FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
REGENCY CENTERS, L.P.
(formerly known as Regency Retail Partnership, L.P.)
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TABLE OF CONTENTS
Article 1
Defined Terms
Article 2
Organizational Matters
Section 2.1
Organization; Application of Act..........................16
Section 2.2
Name......................................................16
Section 2.3
Registered Office and Agent; Principal Office.............16
Section 2.4
Term......................................................16
Article 3
Purpose
Section 3.1
Purpose and Business......................................16
Section 3.2
Powers....................................................17
Article 4
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1
Capital Contributions of the Partners.....................17
Section 4.2
Issuances of Additional Partnership Interests.............19
Section 4.3 No
Preemptive Rights......................................21
Section 4.4
Capital Accounts of the Partners..........................21
Section 4.5
Issuance of Series A Preferred Units......................22
Article 5
Distributions
Section 5.1
Requirement and Characterization of Distributions.........34
Section 5.2
Amounts Withheld..........................................35
Section 5.3
Withholding...............................................35
Section 5.4
Distributions Upon Liquidation............................37
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Article 6
Allocations
Section 6.1
Allocations of Net Income and Net Loss....................37
Section 6.2
Special Allocation Rules..................................39
Section 6.3
Allocations for Tax Purposes..............................40
Article 7
Management And Operations Of Business
Section 7.1
Management................................................41
Section 7.2
Certificate of Limited Partnership........................46
Section 7.3
Restriction on General Partner's Authority................47
Section 7.4
Responsibility for Expenses...............................47
Section 7.5
Outside Activities of the General Partner.................48
Section 7.6
Contracts with Affiliates.................................48
Section 7.7
Indemnification...........................................49
Section 7.8
Liability of the General Partner..........................50
Section 7.9
Other Matters Concerning the General Partner..............51
Section 7.10 Title to
Partnership Assets...............................52
Section 7.11 Reliance
by Third Parties.................................52
Section 7.12 Redemption
of Units Held by General Partner...............53
Article 8
Rights And Obligations Of Limited Partners
Section 8.1
Limitation of Liability...................................53
Section 8.2
Management of Business....................................53
Section 8.3
Outside Activities of Limited Partners....................53
Section 8.4
Priority Among Partners...................................54
Section 8.5
Rights of Limited Partners Relating to the Partnership....54
Section 8.6
Redemption of Units.......................................55
Section 8.7
Regency's Assumption of Right.............................58
Article 9
Books, Records, Accounting And Reports
Section 9.1
Records and Accounting....................................59
Section 9.2
Fiscal Year...............................................59
Section 9.3
Reports...................................................59
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Article 10
Tax Matters
Section 10.1
Preparation of Tax Returns................................60
Section 10.2 Tax
Elections.............................................60
Section 10.3 Tax
Matters Partner.......................................60
Section 10.4
Organizational Expenses...................................61
Article 11
Transfers And Withdrawals
Section 11.1
Transfer..................................................62
Section 11.2 Transfer
of General Partner's Partnership Interests.......62
Section 11.3 Limited
Partners' Rights to Transfer......................63
Section 11.4
Substituted Limited Partners..............................66
Section 11.5
Assignees.................................................66
Section 11.6 General
Provisions........................................67
Article 12
Admission Of Partners
Section 12.1 Admission
of Successor General Partner....................68
Section 12.2 Admission
of Additional Limited Partners..................68
Section 12.3 Amendment
of Agreement and Certificate....................69
Section 12.4
Representations and Warranties of Additional Limited
Partners..................................................69
Article 13
Dissolution And Liquidation
Section 13.1
Dissolution...............................................69
Section 13.2 Winding
Up................................................70
Section 13.3 Compliance
with Timing Requirements of Regulations;
Allowance for Contingent or Unforeseen Liabilities
or Obligations............................................73
Section 13.4 Deficit
Capital Account Restoration.......................73
Section 13.5 Deemed
Distribution and Recontribution....................74
Section 13.6 Rights of
Limited Partners................................75
Section 13.7 Notice of
Dissolution.....................................75
Section 13.8
Cancellation of Certificate of Limited Partnership........75
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Section 13.9 Reasonable
Time for Winding-Up............................75
Article 14
Amendment
Of Partnership Agreement; Meetings
Section 14.1
Amendments................................................75
Section 14.2 Meetings
of Limited Partners..............................79
Article 15
General Provisions
Section 15.1 Addresses
and Notice......................................79
Section 15.2 Titles and
Captions.......................................80
Section 15.3 Pronouns
and Plurals......................................80
Section 15.4 Further
Action............................................80
Section 15.5 Binding
Effect............................................80
Section 15.6 Waiver of
Partition.......................................80
Section 15.7 Entire
Agreement..........................................80
Section 15.8 Remedies
Not Exclusive....................................80
Section 15.9
Time......................................................81
Section 15.10
Creditors.................................................81
Section 15.11
Waiver....................................................81
Section 15.12 Execution
Counterparts....................................81
Section 15.13 Applicable
Law............................................81
Section 15.14 Invalidity of
Provisions..................................81
Article 16
Power Of Attorney
Section 16.1 Power of
Attorney.........................................81
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SCHEDULES
Schedule 7.8(b) Regency's PFIC
Obligations
Schedule 8.6(a) Transfer Restrictions in
Regency's Articles of Incorporation
Schedule 13.4(a) Electing Partners with Deficit
Capital Account Make-up
Requirement
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EXHIBITS
Exhibit A
Partners and Partnership Interests (addresses)
Exhibit B
Notice of Redemption
Exhibit C
Security Capital Waiver and Consent Agreement
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FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP
OF
REGENCY CENTERS, L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
is
dated as of April 1, 2001, by and among
Regency Centers Corporation (formerly
Regency Realty Corporation), a Florida
corporation, as general partner (the
"General Partner"), and those additional
persons who from time to time agree to
be bound by this Agreement as limited
partners (the "Limited Partners"), and
amends and restates the Third Amended and
Restated Agreement of Limited
Partnership of the Partnership dated as of
September 1, 1999.
Background
Limited Partners (the "Original Limited Partners") who formerly
were
partners of Branch Properties, L.P. or its
affiliates were admitted to the
Partnership on March 7, 1997 pursuant to
the Amended and Restated Agreement of
Limited Partnership as of that date (as
amended, the "Initial Agreement").
In February 1998, Regency Realty Corporation ("Regency") merged
with
Regency Atlanta, Inc., which was then the
general partner of the Partnership,
with Regency being the surviving
corporation in the merger. Accordingly, Regency
became the General Partner of the
Partnership. Regency also caused the merger
into the Partnership of its subsidiary,
Regency Centers, Inc., which owned at
least 35 shopping center properties
immediately prior to the merger.
In connection with the admission of limited partners upon the
Partnership's acquisition of assets from
Midland Development Group, Inc. and its
affiliates, the General Partner amended and
restated the Initial Agreement on
March 5, 1998 (the "Second Amended
Agreement") (i) to provide for admitting
Additional Limited Partners (as defined
below) to the Partnership from time to
time, (ii) to make certain changes to the
provisions governing the maintenance
of Capital Accounts, and (iii) to delete
matters of historical interest.
In connection with the issuance by the Partnership of $80
million
Series A Preferred Units (as defined below)
to an institutional investor
pursuant to Section 4.2 hereof, the General
Partner and Security Capital (as
defined below) entered into Amendment No. 1
to the Second Amended Agreement on
June 25, 1998 (the "Preferred Unit
Amendment"). The Preferred Unit Amendment
designated the rights, preferences and
limitations of the Series A Preferred
Units and was approved by the holders of a
majority of the Original Limited
Partnership Units and the holders of a
majority of the Additional Units.
Pursuant to Article XIV and Section 4.2, the Second Amended
Agreement,
as amended, was amended and restated on
September 1, 1999 (the "Third Amended
Agreement") (i) to reflect the admission of
the Series A Preferred Partners (as
defined below), (ii) to incorporate the
Preferred Unit Amendment, (iii) to make
certain changes to the allocations of
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Net Income and Net Loss, (iv) to authorize
the issuance of Preferred Units and
Additional Units from time to time, and (v)
to delete matters of historical
interest.
The Third Amended Agreement also contemplated that the General
Partner
would eventually contribute, directly or
indirectly through nominee agreements,
all its assets to the Partnership, subject
to applicable consents of third
parties or in the case of shopping centers
securing $51 million of securitized
mortgage debt due November 5, 2000, upon
the repayment of such debt, so as to
cause the Partnership to become an
"UPREIT".
In connection with their approval of the Third Amended
Agreement,
pursuant to Section 14.1(a) and Section
4.2, Original Limited Partners holding
95.3% of the Original Limited Partnership
Interests and Additional Limited
Partners holding 97.0% of the Additional
Limited Partnership Interests consented
to amending and restating the Third Amended
Agreement, in the event that the
Partnership became an UPREIT, (i) to
provide for the Units of all Partners
(other than Preferred Units) to be pari
passu with respect to distributions and
to conform the allocations of Net Income
and Net Loss to such revised economic
sharing arrangement, and (ii) to authorize
the issuance of Units to the General
Partner from time to time, subject to the
conditions set forth in Section
4.2(b)(i), in connection with, and as a
result of the Partnership becoming an
UPREIT. Because Section 4.2(b) of this
Agreement provides for the Units held by
the General Partner to mirror one-for-one
the outstanding shares of capital
stock of the General Partner and Section
7.5 prohibits the General Partner from
engaging in business except through or for
the account of the Partnership, these
UPREIT amendments insure that Limited
Partners (other than Preferred Partners)
cannot receive lower distributions than
common shareholders of Regency.
Therefore, these UPREIT amendments do not
adversely affect the Limited Partners.
The Third Amended Agreement provided that, at such time as the
Partnership satisfied the UPREIT criteria
established in the Third Amended
Agreement, the Third Amended Agreement
would be amended and restated by this
Fourth Amended and Restated Agreement
("Fourth Amended Agreement"). One of such
criteria consists of the approval of this
Fourth Amended Agreement by those
Persons (or their transferees) who were
Limited Partners on the date of adoption
of the Third Amended Agreement but had not
then consented to the Third and
Fourth Amended Agreements, so that this
Fourth Amended Agreement will have been
approved by unanimous consent of all
Persons who were Limited Partners on that
date or their transferees (collectively,
the "Preexisting Partners," which term
includes any transferee of a Preexisting
Partner) (such unanimous consent
requirement may be reduced, in Regency's
discretion, to the consent of
Preexisting Partners holding not less than
85% of the outstanding Units held by
the Preexisting Partners). Since the date
of adoption of the Third Amended
Agreement, the holders of at least 95.7%,
but not 100%, of the Units held by the
Preexisting Partners have consented to the
adoption of this Fourth Amended
Agreement. Regency determined that, and by
execution of this Agreement hereby
represents and warrants that, on February
15, 2001, the Partnership satisfied
the UPREIT criteria established in the
Third Amended Agreement for this Fourth
Amended Agreement to be effective, and
Regency has given written notice to such
effect to the Limited Partners and of the
applicability of Section 14.1(g)
herein.
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NOW, THEREFORE, the Third Amended Agreement is hereby amended
and
restated as follows (matters in italics are
agreements with the Original Limited
Partners only).
Article 1
Defined Terms
The following definitions shall be for all purposes, unless
otherwise
clearly indicated to the contrary, applied
to the terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act,
as it
may be amended from time to time, and any
successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership
as a Limited Partner pursuant to Section
4.2 hereof (other than (i) a Preferred
Partner, (ii) the General Partner or (iii)
any Affiliate of the General Partner
other than a Property Affiliate) and who is
shown as such on the books and
records of the Partnership, including the
Persons admitted in connection with
the Partnership's acquisition of assets
from Midland Development Group, Inc. and
certain of its affiliated entities.
"Additional Units" means Units issued to an Additional Limited
Partner.
The distribution rights of the Additional
Units are pari passu with the Original
Limited Partnership Units.
"Adjusted Capital Account" means the Capital Account maintained
for
each Partner as of the end of each
Partnership Year (i) increased by any amounts
which such Partner is obligated to restore
pursuant to any provision of this
Agreement or is deemed to be obligated to
restore pursuant to the penultimate
sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5) and (ii)
decreased by the items described in
Regulations Sections
1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted
Capital Account is intended to comply with
the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner,
the deficit balance, if any, in such
Partner's Adjusted Capital Account as of
the end of the relevant Partnership
Year.
"Adjusted Series A Preferred Units" of a Partner means the number
of
Series A Preferred Units owned by the
Partner multiplied by the quotient
obtained by dividing $50 by $24.25 (the
Value of a Share on June 25, 1998).
"Affiliate" means, with respect to any Person, any Person directly
or
indirectly controlling, controlled by or
under common control with such Person.
"Agreement" means this Fourth Amended and Restated Agreement of
Limited
Partnership, as it may be amended,
supplemented or restated from time to time.
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"Articles of Incorporation" means the Amended and Restated Articles
of
Incorporation of Regency, as filed with the
Florida Department of State, as
further amended or restated from time to
time.
"Assignee" means a Person to whom one or more Partnership Units
have
been transferred in a manner permitted
under this Agreement, but who has not
become a Substituted Limited Partner, and
who has the rights set forth in
Section 11.5.
"Available Cash" means with respect to any period for which
such
calculation is being made:
(a)
all cash revenues and funds received by the Partnership
from whatever source (excluding the proceeds of any Capital
Contribution and excluding Capital Transaction Proceeds) plus
the amount of any reduction (including, without limitation, a
reduction resulting because the General Partner determines
such amounts are no longer necessary) in reserves of the
Partnership, which reserves are referred to in clause (b)(iv)
below;
(b)
less the sum of the following (except to the extent made
with the proceeds of any Capital Contribution and except to the
extent taken into account in determining Capital Transaction
Proceeds):
(i)
all interest, principal and other debt payments
made during such period by the Partnership,
(ii) all
other cash expenditures (including capital
expenditures) made by the Partnership during such period,
(iii)
investments in any entity (including loans made
thereto) to the extent that such investments are not otherwise
described in clauses (b)(i) or (ii), and
(iv) the
amount of any increase in reserves
established during such period which the General Partner
determines is necessary or appropriate in its sole and absolute
discretion.
Notwithstanding the foregoing, Available
Cash shall not include any cash
received or reductions in reserves, or take
into account any disbursements made
or reserves established, after commencement
of the dissolution and liquidation
of the Partnership.
"Business Day" means any day except a Saturday, Sunday or other day
on
which commercial banks in New York City,
New York are authorized or required by
law to close.
"Capital Account" means the Capital Account maintained for a
Partner
pursuant to Section 4.4 hereof.
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"Capital Contribution" means, with respect to any Partner, any
cash,
cash equivalents or the value (as set forth
by separate agreement) of property
which such Partner contributes or is deemed
to contribute to the Partnership
pursuant to Section 4.1, Section 4.2 or
Section 4.5 hereof and which shall be
treated as a contribution to the
Partnership pursuant to Section 721(a) of the
Code.
