\n corporation, its general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————
\n Name: Stanley M. Stevens
\n Title: Vice President<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP, a Delaware limited
\n partnership<\/p>\n
By: Equity Office Properties Trust, its general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n —————————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 81
\n 850 Third – Step 3, No. 17<\/p>\n
ASSIGNMENT AND ASSUMPTION AGREEMENT<\/p>\n
Assignment and Assumption Agreement, dated July 11, 1997,
\nbetween Zell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership
\nIII, an Illinois limited partnership (“ZML OP III”), and EOP Operating Limited
\nPartnership, a Delaware limited partnership (“EOP OP”).<\/p>\n
WHEREAS, pursuant to a Contribution Agreement, dated as of May
\n30, 1997 among ZML OP III, EOP OP and various other parties (the “Contribution
\nAgreement”), ZML OP III has agreed to contribute certain property interests of
\nZML OP III (the “Property Interests”) to EOP OP; and<\/p>\n
WHEREAS, pursuant to the Contribution Agreement, in exchange
\nfor such contribution, EOP OP has agreed to (a) issue certain partnership
\ninterests in EOP OP (“OP Units”) to ZML OP III and (b) assume certain
\nliabilities of ZML OP III.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and for
\nother good and valuable consideration (receipt of which is hereby acknowledged),
\nthe parties hereto, intending to be legally bound hereby, agree as follows:<\/p>\n
1. Pursuant to and in accordance with the Contribution
\nAgreement, ZML OP III hereby sells, conveys, assigns, transfers and delivers
\nover unto EOP OP, its successors and assigns, all of the right, title and
\ninterest of ZML OP III in each of the Property Interests described on Exhibit A
\nattached hereto.<\/p>\n
2. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby sells, conveys, assigns, transfers and delivers over
\nunto ZML OP III, its successors and assigns, 49,228,311 OP Units, which OP Units
\nare hereby accepted by ZML OP III.<\/p>\n
3. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby assumes (a) all of the right, title and interest of ZML
\nOP III in each of the Property Interests and (b) all liabilities and
\nobligations, secured or unsecured, whether absolute, accrued, contingent or
\notherwise, whether known or unknown and whether or not due, arising from,
\nrelating to or otherwise in respect of each of the Property Interests, whether
\narising prior to, as of or following the execution of this Agreement.<\/p>\n
4. ZML OP III and EOP OP, from time to time, shall execute,
\nacknowledge, deliver and perform, or cause to be executed, acknowledged,
\ndelivered and performed, all such further acts, assignments, transfers,
\nconveyances, powers of attorney and assurances as may be necessary or proper to
\ncarry out the provisions and intent of the Contribution Agreement and this
\nAgreement.<\/p>\n
5. This Agreement shall be governed by the internal laws of
\nthe State of Illinois, without regard to the choice of laws provisions thereof.
\n 82<\/p>\n
IN WITNESS WHEREOF, the parties have executed this Agreement
\nas of the date first above written.<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE OPPORTUNITY
\n PARTNERS LIMITED PARTNERSHIP III, an
\n Illinois limited partnership<\/p>\n
By: ZML Partners Limited Partnership III,
\n an Illinois limited partnership, its
\n general partner<\/p>\n
By: ZM Investors Limited Partnership
\n III, an Illinois limited
\n partnership, its general partner<\/p>\n
By: Zell\/Merrill III, Inc., an
\n Illinois corporation, its
\n general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ———————–
\n Name: Stanley M. Stevens
\n Title: Vice President<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP, a Delaware
\n limited partnership<\/p>\n
By: Equity Office Properties Trust, its
\n general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 83
\n British – Step 3, No. 10<\/p>\n
ASSIGNMENT AND ASSUMPTION AGREEMENT<\/p>\n
Assignment and Assumption Agreement, dated July 11, 1997,
\nbetween Zell\/Merrill Lynch Real Estate Opportunity Partners Limited Partnership
\nIV, an Illinois limited partnership (“ZML OP IV”), and EOP Operating Limited
\nPartnership, a Delaware limited partnership (“EOP OP”).<\/p>\n
WHEREAS, pursuant to a Contribution Agreement, dated as of May
\n30, 1997 among ZML OP IV, EOP OP and various other parties (the “Contribution
\nAgreement”), ZML OP IV has agreed to contribute certain property interests of
\nZML OP IV (the “Property Interests”) to EOP OP; and<\/p>\n
WHEREAS, pursuant to the Contribution Agreement, in exchange
\nfor such contribution, EOP OP has agreed to (a) issue certain partnership
\ninterests in EOP OP (“OP Units”) to ZML OP IV and (b) assume certain liabilities
\nof ZML OP IV.<\/p>\n
NOW, THEREFORE, in consideration of the foregoing and for
\nother good and valuable consideration (receipt of which is hereby acknowledged),
\nthe parties hereto, intending to be legally bound hereby, agree as follows:<\/p>\n
1. Pursuant to and in accordance with the Contribution
\nAgreement, ZML OP IV hereby sells, conveys, assigns, transfers and delivers over
\nunto EOP OP, its successors and assigns, all of the right, title and interest of
\nZML OP IV in each of the Property Interests described on Exhibit A attached
\nhereto.<\/p>\n
2. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby sells, conveys, assigns, transfers and delivers over
\nunto ZML OP IV, its successors and assigns, 31,186,903 OP Units, which OP Units
\nare hereby accepted by ZML OP IV.<\/p>\n
3. Pursuant to and in accordance with the Contribution
\nAgreement, EOP OP hereby assumes (a) all of the right, title and interest of ZML
\nOP IV in each of the Property Interests and (b) all liabilities and obligations,
\nsecured or unsecured, whether absolute, accrued, contingent or otherwise,
\nwhether known or unknown and whether or not due, arising from, relating to or
\notherwise in respect of each of the Property Interests, whether arising prior
\nto, as of or following the execution of this Agreement.<\/p>\n
4. ZML OP IV and EOP OP, from time to time, shall execute,
\nacknowledge, deliver and perform, or cause to be executed, acknowledged,
\ndelivered and performed, all such further acts, assignments, transfers,
\nconveyances, powers of attorney and assurances as may be necessary or proper to
\ncarry out the provisions and intent of the Contribution Agreement and this
\nAgreement.<\/p>\n
5. This Agreement shall be governed by the internal laws of
\nthe State of Illinois, without regard to the choice of laws provisions thereof.
