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Exhibit 3.3
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
VINTAGE WINE TRUST LP
a Delaware limited partnership
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THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM
AND SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT
THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE
EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND
UNDER
APPLICABLE STATE SECURITIES OR "BLUE SKY" LAWS.
AMENDED AND RESTATED AS OF MARCH 23, 2005
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ARTICLE I
DEFINED
TERMS..............................................................................1
ARTICLE II
ORGANIZATIONAL
MATTERS....................................................................14
Section 2.1.
Organization.........................................................................14
Section 2.2.
Name.................................................................................14
Section 2.3. Registered
Office and Agent; Principal
Office........................................14
Section 2.4. Power of
Attorney....................................................................15
Section 2.5.
Term.................................................................................16
ARTICLE III
PURPOSE...................................................................................16
Section 3.1. Purpose
and
Business.................................................................16
Section 3.2.
Powers...............................................................................16
Section 3.3.
Partnership Only for Partnership Purposes
Specified..................................16
Section 3.4.
Representations and Warranties by the
Parties........................................17
ARTICLE IV
CAPITAL
CONTRIBUTIONS.....................................................................18
Section 4.1. Capital
Contributions of the
Partners................................................18
Section 4.2. Classes of
Partnership
Units.........................................................18
Section 4.3. Issuances
of Additional Partnership
Interests........................................18
Section 4.4. Additional
Funds and Capital
Contributions...........................................19
Section 4.5. Equity
Incentive
Plan................................................................20
Section 4.6. LTIP
Units...........................................................................21
Section 4.7. Conversion
of LTIP
Units.............................................................23
Section 4.8. No
Interest; No
Return...............................................................26
Section 4.9. Other
Contribution
Provisions........................................................26
Section 4.10. Not Publicly
Traded..................................................................26
ARTICLE V
DISTRIBUTIONS.............................................................................26
Section 5.1.
Requirement and Characterization of
Distributions....................................26
Section 5.2.
Distributions
In-Kind................................................................26
Section 5.3. Amounts
Withheld.....................................................................27
Section 5.4.
Distributions Upon
Liquidation.......................................................27
Section 5.5.
Distributions to Reflect Issuance of Additional Partnership
Units....................27
Section 5.6. Restricted
Distributions.............................................................27
ARTICLE VI
ALLOCATIONS...............................................................................27
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Section 6.1. Timing and
Amount of Allocations of Net Income and Net
Loss..........................27
Section 6.2. General
Allocations..................................................................27
Section 6.3. Additional
Allocation
Provisions.....................................................29
Section 6.4. Tax
Allocations......................................................................31
ARTICLE VII
MANAGEMENT AND OPERATIONS OF
BUSINESS.....................................................32
Section 7.1.
Management...........................................................................32
Section 7.2.
Certificate of Limited
Partnership...................................................35
Section 7.3.
Restrictions on General Partner's
Authority..........................................35
Section 7.4.
Reimbursement of the General Partner and
Parent......................................36
Section 7.5. Outside
Activities of the General
Partner............................................38
Section 7.6. Contracts
with
Affiliates............................................................38
Section 7.7.
Indemnification......................................................................38
Section 7.8. Liability
of the General
Partner.....................................................40
Section 7.9. Other
Matters Concerning the General Partner and the
Parent..........................41
Section 7.10. Title to
Partnership
Assets..........................................................42
Section 7.11. Reliance by
Third
Parties............................................................42
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED
PARTNERS................................................42
Section 8.1. Limitation
of
Liability..............................................................42
Section 8.2. Management
of
Business...............................................................42
Section 8.3. Outside
Activities of Limited
Partners...............................................43
Section 8.4. Return of
Capital....................................................................43
Section 8.5. Adjustment
Factor....................................................................43
Section 8.6. Redemption
Rights....................................................................43
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND
REPORTS....................................................46
Section 9.1. Records
and
Accounting...............................................................46
Section 9.2.
Partnership
Year.....................................................................46
Section 9.3.
Reports..............................................................................46
ARTICLE X
TAX
MATTERS...............................................................................47
Section 10.1. Preparation of
Tax
Returns...........................................................47
Section 10.2. Tax
Elections........................................................................47
Section 10.3. Tax Matters
Partner..................................................................47
Section 10.4.
Withholding..........................................................................48
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Section 10.5. Organizational
Expenses..............................................................49
ARTICLE XI
TRANSFERS AND
WITHDRAWALS.................................................................49
Section 11.1.
Transfer.............................................................................49
Section 11.2. Transfer of
General Partner's Partnership
Interest...................................49
Section 11.3. Transfer of
Limited Partners' Partnership
Interests..................................50
Section 11.4. Substituted
Limited
Partners.........................................................51
Section 11.5.