"Capital Transaction" means a sale, exchange or other
disposition
(other than in liquidation of the
Partnership) or a financing or refinancing by
the Partnership (which shall not include
any loan or financing to the General
Partner as permitted by Section
7.1(a)(iii)) of a Partnership asset or any
portion thereof.
"Capital Transaction Proceeds" means the net cash proceeds of a
Capital
Transaction, after deducting all expenses
incurred in connection therewith and
after application of any proceeds, at the
sole discretion of the General
Partner, toward the payment of any
indebtedness of the Partnership whether or
not secured by the property that is the
subject of that Capital Transaction, the
purchase, improvement or expansion of
Partnership property, or the establishment
of any reserves deemed reasonably necessary
by the General Partner, including
reserves for the purchase, improvement or
expansion of Partnership property.
"Cash Amount" means an amount of cash arrived at by multiplying (i)
the
number of Partnership Units that are the
subject of a Notice of Redemption times
(ii) the Unit Adjustment Factor times (iii)
the Value on the Valuation Date of a
Share.
"Certificate" means the Certificate of Limited Partnership relating
to
the Partnership filed in the office of the
Secretary of State of the State of
Delaware, as amended from time to time in
accordance with the terms hereof and
the Act.
"Code" means the Internal Revenue Code of 1986, as amended. Any
reference herein to a specific section or
sections of the Code shall be deemed
to include a reference to any corresponding
provision of future law.
"Common Stock" means the voting Common Stock, $0.01 par value,
of
Regency.
"Common Units" means the Original Limited Partnership Units,
the
Additional Units and any other Partnership
Interests in the Partnership
hereafter authorized, issued or outstanding
which are entitled to distributions
and to rights upon voluntary or involuntary
liquidation, winding-up or
dissolution only out of any assets
remaining after all Preferred Units have
received the amounts to which they are
entitled.
"Consent" means, except where this Agreement expressly
specifies
otherwise, with respect to Limited Partners
holding any class of Units (other
than Series A Preferred Units), the written
consent or affirmative vote of those
Limited Partners holding a majority of such
Units outstanding at the time in
question. The Consent of the Original
Limited Partners means the written consent
or affirmative vote of the Original Limited
Partners holding a majority of the
Original Limited Partnership Units
outstanding at the time in question. Except
where this Agreement expressly specifies
otherwise, the Consent of the Limited
Partners means the
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written consent or affirmative vote of the
Limited Partners holding a majority
of the Original Limited Partnership Units
and Additional Units outstanding at
the time in question, treating such Units
as a single class, and shall exclude
any Partners holding Preferred Units unless
this Agreement is amended to
expressly provide for a particular class or
series of Preferred Units to vote
together with the holders of Common Units
as a single class. "Consent of the
Limited Partners" shall be determined
excluding any Units held by the General
Partner or any of its Affiliates other than
a Property Affiliate, who shall have
no right to vote on any matter for which
the consent of the Limited Partners is
solicited.
"Contribution Agreement" means that certain Contribution Agreement
and
Plan of Reorganization, dated as of
February 10, 1997, by and among Branch
Properties, L.P., Branch Realty Inc. and
Regency.
"Depreciation" means for each Partnership Year or other period,
an
amount equal to the federal income tax
depreciation, amortization, or other cost
recovery deduction allowable with respect
to an asset for such year or other
period, except that if the Gross Asset
Value of an asset differs from its
adjusted basis for federal income tax
purposes at the beginning of such year or
other period, Depreciation shall be an
amount which bears the same ratio to such
beginning Gross Asset Value as the federal
income tax depreciation,
amortization, or other cost recovery
deduction for such year bears to such
beginning adjusted tax basis; provided,
however, that if the federal income tax
depreciation, amortization, or other cost
recovery deduction for such year is
zero, Depreciation shall be determined with
reference to such beginning Gross
Asset Value using any reasonable method
selected by the General Partner, except
that in the case of a zero basis property
contributed by an Original Limited
Partner, such property shall be depreciated
for book purposes over a period of
not more than ten years.
"Event of Dissolution" has the meaning set forth in Section
13.1.
"Excess Units" has the meaning set forth in Section
4.5(g)(i)(C).
"Exchange Notice" has the meaning set forth in Section
4.5(g)(ii)(A).
"Exchange Price" has the meaning set forth in Section
4.5(g)(i)(A).
"First Closing" has the meaning set forth in the Contribution
Agreement.
"General Partner" means Regency Centers Corporation (formerly
Regency
Realty Corporation) or its permitted
successors as a general partner of the
Partnership.
"General Partner Units" means the Partnership Interest in the
Partnership owned by the General Partner or
any Affiliate other than a Property
Affiliate but (i) shall exclude any Series
A Preferred Units and any other
Preferred Units issued in compliance with
this Agreement and (ii) also shall
exclude any other types of Common Units
issued to the General Partner pursuant
to Section 4.2(b)(i) which do not mirror
the Common Stock. Pursuant to this
Fourth Amended Agreement, all Class B Units
(as defined in the Third Amended
Agreement) have been reclassified as
General Partner Units.
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"General Partnership Interest" means a Partnership Interest held by
a
General Partner that is a general
partnership interest.
"Gross Asset Value" means with respect to any asset, the
asset's
adjusted basis for federal income tax
purposes, except as follows:
(a)
The initial Gross Asset Value of any asset contributed
by a Partner to the Partnership shall be the fair market value
(exclusive of liabilities) of such asset, as determined by the
General
Partner,
unless required to be determined in some other manner herein;
(b)
The Gross Asset Values of all Partnership assets shall
be adjusted to equal their respective fair market values (exclusive
of
liabilities), as determined by the General Partner, as of the
following
times: (i) the acquisition of an additional interest in the
Partnership
by any new or existing Partner in exchange for more than a de
minimis
capital contribution; (ii) the distribution by the Partnership to
a
Partner of more than a de minimis amount of property as
consideration
for an interest in the Partnership; and (iii) the liquidation of
the
Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g); provided, however, that adjustments pursuant
to
clauses (i) and (ii) above shall be made only if the General
Partner
reasonably determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the
Partners
in the Partnership;
(c)
The Gross Asset Value of any Partnership asset
distributed to any Partner shall be adjusted to equal the fair
market
value (exclusive of liabilities) of such asset on the date of
distribution as determined by the General Partner; and
(d)
The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the
adjusted
basis of such assets pursuant to Code Section 734(b) or Code
Section
743(b), but only to the extent that such adjustments are taken
into
account in determining Capital Accounts pursuant to Regulations
Section
1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values
shall
not be adjusted pursuant to this paragraph (d) to the extent
the
General Partner determines that an adjustment pursuant to paragraph
(b)
above is necessary or appropriate in connection with a transaction
that
would otherwise result in an adjustment pursuant to this paragraph
(d).
If the Gross Asset Value of an asset has
been determined or adjusted pursuant to
paragraphs (a), (b), or (d) above, such
Gross Asset Value shall thereafter be
adjusted by the Depreciation taken into
account with respect to such asset for
purposes of computing profits and
losses.
"Immediate Family" means, with respect to any natural Person,
such
natural Person's spouse, parents,
descendants, nephews, nieces, brothers and
sisters and trusts for the benefit of any
of the foregoing.
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"Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability
or entry by a court of competent
jurisdiction adjudicating him incompetent
to manage his Person or his estate;
(ii) as to any corporation which is a
Partner, the filing of a certificate of
dissolution, or its equivalent, for the
corporation or the revocation of its
charter; (iii) as to any partnership which
is a Partner, the dissolution and
commencement of winding up of the
partnership; (iv) as to any estate which is a
Partner, the distribution by the fiduciary
of the estate's entire interest in
the Partnership; (v) as to any trustee of a
trust which is a Partner, the
termination of the trust (but not the
substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such
Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to
have occurred when the Partner (a)
makes an assignment for the benefit of
creditors, (b) files a voluntary petition
in bankruptcy, (c) is adjudged a bankrupt
or insolvent, or has entered against
him an order of relief in any bankruptcy or
insolvency proceeding, (d) files a
petition or answer seeking for himself any
reorganization, arrangement,
composition, readjustment, liquidation,
dissolution or similar relief under any
statute, law or regulation, (e) files an
answer or other pleading admitting or
failing to contest the material allegations
of a petition filed against him in
any proceeding of this nature, (f) seeks,
consents to or acquiesces in the
appointment of a trustee, receiver or
liquidator of the Partner or of all or any
substantial part of his properties, (g) is
the debtor in any proceeding seeking
reorganization, arrangement, composition,
readjustment, liquidation, dissolution
or similar relief under any statute, law or
regulation, which has not been
dismissed within 120 days after the
commencement thereof, or (h) is the subject
of a proceeding whereby a trustee, receiver
or liquidator is appointed for the
Partner or all or any substantial part of
its properties without the Partner's
consent or acquiescence of a trustee,
receiver or liquidator, and such
appointment has not been vacated or stayed
within 90 days after the appointment
or such appointment is not vacated within
90 days after the expiration of any
such stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by
reason of his status as (a) the General
Partner, (b) a Limited Partner or (c) a
director or officer of the Partnership or a
Partner, and (ii) such other Persons
(including Affiliates of the General
Partner or the Partnership) acting in good
faith on behalf of the Partnership as
determined by the General Partner in its
good faith judgment other than for any
action by such Person involving fraud,
willful misconduct or gross negligence.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United
States.
"Junior Units" has the meaning set forth in Section 4.5(c)(iv).
"Limited Partner" means any Person named as a Limited Partner
in
Exhibit A attached hereto, as such Exhibit
may be amended from time to time in
accordance with the terms of this
Agreement, or any Substituted Limited Partner,
Preferred Partner or Additional Limited
Partner, in such Person's capacity as a
Limited Partner in the Partnership.
"Limited
Partnership Interest" means a Partnership Interest of a
Limited Partner in the Partnership
representing a fractional part of the
Partnership Interests of all Limited
Partners
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and includes any and all benefits to which
the holder of such a Partnership
Interest may be entitled as provided in
this Agreement, together with all
obligations of such Person to comply with
the terms and provisions of this
Agreement. A Limited Partnership Interest
may be expressed as a number of
Preferred Units, Common Units or General
Partner Units as provided herein.
"Liquidating Transaction" means any sale or other disposition of
all or
substantially all of the assets of the
Partnership following the adoption by the
General Partner of a plan of liquidation
for the Partnership.
"Liquidator" has the meaning set forth in Section 13.2.
"Net Income" and "Net Loss" means for any taxable period, an
amount
equal to the Partnership's taxable income
or loss for such taxable period
determined in accordance with Section
703(a) of the Code (for this purpose all
items of income, gain, loss or deduction
required to be stated separately
pursuant to Section 703(a)(1) of the Code
shall be included in taxable income or
loss), with the following adjustments:
(a)
Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income,
gain,
loss and deduction shall be made without regard to any election
under
Section 754 of the Code which may be made by the Partnership;
provided,
that the amounts of any adjustments to the adjusted bases of the
assets
of the Partnership made pursuant to Section 734 of the Code as a
result
of the distribution of
property by the Partnership to a Partner (to
the extent that such adjustments have not previously been reflected
in
the Partners' Capital Accounts) shall be reflected in the
Capital
Accounts of the Partners in the manner and subject to the
limitations
prescribed in Regulations Section 1.704-1(b)(2)(iv)(m).
(b)
Any income of the Partnership that is exempt from
federal income tax and not otherwise taken into account in
computing
Net Income or Net Loss pursuant to this definition shall be added
to
such Net Income or Net Loss.
(c)
The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items
described
in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not
includable
in gross income or are neither currently deductible nor capitalized
for
federal income tax purposes.
(d)
Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if
the
adjusted basis of such property as of such date of disposition
were
equal in amount to the Partnership's Gross Asset Value with respect
to
such property as of such date.
(e)
In lieu of the depreciation, amortization, and other
cost recovery deductions taken into account in computing such
taxable
income or loss,
there shall be taken into account Depreciation for such
fiscal year.
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(f)
In the event the Gross Asset Value of any Partnership
asset is adjusted pursuant to clause (b) or (c) of the
definition
thereof, the amount of any such adjustment shall be taken into
account
as gain or loss from the disposition of such asset for purposes
of
computing Net Income and Net Loss.
(g)
Any items specially allocated under Section 6.2 and
Section 6.3 hereof shall not be taken into account.
Solely for purposes of allocating Net Income or Net Loss in any
Fiscal
Year to the holders of the Series A
Preferred Units, items of Net Income and Net
Loss, as the case may be, shall not include
Depreciation with respect to
properties (or groupings of properties
selected by the General Partner using any
method determined by it to be reasonable)
that are "ceiling limited" in respect
of the holders of the Series A Preferred
Units. For purposes of the preceding
sentence, Partnership property shall be
considered ceiling limited in respect of
a holder of Series A Preferred Units if
Depreciation attributable to such
Partnership property which would otherwise
be allocable to such Partner, without
regard to this paragraph, exceeded
depreciation determined for federal income
tax purposes attributable to such
Partnership property which would otherwise be
allocated to such Partner by more than
5%.
"Non-U.S. Person" means with respect to the acquisition, ownership
or
transfer of any Partnership Interest or
Shares, the direct or indirect
acquisition or ownership thereof by or a
transfer that results in the direct or
indirect ownership thereof by any Person
who is not (i) a citizen or resident of
the United States, (ii) a partnership or
corporation created or organized in the
United States or under the laws of the
United States or any state therein
(including the District of Columbia), or
(iii) a foreign estate or trust within
the meaning of Section 7701(a)(31) of the
Code.
"Nonrecourse Deductions" has the meaning set forth in
Regulations
Section 1.704-2(b)(1), and the amount of
Nonrecourse Deductions for a
Partnership Year shall be determined in
accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption, Security
Agreement and Investor Questionnaire
substantially in the form of Exhibit B to
this Agreement, as it may be amended from
time to time by the General Partner
effective upon written notice to the
Limited Partners.
"Original Limited Partner" means the Partners who received
Original
Limited Partnership Units distributed by
Branch Properties, L.P. to its
respective partners pursuant to the
Contribution Agreement. The Original Limited
Partners are listed on Exhibit A attached
hereto. The term "Original Limited
Partner" shall also include any permitted
transferee of an Original Limited
Partner pursuant to Section 11.3 other than
(i) the General Partner or (ii) any
Affiliate of the General Partner other than
a Property Affiliate.
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<PAGE>
"Original Limited Partnership Unit" means a Partnership Unit issued
to
an Original Limited Partner. The term
"Original Limited Partnership Unit" does
not include or refer to any Preferred
Units, Additional Units or General Partner
Units.