\n 84
\n IN WITNESS WHEREOF, the parties have executed this Agreement
\nas of the date first above written.<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE OPPORTUNITY
\n PARTNERS LIMITED PARTNERSHIP IV, an Illinois
\n limited partnership<\/p>\n
By: ZML Partners Limited Partnership IV, an
\n Illinois limited partnership, its general
\n partner<\/p>\n
By: ZM Investors Limited Partnership IV, an
\n Illinois limited partnership, its
\n general partner<\/p>\n
By: Zell\/Merrill IV, Inc., an Illinois
\n corporation, its general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ————————
\n Name: Stanley M. Stevens
\n Title: Vice President<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP, a Delaware
\n limited partnership<\/p>\n
By: Equity Office Properties Trust, its general
\n partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ———————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President
\n 85
\n FIRST AMENDMENT TO
\n AGREEMENT OF LIMITED PARTNERSHIP
\n OF
\n EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
THIS AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF EOP
\nOPERATING LIMITED PARTNERSHIP (this “AMENDMENT”), dated September 2, 1997, is
\nentered into by EQUITY OFFICE PROPERTIES TRUST, a Maryland real estate
\ninvestment trust, as managing general partner (the “GENERAL PARTNER”) of EOP
\nOperating Limited Partnership, a Delaware limited partnership (the
\n“PARTNERSHIP”), for itself and on behalf of the limited partners of the
\nPartnership.<\/p>\n
WHEREAS, on the date hereof, Columbus America Properties,
\nL.L.C. (“CAP”) is receiving 1,690,000 Class A Units, subject to adjustment as
\nprovided in the Contribution Agreement, of limited partnership interest (“OP
\nUNITS”) in the Partnership in exchange for the office properties known as Texaco
\nCenter, LL&E Tower and 601 Tchoupitoulas Garage (collectively, the “CAP
\nProperties”) pursuant to a closing under, and as more particularly described in,
\nthat certain Agreement for Contribution of Real Estate and Related Property
\ndated as of August 1, 1997 by and between the Partnership, the General Partner,
\nCAP and certain members of CAP (the “CONTRIBUTION AGREEMENT”);<\/p>\n
WHEREAS, pursuant to the authority granted to the General
\nPartner under the Agreement of Limited Partnership of the Partnership dated as
\nof July 3, 1997 (the “PARTNERSHIP AGREEMENT”), the General Partner desires to
\namend the Partnership Agreement to admit CAP as a result of the foregoing
\ntransactions, and to amend and restate Exhibit A to reflect the admission of CAP
\nas an Additional Limited Partner and the holder of the OP Units; and<\/p>\n
WHEREAS, CAP desires to become a party to the Partnership
\nAgreement and to be bound by all of the terms, conditions and other provisions
\nof this Amendment and the Partnership Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the premises and for other
\ngood and valuable consideration, the receipt and sufficiency of which hereby are
\nacknowledged, the General Partner hereby amends the Partnership Agreement as
\nfollows:<\/p>\n
1. CAP hereby agrees to become a party to the Partnership
\nAgreement and to be bound by all of the terms, conditions and other provisions
\nof the Partnership Agreement.<\/p>\n
86
\n 2. Exhibit A hereby is amended by replacing such Exhibit A
\nwith Exhibit “A” attached to this Amendment, and CAP hereby is admitted as an
\nAdditional Limited Partner in accordance with Section 12.2 of the Partnership
\nAgreement holding the OP Units. In the event the post-closing adjustments called
\nfor under the Contribution Agreement result in adjustments to the number of OP
\nUnits CAP is entitled to, the parties hereto agree to further amend the
\nPartnership Agreement to reflect such adjustment.<\/p>\n
3. Notwithstanding any provision in the Partnership Agreement
\nto the contrary and in addition to (and not in lieu thereof) any and all rights
\nof CAP under the Partnership Agreement:<\/p>\n
(i) The holder of the OP Units shall have the right
\nat any time and from time to time, to exchange all or any number of such OP
\nUnits at the request of such holder for common shares of beneficial interest,
\npar value $0.01 per share of General Partner (“COMMON SHARES”) in the form
\nrequired in Section 8.6B(i) of the Partnership Agreement; and<\/p>\n
(ii) CAP shall have the right, exercisable upon
\nwritten notice to Partnership at any time and from time to time before the
\nearlier to occur of (a) September [2], 1998, or (b) the date that CAP shall have
\neither transferred or converted all of its OP Units into Common Shares, to
\nrequire Partnership to acquire all, or any portion or portions, of CAP’s OP
\nUnits at $29.00 per OP Unit. The price for such OP Units shall be paid by
\nPartnership, in immediately available funds not less than five (5) days after
\nreceipt of such notice from CAP. The OP Units shall be conveyed to CAP free and
\nclear of all liens and encumbrances, other than those liens and encumbrances, if
\nany, in favor of General Partner or Partnership. At the closing of the
\nacquisition of the OP Units, the parties shall execute instruments of assignment
\nand conveyance in the form attached hereto as Exhibit “B” and an amendment to
\nthe Partnership Agreement evidencing the assignment of the OP Units to the
\nPartnership and the withdrawal of CAP as a Limited Partner of the Partnership
\n(the “UNIT ACQUISITION DOCUMENTS”).<\/p>\n
4. Notwithstanding any other provision of this Amendment or
\nthe Partnership Agreement to the contrary, upon liquidation of the Partnership,
\nCAP shall be required to contribute to the Partnership the deficit balance in
\nits Capital Account computed in accordance with Section 1.752-2(b)(1) and (2) of
\nthe Regulations, provided, however, that such contribution obligation shall not
\nexceed $84,350,000 (the “Deficit Obligation”). CAP specifically waives any right
\nof contribution or subrogation with respect to such Deficit Obligation and
\nneither the General partners nor any other Partner or other Person shall be
\nrequired to reimburse CAP for such contribution. Irrespective of the balance in
\nthe Capital Account of CAP, CAP agrees to indemnify the Partnership and the
\nGeneral Partners to the extent that the recourse obligations of the Partnership
\nexceed the assets of the Partnership available to satisfy such recourse
\nobligations. This <\/p>\n
-2-
\n 87
\nindemnity obligation is intended to protect and hold the Partnership and the
\nGeneral Partners harmless for such recourse obligations without regard to
\nobligations imposed on the General Partners under applicable state law or other
\ncontract provisions. This indemnity obligation shall be limited to $84,350,000
\n(the “Indemnity Obligation”). CAP hereby specifically waives any right of
\ncontribution from or subrogation against the General Partner or any other
\nPartner and neither the Partnership nor any other Partner shall be required to
\ncontribute to or otherwise reimburse CAP with respect to such indemnity. Upon
\npayment of such indemnity, CAP’s Capital Account shall be credited with such
\npayment only to the extent of any deficit in such Capital Account. Amounts paid
\nto the Partnership pursuant to the Deficit Obligation or the Indemnity
\nObligation shall be used to satisfy the recourse obligations of the Partnership.<\/p>\n
CAP’s Deficit Obligation and Indemnity Obligation shall not in
\nthe aggregate exceed $84,350,000 (subject to reduction as herein provided). In
\naddition, the Deficit Obligation and the Indemnity Obligation shall be forever
\nreduced to $6,350,000 immediately upon the first placing, after acquisition of
\nthe Properties by the Partnership, of a non-recourse third party mortgage on the
\nProperties securing a third party non-recourse loan to the Partnership in an
\namount not less than $78,000,000.<\/p>\n
Unless the transferee, in its sole discretion, specifically
\nagrees to the Deficit Obligation or the Indemnity Obligation, upon the sale,
\nredemption, conversion or other disposition of the OP Units, the Deficit
\nObligation and the Indemnity Obligation of CAP under this provision shall
\nterminate. Nothing in this paragraph 4 of the Amendment shall in any way effect
\nthe sale, exchange or conversion rights of CAP under the Partnership Agreement
\nor this Amendment.<\/p>\n
All capitalized terms used in this Amendment and not otherwise
\ndefined shall have the meanings assigned in the Partnership Agreement. Except as
\nmodified herein, all terms and conditions of the Partnership Agreement shall
\nremain in full force and effect, which terms and conditions the General Partner
\nhereby ratifies and affirms.<\/p>\n
-3-
\n 88<\/p>\n
IN WITNESS WHEREOF, the undersigned has executed this
\nAmendment as of the date first set forth above.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, a
\n Maryland real estate investment
\n trust, as General Partner of EOP
\n Operating Limited Partnership and on
\n behalf of existing Limited Partners<\/p>\n
By: \/s\/ SYBIL J. ELLIS
\n ————————————
\n Name: Sybil J. Ellis
\n ———————————-
\n Title: SVP – Acquisitions
\n ——————————— <\/p>\n
COLUMBUS AMERICA PROPERTIES, L.L.C.,
\n a Louisiana limited liability company<\/p>\n
By: Columbus Southeast Properties, Inc.,
\n manager<\/p>\n
By: \/s\/ Joseph C. Canizaro
\n ——————————
\n Joseph C. Canizaro, President<\/p>\n
-4-
\n 89
\n ADDENDUM DATED AS OF OCTOBER 1, 1997
\n TO EOP OPERATING LIMITED PARTNERSHIP
\n AGREEMENT OF LIMITED PARTNERSHIP<\/p>\n
This Addendum to EOP Operating Limited Partnership Agreement of Limited
\nPartnership dated as of October 1, 1997 (the “Addendum”), which Addendum is
\nincorporated into that certain EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of July 3, 1997 (the “Partnership Agreement”), is
\nexecuted and delivered by each of the undersigned. As of the date hereof, the
\nundersigned designated as an Additional Limited Partner is admitted as a Limited
\nPartner of the Partnership, and by said undersigned’s execution and delivery
\nhereof, said undersigned agrees to be bound by the terms and provisions of the
\nPartnership Agreement. The number of Units issued as of the date hereof to the
\nundersigned designated as an Additional Limited Partner is shown opposite such
\nAdditional Limited Partner’s signature below. All terms used herein and not