Assignees............................................................................52
Section 11.6. General
Provisions...................................................................52
ARTICLE XII
ADMISSION OF
PARTNERS.....................................................................53
Section 12.1. Admission of
Successor General
Partner...............................................53
Section 12.2. Admission of
Additional Limited
Partners.............................................54
Section 12.3. Amendment of
Agreement and Certificate of Limited
Partnership........................54
Section 12.4. Limit on Number
of
Partners..........................................................54
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND
TERMINATION..................................................55
Section 13.1.
Dissolution..........................................................................55
Section 13.2. Winding
Up...........................................................................55
Section 13.3. Deemed
Distribution and
Recontribution...............................................57
Section 13.4. Rights of
Limited
Partners...........................................................58
Section 13.5. Notice of
Dissolution................................................................58
Section 13.6. Cancellation of
Certificate of Limited
Partnership...................................58
Section 13.7. Reasonable Time
for
Winding-Up.......................................................58
ARTICLE XIV
PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS;
MEETINGS.....................58
Section 14.1. Procedures for
Actions and Consents of
Partners......................................58
Section 14.2.
Amendments...........................................................................58
Section 14.3. Meetings of the
Partners.............................................................59
ARTICLE XV
GENERAL
PROVISIONS........................................................................60
Section 15.1. Addresses and
Notice.................................................................60
Section 15.2. Titles and
Captions..................................................................60
Section 15.3. Pronouns and
Plurals.................................................................60
Section 15.4. Further
Action.......................................................................60
Section 15.5. Binding
Effect.......................................................................60
Section 15.6.
Waiver...............................................................................60
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Section 15.7.
Counterparts.........................................................................60
Section 15.8. Applicable
Law.......................................................................60
Section 15.9. Entire
Agreement.....................................................................61
Section 15.10. Invalidity of
Provisions.............................................................61
Section 15.11. Limitation to Preserve
REIT
Status...................................................61
Section 15.12. No
Partition.........................................................................61
Section 15.13. No Third-Party Rights
Created
Hereby.................................................62
Section 15.14. No Rights as
Shareholders of General Partner or Stockholders of
Parent...............62
Section 15.15.
Creditors............................................................................62
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FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP OF VINTAGE WINE TRUST LP
THIS FIRST
AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF
VINTAGE WINE TRUST LP, dated as of March
23, 2005 is entered into by and among
Vintage Wine Business Trust I, a Maryland
business trust (the "General
Partner"), and the limited partners listed
on Exhibit A hereto (each a "Limited
Partner").
WHEREAS,
the General Partner and the Parent Limited Partner entered into
an Agreement of Limited Partnership of
Vintage Wine TRUST LP dated as of January
24, 2005, pursuant to which the Partnership
was formed (the "Original
Agreement"); and
WHEREAS,
the General Partner and the Parent Limited Partner desire to
amend and restate the Original Agreement in
its entirety by entering into this
First Amended and Restated Agreement of
Limited Partnership;
NOW,
THEREFORE, in consideration of the mutual covenants and
agreements
contained herein and other good and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINED TERMS
The
following definitions shall be for all purposes, unless
otherwise
clearly indicated to the contrary, applied
to the terms used in this Agreement.
"Act" means the Delaware Revised
Uniform Limited Partnership Act (6 Del.
C. Section 17-101 et seq.), as it may be
amended from time to time, and any
successor to such statute.
"Actions"
has the meaning set forth in Section 7.7 hereof.
"Additional Funds" has the meaning set forth in Section 4.4.A
hereof.
"Additional Limited Partner" means a Person who is admitted to
the
Partnership as a Limited Partner pursuant
to Section 4.3 and Section 12.2 hereof
and who is shown as such on the books and
records of the Partnership.
"Adjusted
Capital Account" means the Capital Account maintained for each
Partner as of the end of each Fiscal 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.
"Adjustment Event" shall have the meaning set forth in Section
4.6.A
hereof.