"Parity Preferred Units" means any class or series of
Partnership
Interests of the Partnership now or
hereafter authorized, issued or outstanding
expressly designated by the Partnership to
rank on a parity with Series A
Preferred Units with respect to
distributions or rights upon voluntary or
involuntary liquidation, winding-up or
dissolution of the Partnership, or both,
as the context may require, whether or not
the dividend rates, dividend payment
dates or redemption or liquidation prices
per Unit or conversion rights or
exchange rights shall be different from
those of the Series A Preferred Units.
"Partner" means a General Partner or a Limited Partner, and
"Partners"
means the General Partner and the Limited
Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner
Nonrecourse Debt, equal to the Partnership
Minimum Gain that would result if
such Partner Nonrecourse Debt were treated
as a Nonrecourse Liability,
determined in accordance with Regulations
Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in
Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the
amount of Partner Nonrecourse
Deductions with respect to a Partner
Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the
rules of Regulations Section
1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act
and
pursuant to this Agreement, and any
successor thereto.
"Partnership Interest" means an ownership interest in the
Partnership
representing a Capital Contribution and
includes any and all benefits to which
the holder of such a Partnership Interest
may be entitled as provided in this
Agreement, together with all obligations of
such Person to comply with the terms
and provisions of this Agreement. A
Partnership Interest may be expressed as a
number of Preferred Units, Original Limited
Partnership Units, Additional Units,
General Partner Units or any other type of
Unit permitted by Section 4.2(b)(i).
"Partnership Minimum Gain" has the meaning set forth in
Regulations
Section 1.704-2(b)(2), and the amount of
Partnership Minimum Gain, as well as
any net increase or decrease in Partnership
Minimum Gain, for a Partnership Year
shall be determined in accordance with the
rules of Regulations Section
1.704-2(d).
"Partnership Record Date" means the record date established by
the
General Partner for the distribution of
Available Cash pursuant to Section 5.1
hereof to Partners holding
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Common Units, which record date shall be
the same as the record date established
by Regency for a dividend to the holders of
Common Stock.
"Partnership Year" means the fiscal year of the Partnership,
which
shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in
the
Partnership as determined by dividing (i)
the Adjusted Series A Preferred Units,
Common Units and General Partner Units
owned by such Partner by (ii) the total
number of Adjusted Series A Preferred
Units, Common Units and General Partner
Units then outstanding and as specified in
Exhibit A attached hereto, as such
Exhibit may be amended from time to time in
accordance with the terms of this
Agreement.
"Person" means an individual or a corporation, limited
liability
company, partnership, trust, unincorporated
organization, association or other
entity.
"Pledged Units" means any Units pledged by a Limited Partner to
the
Partnership or the General Partner, whether
pursuant to this Agreement or by
separate agreement.
"Preexisting Partner" has the meaning set forth at the outset of
this
Agreement. Preexisting Partner shall not
include any Person who is not a
transferee of a Preexisting Partner and who
first became a Limited Partner after
September 1, 1999.
"Preferred Partner" means a Partner who holds Preferred Units.
"Preferred Unit Distribution Payment Date" has the meaning set
forth in
Section 4.5(c)(i).
"Preferred Unit Partnership Record Date" has the meaning set forth
in
Section 4.5(c)(i).
"Preferred Units" means the Series A Preferred Units and any
Partnership Interests in the Partnership
hereafter authorized, issued or
outstanding from time to time pursuant to
Section 14.1(g)(ii) expressly
designated by the Partnership to rank
senior to the Common Units and General
Partner Units with respect to distributions
or rights upon voluntary or
involuntary liquidation, winding-up or
dissolution of the Partnership, or both.
"Property Affiliate" means a Person, other than any Subsidiary
of
Regency, who contributed property in
exchange for a Limited Partnership Interest
and who may be deemed an Affiliate of the
General Partner, e.g., because such
person is a director of Regency or owns a
significant number of Units or shares
of Regency stock.
"Prime Rate" means, on any date, a fluctuating rate of interest
per
annum equal to the rate of interest most
recently established by Wachovia Bank
of Georgia, N.A. at its Atlanta, Georgia
office (or, at the General Partner's
election, another major lender to the
Partnership,
12
<PAGE>
at the office with which the Partnership
deals), as its prime rate of interest
for loans in United States dollars.
"PTP" means a "publicly traded partnership" within the meaning
of
Section 7704 of the Code.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment
required by Section 734 or Section
743 of the Code) upon the disposition of
any property or asset of the
Partnership, which gain is characterized as
ordinary income because it
represents the recapture of deductions
previously taken with respect to such
property or asset.
"Recourse Liabilities" has the meaning set forth in Regulations
Section
1.752-1(a)(1).
"Redeeming Partner" means a Limited Partner who duly exercised
a
Redemption Right.
"Redemption Amount" means the Share Amount or, as determined by
the
General Partner in its sole and absolute
discretion, the Cash Amount or any
combination of the Share Amount and the
Cash Amount.
"Redemption Right" with respect to the Original Limited Partners
has
the meaning set forth in Section 8.6(a)
hereof and with respect to Additional
Limited Partners means any right granted to
such Partners by separate agreement
of the Partnership to redeem such Partners'
Limited Partnership Interests for
Common Stock and/or cash.
"Regency" means Regency Centers Corporation (formerly Regency
Realty
Corporation), a Florida corporation.
"Regulations" means the Income Tax Regulations, including the
Temporary
Regulations, promulgated under the Code, as
such regulations may be amended from
time to time (including corresponding
provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856 of
the
Code.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Capital" means Security Capital U.S. Realty, a
Luxembourg
corporation, Security Capital Holdings, S.A., a
Luxembourg corporation, and
their Affiliates.
"Series A Preferred Partner" means the Limited Partners who
received
Series A Preferred Units and also include
any permitted transferee of a Series A
Preferred Partner pursuant to Section 11.3
and the General Partner or any
Affiliate of Regency upon exchange or
redemption of the Series A Preferred Units
pursuant to Section 4.5.
"Series A Preferred Stock" has the meaning set forth in Section
4.5(g)(i)(A).
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<PAGE>
"Series A Preferred Units" means the Partnership Interest in
the
Partnership issued pursuant to Section 4.2
and Section 4.5 hereof representing
8.125% Series A Cumulative Redeemable
Preferred Units. The term "Series A
Preferred Unit" does not include or refer
to any Original Limited Partnership
Units, Additional Units or General Partner
Units.
"Series A Priority Return" means an amount equal to 8.125% per
annum,
determined on the basis of a 360 day year
of twelve 30 day months (or actual
days for any month which is shorter than a
full monthly period), cumulative to
the extent not distributed for any given
distribution period, of the stated
value of $50 per Series A Preferred Unit,
commencing on the date of issuance of
such Series A Preferred Unit.
"Series A Redemption Price" has the meaning set forth in
Section
4.5(e)(i).
"Share Amount" means a number of Shares arrived at by multiplying
(i)
the number of Partnership Units that are
the subject of a Notice of Redemption
times (ii) the Unit Adjustment Factor.
"Shares" means (i) the Common Stock of Regency, and (ii) any
securities
issuable with respect to Shares as a result
of the application of Section
11.2(b).
"Specified Redemption Date" means the later of (i) 5:00 p.m.
Eastern
time, on the date specified by the
Redeeming Partner in such Partner's Notice of
Redemption, or (ii) the close of business,
Eastern time, on the first Business
Day after the date in clause (i) if such
date is not a Business Day, or (iii)
5:00 p.m. Eastern time, on the tenth
Business Day after receipt by the General
Partner of a Notice of Redemption.
"Subsidiary" means, with respect to any Person, any corporation
or
other entity of which a majority of (i) the
voting power of the voting equity
securities or (ii) the outstanding equity
interests is owned, directly or
indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as
a
Limited Partner to the Partnership pursuant
to Section 11.4.
"Transaction" has the meaning set forth in Section 11.2(b).
"Unit", "Limited Partnership Unit" or "Partnership Unit" means
the
Partnership Interest in the Partnership to
be issued to and held by the Limited
Partners pursuant to Section 4.1, Section
4.2 or Section 4.5. The ownership of
Units may be evidenced by such form of
certificate as the General Partner may
determine, in its discretion, and the
transfer of the Units evidenced by such
certificates shall be governed by Article
11.
"Unit Adjustment Factor" means initially 1.0; provided that, in
order
to prevent dilution of the Redemption
Right, in the event that Regency (i)
declares or pays a dividend on its
outstanding Common Stock in Common Stock or
makes a distribution to all holders of its
outstanding Common Stock in Common
Stock, (ii) subdivides its outstanding
Common Stock, or (iii) combines its
outstanding Common Stock into a smaller
number of shares, except as
14
<PAGE>
provided below, the Unit Adjustment Factor
shall be adjusted by multiplying the
Unit Adjustment Factor by a fraction, the
numerator of which shall be the number
of Shares issued and outstanding on the
record date (assuming for such purposes
that such dividend, distribution,
subdivision or combination has occurred as of
such time), and the denominator of which
shall be the actual number of Shares
(determined without the above assumption)
issued and outstanding on the record
date for such dividend, distribution,
subdivision or combination. Any adjustment
to the Unit Adjustment Factor shall become
effective immediately after the
effective date of such event retroactive to
the record date, if any, for such
event. If the General Partner (i) makes a
distribution to all holders of
outstanding Units in Units, (ii) subdivides
the outstanding Units, or (iii)
combines the outstanding Units into a
smaller number of Units at the same time
as a distribution, subdivision or
combination, as the case may be, occurs with
respect to the Common Stock, in such manner
as to prevent enlargement or
dilution of the right to redeem one Unit
for one share of Common Stock, then no
adjustment shall be made to the Unit
Adjustment Factor, and such distribution,
subdivision or combination of Units shall
take the place of an adjustment to the
Unit Adjustment Factor so as to preserve
the one-Share-for-one Unit equivalency
for purposes of any Redemption Right.
"Valuation Date" means the date of receipt by the General Partner
of a
Notice of Redemption or, if such date is
not a Business Day, the first Business
Day thereafter.
"Value" means, with respect to a Share, the average of the daily
market
price of the Common Stock for the ten (10)
consecutive trading days immediately
preceding the Valuation Date. The market
price for each such trading day shall
be: (i) if the Common Stock is listed or
admitted to trading on any securities
exchange or the Nasdaq National Market, the
closing price, regular way, on such
day, or if no such sale takes place on such
day, the average of the closing bid
and asked prices on such day, (ii) if the
Common Stock is not listed or admitted
to trading on any securities exchange or
the Nasdaq National Market, the last
reported sale price on such day or, if no
sale takes place on such day, the
average of the closing bid and asked prices
on such day, as reported by a
reliable quotation source designated by the
General Partner, or (iii) if the
Common Stock is not listed or admitted to
trading on any securities exchange or
the Nasdaq National Market and no such last
reported sale price or closing bid
and asked prices are available, the average
of the reported high bid and low
asked prices on such day, as reported by a
reliable quotation source designated
by the General Partner, or if there shall
be no bid and asked prices on such
day, the average of the high bid and low
asked prices, as so reported, on the
most recent day (not more than 10 days
prior to the date in question) for which
prices have been so reported; provided,
that if there are no bid and asked
prices reported during the 10 days prior to
the date in question, the Value of
the Common Stock shall be determined by
Regency's board of directors acting in
good faith on the basis of such quotations
and other information as it
considers, in its reasonable judgment,
appropriate.
15
<PAGE>
Article 2
Organizational Matters
Section 2.1 Organization;
Application of Act.
(a)
Organization and Formation of Partnership. The
Partnership has been formed as a limited partnership under the Act.
The
General Partner is the sole general partner and the Limited
Partners
are the
sole limited partners of the Partnership.
(b)
Application of Act. The Partnership is a limited
partnership pursuant to the provisions of the Act and upon the
terms
and conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of
the
Partners and the administration and termination of the
Partnership
shall be governed by the Act. No Partner has any interest in
any
Partnership property, and the Partnership Interest of each
Partner
shall be personal property for all purposes.
Section 2.2 Name. The name of the
Partnership is Regency Centers,
L.P. The Partnership's business may be
conducted under any other name or names
deemed advisable by the General Partner,
including the name of the General
Partner or any Affiliate thereof. The words
"Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be
included in the Partnership's name
where necessary for the purposes of
complying with the laws of any jurisdiction
that so requires. The General Partner in
its sole and absolute discretion may
change the name of the Partnership at any
time and from time to time and shall
promptly notify the Limited Partners of
such change; provided, that the name of
the Partnership may not be changed to
include the name, or any variant thereof,
of any Limited Partner without the written
consent of that Limited Partner.
Section 2.3 Registered Office and
Agent; Principal Office. The
address of the registered office of the
Partnership in the State of Delaware is
located at 1013 Centre Road, City of
Wilmington, County of New Castle, Delaware
19801, and the registered agent for service
of process on the Partnership in the
State of Delaware at such registered office
is Corporation Service Company. The
principal office of the Partnership is 121
W. Forsyth Street, Suite 200,
Jacksonville, Florida 32202, or such other
place as the General Partner may from
time to time designate by notice to the
Limited Partners. The Partnership may
maintain offices at such other place or
places within or outside the State of
Florida as the General Partner deems
advisable.
Section 2.4 Term. The term of the
Partnership shall commence on the
date hereof and shall continue until
December 31, 2097, unless it is dissolved
sooner pursuant to the provisions of
Article 13 or as otherwise provided by law.
Article 3
Purpose
Section 3.1 Purpose and Business.
The purpose and nature of the
business to be conducted by the Partnership
is (i) to conduct any business that
may be lawfully conducted by a
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<PAGE>
limited partnership organized pursuant to
the Act and in connection therewith to
sell or otherwise dispose of Partnership
assets, (ii) to enter into any
partnership, joint venture or other similar
arrangement to engage in any of the
foregoing or the ownership of interests in
any entity engaged in any of the
foregoing and (iii) to do anything
necessary or incidental to the foregoing
which, in each case, is not in breach of
this Agreement; provided, however, that
each of the foregoing clauses (i), (ii),
and (iii) shall be limited and
conducted in such a manner as to permit
Regency at all times to be classified as
a REIT, unless Regency provides notice to
the Partnership that it intends to
cease or has ceased to qualify as a
REIT.
Section 3.2 Powers. The
Partnership is empowered to do any and all
acts and things necessary, appropriate,
proper, advisable, incidental to or
convenient for the furtherance and
accomplishment of the purposes and business
described herein and for the protection and
benefit of the Partnership;
provided, however, that the Partnership
shall not take, or refrain from taking,
any action which, in the judgment of the
General Partner, (i) could adversely
affect the ability of Regency to continue
to qualify as a REIT, unless Regency
provides notice to the Partnership that it
intends to cease or has ceased to
qualify as a REIT, (ii) could subject
Regency to any additional taxes under
Section 857 or Section 4981 of the Code or
(iii) could violate any law or
regulation of any governmental body or
agency having jurisdiction over the
General Partner, Regency or their
securities, unless such action (or inaction)
shall have been specifically consented to
by the General Partner in writing.