\notherwise defined shall have the meanings given them in the Partnership
\nAgreement.<\/p>\n
GENERAL PARTNER<\/p>\n
EQUITY OFFICE PROPERTIES TRUST,
\n a Maryland real estate investment trust<\/p>\n
By: \/s\/ David H. Naus
\n ———————————-
\n Name: David H. Naus
\n Title: Senior Vice President<\/p>\n
ADDITIONAL LIMITED PARTNERS:<\/p>\n
2,900,000 Units PRUDENTIAL INSURANCE COMPANY OF AMERICA, a
\n New Jersey corporation<\/p>\n
By: \/s\/ Robert W. Gadsden
\n ———————————-
\n Name: Robert W. Gadsden
\n Title: Vice President
\n Tax ID#: xx-xxx-xxxx
\n 90
\n FURTHER ADDENDUM DATED AS OF OCTOBER 6, 1997
\n TO EOP OPERATING LIMITED PARTNERSHIP
\n AGREEMENT OF LIMITED PARTNERSHIP<\/p>\n
This Further Addendum to EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of October 6, 1997 (the “Addendum”), which Addendum
\nis incorporated into that certain EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of July 3, 1997 (the “Partnership Agreement”), is
\nexecuted and delivered by the undersigned. Each of the undersigned designated as
\nan Existing Limited Partner has previously been admitted as a Limited Partner of
\nthe Partnership. Such Existing Limited Partner has transferred, assigned and
\nconveyed a portion of their Class B Units to the undersigned person designated
\nas an Additional Limited Partner. As of the date hereof, the undersigned
\ndesignated as an Additional Limited Partner is admitted as a Limited Partner of
\nthe Partnership, and by said undersigned’s execution and delivery hereof, said
\nundersigned agrees to be bound by the terms and provisions of the Partnership
\nAgreement. After giving effect to the assignment contemplated hereby, as of the
\ndate hereof, the number of Class B Units held by each of the undersigned
\nExisting Limited Partner and the Additional Limited Partner shall be the amount
\nshown opposite each of their respective signatures. All terms used herein and
\nnot otherwise defined shall have the meanings given them in the Partnership
\nAgreement.<\/p>\n
GENERAL PARTNER:<\/p>\n
EQUITY OFFICE PROPERTIES TRUST,
\n a Maryland real estate investment trust<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President & Chief Legal Counsel<\/p>\n
EXISTING LIMITED PARTNER:<\/p>\n
THE PRUDENTIAL INSURANCE COMPANY OF
\n AMERICA, a New Jersey corporation
\n621,429 Class B Units retained
\nby Existing Limited Partner By: \/s\/ Robert W. Gadsden
\n ——————————-
\n Name: Robert W. Gadsden
\n Title: Vice President
\n Tax ID#: xx-xxx-xxxx<\/p>\n
ADDITIONAL LIMITED PARTNER:<\/p>\n
STRATEGIC VALUE INVESTORS, LLC, a Delaware
\n limited liability company
\n2,278,571 Class B Units
\ntransferred from Existing By: \/s\/ Gary H. Picone
\nLimited Partner ——————————–
\n Name: Gary H. Picone
\n Title: Vice President
\n 91
\n SECOND ADDENDUM DATED AS OF OCTOBER 7, 1997
\n TO EOP OPERATING LIMITED PARTNERSHIP
\n AGREEMENT OF LIMITED PARTNERSHIP<\/p>\n
This Second Addendum to EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of October 7, 1997 (the “Addendum”), which Addendum
\nis incorporated into that certain EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of July 3, 1997 (the “Partnership Agreement”), is
\nexecuted and delivered by each of the undersigned. As of the date hereof, each
\nof the undersigned designated as an Additional Limited Partner is admitted as a
\nLimited Partner of the Partnership, and by said undersigned’s execution and
\ndelivery hereof, said undersigned agrees to be bound by the terms and provisions
\nof the Partnership Agreement. The number of Units issued as of the date hereof
\nto each of the undersigned designated as an Additional Limited Partner is shown
\nopposite such Additional Limited Partner’s signature below. All terms used
\nherein and not otherwise defined shall have the meanings given them in the
\nPartnership Agreement.<\/p>\n
This Second Addendum may be executed in two (2) or more counterparts,
\neach of which shall be deemed an original but all of which collectively shall
\nconstitute one and the same document.<\/p>\n
GENERAL PARTNER<\/p>\n
EQUITY OFFICE PROPERTIES TRUST,
\n a Maryland real estate investment trust<\/p>\n
By: \/s\/ Matthew Gworek
\n ———————————-
\n Name: Matthew Gworek
\n Title: Vice President – Acquisitions<\/p>\n
ADDITIONAL LIMITED PARTNERS:<\/p>\n
239,306 Units \/s\/ David A. Gardner
\n ——————————————-
\n DAVID A. GARDNER
\n SS #xxx-xx-xxxx<\/p>\n
239,295 Units \/s\/ Donald J. Resnick
\n ——————————————-
\n DONALD J. RESNICK
\n SS #xxx-xx-xxxx<\/p>\n
21,376 Units \/s\/ Mark D. Quigley
\n ——————————————-
\n MARK D. QUIGLEY
\n SS #xxx-xx-xxxx
\n 92
\n SECOND AMENDMENT TO
\n AGREEMENT OF LIMITED PARTNERSHIP
\n OF
\n EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
THIS SECOND AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF
\nEOP OPERATING LIMITED PARTNERSHIP (this “AMENDMENT”), dated October 16, 1997, is
\nentered into by EQUITY OFFICE PROPERTIES TRUST, a Maryland real estate
\ninvestment trust, as managing general partner (the “GENERAL PARTNER”) of EOP
\nOperating Limited Partnership, a Delaware limited partnership (the
\n“PARTNERSHIP”), for itself and on behalf of the limited partners of the
\nPartnership.<\/p>\n
WHEREAS, on the date hereof, 1120 20th Street Associates
\n(“1120”) is receiving 1,645,885 Class A Units, subject to adjustment as provided
\nin the Contribution Agreement, of limited partnership interest (“OP UNITS”) in
\nthe Partnership in exchange for the office property known as One Lafayette
\nCentre, 1120 20th Street, N.W., Washington, D.C. (the “PROPERTY”) pursuant to a
\nclosing under, and as more particularly described in, that certain Contribution
\nAgreement dated September 4, 1997, as amended, by and between the Partnership
\nand 1120 (the “CONTRIBUTION AGREEMENT”);<\/p>\n
WHEREAS, pursuant to the authority granted to the General
\nPartner under the Agreement of Limited Partnership of the Partnership dated as
\nof July 3, 1997, as amended (the “PARTNERSHIP AGREEMENT”), the General Partner
\ndesires to amend the Partnership Agreement to admit 1120 as a result of the
\nforegoing transactions, and to amend and restate Exhibit A thereto to reflect
\nthe admission of 1120 as an Additional Limited Partner and the holder of the OP
\nUnits; and<\/p>\n
WHEREAS, 1120 desires to become a party to the Partnership
\nAgreement and to be bound by all of the terms, conditions and other provisions
\nof this Amendment and the Partnership Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the premises and for other
\ngood and valuable consideration, the receipt and sufficiency of which hereby are
\nacknowledged, the General Partner hereby amends the Partnership Agreement as
\nfollows:<\/p>\n
1. 1120 hereby agrees to become a party to the Partnership
\nAgreement and to be bound by all of the terms, conditions and other provisions
\nof the Partnership Agreement.<\/p>\n
2. Exhibit A to the Partnership Agreement is hereby amended by<\/p>\n
-1-
\n 93
\nreplacing such Exhibit A with Exhibit “A” attached to this Amendment, and 1120
\nhereby is admitted as an Additional Limited Partner in accordance with Section
\n12.2 of the Partnership Agreement holding the OP Units. In the event the
\npost-closing adjustments called for under the Contribution Agreement result in
\nadjustments to the number of OP Units 1120 is entitled to, the parties hereto
\nagree to further amend the Partnership Agreement to reflect such adjustment.<\/p>\n
3. Notwithstanding any other provision of this Amendment or
\nthe Partnership Agreement to the contrary, upon liquidation of the Partnership,
\n1120 shall be required to contribute to the Partnership the deficit balance in
\nits Capital Account computed in accordance with Sections 1.752-2(b)(1) and (2)
\nof the Regulations, provided, however, that such contribution obligation shall
\nnot exceed $14,000,000 (the “DEFICIT OBLIGATION”). 1120 specifically waives any
\nright of contribution or subrogation with respect to such Deficit Obligation and
\nneither the General Partners nor any other Partner or other Person shall be
\nrequired to reimburse 1120 for such contribution. Irrespective of the balance in
\nthe Capital Account of 1120, 1120 agrees to indemnify the Partnership and the
\nGeneral Partners to the extent that the recourse obligations of the Partnership
\nexceed the assets of the Partnership available to satisfy such recourse
\nobligations. This indemnity obligation is intended to protect and hold the
\nPartnership and the General Partners harmless for such recourse obligations
\nwithout regard to obligations imposed on the General Partners under applicable
\nstate law or other contract provisions. This indemnity obligation shall be
\nlimited to $14,000,000 (the “INDEMNITY OBLIGATION”). 1120 hereby specifically
\nwaives any right of contribution from or subrogation against the General Partner
\nor any other Partner and neither the Partnership nor any other Partner shall be
\nrequired to contribute to or otherwise reimburse 1120 with respect to such
\nindemnity. Upon payment of such indemnity, 1120’s Capital Account shall be
\ncredited with such payment only to the extent of any deficit in such Capital
\nAccount. Amounts paid to the Partnership pursuant to the Deficit Obligation or
\nthe Indemnity Obligation shall be used to satisfy the recourse obligations of
\nthe Partnership.<\/p>\n
Upon the sale, redemption, conversion or other disposition of the OP
\nUnits, the Deficit Obligation and the Indemnity Obligation of 1120 under this
\nprovision shall terminate; provided however, a transferee of 1120 may, in its
\nsole discretion, assume the Deficit Obligation and\/or the Indemnity Obligation
\nof 1120 and, in such event, the Deficit Obligation and the Indemnity Obligation
\nshall be the obligation solely of such transferee (but 1120’s obligation shall
\nin all events be terminated as of the date of any disposition of its interest in
\nthe Partnership). Nothing in this paragraph 4 of the Amendment shall in any way
\neffect the sale, exchange or conversion rights of 1120 under the Partnership
\nAgreement or this Amendment.<\/p>\n
4. Time is of the essence of each and every provision of this
\nAmendment.<\/p>\n
-2-
\n 94
\n 5. All capitalized terms used in this Amendment and not
\notherwise defined shall have the meanings assigned in the Partnership Agreement.