Article 4
Capital Contributions; Issuance Of Units;
Capital Accounts
Section 4.1 Capital Contributions
of the Partners.
(a)
Initial Capital Contributions of Original Limited
Partners. Branch Properties, L.P. has contributed property to
the
Partnership which shall be deemed to have been contributed by
its
respective partners as Original Limited Partners. The Original Limited
Partners who have not exercised a Redemption Right with respect to
all
their Units are set forth on Exhibit A, together with their
respective
number of Units and their respective Percentage Interests.
Percentage
Interests of the Original Limited Partners shall be adjusted in
Exhibit
A from time to time by the General Partner to the extent permitted
by
this Agreement to reflect accurately redemptions, Capital
Contributions, the issuance of Additional Units or General
Partner
Units, or similar events having an effect on a Partner's
Percentage
Interest or number of Units.
(b)
Initial Capital Contributions of Additional Limited
Partners. Midland Development Group, Inc. and certain of its
affiliated
entities and PP Center Limited have contributed property to the
Partnership which shall be deemed to have been contributed by
their
respective equity owners as Additional Limited Partners. Such
Additional Limited Partners who have not exercised a Redemption
Right
with respect to all their Units are set forth on Exhibit A,
together
with their respective number of Units and their respective
Percentage
Interests.
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<PAGE>
(c)
Capital Contributions by General Partner. The General
Partner has contributed cash or other assets to the Partnership
in
exchange for the number of General Partner Units set forth on
Exhibit
A. The General Partner also owns the number of General Partner
Units
set forth on Exhibit A which were acquired by Regency upon the
exchange
by Regency of Shares pursuant to the exercise by former Limited
Partners of
Redemption Rights or were issued pursuant to Section
4.2(b).
(d)
Capital Contributions of Series A Preferred Partners.
The Series A Preferred Partners have contributed cash to the
Partnership in the amount of $50 per Series A Preferred Unit.
The
distribution rights for the Series A Preferred Units shall be
senior to
the distribution rights of the Original Limited Partnership Units,
the
Additional Units, the General Partner Units and any other Common
Units.
The number of Series A Preferred Units issued to the Series A
Preferred
Partners is set forth on Exhibit A.
(e)
Additional Capital Contributions or Assessments. No
Partner shall be assessed or be required to contribute additional
funds
or other property to the Partnership, except for any such amounts
which
a Limited Partner may be obligated to repay under Section 5.3
or
Section 13.4. Any
additional funds required by the Partnership, as
determined by the General Partner in its reasonable business
judgment, may, at the option of the General Partner and without
an
obligation to do so, be contributed by the General Partner as
additional Capital Contributions. If and as the General Partner or
any
other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive Additional Units,
General
Partner Units or other Partnership Interests, subject to the
provisions
of Section 4.2 and Section 4.5, and such Partner's Capital
Account
shall be adjusted as provided in Section 4.4.
(f)
Return of Capital Contributions. Except as otherwise
expressly provided herein, the Capital Contribution of each
Partner
will be returned to that Partner only in the manner and to the
extent
provided in Article 5 and Article 13 hereof, and no Partner may
withdraw from the Partnership or otherwise have any right to demand
or
receive the return of its Capital Contribution to the Partnership
(as
such), except as specifically provided herein. Under circumstances
requiring a return of any Capital Contribution, no Partner shall
have
the right to receive property other than cash, except as
specifically
provided herein. No
Partner shall be entitled to interest on any
Capital Contribution or Capital Account notwithstanding any
disproportion therein as between the Partners. Except as specifically
provided herein, the General Partner shall not be liable for the
return
of any portion of the Capital Contribution of any Limited Partner,
and
the return of such Capital Contributions shall be made solely
from
Partnership assets.
(g)
Liability of Limited Partners. No Limited Partner shall
have any further personal liability to contribute money to, or
in
respect of, the liabilities or the obligations of the Partnership,
nor
shall any Limited Partner be personally liable for any obligations
of
the Partnership, except as otherwise provided in Section 4.1(e) or
in
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<PAGE>
the Act. No Limited Partner shall be required to make any
contributions
to the capital of the Partnership other than its Capital
Contribution.
Section 4.2 Issuances of
Additional Partnership Interests.
(a)
Limitations. Separate
agreements relating to the
admission of Additional Limited Partners set forth the provisions,
if
any, upon which any Additional Units shall be issued to
Additional
Limited Partners in the form of earn-out or as consideration
for
additional assets to be contributed by such Additional Limited
Partners
to the Partnership.
The General Partner shall cause the earn-out
Additional Units to be
issued to the Additional Limited Partners
entitled to receive the same, and shall cause the amendment of
this
Agreement to reflect the issuance of any such Additional Units.
Subject to the
restrictions set forth in Section 4.2(b) and in Section
4.5(f)(ii), the General Partner is hereby authorized to cause
the
Partnership at any time or from time to time to issue to the
Partners
or to other Persons such Partnership Interests in one or more
classes,
or one or more series
of any such classes, with such designations,
preferences and relative, participating, optional or other
special
rights, powers and duties, and for such consideration as shall
be
determined by the General Partner in its sole and absolute
discretion,
subject to Delaware law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction
and
credit to each such class or series of Partnership Interests, (ii)
the
right of each such class or series of Partnership Interests to share
in Partnership distributions, and (iii) the rights of each such
class
or series of Partnership Interests upon dissolution and liquidation
of
the Partnership.
(b)
Consent Granted by Limited Partners for Certain
Issuances.
(i)
Issuance of Additional Units to General Partner.
As a condition to the effectiveness of this Fourth Amended
Agreement, the Partnership shall:
(A)
issue to the General Partner in exchange
for the assets contributed by it additional Units such
that (i) the total number of General Partner Units held
by the General Partner equals the total number of Shares
of Common Stock then outstanding, and (ii) additional
Limited Partnership Interests are issued in the same
number as, and having designations, preferences and
other rights substantially similar to the
designations, preferences and other rights of other
classes of equity of the General Partner then
outstanding, whether consisting of preferred stock or
special common stock; and
(B)
redeem and cancel Units previously
issued to the General Partner if and to the extent
necessary in order that there shall be (i) a one-to-one
equivalency between the number of shares of Common
Stock outstanding and the number of General Partner
Units outstanding, and (ii) (subject to Section
14.1(g)(ii), if applicable, in the case of the
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<PAGE>
issuance of Preferred Units) a one-to-one equivalency
between the number of shares of other classes of
equity of the General Partner outstanding and the
number of other classes of Units outstanding.
Thereafter, the Partnership may issue Partnership Interests to
the General Partner in the same number and having
designations, preferences and other rights substantially
similar to the designations, preferences and other rights of,
shares issued by the General Partner provided that:
(A)
General Partner Units shall be issued to
match
shares of Common Stock issued by the General
Partner; and
(B)
The General Partner shall comply with
the following in connection with any such issuance of
Units to the General Partner:
(1)
The General Partner shall have
determined in good faith that the issuance of the
matching shares, and the price thereof, are in the best
interests of the General Partner and the Partnership;
(2)
Without limiting clause (1), in
the case of the issuance of shares to employees,
directors or independent contractors of the General
Partner or any Subsidiary at a price less than their
fair market value, the compensation committee of the
General Partner's Board of Directors shall reasonably
determine that such issuance is for the benefit of
the Partnership's business or such issuance shall be
pursuant to an incentive plan approved by the
compensation committee and adopted by the General
Partner;
(3)
The General Partner shall
contribute the net proceeds to the Partnership from the
issuance of the matching shares, including assets
acquired in exchange for shares and the exercise price
received upon the exercise of options; and
(4)
In the case of the issuance of
shares upon the conversion of convertible securities
issued by the General Partner, the General Partner shall
contribute or shall have previously contributed to the
Partnership the net proceeds from the issuance of
such convertible securities.
The cost of issuance of equity the net proceeds of which are
so contributed by the General Partner to the Partnership shall
be deemed a capital contribution to, and a cost of, the
Partnership.
(c)
Certain Issuances in the Nature of Stock Split. Nothing
herein shall prohibit the General Partner from issuing Units pro
rata
to the holders of existing Units
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<PAGE>
in lieu of adjusting the Unit Adjustment Factor in connection with
a
stock split, stock dividend or similar event with respect to the
Common
Stock.
Section 4.3 No Preemptive Rights.
No Person shall have any
preemptive, preferential or other similar
right with respect to (i) additional
Capital Contributions or loans to the
Partnership or (ii) issuance or sale of
any Partnership Interests.
Section 4.4 Capital Accounts of
the Partners.
(a) General. The Partnership shall maintain for each Partner a
separate Capital Account in accordance with the rules of
Regulations
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased
by
(i) the amount of all Capital Contributions made by such Partner to
the
Partnership pursuant to this Agreement, (ii) all items of
Partnership
income and gain (including income and gain exempt from tax)
allocated
to such Partner pursuant to Section 6.1 and Section 6.2 of this
Agreement, and (iii) the amount of any Partnership liabilities
assumed
by such Partner or which are secured by any property distributed
to
such Partner, and decreased by (x) the amount of cash or Gross
Asset
Value of all actual and deemed distributions of cash or property
made
to such Partner
pursuant to this Agreement, (y) all items of
Partnership deduction and loss allocated to such Partner pursuant
to
Section 6.1 and Section 6.2 of this Agreement, and (z) the amount
of
any liabilities of such Partner assumed by the Partnership or which
are
secured by any property contributed by such Partner to the
Partnership.
Additional Capital Contributions shall be deemed to be made by
reason
of the issuance, and the Additional Limited Partner's Capital
Account
shall be adjusted by an amount equal to the agreed value (as set
forth
by separate agreement), of additional Partnership Interests issued
to
an Additional Limited Partner pursuant to any earn-out provisions
in
the agreement governing such Additional Limited Partner's admission
to
the Partnership. Any such additional Capital Contributions shall
be
allocated to the items of contributed property contributed by each
such
Additional Limited Partner in proportion to their book values at
the
time of issuance of the additional Partnership Interests.
(b)
Transfers of Partnership Units. A transferee of a
Partnership Interest shall succeed to a pro rata portion of the
Capital
Account of the transferor.
(c)
Modification by General Partner. The provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended
to comply with Regulations Section 1.704-1(b), and shall be
interpreted
and applied in a manner consistent with such Regulations. In the
event
the General Partner shall determine that it is prudent to modify
the
manner in which the Capital Accounts, or any debits or credits
thereto
(including, without limitation, debits or credits relating to
liabilities which are secured by contributed or distributed
property or
which are assumed by the Partnership, the General Partner, or
any
Limited Partners), are computed in order to comply with such
Regulations, the General Partner may make such modification
without
regard to Article 14 of this Agreement. The General Partner also
shall
(i)
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<PAGE>
make any adjustments that are necessary or appropriate to
maintain
equality between the Capital Accounts of the Partners and the
amount of
Partnership capital reflected on the Partnership's balance sheet,
as
computed for book purposes, in accordance with Regulations
Section
1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications
in
the event unanticipated events might otherwise cause this Agreement
not
to comply with Regulations Section 1.704-1(b).
Section 4.5 Issuance of Series A
Preferred Units. Pursuant to
authority granted by Section 4.2 with the
Consent of the Original Limited
Partners and the Consent of the Additional
Limited Partners, the General Partner
caused the Partnership to establish a
series of Partnership Interests
representing the Series A Preferred Units,
with such designations, preferences
and relative, participating, optional or
other special rights, powers and duties
as are set forth in this Section 4.5. In
the event of a conflict between this
Section 4.5 and any other provision of this
Agreement as to the Series A
Preferred Units, the provisions of this
Section 4.5 shall control.
(a)
Designation and Number. A series of Partnership Units in
the Partnership designated as the "8.125% Series A Cumulative
Redeemable Preferred Units" is hereby established. The number of
Series
A Preferred Units shall be 1,600,000.
(b)
Rank. The Series A Preferred Units will, with respect to
distributions or rights upon voluntary or involuntary
liquidation,
winding-up or dissolution of the Partnership, or both, rank senior
to
all classes or series of Partnership Interests now or hereafter
authorized, issued or outstanding, other than any class or series
of
equity securities of the Partnership issued after the issuance of
the
Series A Preferred Units and expressly designated in accordance
with
this Agreement as ranking on a parity with or senior to the Series
A
Preferred Units as to distributions or rights upon voluntary or
involuntary liquidation, winding-up or dissolution of the
Partnership,
or both.
(c)
Distributions.
(i)
Payment of Distributions. Subject to the rights
of holders of Parity Preferred Units and any holders of
Partnership Interests issued after the date of issuance of the
Series A Preferred Units in accordance herewith ranking senior
to the Series A Preferred Units as to the payment of
distributions, holders of Series A Preferred Units shall be
entitled to receive, when, as and if declared by the
Partnership
acting through the General Partner, out of Available Cash and
Capital Transaction Proceeds, cumulative preferential cash
distributions at the rate per annum of 8.125% of the original
Capital Contribution per Series A Preferred Unit. Such
distributions shall be cumulative, shall accrue from the
original date of issuance and will be payable (A) quarterly in
arrears, on or before March 31, June 30, September 30 and
December 31 of each year commencing on June 30, 1998 and, (B),
in the event of (i) an exchange of Series A Preferred Units
into
Series A Preferred Stock, or (ii) a redemption of
22
<PAGE>
Series A Preferred Units, on the exchange date or redemption
date, as applicable (each a "Preferred Unit Distribution
Payment
Date"). The amount of the distribution payable for any period
will be computed on the basis of a 360-day year of twelve
30-day
months and for any period shorter than a full quarterly period
for which distributions are computed, the amount of the
distribution payable will be computed on the basis of the
actual
number of days elapsed in such a 30-day month. If any date on
which distributions
are to be made on the Series A Preferred
Units is not a Business Day, then payment of the distribution
to
be made on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other
payment in respect of any such delay) except that, if such
Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business
Day,
in each case with the same force and effect as if made on such
date. Distributions on
June 30, 1998 and thereafter on the
Series A Preferred Units will be made to the holders of record
of the Series A Preferred Units on the relevant record dates to
be fixed by the Partnership acting through the General Partner,
which record dates
shall be not less than ten (10) days and not
more than thirty (30) Business Days prior to the relevant
Preferred Unit Distribution Payment Date (the "Preferred Unit
Partnership Record Date").
(ii)
Limitation on Distributions. No distribution on
the Series A Preferred Units shall be declared or paid or set
apart for payment by the Partnership at such time as the terms
and provisions of any agreement of the Partnership relating to
its indebtedness (other than any agreement with the holder of
Partnership Interests or an Affiliate thereof), prohibits such
declaration, payment or setting apart for payment or provide,
that such declaration, payment or setting apart for payment
would constitute a breach thereof or a default thereunder, or
if
such declaration, payment or setting apart for payment shall be
restricted or prohibited by law. Nothing in this Section
4.5(c)(ii) shall be deemed to modify or in any manner limit the
provisions Section 4.5(c)(iii) and (iv).
(iii)
Distributions Cumulative. Distributions on the
Series A Preferred Units will accrue whether or not the terms
and provisions of any agreement of the Partnership, including
any agreement relating to its indebtedness at any time prohibit
the current payment of distributions, whether or not the
Partnership has earnings, whether or not there are funds
legally
available for the payment of such of such distributions and
whether or not such distributions are authorized. Accrued but
unpaid distributions on the Series A Preferred Units will
accumulate as of the Preferred Unit Distribution Payment Date
on
which they first become payable. Distributions on account of
arrears for any past distribution periods may be declared and
paid at any time, without reference to a regular Preferred Unit
Distribution Payment Date to holders of record of the Series A
Preferred Units on the record date fixed by the Partnership
acting through the General Partner which date shall be not less
than
23
<PAGE>
ten (10) days and not more than thirty (30) Business Days prior
to the payment date.
Accumulated and unpaid distributions
will not bear interest.
(iv)
Priority as to Distributions.
(A)
So long as any Series A Preferred Units
are outstanding, no distribution of cash or other
property shall be authorized, declared, paid or set
apart for payment on or with respect to any class or
series of Partnership Interests of the Partnership
ranking junior as to the payment of distributions to the
Series A Preferred Units (collectively, "Junior Units"),
nor shall any cash or other property be set aside for or
applied to the purchase, redemption or other acquisition
for consideration of any Series A Preferred Units, any
Parity Preferred Units with respect to distributions or
any Junior Units, unless, in each case, all
distributions accumulated on all Series A Preferred
Units and all classes and series of outstanding Parity
Preferred Units as to payment of distributions have been
paid in full. The
foregoing sentence will not prohibit
(a) distributions payable solely in Junior Units, (b)
the conversion of Junior Units or Parity Preferred Units
into Partnership Interests of the Partnership ranking
junior to the Series A Preferred Units as to
distributions, or (c) the redemption of Partnership
Interests corresponding to any Series A Preferred Stock,
Parity Preferred Stock with respect to distributions or
Junior Stock (as such terms are defined herein or in the
Articles of Incorporation) to be purchased by the
General Partner pursuant to Article 5 of the Articles of
Incorporation to preserve the General Partner's status
as a real estate investment trust, provided that such
redemption shall be upon the same terms as the
corresponding purchase pursuant to Article 5 of the
Articles of Incorporation.
(B)
So long as distributions have not been
paid in full (or a sum sufficient for such full payment
is not irrevocably deposited in trust for payment) upon
the Series A Preferred Units, all distributions
authorized and declared on the Series A Preferred Units
and all classes or series of outstanding Parity
Preferred Units with respect to distributions shall be
authorized and declared so that the amount of
distributions authorized and declared per Series A
Preferred Unit and such other classes or series of
Parity Preferred Units shall in all cases bear to each
other the same ratio that accrued distributions per
Series A Preferred Unit and such other classes or series
of Parity Preferred Units (which shall not include any
accumulation in respect of unpaid distributions for
prior distribution periods if such class or series of
Parity Preferred Units do not have cumulative
distribution rights) bear to each other.
24
<PAGE>
(v)
No Further Rights. Holders of Series A Preferred
Units shall not be entitled to any distributions, whether
payable in cash, other property or otherwise, in excess of the
full cumulative distributions described herein.
(d)
Liquidation Preference.
(i)
Payment of Liquidating Distributions. Subject
to the rights of holders of Parity Preferred Units with respect
to rights upon any voluntary or involuntary liquidation,
dissolution or winding-up of the Partnership and subject to
Partnership Interests ranking senior to the Series A Preferred
Units with respect to rights upon any voluntary or involuntary
liquidation, dissolution or winding-up of the Partnership, the
holders of Series A Preferred Units shall be entitled to
receive
out of the assets of the Partnership legally available for
distribution or the proceeds thereof, after payment or
provision
for debts and other liabilities of the Partnership, but before
any payment or distributions of the assets shall be made to
holders of any class or series of Partnership Interest that
ranks junior to the Series A Preferred Units as to rights upon
liquidation, dissolution or winding-up of the Partnership, an
amount equal to the sum of (i) a liquidation preference equal
to
their positive Capital Account balances, determined after
taking into account all Capital Account adjustments for the
Partnership taxable year during which the liquidation occurs
(other than those made as a result of the liquidating
distribution set forth in this Section 4.5(d)(i) and (ii) an
amount equal to any accumulated and unpaid distributions
thereon, whether or not declared, to the date of payment. In
the
event that, upon such voluntary or involuntary liquidation,
dissolution or winding-up, there are insufficient assets to
permit full payment of liquidating distributions to the holders
of Series A Preferred Stock and any Parity Preferred Units as
to
rights upon liquidation, dissolution or winding-up of the
Partnership, all payments of liquidating distributions on the
Series A Preferred Units and such Parity Preferred Units shall
be made so that the payments on the Series A Preferred Units
and
such Parity Preferred Units shall in all cases bear to each
other the same ratio that the respective rights of the Series A
Preferred Unit and such other Parity Preferred Units (which
shall not include any accumulation in respect of unpaid
distributions for prior distribution periods if such Parity
Preferred Units do not have cumulative distribution rights)
upon
liquidation, dissolution or winding-up of the Partnership
bear to each other.
(ii)
Notice. Written notice of any such voluntary or
involuntary liquidation, dissolution or winding-up of the
Partnership, stating the payment date or dates when, and the
place or places where, the amounts distributable in such
circumstances shall be payable, shall be given by (x) fax and
(y) by first class mail, postage pre-paid, not less than 30
and not more that 60 days prior to the payment date stated
therein, to each record holder of the Series A Preferred Units
at the respective addresses of such holders as the same shall
appear on the transfer records of the Partnership.
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<PAGE>
(iii) No Further
Rights. After payment of the full
amount of the liquidating distributions to which they are
entitled, the holders of Series A Preferred Units will have no
right or claim to any of the remaining assets of the
Partnership.
(iv)
Consolidation, Merger or Certain Other
Transactions. The voluntary sale, conveyance, lease, exchange
or
transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the property or
assets of the General Partner to, or the consolidation or
merger
or other business combination of the Partnership with or into,
any corporation, trust or other entity (or of any corporation,
trust or other entity with or into the Partnership) shall not
be
deemed to constitute a liquidation, dissolution or winding-up
of
the Partnership.
(e)
Optional Redemption.
(i)
Right of Optional Redemption. The Series A
Preferred Units may not be redeemed prior to the fifth
anniversary of the issuance date. On or after such date, the
Partnership shall have the right to redeem the Series A
Preferred Units, in whole or in part, at any time or from time
to time, upon not less than 30 nor more than 60 days' written
notice, at
a redemption price, payable in cash, equal to the
Capital Account balance of the holder of Series A Preferred
Units (the "Series A Redemption Price"); provided, however,
that
no redemption pursuant to this Section 4.5(e) will be permitted
if the Series A Redemption Price does not equal or exceed the
original Capital Contribution of such holder plus the
cumulative
Series A Priority Return, whether or not declared, to the
redemption date to the extent not previously distributed or
distributed on the redemption date pursuant to Section
4.5(c)(i). If fewer
than all of the outstanding Series A
Preferred Units are to be redeemed, the Series A Preferred
Units
to be redeemed shall be selected pro rata (as nearly as
practicable without creating fractional units).
(ii)
Limitation on Redemption.
(A)
The Series A Redemption Price of the
Series A Preferred Units (other than the portion thereof
consisting of accumulated but unpaid distributions) will
be payable solely out of the sale proceeds of capital
stock of the General Partner, which will be contributed
by the General Partner to the Partnership as additional
capital contribution, or out of the sale of limited
partner interests in the Partnership and from no other
source. For purposes
of the preceding sentence,
"capital stock" means any equity securities (including
Common Stock and Preferred Stock (as such terms are
defined in the Articles of Incorporation)), shares,
participation or other ownership interests (however
designated) and any rights (other than debt securities
convertible into or
26
<PAGE>
exchangeable for equity securities) or options to
purchase any of the foregoing.
(B)
The Partnership may not redeem fewer
than all of the outstanding Series A Preferred Units
unless all accumulated and unpaid distributions have
been paid on all Series A Preferred Units for all
quarterly distribution periods terminating on or prior
to the date of redemption.
(iii) Procedures
for Redemption.
(A)
Notice of redemption will be (i) faxed,
and (ii) mailed by the Partnership, by certified mail,
postage prepaid, not less than 30 nor more than 60 days
prior to the redemption date, addressed to the
respective holders of record of the Series A Preferred
Units at their respective addresses as they appear on
the records of the Partnership. No failure to give or
defect in such notice shall affect the validity of the
proceedings for the redemption of any Series A Preferred
Units except as to the holder to whom such notice was
defective or not given. In addition to any information
required by law, each such notice shall state: (i) the
redemption date, (ii) the Series A Redemption Price,
(iii) the aggregate number of Series A Preferred Units
to be redeemed and if fewer than all of the outstanding
Series A Preferred Units are to be redeemed, the number
of Series A Preferred Units to be redeemed held by such
holder, which number shall equal such holder's pro rata
share (based on the percentage of the aggregate number
of outstanding Series A Preferred Units the total number
of Series A Preferred Units held by such holder
represents) of the aggregate number of Series A
Preferred Units to be redeemed, (iv) the place or places
where such Series A Preferred Units are to be
surrendered for payment of the Series A Redemption
Price, (v) that distributions on the Series A Preferred
Units to be redeemed will cease to accumulate on such
redemption date and (vi) that payment of the Series A
Redemption Price will be made upon presentation and
surrender of such Series A Preferred Units.
(B)
If the Partnership gives a notice of
redemption in respect of Series A Preferred Units (which
notice will be irrevocable) then, by 12:00 noon, New
York City time, on the redemption date, the Partnership
will deposit irrevocably in trust for the benefit of the
Series A Preferred Units being redeemed funds sufficient
to pay the applicable Series A Redemption Price and will
give irrevocable instructions and authority to pay such
Series A
Redemption Price to the holders of the Series A
Preferred Units upon surrender of the Series A Preferred
Units by such holders at the place designated in the
notice of redemption.
If the Series A Preferred Units
are evidenced by a certificate and if fewer
27
<PAGE>
than all Series A Preferred Units evidenced by any
certificate are being redeemed, a new certificate shall
be issued upon surrender of the certificate evidencing
all Series A Preferred Units, evidencing the unredeemed
Series A Preferred Units without cost to the holder
thereof. On and after
the date of redemption,
distributions will cease to accumulate on the Series A
Preferred Units or portions thereof called for
redemption, unless the Partnership defaults in the
payment thereof. If
any date fixed for redemption of
Series A Preferred Units is not a Business Day, then
payment of the Series A Redemption Price payable on such
date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment
in
respect of any such delay) except that, if such
Business Day falls in the next calendar year, such
payment will be made on the immediately preceding
Business Day, in each case with the same force and
effect as if made on such date fixed for redemption. If
payment of the Series A Redemption Price is improperly
withheld or refused and not paid by the Partnership,
distributions on such Series A Preferred Units will
continue to accumulate from the original redemption date
to the date of payment, in which case the actual payment
date will be considered the date fixed for redemption
for purposes of calculating the applicable Series A
Redemption Price.
(f)
Voting Rights.
(i)
General. Notwithstanding anything to the
contrary contained in this Agreement, Series A Preferred
Partners will not have any voting rights or right to consent to
any matter requiring the consent or approval of the Limited
Partners, except as otherwise expressly set forth in this
Agreement and except as set forth below.
(ii)
Certain Voting Rights.
So long as any Series A
Preferred Units remain outstanding, the Partnership shall not,
without the affirmative vote of the holders of at least two-
thirds of the Series A Preferred Units outstanding at the time
(A) authorize or create, or increase the authorized or issued
amount of, any class or series of Partnership Interests ranking
prior to the Series A Preferred Units with respect to payment
of distributions or rights upon liquidation, dissolution or
winding-up or reclassify any Partnership Interests of the
Partnership into any such Partnership Interest, or create,
authorize or issue any obligations or security convertible into
or evidencing the right to purchase any such Partnership
Interests, (B) authorize or create, or increase the authorized
or issued amount of any Parity Preferred Units or reclassify
any
Partnership Interest of the Partnership into any such
Partnership Interest or create, authorize or issue any
obligations or security convertible into or evidencing the
right
to purchase any such Partnership Interests but only to the
extent such Parity Preferred Units are issued to an affiliate
of
the Partnership, other than (I)
28
<PAGE>
Security Capital or (II) the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership or (C) either (I) consolidate,
merge into or with, or convey, transfer or lease its assets
substantially as an entirety to, any corporation or other
entity
or (II) amend, alter or repeal the provisions of this
Agreement,
whether by
merger, consolidation or otherwise, that would
materially and adversely affect the powers, special rights,
preferences, privileges or voting power of the Series A
Preferred Units or the holders thereof; provided, however, that
with respect to the occurrence of a merger, consolidation or a
sale or lease of all of the Partnership's assets as an
entirety,
so long as (a) the Partnership is the surviving entity and
the Series A Preferred Units remain outstanding with the terms
thereof unchanged, or (b) the resulting, surviving or
transferee
entity is a partnership, limited liability company or other
pass-through entity organized under the laws of any state and
substitutes the Series A Preferred Units for other interests in
such entity having substantially the same terms and rights as
the Series A Preferred Units, including with respect to
distributions, voting rights and rights upon liquidation,
dissolution or winding-up, then the occurrence of any such
event
shall not be deemed to materially and adversely affect such
rights, privileges or voting powers of the holders of the
Series
A Preferred Units and
no vote of the Series A Preferred Units
shall be required in such case; and provided further that any
increase in the amount of Partnership Interests or the creation
or issuance of any other class or series of Partnership
Interests, in each case ranking (a) junior to the Series A
Preferred Units with respect to payment of distributions and
the
distribution of assets upon liquidation, dissolution or
winding-
up, or (b) on a parity to the Series A Preferred Units with
respect to payment of distributions and the distribution of
assets upon liquidation, dissolution or winding-up to the
extent
such Partnership Interest are not issued to an affiliate of the
Partnership, other than the General Partner to the extent the
issuance of such interests was to allow the General Partner to
issue corresponding preferred stock to persons who are not
affiliates of the Partnership, shall not be deemed to
materially
and adversely affect such rights, preferences, privileges or
voting powers and no vote of the Series A Preferred Units shall
be required in such case.
(g)
Exchange Rights.
(i)
Right to Exchange.