\nExcept as modified herein, all terms and conditions of the Partnership Agreement
\nshall remain in full force and effect, which terms and conditions the General
\nPartner hereby ratifies and affirms.<\/p>\n
6. To facilitate execution, this Amendment may be executed in
\nas many counterparts as may be required; and it shall not be necessary that the
\nsignatures of, or on behalf of, each party, or that the signatures of all
\npersons required to bind any party, appear on each counterpart; but it shall be
\nsufficient that the signature of, or on behalf of, each party, or that the
\nsignatures of the persons required to bind any party, appear on one or more of
\nthe counterparts. All counterparts shall collectively constitute a single
\nagreement. It shall not be necessary in making proof of this Amendment to
\nproduce or account for more than a number of counterparts containing the
\nrespective signatures of, or on behalf of, all of the parties hereto.<\/p>\n
[signatures begin next page]<\/p>\n
-3-
\n 95
\n IN WITNESS WHEREOF, the undersigned have executed this
\nAmendment as of the date first set forth above.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, a
\n Maryland real estate investment
\n trust, as General Partner of EOP
\n Operating Limited Partnership and on
\n behalf of existing Limited Partners<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————-
\n Stanley M. Stevens
\n Executive Vice President<\/p>\n
[signatures continue next page]<\/p>\n
-4-
\n 96
\n 1120 20TH STREET ASSOCIATES, a District of
\n Columbia limited partnership<\/p>\n
By: 1120 Developers Group, Inc., a District
\n of Columbia corporation<\/p>\n
By: \/s\/ John J. Pohanka
\n ———————————-
\n Name: John J. Pohanka
\n ———————————
\n Title: President
\n ——————————–<\/p>\n
-5-<\/p>\n
97
\n FURTHER ADDENDUM DATED AS OF November 21, 1997
\n TO EOP OPERATING LIMITED PARTNERSHIP
\n AGREEMENT OF LIMITED PARTNERSHIP<\/p>\n
This Further Addendum to EOP Operating Limited Partnership Agreement of
\nLimited Partnership dated as of November 21, 1997 (the “Addendum”), which
\nAddendum is incorporated into that certain EOP Operating Limited Partnership
\nAgreement of Limited Partnership dated as of July 3, 1997 (the “Partnership
\nAgreement”), is executed and delivered by each of the undersigned. Each of the
\nundersigned designated as an Existing Limited Partner has previously been
\nadmitted as a Limited Partner of the Partnership. As of the date hereof, each of
\nthe undersigned has been issued additional Class B Units in the Partnership, and
\nby said undersigned’s execution and delivery hereof, said undersigned agrees to
\nbe bound by the terms and provisions of the Partnership Agreement with respect
\nto such additional Class B Units. Both the number of additional Class B Units
\nissued as of the date hereof to each of the undersigned designated as an
\nExisting Limited Partner, and the total number of Class B Units heretofore and
\nhereby issued to each of the undersigned designated as an Existing Limited
\nPartner, is shown opposite such Existing Limited Partner’s signature below. All
\nterms used herein and not otherwise defined shall have the meanings given them
\nin the Partnership Agreement.<\/p>\n
This Addendum may be executed in two (2) or more counterparts, each of
\nwhich shall be deemed an original but all of which collectively shall constitute
\none and the same document.<\/p>\n
GENERAL PARTNER<\/p>\n
EQUITY OFFICE PROPERTIES TRUST,
\n a Maryland real estate investment trust<\/p>\n
By: \/s\/ Matthew Gworek
\n ——————————
\n Name: Matthew Gworek
\n Title: Vice President – Acquisitions<\/p>\n
EXISTING LIMITED PARTNERS:
\nAdditional Total
\nClass B Units Class B Units(1)<\/p>\n
51,005 290,311 \/s\/ David A. Gardner
\n —————————————
\n DAVID A. GARDNER
\n SS #xxx-xx-xxxx<\/p>\n
51,005 290,300 \/s\/ Donald J. Resnick
\n —————————————
\n DONALD J. RESNICK
\n SS #xxx-xx-xxxx<\/p>\n
22,338 43,714 \/s\/ Mark D. Quigley
\n —————————————
\n MARK D. QUIGLEY
\n SS #xxx-xx-xxxx<\/p>\n
——–<\/p>\n
(1) Inclusive of both (i) Class B Units issued on October 7, 1997 as evidenced
\nby that certain Second Addendum dated as of October 7, 1997 to EOP Operating
\nLimited Partnership Agreement of Limited Partnership, and (ii) the additional
\nClass B Units evidenced by this Further Addendum.
\n 98
\n THIRD AMENDMENT TO
\n AGREEMENT OF LIMITED PARTNERSHIP
\n OF
\n EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
THIS THIRD AMENDMENT TO AGREEMENT OF LIMITED PARTNERSHIP OF EOP
\nOPERATING LIMITED PARTNERSHIP (this “AMENDMENT”), dated December 16, 1997, is
\nentered into by EQUITY OFFICE PROPERTIES TRUST, a Maryland real estate
\ninvestment trust, as managing general partner (the “GENERAL PARTNER”) of EOP
\nOperating Limited Partnership, a Delaware limited partnership (the
\n“PARTNERSHIP”), for itself and on behalf of the Limited Partners of the
\nPartnership.<\/p>\n
WHEREAS, on the date hereof, (i) Wright Runstad Asset Management L.P.,
\na Washington limited partnership (“WRAM”), is receiving 446,890 Class B Units
\n(WRP Series) of limited partnership interest in the Partnership in exchange for
\ncertain partnership interests (“Titleholder Interests”) in Wright Runstad
\nProperties L.P., a Delaware limited partnership (the “Titleholder”), pursuant to
\na closing under, and as more particularly described in, that certain
\nContribution Agreement dated December 16, 1997, by and between the Partnership,
\nWRAM, WRH (as defined below) and certain other parties (the “Contribution
\nAgreement”), (ii) Wright Runstad Holdings L.P., a Washington limited partnership
\n(“WRH”), is receiving 2,168,810 Class B Units (WRP Series) of limited
\npartnership interest in the Partnership in exchange for certain Titleholder
\nInterests pursuant to a closing under, and as more particularly described in,
\nthe Contribution Agreement, and (iii) H. Jon Runstad (“Runstad”), Douglas E.
\nNorberg (“Norberg”) and John F. Nordby (“Nordby”) are receiving, in the
\naggregate, 137,427 Class B Units (“WRP Series) of limited partnership interests
\nin the Partnership in exchange for certain limited partnership interests (“WRALP
\nInterests”) in Wright Runstad Associates Limited Partnership, a Washington
\nlimited partnership (“WRALP”), pursuant to a closing under, and as more
\nparticularly described in, that certain WRALP Investment Agreement dated
\nDecember 16, 1997, by and among the Partnership, WRALP, Runstad, Norberg, Nordby
\nand certain other parties (the “Investment Agreement”). WRAM and WRH are
\ncollectively referred to herein as the “Contributors.” Runstad, Norberg, Nordby
\nare collectively referred to herein as the “Principals”. The Class B Units (WRP
\nSeries) are collectively referred to herein as the “OP Units.” The Titleholder
\nis the owner of certain property (the “WRP Property”) described in the
\nContribution Agreement.<\/p>\n
WHEREAS, pursuant to the authority granted to the General Partner under
\nthe Agreement of Limited Partnership of Partnership dated as of July 3, 1997, as
\namended by the First Amendment to Agreement of Limited Partnership of the
\nPartnership dated September 2, 1997 and the Second Amendment to Agreement of
\nLimited Partnership of the Partnership dated October 16, 1997 (collectively, the
\n“Partnership Agreement”), the General Partner desires to amend the Partnership
\nAgreement to reflect the admission of the Contributors and the Principals
\n 99
\nas Additional Limited Partners and the holders of the OP Units and certain other
\nmatters described herein.<\/p>\n
WHEREAS, each Contributor and each Principal desires to become a party
\nto the Partnership Agreement and to be bound by all of the terms, conditions and
\nother provisions of this Amendment and the Partnership Agreement.<\/p>\n
NOW, THEREFORE, in consideration of the premises and for other good and
\nvaluable consideration, the receipt and sufficiency of which hereby are
\nacknowledged, the General Partner hereby amends the Partnership Agreement as
\nfollows:<\/p>\n
1. AGREEMENT TO PARTNERSHIP AGREEMENT. Each Contributor and each
\nPrincipal hereby agrees to become a party to the Partnership Agreement and to be
\nbound by all of the terms, conditions and other provisions of the Partnership
\nAgreement, including but not limited to the power of attorney set forth in
\nSection 15.11 of the Partnership Agreement.<\/p>\n
2. RESTATEMENT OF EXHIBIT A. Exhibit A to the Partnership Agreement
\nhereby is amended by replacing such Exhibit A with Exhibit “A” attached to this
\nAmendment, and each Contributor and each Principal hereby is admitted as an
\nAdditional Limited Partner in accordance with Section 12.2 of the Partnership
\nAgreement holding the OP Units.<\/p>\n
3. RIGHT TO ASSIGN. Notwithstanding any other provision of this
\nAmendment or of the Partnership Agreement, each Contributor shall have the right
\nto assign all or any portion of its OP Units, together with any and all other
\nrights of such Contributor pursuant to this Amendment or the Partnership
\nAgreement, to one or more of the constituent partners or shareholders, members,
\npartners or beneficiaries of constituent partners of such Contributor on the
\ndate hereof, without the need for the consent of the Managing General Partner or
\nany other General Partner or Limited Partner and without being subject to the
\nright of first refusal set forth in Section 11.3.A(a) of the Partnership
\nAgreement, but in each case subject to the restrictions and conditions set forth
\nin Sections 11.3.C, 11.3.D, 11.3.E, 11.6.E and 11.6.F of the Partnership
\nAgreement. Upon the delivery of written notice of such an assignment to the
\nManaging General Partner, each assignee of OP Units pursuant to the immediately
\npreceding sentence shall be admitted to the Partnership as a Substituted Limited
\nPartner owning the OP Units so assigned and having all of the rights of a
\nLimited Partner under the Partnership Agreement and this Amendment, subject only
\nto such assignee executing and delivering to the Partnership an acceptance of
\nall of the terms and conditions of the Partnership Agreement and such other
\ndocuments or instruments as the Managing General Partner may reasonably require
\nto effect such admission, in accordance with Section 11.4.B of the Partnership
\nAgreement. Each permitted assignee of any of the OP Units issued to a
\nContributor pursuant to the Contribution Agreement that is admitted as a
\nSubstituted Limited Partner in accordance with this Section 3 or Article XI of
\nthe Partnership Agreement, for so long as such Person owns any such OP Units, is
\nreferred to in this Amendment as a “Contributor Limited Partner.” Upon
\nsatisfaction of the condition described in the second sentence of this Section
\n3, the Managing General Partner shall <\/p>\n
2
\n 100
\namend Exhibit A to the Partnership Agreement in the manner described in Section
\n11.4.C of the Partnership Agreement. For purposes of Section 8.6 of the
\nPartnership Agreement, each Contributor Limited Partner which is a permitted
\nassignee of a Contributor shall be entitled to exercise its right to require the
\nPartnership to redeem all or any portion of the OP Units assigned to it by such
\nContributor at any time on or after the first anniversary date of the issuance
\nof the OP Units to such Contributor (which one-year period shall include the
\nperiod of time from the date such OP Units were issued to such Contributor as
\nother than Class A Units until the date any such OP Units are converted
\nautomatically to Class A Units pursuant to the Partnership Agreement).<\/p>\n
4. ADJUSTMENTS TO CARRYING VALUES.<\/p>\n
(a) Upon the admission of the Contributors and the Principals
\n to the Partnership and upon the distribution by the Partnership of the
\n Cash Amount to either Contributor or to any Principal or any
\n Contributor Limited Partner pursuant to the exercise of the Redemption
\n Right with respect to the OP Units held by such Contributor, Principal
\n or Contributor Limited Partner, the Carrying Values of the Assets of
\n the Partnership shall be adjusted in accordance with the procedures
\n described in Section 1.D of Exhibit B to the Partnership Agreement;
\n provided, however, that in order to minimize the administrative burden
\n associated with the adjustments required by this Section 4(a) in
\n connection with the distribution of the Cash Amount to a Contributor, a
\n Principal or a Contributor Limited Partner, the Partnership shall make
\n the adjustments to the Carrying Values of the Partnership’s Assets (and
\n the resulting adjustments to the Capital Accounts of the Partners) only
\n upon the happening of the most material event during the calendar year
\n that is described in Section 1.D(2) of Exhibit B to the Partnership
\n Agreement (the “Annual Adjustment”); and provided further, that upon
\n the distribution of the Cash Amount to a Contributor, a Principal or a
\n Contributor Limited Partner or, at the option of the General Partner,
\n upon the occurrence of any other event described in Section 1.D(2) of
\n Exhibit B to the Partnership Agreement, that occurs during any year
\n other than as of the date of the Annual Adjustment, the Partnership
\n shall, at the time of such distribution, make adjustments to the
\n Carrying Values of the Partnership’s Assets in accordance with the
\n procedures described in Section 1.D of Exhibit B to the Partnership
\n Agreement for purposes of adjusting the Capital Account of such
\n Contributor, such Principal or such Contributor Limited Partner who has
\n exercised his Redemption Right or such other affected Partner, but no
\n such adjustments shall be necessary at such time with respect to the
\n Capital Account balances of Partners who remain Partners through the
\n date of the Annual Adjustment or are otherwise not directly affected by
\n any such other event.<\/p>\n
(b) Any determination of the fair market value of Partnership
\n assets pursuant to Section 1.D of Exhibit B to the Partnership
\n Agreement (for purposes of calculating Unrealized Gain or Unrealized
\n Loss), with respect to adjusting the Carrying Values of Partnership
\n assets in connection with the exercise of Redemption Rights by a
\n Contributor, <\/p>\n
3
\n 101
\n any Principal or any Contributor Limited Partner shall be made by
\n assuming that the aggregate fair market value of all Partnership assets
\n is equal to the aggregate Cash Amount that would be distributed by the
\n Partnership if all Partnership Units held by all Partners (including
\n the General Partners) were redeemed in exchange for the Cash Amount
\n with respect to each such Partnership Unit at such time, provided,
\n however, such valuation methodology shall not be utilized for purposes
\n of determining the fair market value of the Partnership’s assets with
\n respect to any such exercise of Redemption Rights in contemplation of
\n an assignment by or reorganization of the Partnership for the benefit
\n of creditors and any liquidation of the Partnership related thereto or
\n following the filing by (or in contemplation of a filing) by the
\n Partnership of a case under Title 11 of the U.S. Code.<\/p>\n
5. ALLOCATIONS. Notwithstanding the provisions of Section 2.C of
\nExhibit C to the Partnership Agreement, for purposes of allocating items of
\nincome, gain, loss and deduction with respect to the WRP Property in the manner
\nrequired by Section 704(c) of the Code, the Partnership shall employ, and shall
\ncause any entity controlled by the Partnership which holds title to any of the