(A)
Series A Preferred Units will be
exchangeable in whole or in part at anytime on or after
the tenth anniversary of the date of issuance, at the
option of the holders thereof, for authorized but
previously unissued shares of 8.125% Series A Cumulative
Redeemable Preferred Stock of Regency (the "Series A
Preferred Stock") at an exchange rate of one share of
Series A Preferred Stock for one Series A Preferred
Unit, subject to adjustment as described below (the
"Exchange
29
<PAGE>
Price"), provided that the Series A Preferred Units will
become exchangeable at any time, in whole or in part, at
the option of the holders of Series A Preferred Units
for Series A Preferred Stock if (I) at any time full
distributions shall not have been timely made on any
Series A Preferred Unit with respect to six (6) prior
quarterly distribution periods, whether or not
consecutive, provided, however, that a distribution in
respect of Series A Preferred Units shall be considered
timely made if made within two (2) Business Days after
the applicable Preferred Unit Distribution Payment Date
if at the time of such late payment there shall not be
any prior quarterly distribution periods in respect of
which full distributions were not timely made or (II)
upon receipt by a holder or holders of Series A
Preferred Units of (a) notice from the General Partner
that the General Partner or a Subsidiary of the General
Partner has taken the position that the Partnership is,
or upon the occurrence of a defined event in the
immediate future will be, a PTP and (b) an opinion
rendered by an outside nationally recognized independent
counsel familiar with such matters addressed to a holder
or holders of Series A Preferred Units, that the
Partnership is or likely is, or upon the occurrence of a
defined event in the immediate future will be or likely
will be, a PTP. In addition, the Series A Preferred
Units may be exchanged for Series A Preferred Stock, in
whole or in part, at the option of any holder prior to
the tenth anniversary of the issuance date and after the
third anniversary thereof if such holder of a Series A
Preferred Units shall deliver to the General Partner
either (i) a private ruling letter addressed to such
holder of Series A Preferred Units or (ii) an opinion of
independent counsel reasonably acceptable to the General
Partner based on the enactment of temporary or final
Regulations or the publication of a Revenue Ruling, in
either case to the effect that an exchange of the Series
A Preferred Units at such earlier time would not cause
the Series A Preferred Units to be considered "stock and
securities" within the meaning of Section 351(e) of the
Code for purposes of determining whether the holder of
such Series A Preferred Units is an "investment company"
under Section 721(b) of the Code if an exchange is
permitted at such earlier date. Furthermore, the Series
A Preferred Units may be exchanged in whole or in part
for Series A Preferred Stock at any time after the date
hereof, if both (x) the holder thereof concludes based
on results or projected results that there exists (in
the reasonable judgement of the holder) an imminent and
substantial risk that the holder's interest in the
Partnership does or will represent more than 19.5% of
the total profits or capital interests in the
Partnership (determined in accordance with Regulations
Section 1.731-2(e)(4)) for a taxable year, and (y) the
holder delivers to the General Partner an opinion of
nationally recognized independent counsel to the effect
that there is an imminent and substantial risk that the
holder's
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interest in the Partnership does or will represent more
than 19.5% of the total profits or capital interests in
the Partnership (determined in accordance with
Regulations Section 1.731-2(e)(4)) for a taxable year.
(B)
Notwithstanding anything to the contrary
set forth in Section 4.5(g)(i)(A), if an Exchange Notice
has been delivered to the General Partner, then the
General Partner may, at its option, elect to redeem or
cause the Partnership to redeem all or a portion of the
outstanding Series A Preferred Units for cash in an
amount equal to the original Capital Contribution per
Series A Preferred Unit and all accrued and unpaid
distributions thereon to the date of redemption. The
General Partner may exercise its option to redeem the
Series A Preferred Units for cash pursuant to this
Section 4.5(g)(i)(B) by giving each holder of record of
Series A Preferred Units notice of its election to
redeem for cash, within five (5) Business Days after
receipt of the Exchange Notice, by (i) fax, and (ii)
registered mail, postage paid, at the address of each
holder as it may appear on the records of the
Partnership stating (i) the redemption date, which shall
be no later than sixty (60) days following the receipt
of the Exchange Notice, (ii) the redemption price, (iii)
the place or places where the Series A Preferred Units
are to be surrendered for payment of the redemption
price, (iv) that distributions on the Series A Preferred
Units will cease to accrue on such redemption date; (v)
that payment of the redemption price will be made upon
presentation and surrender of the Series A Preferred
Units and (vi) the aggregate number of Series A
Preferred Units to be redeemed, and if fewer than all of
the outstanding Series A Preferred Units are to be
redeemed, the number of Series A Units to be redeemed
held by such holder, which number shall equal such
holder's pro-rata share (based on the percentage of the
aggregate number of outstanding Series A Preferred Units
the total number of Series A Preferred Units held by
such holder represents) of the aggregate number of
Series A Preferred Units being redeemed.
(C)
Upon the occurrence of an event giving
rise to exchange rights pursuant to Section
4.5(g)(i)(A), in the event an exchange of all or a
portion of Series Preferred A Preferred Units pursuant
to Section 4.5(g)(i)(A) would violate the provisions on
ownership limitation of the General Partner set forth in
Article 5 of the Articles of Incorporation, the General
Partner shall give written notice thereof to each holder
of record of Series A Preferred Units, within five (5)
Business Days following receipt of the Exchange Notice,
by (i) fax, and (ii) registered mail, postage prepaid,
at the address of each such holder set forth in the
records of the Partnership. In such event, each holder
of Series A Preferred Units shall be entitled to
exchange, pursuant to the provision of Section
4.5(g)(ii) a number of Series A Preferred Units which
would comply with the provisions on the ownership
limitation of the General
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Partner set forth in such Article 5 of the Articles of
Incorporation and any Series A Preferred Units not so
exchanged (the "Excess Units") shall be redeemed by the
Partnership for cash in an amount equal to the original
Capital Contribution per Excess Unit, plus any accrued
and unpaid distributions thereon, whether or not
declared, to the date of redemption. The written notice
of the General Partner shall state (i) the number of
Excess Units held by such holder, (ii) the redemption
price of the Excess Units, (iii) the date on which such
Excess Units shall be redeemed, which date shall be no
later than sixty (60) days following the receipt of the
Exchange Notice, (iv) the place or places where such
Excess Units are to be surrendered for payment of the
Series A Redemption Price, (iv) that distributions on
the Excess Units will cease to accrue on such redemption
date, and (v) that payment of the redemption price will
be made upon presentation and surrender of such Excess
Units. In the event an exchange would result in Excess
Units, as a condition to such exchange, each holder of
such units agrees to provide representations and
covenants reasonably requested by the General Partner
relating to (i) the widely held nature of the interests
in such holder, sufficient to assure the General Partner
that the holder's ownership of stock of the General
Partner (without regard to the limits described above)
will not cause any individual to own in excess of 9.8%
of the stock of the General Partner; and (ii) to the
extent such holder can so represent and covenant without
obtaining information from its owners, the holder's
ownership of tenants of the Partnership and its
affiliates.
(D)
The redemption of Series A Preferred
Units described in Section 4.5(g)(i)(B) and (C) shall be
subject to the provisions of Section 4.5(e)(ii)(A) and
Section 4.5(e)(iii)(B); provided, however, that for
purposes hereof the term "Series A Redemption Price" in
Section 4.5(e)(ii)(A)
and Section 4.5(e)(iii)(B) shall
be read to mean the original Capital Contribution per
Series A Preferred Unit being redeemed plus all accrued
and unpaid distributions to the redemption date.
(ii)
Procedure for Exchange.
(A)
Any exchange shall be exercised pursuant
to a notice of exchange (the "Exchange Notice")
delivered to the General Partner by the holder who is
exercising such exchange right, by (i) fax and (ii) by
certified mail postage prepaid. Upon request of the
General Partner, such holder delivering the Exchange
Notice shall provide to the General Partner in writing
such information as the General Partner may reasonably
request to determine whether any portion of the exchange
by the delivering holder will result in the violation of
the restrictions of Article 5 of the Articles of
Incorporation, including the Ownership Limit and the
Related Tenant Limit. The exchange of Series A Preferred
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Units, or a specified portion thereof, may be effected
after the fifth (5th) Business Days following receipt by
the General Partner of the Exchange Notice and such
requested information by delivering certificates, if
any, representing such Series A Preferred Units to be
exchanged together with, if applicable, written notice
of exchange and a proper assignment of such Series A
Preferred Units to the office of the General Partner
maintained for such purpose. Currently, such office is
121 West Forsyth Street, Suite 200, Jacksonville,
Florida 32202. Each exchange will be deemed to have been
effected immediately prior to the close of business on
the date on which such Series A Preferred Units to be
exchanged (together with all required documentation)
shall have been surrendered and notice shall have been
received by the General Partner as aforesaid and the
Exchange Price shall have been paid. Any Series A
Preferred Stock issued pursuant to this Section 4.5(g)
shall be delivered as shares which are duly authorized,
validly issued, fully paid and nonassessable, free of
pledge, lien, encumbrance or restriction other than
those provided in the Articles of Incorporation, the
Bylaws of the General Partner, the Securities Act and
relevant state securities or blue sky laws.
(B)
In the event of an exchange of Series A
Preferred Units for shares of Series A Preferred Stock,
an amount equal to the accrued and unpaid distributions
which are not paid pursuant to Section 4.5(c)(i) hereof,
whether or not declared, to the date of exchange on any
Series A Preferred Units tendered for exchange shall (i)
accrue and be payable by the General Partner from and
after the date of exchange on the shares of the Series A
Preferred Stock into which such Series A Preferred Units
are exchanged, and (ii) continue to accrue on such
Series A Preferred
Units, which shall remain outstanding
following such exchange, with the General Partner as the
holder of such Series A Preferred Units. Notwithstanding
anything to the contrary set forth herein, in no event
shall a holder of a Series A Preferred Unit that was
validly exchanged into Series A Preferred Stock pursuant
to this section (other than the General Partner now
holding such Series A Preferred Unit), receive a
distribution out of Available Cash or Capital
Transaction Proceeds of the Partnership with respect to
any Series A Preferred Units so exchanged.
(C)
Fractional shares of Series A Preferred
Stock are not to be issued upon exchange but, in lieu
thereof, the General Partner will pay a cash adjustment
based upon the fair market value of the Series A
Preferred Stock on the day prior to the exchange date as
determined in good faith by the Board of Directors of
the General Partner.
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<PAGE>
(iii) Adjustment
of Exchange Price.
(A)
The Exchange Price is subject to
adjustment upon certain events, including, (i)
subdivisions, combinations and reclassification of the
Series A Preferred Stock, and (ii) distributions to all
holders of Series A Preferred Stock of evidences of
indebtedness of the General Partner or assets (including
securities, but excluding dividends and distributions
paid in cash out of equity applicable to Series A
Preferred Stock).
(B)
In case the General Partner shall be a
party to any transaction (including, without limitation,
a merger, consolidation, statutory share exchange,
tender offer for all or substantially all of the General
Partner's capital stock or sale of all or substantially
all of the General Partner's assets), in each case as a
result of which the Series A Preferred Stock will be
converted into the right to receive shares of capital
stock, other securities or other property (including
cash or any combination thereof), each Series A
Preferred Unit will thereafter be exchangeable into the
kind and amount of shares of capital stock and other
securities and
property receivable (including cash or
any combination thereof) upon the consummation of such
transaction by a holder of that number of shares of
Series A Preferred Stock or fraction thereof into which
one Series A Preferred Unit was exchangeable immediately
prior to such transaction. The General Partner may not
become a party to any such transaction unless the terms
thereof are consistent with the foregoing.
(h)
No Conversion Rights. The holders of the Series A
Preferred Units shall not have any rights to convert such shares
into
shares of any other class or series of stock or into any other
securities of, or interest in, the Partnership.
(i)
No Sinking Fund. No sinking fund shall be established
for the retirement or redemption of Series A Preferred Units.
Article 5
Distributions
Section 5.1 Requirement and
Characterization of Distributions.
(a)
Subject to Section 5.1(b), the General Partner shall:
(i)
distribute quarterly an amount equal to 100% of
Available Cash generated by the Partnership during such quarter
to the holders of Original Limited Partnership Units,
Additional
Units and General Partner Units, pro rata based on the number
of such Units by each; and
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<PAGE>
(ii)
distribute Capital Transaction Proceeds received
by the
Partnership within 30 days after the date of such Capital
Transaction to the holders of Original Limited Partnership
Units, Additional Units and General Partner Units, pro rata
based on the number of such Units held by each.
Notwithstanding the foregoing, if the General Partner holds
Units that mirror outstanding shares of special common stock of
the
General Partner and such shares of special common stock bear a
quarterly dividend per share that is different from the cash
dividend
on a share of Common Stock, distributions under this Section
5.1(a)
shall be adjusted as appropriate to pay the amounts required
with
respect to such Units, but such Units shall not be senior as to
the
other Common Units with respect to distributions under this
Section
5.1(a).
(b)
Anything herein to the contrary notwithstanding, no
Available Cash or Capital Transaction Proceeds shall be
distributed
pursuant to Section 5.1 or any other provision of this Article 5
unless
all distributions accumulated on all Series A Preferred Units
pursuant
to Section 4.5 have been paid in full and unless all
distributions
accumulated on any other outstanding Preferred Units have been paid
in
full.
Section 5.2 Amounts Withheld. All
amounts withheld pursuant to the
Code or any provisions of any state or
local tax law and Section 5.3 hereof with
respect to any allocation, payment or
distribution to the General Partner, or
any Limited Partners or Assignees shall be
promptly paid, solely out of funds of
the Partnership (except as otherwise
provided in Section 5.3 in connection with
the exercise by a Limited Partner of a
Redemption Right), by the General Partner
to the appropriate taxing authority and
treated as amounts distributed to the
General Partner or such Limited Partners or
Assignees pursuant to Section 5.1
for all purposes under this Agreement.