\nWRP Property to employ, the “traditional method” as set forth in Regulation
\nSection 1.704-3(b).<\/p>\n
6. OBLIGATION TO RESTORE DEFICIT CAPITAL ACCOUNT.<\/p>\n
(a) For purposes of this Section 6, the following terms shall
\n have the meanings set forth below:<\/p>\n
(i) “DRO Amount” means (A) with respect to WRAM,
\n $10,873,678, (B) with respect to WRH, $63,014,285 and (C) with
\n respect to each Scheduled Assignee, the amount set forth
\n opposite such Scheduled Assignee’s name on Schedule 1 hereto.<\/p>\n
(ii) “Partner Contribution Agreement” means one or
\n more agreements in favor of that certain partnership or
\n partnerships that are partners in WRH, which are being
\n executed concurrently with this Amendment and have been
\n assigned by such partnerships to WRH, pursuant to which a
\n Second-Tier Partner has agreed to make certain capital
\n contributions to WRH on the terms and subject to the
\n conditions set forth in such Partner Contribution Agreement.<\/p>\n
(iii) “Partner Contribution Amount” means, with
\n respect to each Second-Tier Partner, the amount set forth
\n opposite such Second-Tier Partner’s name on Schedule 1 hereto,
\n which amount is the amount of capital contributions agreed to
\n be made by such Second-Tier Partner pursuant to the Partner
\n Contribution Agreement to which he is a party.<\/p>\n
4
\n 102
\n (iv) “Scheduled Assignee” means each permitted
\n assignee of any of the OP Units of either WRAM or WRH listed
\n on Schedule 1 hereto and the successors and assigns of such
\n Scheduled Assignee.<\/p>\n
(v) “Second-Tier Partners” means those persons listed
\n on Schedule 1 hereto who are partners in certain general
\n partnerships that are partners in WRH and who have executed
\n and delivered one or more Partner Contribution Agreements.<\/p>\n
(b) Notwithstanding any other provisions of the Partnership
\n Agreement, upon liquidation of the Partnership or upon the liquidation
\n of the Partnership Interest of a Contributor or a Scheduled Assignee,
\n each Contributor or Scheduled Assignee whose interest is being
\n liquidated shall contribute to the Partnership in accordance with
\n Treasury Regulation Section 1.704 – 1(b) (2) (ii) (b) (2) the deficit
\n balance, if any, in its Capital Account, calculated after the
\n allocation for such year of all items of Net Income, Net Losses, Gross
\n Income and Unrealized Gain or Unrealized Loss allocated in accordance
\n with Section 1.D of Exhibit B to the Partnership Agreement; provided,
\n however, that in no event shall such contribution obligation for any
\n Contributor or Scheduled Assignee exceed such Contributor’s or
\n Scheduled Assignee’s DRO Amount. In addition, WRH hereby assigns and
\n conveys to the Partnership, effective upon distribution of the OP Units
\n by WRH, all of WRH’s rights under each Partner Contribution Agreement
\n provided by a Second-Tier Partner; provided, that in no event shall the
\n contribution obligation pursuant to such Partner Contribution Amount
\n exceed such Second-Tier Partner’s Partner Contribution Amount. The
\n obligation created pursuant to this Section 6(b) shall be for the
\n benefit of the Partnership, its general partners (the “General
\n Partners”), the creditors of the Partnership or any other person to
\n whom any debts, liabilities or obligations are owed by (or who
\n otherwise has any claim against) the Partnership or the General
\n Partners in their capacities as general partners of the Partnership and
\n shall be enforceable by such parties. Each Contributor and Scheduled
\n Assignee unconditionally and irrevocably waives any subrogation,
\n reimbursement or similar rights to which it might otherwise be entitled
\n as the result of its performance with respect to the obligation created
\n pursuant to Section 6(b), whether such rights arise with respect to the
\n Partnership, another Partner of the Partnership or a third party;
\n provided, however, that the General Partners shall in all events be
\n entitled to enforce the contribution obligation of a Contributor or
\n Scheduled Assignee undertaken pursuant to Section 6(b).<\/p>\n
(c) Notwithstanding the foregoing, in the event that the
\n Managing General Partner, pursuant to Section 8.6B of the Partnership
\n Agreement, elects to assume directly and satisfy a Redemption Right
\n exercised by a Contributor or a Scheduled Assignee (a “Tendering
\n Limited Partner”), the Managing General Partner shall assume the
\n obligation of the Tendering Limited Partner pursuant to Section 6(b)
\n above with respect to the OP Units transferred to the Managing General
\n Partner by such Tendering Limited Partner; <\/p>\n
5
\n 103
\n provided, however, that if the adjustment to the Carrying Values of
\n Partnership Assets and the related adjustments to the Capital Accounts
\n of the Partners pursuant to Section 4 hereof and Section 1.D of Exhibit
\n B to the Partnership Agreement that would have been undertaken pursuant
\n to Section 4 hereof had the Partnership satisfied the Redemption Right
\n exercised by such Tendering Limited Partner would have resulted in the
\n Capital Account of the Tendering Limited Partner having a zero or
\n positive balance, then, with respect to such OP Units acquired from the
\n Tendering Limited Partner, the Managing General Partner shall have no
\n obligation pursuant to Section 6(b) hereof with respect to a
\n liquidation of the Partnership or a liquidation of the Partnership
\n interest reflected by such OP Units that occurs more than twelve months
\n following the acquisition of such OP Units by the Managing General
\n Partner.<\/p>\n
(d) In the event that the liquidation of the Partnership
\n Interest of a Tendering Limited Partner, other than in connection with
\n the liquidation of the Partnership, would trigger an obligation
\n pursuant to Section 6(b) hereof to contribute an amount to the
\n Partnership, then the Net Income of the Partnership for the portion of
\n such year ending on the Specified Redemption Date with respect to such
\n Tendering Limited Partner shall be specially allocated to such
\n Tendering Limited Partner in the amount necessary to eliminate the
\n deficit balance in its Capital Account remaining after all other
\n adjustments for such year (including any adjustments made pursuant to
\n Section 1.D of Exhibit B to the Partnership Agreement).<\/p>\n
7. MAINTENANCE OF RECOURSE DEBT. The Partnership shall maintain
\nunsecured liability as to which the creditor has recourse to the General
\nPartners, including any such unsecured recourse liability (as to which the
\ncreditor has recourse to the General Partners in their capacities as General
\nPartners) of any other entity that is allocable to the Partnership, in an
\naggregate amount not less than the amount necessary such that (a) prior to the
\ndistribution by WRAM and WRH of OP Units issued to them pursuant to the
\nContribution Agreement, the amount of Partnership recourse liabilities allocated
\nto each of WRAM and WRH shall be not less than its DRO Amount and (b) following
\nthe distribution by WRAM and WRH of OP Units issued to them pursuant to the
\nContribution Agreement, the amount of Partnership recourse liabilities allocated
\ndirectly or indirectly to all Scheduled Assignees and Second-Tier Partners shall
\nbe not less than the sum of their respective DRO Amounts and Partner
\nContribution Amounts. In making such determination, the Partnership shall take
\ninto account any and all allocations of Partnership recourse liabilities to
\nother Partners by reason of any guaranties, indemnities, restoration obligations
\nor other, similar arrangements with respect to any such Partners, and the
\nliability by reason of any such Partner’s status as a general partner of the
\nPartnership.<\/p>\n
8. TIME IS OF THE ESSENCE. Time is of the essence of each and every
\nprovision of this Amendment.<\/p>\n
6
\n 104
\n 9. AMENDMENTS. Notwithstanding any provision in the Partnership
\nAgreement to the contrary, the provisions of this Amendment may be waived or
\namended or otherwise modified with the prior written consent of holders of more
\nthan fifty percent (50%) of the OP Units at the time outstanding and without the
\nconsent of any other Limited Partner.<\/p>\n
All capitalized terms used in this Amendment and not otherwise defined
\nshall have the meanings assigned to them in the Partnership Agreement. Except as
\nmodified herein, all terms and conditions of the Partnership Agreement shall
\nremain in full force and effect, which terms and conditions the General Partner
\nhereby ratifies and affirms.<\/p>\n
7
\n 105
\n IN WITNESS WHEREOF, the undersigned has executed this Amendment as of
\nthe date first set forth above.<\/p>\n
EQUITY OFFICE PROPERTIES
\n TRUST, a Maryland real estate investment
\n trust, as General Partner of EOP Operating
\n Limited Partnership and on behalf of
\n existing Limited Partners<\/p>\n
By: \/s\/ Ross Satter White
\n ————————————-
\n Name: Ross Satter White
\n ——————————-
\n Title: Vice President\/Acquisitions
\n ——————————<\/p>\n
CONTRIBUTORS:<\/p>\n
WRIGHT RUNSTAD ASSET MANAGEMENT L.P., a
\n Washington limited partnership<\/p>\n
By: WRAM, INC.,
\n its general partner<\/p>\n
By: \/s\/ Douglas E. Norberg
\n ————————–
\n Name: Douglas E. Norberg
\n ——————–
\n Title: President
\n ——————-<\/p>\n
8
\n 106
\n WRIGHT RUNSTAD HOLDINGS LIMITED
\n PARTNERSHIP, a Washington limited
\n partnership<\/p>\n
By: WRIGHT RUNSTAD ASSOCIATES LIMITED
\n PARTNERSHIP, a Washington limited
\n partnership, its general partner<\/p>\n
By: WRIGHT RUNSTAD & COMPANY,
\n a Washington corporation,
\n its general partner<\/p>\n
By: WRAM INC.
\n Name: \/s\/ DOUGLAS E. NORBERG
\n ————————
\n Title: President
\n ———————–<\/p>\n
PRINCIPALS:<\/p>\n
\/s\/ H. JON RUNSTAD
\n ——————————
\n H. Jon Runstad<\/p>\n
\/s\/ DOUGLAS E. NORBERG
\n ——————————
\n Douglas E. Norberg<\/p>\n
\/s\/ JON F. NORDBY
\n ——————————
\n Jon F. Nordby<\/p>\n
9
\n 107<\/p>\n
FOURTH AMENDMENT TO<\/p>\n
AGREEMENT OF LIMITED PARTNERSHIP<\/p>\n
OF<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
This Fourth Amendment is made as of December 19, 1997 by and among
\nEquity Office Properties Trust, a Maryland real estate investment trust, as
\nmanaging general partner (the “Company” or the “Managing General Partner”) of
\nEOP Operating Limited Partnership, a Delaware limited partnership (the
\n“Partnership”), and as attorney-in-fact for the Persons named on Exhibit A to
\nthe Agreement of Limited Partnership of EOP Operating Limited Partnership, dated
\nas of July 3, 1997, as amended, (the “Partnership Agreement”) for the purpose of
\namending the Partnership Agreement. Capitalized terms used herein and not
\ndefined shall have the meanings given to them in the Partnership Agreement.<\/p>\n
WHEREAS, the Company and the Partnership are parties to an
\nAgreement and Plan of Merger, dated as of September 15, 1997, as amended (the
\n“Merger Agreement”), with Beacon Properties Corporation, a Maryland corporation
\n(“Beacon”), and Beacon Properties, L.P., a Delaware limited partnership (“Beacon
\nPartnership”), pursuant to which Beacon has merged with and into the Company
\n(the “Company Merger”) and Beacon Partnership has merged with and into the
\nPartnership (the “Partnership Merger,” together with the Company Merger, the
\n“Mergers”);<\/p>\n
WHEREAS, the Company has issued 8,000,000 8.98% Series A
\nCumulative Redeemable Preferred Shares (the “Series A Preferred Shares”) in
\nconnection with the Company Merger;<\/p>\n
WHEREAS, the Managing General Partner has determined that, in
\nconnection with the Mergers, it is necessary and desirable to amend the
\nPartnership Agreement (i) to create additional Partnership Units having
\ndesignations, preferences and other rights which are substantially the same as
\nthe economic rights of the Series A Preferred Shares and (ii) to admit as
\nAdditional Limited Partners the partners of Beacon Partnership.<\/p>\n
NOW, THEREFORE, in consideration of the premises and for other
\ngood and valuable consideration, the receipt and sufficiency of which hereby are<\/p>\n
108<\/p>\n
acknowledged, the Managing General Partner hereby amends the Partnership
\nAgreement as follows:<\/p>\n
1. Article I of the Partnership Agreement is hereby amended by
\n(i) adding the following definitions:<\/p>\n
“Series A Preferred Shares” means the 8.98% Series A Cumulative
\nRedeemable Preferred Shares of the Company issued in connection with the Company
\nMerger; and<\/p>\n
“Series A Preferred Units” means the series of Partnership Units
\nrepresenting units of Limited Partnership Interests designated as the 8.98%
\nSeries A Cumulative Redeemable Preferred Units with the designations,
\npreferences and other rights set forth herein; and<\/p>\n
(ii) by deleting the definition of “Deemed Value of the Partnership Interest”
\nand replacing it with the following:<\/p>\n
“DEEMED VALUE OF PARTNERSHIP INTEREST” means, as of any date with
\nrespect to any class of Partnership Interests, (a) if the common shares of
\nbeneficial interests (or other comparable equity interests) of the General
\nPartner Entity are Publicly Traded (i) the total number of shares of beneficial
\ninterest (or other comparable equity interest) of the General Partner Entity
\ncorresponding to such class of Partnership Interest (as provided for in Section
\n4.2.B) issued and outstanding as of the close of business on such date
\n(excluding any treasury shares) multiplied by the Value of a share of such
\nbeneficial interest (or other comparable equity interests) on such date DIVIDED
\nBY (ii) the Percentage Interests of the Managing General Partner, held directly
\nor indirectly through another entity, in such class of Partnership Interests on
\nsuch date, and (b) otherwise, the aggregate Value of such class of Partnership
\nInterests determined as set forth in fourth and fifth sentences of the
\ndefinition of Value. For purposes of clause (a) of the preceding sentence,
\n“Value” means the average of the daily market price of such corresponding shares
\nof beneficial interest (or other comparable equity interests) of the General
\nPartner Entity for such number of consecutive trading days or the Business Day
\nimmediately preceding the date with respect to which Value must be determined
\n(which number of days or the Business Day shall be determined by the Managing
\nGeneral Partner in its sole discretion), with the market price for each such
\ntrading day being the closing price, regular way, on such day, of if no such
\nsale takes place on such day, the average of the closing bid and asked prices on
\nsuch day. Notwithstanding any of the foregoing, with respect to any class or
\nseries of Partnership Interests that is entitled to a preference as compared to
\nthe class of Partnership Interests corresponding to common shares of beneficial
\ninterests (or other comparable equity interests) of the General Partner Entity,
\n“Value” means the stated liquidation preference or value of such class or series
\nof Partnership <\/p>\n
2<\/p>\n
109<\/p>\n
Interests provided in the instrument establishing such class or series of
\nPartnership Interests (unless otherwise provided in such instrument).<\/p>\n
2. In accordance with Section 4.2.A of the Partnership
\nAgreement, set forth below are the terms and conditions of the Series A
\nPreferred Units hereby established and issued to the Company in connection with
\nthe Partnership Merger.<\/p>\n
A. DESIGNATION AND NUMBER. A series of Partnership Units
\ndesignated as Series A Preferred Units is hereby established. The number of
\nSeries A Preferred Units shall be 8,000,000.<\/p>\n
B. RANK. The Series A Preferred Units will, with respect to
\ndistribution rights and rights upon liquidation, dissolution or winding up of
\nthe Partnership, rank (a) senior to the Class A Units, Class B Units and all
\nPartnership Interests ranking junior to the Series A Preferred Units; (b) on a
\nparity with all Partnership Interests issued by the Partnership the terms of
\nwhich specifically provide that such Partnership Interests rank on a parity with
\nthe Series A Preferred Units; and (c) junior to all Partnership Interests issued
\nby the Partnership the terms of which specifically provide that such Partnership
\nInterests rank senior to the Series A Preferred Units.<\/p>\n
C. DISTRIBUTIONS.<\/p>\n
(i) Pursuant to Section 5.1 of the Partnership Agreement,
\nholders of Series A Preferred Units shall be entitled to receive, out of
\nAvailable Cash, cumulative preferential distributions of Available Cash at the
\nrate of 8.98% of the $25.00 liquidation preference per annum (equivalent to a
\nfixed annual amount of $2.245 per unit). Such distributions shall be cumulative
\nfrom the last date on which any distributions were paid with respect to the
\nSeries A Preferred Units of Beacon Partnership for which the Series A Preferred
\nUnits were exchanged in connection with the Partnership Merger and shall be
\npayable quarterly in arrears on or before March 15, June 15, September 15 and
\nDecember 15 of each year or, if not a business day, the next succeeding business
\nday (each a “Series A Preferred Unit Distribution Payment Date”). Any
\ndistribution payable on the Series A Preferred Units for any partial
\ndistribution period will be computed on the basis of a 360-day year consisting
\nof twelve 30-day months.<\/p>\n
(ii) No distributions on Series A Preferred Units shall be
\nauthorized or paid or set apart for payment at such time as the terms and
\nprovisions of any agreement of the Partnership, including any agreement relating
\nto its indebtedness, prohibits such authorization, payment or setting apart for
\npayment or provides that such authorization, payment or setting apart for
\npayment would constitute a breach <\/p>\n
3<\/p>\n
110<\/p>\n
thereof, or a default thereunder, or if such authorization or payment shall be
\nrestricted or prohibited by law.<\/p>\n
(iii) Notwithstanding the foregoing, distributions with respect
\nto the Series A Preferred Units will accrue whether or not the terms and
\nprovisions set forth in Section 2.C.(ii) at any time prohibit the current
\npayment of distributions, whether or not there is sufficient Available Cash for
\nsuch distributions and whether or not such distributions are authorized. Accrued
\nbut unpaid distributions on the Series A Preferred Units will accumulate as of
\nthe Series A Preferred Unit Distribution Payment Date on which they first become
\npayable.<\/p>\n
(iv) When distributions are not paid in full (or a sum
\nsufficient for such full payment is not so set apart) upon the Series A
\nPreferred Units and any other Partnership Interests ranking on a parity as to
\ndistributions with the Series A Preferred Units, all distributions authorized
\nupon the Series A Preferred Units and any other Partnership Interests ranking on
\na parity as to distributions with the Series A Preferred Units shall be
\nauthorized pro rata so that the amount of distributions authorized per
\nPartnership Unit of Series A Preferred Units and such other Partnership