Section 5.3 Withholding. Each
Limited Partner hereby authorizes the
Partnership to withhold from or pay on
behalf of or with respect to such Limited
Partner any amount of federal, state,
local, or foreign taxes that the General
Partner determines that the Partnership is
required to withhold or pay with
respect to any amount distributable or
allocable to such Limited Partner
pursuant to this Agreement or with respect
to the exercise by such Limited
Partner of the Redemption Rights set forth
in Section 8.6 or in any separate
agreement, including, without limitation,
any taxes required to be withheld or
paid by the Partnership pursuant to
Sections 1441, 1442, 1445, or 1446 of the
Code and Section 48-7-129 of the Official
Code of Georgia Annotated. Any amount
paid on behalf of or with respect to a
Limited Partner shall constitute a loan
by the Partnership to such Limited Partner,
which loan shall be repaid by such
Limited Partner within 15 days after notice
from the General Partner that such
payment must be made unless (i) the
Partnership withholds such payment from a
distribution which would otherwise be made
to the Limited Partner or (ii) the
General Partner determines, in its sole and
absolute discretion, that such
payment may be satisfied out of the
available funds of the Partnership which
would, but for such payment, be distributed
to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses
(i) or (ii) shall be treated as
having been distributed to such Limited
Partner and shall be promptly paid,
solely
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<PAGE>
out of funds of the Partnership, by the
General Partner to the appropriate
taxing authority. Each Limited Partner
hereby unconditionally and irrevocably
grants to the Partnership a security
interest in such Limited Partner's
Partnership Interest as to secure such
Limited Partner's obligation to pay to
the Partnership any amounts required to be
paid pursuant to this Section 5.3
(together with attorney's fees and other
costs in enforcing the Partnership's
rights against the collateral). In the
event that a Limited Partner or Redeeming
Partner fails to pay any amounts owed to
the Partnership pursuant to this
Section 5.3 when due, the General Partner
may, in its sole and absolute
discretion, elect to make the payment on
behalf of such defaulting Partner, and
in such event shall be deemed to have
loaned such amount to such defaulting
Partner and shall succeed to all rights and
remedies of the Partnership as
against such defaulting Partner (including,
without limitation, in the case of a
default by other than a Redeeming Partner
the right to receive distributions
from the Partnership). Any amounts payable
by a Limited Partner or a Redeeming
Partner hereunder shall bear interest at
the Prime Rate, plus two percentage
points (but not higher than the maximum
lawful rate) from the date such amount
is due (i.e., 15 days after demand) until
such amount is paid in full. In the
event that the Partnership or the General
Partner is required to withhold tax
with respect to the exercise by a Limited
Partner of a Redemption Right, the
Limited Partner exercising the Redemption
Right shall make arrangements with the
Partnership or the General Partner, as the
case may be, to provide the funds to
the Partnership necessary to effect the
required withholding. In the event that,
pursuant to applicable laws and
regulations, the General Partner may withhold a
reduced amount pending a determination by
applicable taxing authorities as to
whether any additional withholding tax must
subsequently be deposited, the
General Partner shall have the right to
require the Redeeming Partner to pledge
a first priority security interest in a
portion of the Redemption Amount as
collateral for the Redeeming Partner's
obligation to provide the funds necessary
to effect any subsequent required holding
(together with attorney's fees and
other costs in enforcing the Partnership's
rights against the collateral), in an
amount in the case of a Share Amount equal
to Shares having a Value on the date
of the pledge equal to 125% of the maximum
possible subsequent required
withholding (or 100% of the maximum
possible subsequent required withholding if
the Redemption Amount is paid in the form
of the Cash Amount) (the "Withholding
Collateral"). The General Partner shall be
entitled to retain possession of the
Withholding Collateral until either the
Redeeming Partner provides funds to the
General Partner sufficient to make any
subsequent required withholding deposit
or the General Partner receives a
determination from the applicable authorities
that no subsequent withholding is required.
All dividends, distributions,
interest or other income on the Withholding
Collateral while subject to the
pledge hereunder shall be paid to the
Redeeming Partner pledging the Withholding
Collateral. If the applicable authorities
advise that subsequent withholding is
required and the Redeeming Partner does not
deliver the necessary funds to the
General Partner within 20 days after
receipt of the General Partner's request
therefor, the General Partner shall be
entitled to exercise all rights and
remedies of a secured party under the
Uniform Commercial Code with respect to
the Withholding Collateral. Each Limited
Partner and each Redeeming Partner
shall take such actions as the Partnership
or the General Partner shall request
in order to perfect or enforce the security
interest created hereunder.
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<PAGE>
Section 5.4 Distributions Upon
Liquidation. Notwithstanding anything
contained in Section 5.1 to the contrary,
proceeds from a Liquidating
Transaction shall be distributed to the
Partners in accordance with Section
13.2.
Article 6
Allocations
Section 6.1 Allocations of Net
Income and Net Loss. For purposes of
maintaining the Capital Accounts and in
determining the rights of the Partners
among themselves, the Partnership's Net
Income and Net Loss shall be allocated
among the Partners for each taxable year
(or portion thereof) as provided herein
below.
(a)
Net Income. Net Income for any taxable year (or portion
thereof) shall be allocated, after giving effect to the
special allocations set forth in Section 6.2 below, as
follows:
(i)
First, one hundred percent (100%) to the General
Partner in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the General Partner pursuant
to the last sentence of Section 6.1(b) and Section 6.1(b)(iv)
for all prior fiscal years, over (B) the cumulative Net Income
allocated pursuant to
this Section 6.1(a)(i) for all prior
fiscal years;
(ii)
Second, one hundred percent (100%) to the Series
A Preferred Partners in an amount equal to the excess, if any,
of (A) the cumulative Net Losses allocated to the Series A
Preferred Partners pursuant to Section 6.1(b)(ii) and Section
6.1(b)(viii) of the Third Amended Agreement for all prior
fiscal
years, over (B) the cumulative Net Income allocated pursuant to
this Section 6.1(a)(ii) and Section 6.1(a)(ii) of the Third
Amended Agreement (including any amounts allocated pursuant to
Section 6.2(g) of the Third Amended Agreement which were
attributable to Section 6.1(a)(ii) of the Third Amended
Agreement) for all prior fiscal years;
(iii) Third, one
hundred percent (100%) to the holders
of the Common Units in an amount equal to the excess, if any,
of
(A) the cumulative Net Losses allocated to such Partners for
all
prior fiscal years pursuant to Section 6.1(b)(iii) over (B) the
cumulative Net Income allocated pursuant to this Section
6.1(a)(iii) for all prior fiscal years;
(iv)
Fourth, one hundred percent (100%) to the Series
A Preferred Partners until the Series A Preferred Partners have
been allocated an amount equal to the excess of the cumulative
Series A Priority Return through the last day of the current
fiscal year (determined without reduction for distributions
made
to date in satisfaction thereof) over the cumulative Net Income
allocated to the Series A Preferred Partners pursuant to this
Section 6.1(a)(iii), and Section 6.1(a)(v) of the Third Amended
Agreement (including any amounts allocated pursuant to Section
6.2(g) of the Third Amended Agreement which were
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<PAGE>
attributable to Section 6.1(a)(v) of the Third Amended
Agreement) for all prior periods; and
(v)
Thereafter, to the holders of the Common Units
and the General Partner and any other holders of General
Partner
Units, pro rata in accordance with the relative number of Units
held by each; provided, however, if the General Partner holds
Units that mirror outstanding shares of special common stock
and
such shares of special common stock bear a quarterly dividend
per share that is different from the cash dividend on a share
of
Common Stock, allocations of Net Income under this Section
6.1(a)(v) shall be adjusted as appropriate to allocate amounts
to the General Partner with respect to such Units to mirror the
different quarterly dividend per share.
(b)
Net Losses. Net Losses for any taxable year (or portion
thereof) during which Available Cash and Capital Transaction
Proceeds
are distributed pursuant to Section 5.1 shall be allocated,
after
giving effect to the special allocations set forth in Section
6.2
below, as follows:
(i)
First, one hundred percent (100%) to the holders
of the Common Units and the General Partner in proportion to
such Partners' Adjusted Capital Accounts until the Adjusted
Capital Account of each such Partner has been reduced to zero
(for this purpose, any obligation of such Partner to restore a
negative Capital Account under this Agreement or otherwise
recognized under Regulation Section 1.704-1(b)(2)(ii)(c) shall
be disregarded, and any portion of such Capital Account
attributable to Preferred Units by such Partner shall be
disregarded); and
(ii)
Second, to the Series A Preferred Partners until
their Adjusted Capital Account balance (determined, solely for
purposes of this Section 6.1(b)(i), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4, has been reduced to zero); and
(iii) Third, to
the holders of the Common Units who
have elected to restore a portion of their negative Capital
Accounts under Section 13.4, in proportion to and to the extent
of such amounts; and
(iv)
Thereafter, any remaining Net Loss shall be
allocated to the General Partner.
Notwithstanding the foregoing, Net Losses
shall not be allocated to any Limited
Partner pursuant to this Section 6.1(b) to
the extent that such allocation would
cause such Limited Partner to have an
Adjusted Capital Account Deficit at the
end of such taxable year (or increase any
existing Adjusted Capital Account
Deficit). All Net Losses in excess of the
limitations set forth in the preceding
sentence of this Section 6.1(b) shall be
allocated to the General Partner.
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<PAGE>
(c)
Nonrecourse Liabilities. The Partners agree that excess
Nonrecourse Liabilities of the Partnership (within the meaning
of
Section 1.752-3(a)(3) of the Regulations) will be allocated among
the
Partners for purposes of Section 752 of the Code in accordance
with
their respective Percentage Interests.
(d)
Gains. Any gain allocated to the Partners upon the sale
or other taxable disposition of any Partnership asset shall to
the
extent possible, after taking into account other required
allocations
of gain pursuant to Section 6.2 below, be characterized as
Recapture
Income in the same proportions and to the same extent as such
Partners
have been allocated any deductions directly or indirectly giving
rise
to
the treatment of such gains as Recapture Income.
Section 6.2 Special Allocation
Rules. Notwithstanding any other
provision of this Agreement, the following
special allocations shall be made in
the following order:
(a)
Minimum Gain Chargeback. Notwithstanding any other
provisions of Article 6, if there is a net decrease in
Partnership
Minimum Gain during any Partnership Year, each Partner shall be
specially allocated items of Partnership income and gain for such
year
(and, if necessary, subsequent years) in an amount equal to
such
Partner's share of the net decrease in Partnership Minimum Gain,
as
determined under Regulations Section 1.704-2(g). Allocations
pursuant
to the previous sentence shall be made in proportion to the
respective
amounts required to be allocated to each Partner pursuant thereto.
The
items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(f)(6). This Section 6.2(a) is intended
to
comply with the minimum gain chargeback requirements in
Regulations
Section 1.704-2(f) and for purposes of this Section 6.2(a) only,
each
Partner's Adjusted Capital Account Deficit shall be determined
prior to
any other allocations pursuant to Section 6.1 of the Agreement
with
respect to such fiscal year and without regard to any decrease
in
Partner Minimum Gain during such Partnership Year.
(b)
Partner Minimum Gain Chargeback. Notwithstanding any
other provision of Article 6 (except Section 6.2(a) hereof), if
there
is a net decrease in Partner Minimum Gain attributable to a
Partner
Nonrecourse Debt during any Partnership Year, each Partner who has
a
share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations
Section
1.704-2(i)(5), shall be specially allocated items of Partnership
income
and gain for such year (and, if necessary, subsequent years) in
an
amount equal to such Partner's share of the net decrease in
Partner
Minimum Gain attributable to such Partner Nonrecourse Debt,
determined
in accordance with Regulations Section 1.704-2(i)(5).
Allocations
pursuant to the previous sentence shall be made in proportion to
the
respective amounts required to be allocated to each Partner
pursuant
thereto. The items to be so allocated shall be determined in
accordance
with Regulations Section 1.704-2(i)(4). This Section 6.2(b) is
intended
to comply with the minimum gain chargeback requirement in such
Section
of the Regulations and shall be interpreted consistently
therewith.
Solely for purposes of this Section 6.2(b), each
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<PAGE>
Partner's Adjusted Capital Account Deficit shall be determined
prior to
any other allocations pursuant to Article 6 of this Agreement
with
respect to such Partnership Year, other than allocations pursuant
to
Section 6.2(a) hereof.
(c)
Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or
distributions
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after
giving
effect to the allocations required under Section 6.2(a) and
Section
6.2(b) hereof, such Partner has an Adjusted Capital Account
Deficit,
items of Partnership income and gain shall be specially allocated
to
such Partner in an amount and manner sufficient to eliminate, to
the
extent required by the Regulations, its Adjusted Capital
Account
Deficit created by such adjustments, allocations or distributions
as
quickly as possible.
(d)
Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance
with
their respective Percentage Interests.
(e)
Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to
the
Partner who bears the economic risk of loss with respect to the
Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions
are
attributable in accordance with Regulations Section
1.704-2(i)(2).
(f)
Code Section 754 Adjustments. To the extent an
adjustment to the adjusted tax basis of any Partnership asset
pursuant
to Section 734(b) or 743(b) of the Code is required, pursuant
to
Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account
in
determining Capital Accounts, the amount of such adjustment to
the
Capital Accounts shall be treated as an item of gain (if the
adjustment
increases the basis of the asset) or loss (if the adjustment
decreases
such basis), and such item of gain or loss shall be specially
allocated
to the Partners in a manner consistent with the manner in which
their
Capital Accounts are required to be adjusted pursuant to such
Section
of the Regulations.
Section 6.3 Allocations for Tax
Purposes.
(a)
General. Except as otherwise provided in this Section
6.3, for federal income tax purposes, each item of income, gain,
loss
and deduction shall be allocated among the Partners in the same
manner
as its correlative item of "book" income, gain, loss or deduction
is
allocated pursuant to Section 6.1 and Section 6.2 of this
Agreement.
(b)
Other Allocation Rules.
(i)
For purposes of determining Net Income, Net
Losses, or other items allocable to any period, Net Income, Net
Losses, and any such other items shall be determined on a
daily,
monthly, or other basis, as determined by the
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General Partner using any permissible method under Section 706
of the Code and the
Regulations thereunder.
(ii) In
accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated among
the Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value.
(iii) To the
extent that the fair market value of a
property contributed to the Partnership by Branch Properties,
L.P. differed from its adjusted tax basis at the time it was
originally contributed to Branch Properties, L.P. (the
"Original
Book-Tax Disparity"), the allocation of tax items with respect
to such contributed property shall take into account any
remaining Original Book-Tax Disparity at the time such property
is contributed to the Partnership in a manner consistent with
the principles of Section 704(c) of the Code, using the
"traditional method" under Section 1.704-3(b) of the
Regulations, so that the Limited Partners who originally
contributed such property to Branch Properties, L.P. (or their
successors-in-interest) bear the tax burden (or benefit, if
applicable) of the remaining Original Book-Tax Disparity.
(iv) In
the event the Gross Asset Value of any
Partnership asset is adjusted, subsequent allocations of
income,
gain, loss, and deductions with respect to such asset shall
take
account of any variation between the adjusted basis of such
asset for federal income tax purposes and its Gross Asset Value
in the same manner as under Code Section 704(c) and the
Regulations thereunder. Any elections or other decisions
relating to Code Section 704(c) allocations shall be made by
the
General Partner; provided, however, that the "traditional
method" of making Section 704(c) allocations without curative
allocations described in Section 1.704-3(b) of the Regulations
shall be used. Allocations pursuant to Sections 6.3(b)(ii),
(iii) and (iv) hereof are solely for purposes of federal,
state,
and local taxes and shall not affect, or in any way be taken
into account in computing, any Partner's Capital Account or
share of Net Income, Net Losses, other items, or distributions
pursuant to any provision of this Agreement.
Article 7
Management And Operations Of Business
Section 7.1 Management.