\nInterests shall in all cases bear to each other the same ratio that accrued
\ndistributions per Partnership Unit on the Series A Preferred Units and such
\nother Partnership Interests (which shall not include any accrual in respect of
\nunpaid distributions for prior distribution periods if such other Partnership
\nInterests do not have a cumulative distribution) bear to each other. No
\ninterest, or sum of money in lieu of interest, shall be payable in respect of
\nany distribution payment or payments on Series A Preferred Units which may be in
\narrears.<\/p>\n
(v) Except as provided in Section 2.B.(iv), unless full
\ncumulative distributions on the Series A Preferred Units have been or
\ncontemporaneously are authorized and paid or authorized and a sum sufficient for
\nthe payment thereof is set apart for payment for all past distribution periods
\nand the then current distribution period, no distributions (other than in
\nPartnership Interests ranking junior to the Series A Preferred Units as to
\ndistributions and upon liquidation) shall be authorized or paid or set aside for
\npayment nor shall any other distribution be authorized or made upon the Class A
\nUnits, the Class B Units, or any other Partnership Interests ranking junior to
\nor on a parity with the Series A Preferred Units as to distributions or upon
\nliquidation, nor shall any Class A Units, Class B Units, or any other
\nPartnership Interests ranking junior to or on a parity with the Series A
\nPreferred Shares as to distributions or upon liquidation be redeemed, purchased
\nor otherwise acquired for any consideration (or any moneys be paid to or made
\navailable for a sinking fund for the redemption of any such units or other
\nPartnership Interests) by the Partnership (except by conversion into or exchange
\nfor Partnership Interests ranking junior to the Series A Preferred Units as to
\ndistributions and upon liquidation).<\/p>\n
(vi) Holders of the Series A Preferred Units shall not be
\nentitled to any distribution, whether payable in cash, property or Partnership
\nUnits in excess of full <\/p>\n
4<\/p>\n
111<\/p>\n
cumulative distributions on the Series A Preferred Units as described above. Any
\ndistribution payment made on the Series A Preferred Units shall first be
\ncredited against the earliest accrued but unpaid distribution due with respect
\nto such Series A Preferred Units which remains payable.<\/p>\n
D. ALLOCATIONS.<\/p>\n
Allocations of the Partnership’s items of income, gain, loss and
\ndeduction shall be allocated among holders of Series A Preferred Units in
\naccordance with Article VI of the Partnership Agreement.<\/p>\n
E. LIQUIDATION PREFERENCE.<\/p>\n
(i) Upon any voluntary or involuntary liquidation, dissolution
\nor winding up of the affairs of the Partnership, the holders of Series A
\nPreferred Units then outstanding are entitled to be paid out of the assets of
\nthe Partnership available for distribution to the Partners pursuant to Section
\n13.2.A of the Partnership Agreement a liquidation preference of $25.00 per
\nSeries A Preferred Unit, plus an amount equal to any accrued and unpaid
\ndistributions to the date of payment, before any distribution of assets is made
\nto holders of Class A Units, Class B Units or any other Partnership Interests
\nthat rank junior to the Series A Preferred Units as to liquidation rights.<\/p>\n
(ii) In the event that, upon any such voluntary or involuntary
\nliquidation, dissolution or winding up, the available assets of the Partnership
\nare insufficient to pay the amount of the liquidating distributions on all
\noutstanding Series A Preferred Units and the corresponding amounts payable on
\nall other Partnership Interests ranking on a parity with the Series A Preferred
\nUnits in the distribution of assets, then such assets shall be allocated among
\nthe Series A Preferred Units, as a class, and each class or series of such other
\nsuch Partnership Interests, as a class, in proportion to the full liquidating
\ndistributions to which they would otherwise be respectively entitled.<\/p>\n
(iii) After payment of the full amount of the liquidating
\ndistributions to which they are entitled, the holders of Series A Preferred
\nUnits will have no right or claim to any of the remaining assets of the
\nPartnership.<\/p>\n
(iv) The consolidation or merger of the Partnership with or into
\nany other partnership, corporation, trust or entity or of any other partnership,
\ncorporation, trust or other entity with or into the Partnership or the sale,
\nlease or conveyance of all or substantially all of, the property or business of
\nthe Partnership, shall not be deemed to constitute a liquidation, dissolution or
\nwinding up of the Partnership for purposes of this Section 2.E.<\/p>\n
5<\/p>\n
112<\/p>\n
F. REDEMPTION.<\/p>\n
In connection with a redemption by the Company of any or all of
\nthe Series A Preferred Shares, the Partnership shall provide cash to the Company
\nfor such purpose which shall be equal to redemption price of the Series A
\nPreferred Shares to be redeemed and one Series A Preferred Unit shall be
\ncanceled with respect to each Series A Preferred Share so redeemed. From and
\nafter the date in which the Series A Preferred Shares are redeemed, the Series A
\nPreferred Units so canceled shall no longer be outstanding and all rights
\nhereunder, to distributions or otherwise, with respect to such Series A
\nPreferred Units shall cease.<\/p>\n
3. Section 6.1.C of the Partnership Agreement is deleted and
\nreplaced with the following:<\/p>\n
C. ALLOCATION OF NONRECOURSE DEBT. For purposes of Regulation
\n Section 1.752-3(a), the Partners agree that Nonrecourse
\n Liabilities of the Partnership in excess of the sum of (i)
\n the amount of Partnership Minimum Gain and (ii) the total
\n amount of Nonrecourse Built-in Gain shall be allocated by
\n the Managing General Partner by taking into account facts
\n and circumstances relating to each Partner’s respective
\n interest in the profits of the Partnership. For this
\n purpose, the Managing General partner will have discretion
\n in any fiscal year to allocate such excess Nonrecourse
\n Liabilities among the Partners in any manner permitted
\n under Code Section 752 and the Regulations thereunder.<\/p>\n
4. Section 13.2.A of the Partnership Agreement is amending
\nredesignating subparagraph (4) as subparagraph (5) and inserting the following
\nnew subparagraph (4):<\/p>\n
(4) Fourth, to the holders of Partnership Interests that
\n are entitled to any preference in distribution upon
\n liquidation in accordance with the rights of any
\n such class or series of Partnership Interests (and,
\n within each such class or series, to each holder
\n thereof pro rata based on the proportion of the
\n total number of outstanding units of such class or
\n series represented by such holder’s units of such
\n series or class) and<\/p>\n
5. Exhibit A to the Partnership Agreement is hereby amended by
\nreplacing such Exhibit A with “EXHIBIT A” attached to this Amendment and, upon
\nexecution of this Amendment, each of the Persons listed on “EXHIBIT A” to this
\nAmendment and identified as a Beacon Partner (a “Beacon Partner”) shall be
\nadmitted, effective as of the effective time of this Amendment, as an Additional
\nLimited Partner in accordance with Section 12.2 of the Partnership Agreement
\nholding the Partnership Units and Percentage Interests set forth opposite such<\/p>\n
6<\/p>\n
113<\/p>\n
Person’s name on EXHIBIT A attached to this Amendment. By executing this
\nAmendment, each Beacon Partner hereby agrees to become a party to the
\nPartnership Agreement and to be bound by all of the terms, conditions and
\nprovisions of the Partnership Agreement, including but not limited to the power
\nof attorney set forth in Section 15.11 of the Partnership Agreement, provided,
\nhowever, that, notwithstanding any provision of the Partnership Agreement to the
\ncontrary or any provision of the partnership agreement of Beacon Partnership or
\nany agreement entered into in connection therewith, no Beacon Partner shall be
\nrequired to contribute to the Partnership any deficit or negative balance
\nexisting in its capital account for the Beacon Partnership immediately prior to
\nthe effective time of the Partnership Merger.<\/p>\n
6. Except as modified herein, all terms and conditions of the
\nPartnership Agreement shall remain in full force and effect, which terms and
\nconditions the Managing General Partner hereby ratifies and confirms.<\/p>\n
7. This Amendment is effective as of the effective time of the
\nPartnership Merger.<\/p>\n
7<\/p>\n
114<\/p>\n
IN WITNESS WHEREOF, the undersigned have executed this Amendment
\nas of the date first set forth above.<\/p>\n
EQUITY OFFICE PROPERTIES TRUST, a
\n Maryland real estate investment trust,
\n as Managing General Partner of EOP
\n Operating Limited Partnership and on
\n behalf of existing Limited Partners.<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ————————————<\/p>\n
Name: Stanley M. Stevens
\n ———————————-<\/p>\n
Title: Executive Vice President and
\n Chief Legal Counsel<\/p>\n
ZELL\/MERRILL LYNCH REAL ESTATE
\n OPPORTUNITY PARTNERS LIMITED
\n PARTNERSHIP II, General Partner<\/p>\n
By: Equity Office Properties Trust, its
\n managing general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————–<\/p>\n
Name: Stanley M. Stevens
\n ——————————<\/p>\n
Title: Executive Vice President and
\n Chief Legal Counsel<\/p>\n
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