(a)
Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business
and
affairs of the Partnership are exclusively vested in the
General
Partner, and no Limited Partner shall have any
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right to participate in or exercise control or management power
over
the business and affairs of the Partnership. Notwithstanding
anything
to the contrary in this Agreement, the General Partner may not
be
removed by the Limited Partners with or without cause. In addition
to
the powers now or hereafter granted a general partner of a
limited
partnership
under applicable law or which are granted to the General
Partner under any other provision of this Agreement, the
General
Partner shall have full power and authority to do all things
deemed
necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 hereof
and
to effectuate the purposes set forth in Section 3.1 hereof,
including,
without limitation:
(i) the making of
any expenditures, the lending or
borrowing of money (including, without limitation, borrowing
money to permit the Partnership to make distributions to its
Partners in such amounts as will permit Regency (so long as
Regency desires to qualify as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise
tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit Regency
to maintain REIT status), the assumption or guarantee of, or
other contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness (including the securing
of
same by mortgage, deed of trust or other lien or encumbrance on
the Partnership's assets), the incurring of any obligations it
deems necessary for the conduct of the activities of the
Partnership, and the repayment (including prepayment) of such
indebtedness, liabilities and obligations;
(ii) the
making of tax, regulatory and other filings,
or rendering of periodic or other reports to governmental or
other agencies having jurisdiction over the business or assets
of the Partnership;
(iii) the
acquisition, disposition, conveyance,
mortgage, pledge, encumbrance, hypothecation or exchange of all
or any assets of the Partnership or the merger or other
combination of the Partnership with or into another entity
(provided that such
merger or other combination does not result
in the Partnership recognizing taxable gain or loss for federal
income tax purposes) on such terms as the General Partner deems
proper (subject to Section 7.6 in the case of transactions
between the Partnership and the General Partner or any
Affiliate), and no approval of the Limited Partners shall be
required for the exercise of such powers, provided, however,
that the General Partner shall use reasonable efforts to effect
all dispositions of the Partnership's assets that were
contributed by the Limited Partners in accordance with Section
1031 of
the Code although, except as provided in Section 7.1(c)
hereof, it shall not be required to do so;
(iv) the
use of the assets of the Partnership
(including, without limitation, cash on hand) for any purpose
consistent with the terms of this Agreement and on any terms it
sees fit, including, without limitation, the
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financing of the conduct of the operations of the General
Partner, the Partnership or any of the Partnership's
Subsidiaries, the lending of funds to other Persons (including
Regency or any of the Partnership's Subsidiaries) and the
repayment of obligations of the Partnership and its
Subsidiaries
and any other Person in which it has an equity investment and
the making of capital contributions to its Subsidiaries, the
holding of any
real, personal and mixed property of the
Partnership in the name of the Partnership or in the name of a
nominee or trustee (subject to Section 7.10), the creation, by
grant or otherwise, of easements or servitudes, and the
performance of any and all acts necessary or appropriate to the
operation of the Partnership assets including, but not limited
to, applications for rezoning, objections to rezoning,
constructing, altering, improving, repairing, renovating,
rehabilitating, razing, demolishing or condemning any
improvements or property of the Partnership;
(v)
the negotiation, execution, and performance of
any contracts, conveyances or other instruments (including with
Affiliates of the Partnership to the extent provided in Section
7.6) that the General Partner considers useful or necessary to
the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this
Agreement, including, without limitation, the execution and
delivery
of a REIT management agreement on behalf of or in the
name of the Partnership providing for the day-to-day management
and operation of the Partnership and including, without
limitation, the execution and delivery of leases on behalf of
or
in the name of the Partnership (including the lease of
Partnership property for any purpose and without limit as to
the
term thereof, whether or not such term (including renewal
terms)
shall extend beyond the date of termination of the Partnership
and whether or not the portion so leased is to be occupied by
the lessee or, in turn, subleased in whole or in part to
others);
(vi) the
opening and closing of bank accounts, the
investment of Partnership funds in securities, certificates of
deposit and other instruments, and the distribution of
Partnership cash or other Partnership assets in accordance with
this Agreement;
(vii) the
selection and dismissal of employees of the
Partnership or the General Partner (including, without
limitation, employees having titles such as "president," "vice
president," "secretary" and "treasurer"), and the engagement
and
dismissal of agents, outside attorneys, accountants, engineers,
appraisers,
consultants, contractors and other professionals on
behalf of the General Partner or the Partnership and the
determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance
of such insurance for the
benefit of the Partnership and the Partners as it deems
necessary or appropriate;
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(ix)
subject to
the provisions of Section 4.2 hereof,
the formation of, or acquisition of an interest in, and the
contribution of property to any further limited or general
partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition
of interests in, and the contribution of property to, its
Subsidiaries and any other Person in which it has an equity
investment from time to time) (provided that such transaction
does not result in the Partnership recognizing taxable gain or
loss for federal income tax purposes);
(x)
the control of any matters affecting the rights
and obligations of the Partnership, including the conduct of
litigation and the incurring of legal expense and the
settlement
of claims and litigation, the submission of any matter to
arbitration, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;
(xi) the
undertaking of any action in connection with
the Partnership's direct or indirect investment in its
Subsidiaries or any other Person (including, without
limitation,
the contribution or loan of funds by the Partnership to such
Persons) (provided that such action does not result in the
Partnership recognizing taxable gain or loss for federal income
tax purposes);
(xii) the
distribution in kind of the Briarcliff
Village property pursuant to Section 13.2(c);
(xiii) the
determination of the fair market value of
any Partnership property distributed in kind using such
reasonable method of valuation as it may adopt; and
(xiv) the
execution, acknowledgment and delivery of
any and all documents and instruments to effectuate any or all
of the foregoing.
(b)
No Approval Required for Above Powers. Subject to any
other restriction set forth in this Agreement, each of the
Limited
Partners agrees that the General Partner is authorized to
execute,
deliver and perform the above-mentioned agreements and transactions
on
behalf of the Partnership without any further act, approval or vote
of
the Partners, notwithstanding any other provision of this
Agreement
(except where the Consent of the Limited Partners or the consent of
the
Series A Preferred Partners or of any other class or series of
Partnership Interests is expressly required herein), the Act or
any
applicable law, rule or regulation. The execution, delivery or
performance by the General Partner or the Partnership of any
agreement
authorized or permitted under this Agreement shall not constitute
a
breach by the General Partner of any duty that the General Partner
may
owe the Partnership or the Limited Partners or any other Persons
under
this Agreement or of any duty stated or implied by law or
equity.
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(c)
Approval of Sale of Briarcliff Village. Except pursuant
to the dissolution and liquidation of the Partnership in
accordance
with Article 13 hereof, the property commonly known as
Briarcliff
Village (the "Briarcliff Village Property") shall not be sold by
the
Partnership or the General Partner on or before December 19,
2005
(other than in a transaction in which the Partnership recognizes
no
taxable gain or loss for federal income purposes) without the
approval
of a Majority-in-Interest of the Original Briarcliff Partners
(as
defined below) who continue, as of such time, to hold Original
Limited
Partnership Units attributable to the contribution of the
Briarcliff
Village Property to Branch Properties, L.P. and Branch
Properties,
L.P.'s subsequent contribution of the Briarcliff Village Property
to
the Partnership (the "Original Briarcliff Partners"). Such
approval
right of the Original Briarcliff Partners is personal to the
Original
Briarcliff Partners and shall terminate upon the death of an
Original
Briarcliff Partner or a sale, assignment, conveyance, or other
transfer
by an Original Briarcliff Partner, with respect to that
Partner's
Original Limited Partnership Units, and shall not be exercisable by
any
successor, transferee or assignee of an Original Briarcliff
Partner. In
the event of a like-kind exchange involving the Briarcliff
Village
Property by the Partnership, then such approval right for the
benefit
of the Original Briarcliff Partners will continue to be
enforceable
after such like-kind exchange, but shall relate to the property
(whether real, personal or mixed, tangible or intangible) acquired
by
the Partnership in such like-kind exchange. Nothing herein shall
be
deemed to require that the Partnership or the General Partner take
any
action to avoid or prevent an involuntary disposition of all or
part of
said Briarcliff Village pursuant to a condemnation proceeding or
other
taking. For purposes of this Section 7.1(c), Majority-In-Interest
of
the Original Briarcliff Partners shall mean the Original
Briarcliff
Partners who hold, in the aggregate, more than fifty percent (50%)
of
the Percentage Interests then allocable to and held by all of
the
Original Briarcliff Partners with respect to the Original
Limited
Partnership Units received by the Original Briarcliff Partners as
a
result of the contribution of the Briarcliff Village Property to
Branch
Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution
of the Briarcliff Village Property to the Partnership. The
Partnership
shall not engage in any merger, consolidation or other business
combination with or into another Person unless the Partnership
has
entered into an agreement with such Person in which such Person
expressly agrees to be bound by the provisions of this Section
7.1(c).
(d)
Insurance. At all times from and after the date hereof,
the General Partner may cause the Partnership to obtain and
maintain
casualty, liability and other insurance on the properties of
the
Partnership and liability insurance for the Indemnitees
hereunder.
(e)
Working Capital and Other Reserves. At all times from
and after the date hereof, the General Partner may cause the
Partnership to establish and maintain working capital reserves in
such
amounts as the General Partner, in its sole and absolute
discretion,
deems appropriate and reasonable from time to time. Subject to
the
proviso in the last part of Section 3.1, the General Partner also
may
cause the Partnership to establish reserves out of cash flow
not
constituting Capital Transaction
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Proceeds as well as out of Capital Transaction Proceeds for the
purpose
of purchasing, improving or expanding Partnership property.
(f)
No Obligation to Consider Tax Consequences to Limited
Partners. Except as provided in Section 7.1(c) and Section 13.2(c)
with
respect to Briarcliff Village, except as provided in Section
7.1(g)
with respect to the sale of the Management Business, and except for
the
obligation of the General Partner set forth in Section 7.1(a)(iii)
to
use reasonable efforts to effect all dispositions of the
Partnership's
assets that were contributed by the Limited Partners in accordance
with
Section 1031 of the Code, (i) in exercising its authority under
this
Agreement, the General Partner may, but shall be under no
obligation
to, take into account the tax consequences to any Partner of any
action
taken by it, and (ii) the General Partner and the Partnership shall
not
have liability to a Limited Partner under any circumstances as a
result
of an income tax liability incurred by such Limited Partner as a
result
of an action (or inaction) by the General Partner pursuant to
its
authority under this Agreement.
(g)
Approval of Sale of Management Business. Notwithstanding
anything contained herein to the contrary, the Third Party
Management
Business (as defined in the Contribution Agreement) contributed
by
Branch Properties, L.P. to the Partnership as part of its
initial
Capital Contribution (the "Management Business") shall not be sold
by
the Partnership on or before the tenth (10th) anniversary of the
First
Closing (other than in a transaction in which the Partnership
recognizes no taxable gain or loss for federal income tax
purposes);
provided, however, that the Partnership shall be permitted to
undertake
the following transactions: (i) contribution of the Management
Business
to a corporation (the "New Management Company") in which the
Partnership owns five percent (5%) of the issued and outstanding
voting
common stock and 100% of the issued and outstanding non-voting
preferred stock and in which The Regency Group, Inc., a Florida
corporation, owns ninety-five percent (95%) of the issued and
outstanding voting common stock and in which no other shares of
stock
are issued and outstanding following the contribution; (ii) a
distribution by the Partnership of part or all of the stock of the
New
Management Company to the General Partner on or after the fifth
(5th)
anniversary of the First Closing; or (iii) a sale of part or all of
the
stock of the New Management Company if no Original Limited
Partners
hold Units which they received on the date of this Agreement or
any
Additional Units received by them subsequent to the date of
this
Agreement, or with the unanimous written consent of the
Original
Limited Partners then holding such Units).
Section 7.2 Certificate of Limited
Partnership. To the extent that
such action is determined by the General
Partner to be reasonable and necessary
or appropriate, the General Partner shall
file amendments to and restatements of
the Certificate and do all the things to
maintain the Partnership as a limited
partnership (or a partnership in which the
limited partners have limited
liability) under the laws of the State of
Delaware and each other jurisdiction
in which the Partnership may elect to do
business or own property. Subject to
the terms of Section 8.5(a)(iv) hereof, the
General Partner shall not be
required, before or after filing, to
deliver or mail a copy of the Certificate
or any amendment thereto to any Limited
Partner.
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The General Partner shall use all
reasonable efforts to cause to be filed such
other certificates or documents as may be
reasonable and necessary or
appropriate for the formation,
continuation, qualification and operation of a
limited partnership (or a partnership in
which the Limited Partners have limited
liability) in the State of Delaware and any
other jurisdiction in which the
Partnership may elect to do business or own
property.
Section 7.3 Restriction on General
Partner's Authority. Without the
consent of all the Limited Partners, the
General Partner may not:
(a)
Take any action that would make it impossible to carry
on the ordinary business of the Partnership, except as
otherwise
provided in this Agreement;
(b)
Possess Partnership property for other than a
Partnership purpose;
(c)
Admit a Person as a Partner, except as otherwise
provided in this Agreement; or
(d)
Perform any act that would subject a Limited Partner to
liability as a general partner.
Section 7.4 Responsibility for
Expenses.
(a) No Compensation.
Except as provided in this Section 7.4
and elsewhere in this Agreement (including the provisions of
Article 5
and Article 6 regarding distributions, payments, and allocations
to
which it may be entitled), the General Partner shall not be
compensated
for its services as general partner of the Partnership.
(b)
Responsibility for
Ownership and Operation Expenses.
The Partnership shall be responsible for and shall pay all
expenses
relating to the Partnership's ownership of its assets, and the
operation of, or for the benefit of, the Partnership, and the
General
Partner shall be reimbursed on a monthly basis, or such other basis
as
the General
Partner may determine in its sole and absolute discretion,
for all expenses it incurs relating to the Partnership's ownership
of
its assets and the operation of, or for the benefit of, the
Partnership. Such reimbursements shall be in addition to any
reimbursement to the General Partner pursuant to Section 10.3(c)
and as
a result of indemnification pursuant to Section 7.7. The
General
Partner shall determine in good faith the amount of expenses
incurred
by it relating to the operation of, or that inure to the benefit
of,
the Partnership. In the event that certain expenses are incurred
for
the benefit of the Partnership and other Persons (including the
General
Partner),
such expenses will be allocated to the Partnership and such
other Persons in such a manner as the General Partner deems fair
and
reasonable.
(c)
Responsibility for Organizational Expenses. The
Partnership shall be responsible for and shall pay all expenses
incurred relating to the organization of the Partnership.
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(d)
Partnership Interest Issuance Expenses. The General
Partner shall be reimbursed for all expenses it incurs relating to
any
issuance of additional Partnership Interests pursuant to Section
4.2 or
Section 4.5 hereof, all of which shall be expenses of the
Partnership.
(e)
Other Expenses. The Partnership agrees to pay, as costs
and expenses of the Partnership, any reasonable costs and
expenses
reasonably incurred by the General Partner which do not
specifically
relate to the Partnership's operations but are necessary or
desirable
in connection with the General Partner's business or f