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"Adjustment Factor" means 1.0; provided, however, that in the event
that:
(i) the Parent (a) declares or pays a dividend on its
outstanding
REIT
Shares in REIT Shares or makes a distribution to all holders of
its
outstanding REIT Shares in REIT Shares, (b) splits or subdivides
its
outstanding REIT Shares or (c) effects a reverse stock split or
otherwise
combines
its outstanding REIT Shares into a smaller number of REIT
Shares,
the
Adjustment Factor shall be adjusted by multiplying the
Adjustment
Factor
previously in effect by a fraction, (i) the numerator of which
shall be
the number of REIT Shares issued and outstanding on the record
date for
such dividend, distribution, split, subdivision, reverse split
or
combination (assuming for such purposes that such dividend,
distribution,
split,
subdivision, reverse split or combination has occurred as of
such
time) and
(ii) the denominator of which shall be the actual number of
REIT
Shares
(determined without the above assumption) issued and outstanding
on
the record
date for such dividend, distribution, split, subdivision,
reverse
split or combination;
(ii) the Parent distributes any rights, options or warrants to
all
holders of
its REIT Shares to subscribe for or to purchase or to otherwise
acquire
REIT Shares (or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares) at a price per
share less
than the
Value of a REIT Share on the record date for such distribution
(each a
"Distributed Right"), then the Adjustment Factor shall be
adjusted
by
multiplying the Adjustment Factor previously in effect by a
fraction
(a) the
numerator of which shall be the number of REIT Shares issued
and
outstanding on the record date plus the maximum number of REIT
Shares
purchasable under such Distributed Rights and (b) the denominator
of which
shall be
the number of REIT Shares issued and outstanding on the record
date plus
a fraction (1) the numerator of which is the maximum number of
REIT
Shares purchasable under such Distributed Rights times the
minimum
purchase
price per REIT Share under such Distributed Rights and (2) the
denominator of which is the Value of a REIT Share as of the record
date;
provided,
however, that, if any such Distributed Rights expire or become
no longer
exercisable, then the Adjustment Factor shall be adjusted,
effective
retroactive to the date of distribution of the Distributed
Rights, to
reflect a reduced maximum number of REIT Shares or any change
in the
minimum purchase price for the purposes of the above fraction;
and
(iii) the Parent shall, by dividend or otherwise, distribute to
all
holders of
its REIT Shares evidences of its indebtedness or assets
(including
securities, but excluding any dividend or distribution referred
to in
subsection (i) above), which evidences of indebtedness or
assets
relate to
assets not received by the Parent or its Subsidiaries pursuant
to a pro
rata distribution by the Partnership, then the Adjustment
Factor
shall be
adjusted to equal the amount determined by multiplying the
Adjustment
Factor in effect immediately prior to the close of business on
the date
fixed for determination of stockholders entitled to receive
such
distribution by a fraction (i) the numerator of which shall be such
Value
of a REIT
Share on the date fixed for such determination and (ii) the
denominator of which shall be the Value of a REIT Share on the
dates fixed
for such
determination less the then fair market value (as determined by
the REIT,
whose determination shall be conclusive) of the portion of the
evidences
of indebtedness or assets so distributed applicable to one REIT
Share.
Any
adjustments to the Adjustment Factor shall become effective
immediately after the effective date of
such event, retroactive to the record
date, if any, for such event.
"Affiliate" means, with respect to any Person, any Person directly
or
indirectly controlling or controlled by or
under common control with such
Person. For the purposes of this
definition, "control" when used with respect to
any Person means the possession, directly
or indirectly, of the power to direct
or cause the direction of the management
and policies of such Person, whether
through the ownership of
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voting securities, by contract or
otherwise, and the terms "controlling" and
"controlled" have meanings correlative to
the foregoing.
"Agreement" means this First Amendment and Restated Agreement of
Limited
Partnership of Vintage Wine Trust LP, as it
may be amended, supplemented 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
hereof.
"Available
Cash" means, with respect to any period for which such
calculation is being made, the amount of
cash available for distribution by the
Partnership as determined by the General
Partner.
"Business
Day" means any day except a Saturday, Sunday or other day on
which commercial banks in New York, New
York are authorized or required by law
to close.
"Bylaws"
means the Bylaws of the Parent, as amended, supplemented or
restated from time to time.
"Capital
Account" means, with respect to any Partner, the Capital
Account
maintained by the General Partner for such
Partner on the Partnership's books
and records in accordance with the
following provisions:
A. To each Partner's Capital Account, there shall be added such
Partner's
Capital Contributions, such Partner's distributive share of Net
Income and
any items in the nature of income or gain that are specially
allocated
pursuant to Section 6.3 hereof, and the principal amount of any
Partnership liabilities assumed by such Partner or that are secured
by any
property
distributed to such Partner.
B. From each Partner's Capital Account, there shall be
subtracted
the amount
of cash and the Gross Asset Value of any property distributed
to such
Partner pursuant to any provision of this Agreement, such
Partner's
distributive share of Net Losses and any items in the nature of
expenses
or losses that are specially allocated pursuant to Section 6.3
hereof,
and the principal amount of any liabilities of such Partner
assumed by
the Partnership or that are secured by any property contributed
by such
Partner to the Partnership.
C. In the event any interest in the Partnership is Transferred
in
accordance
with the terms of this Agreement, the transferee shall succeed
to the
Capital Account of the transferor to the extent that it relates
to
the
Transferred interest.
D. In determining the principal amount of any liability for
purposes
of
subsections (a) and (b) hereof, there shall be taken into account
Code
Section
752(c) and any other applicable provisions of the Code and
Regulations.
E. The provisions of this Agreement relating to the maintenance
of
Capital
Accounts are intended to comply with Regulations Sections
1.704-1(b)
and 1.704-2, and shall be interpreted and applied in a manner
consistent
with such Regulations. If the General Partner shall determine
that it is
prudent to modify the manner in which the Capital Accounts are
maintained
in order to comply with such Regulations, the General Partner
may make
such modification provided that such modification will not have
a
material
effect on the amounts distributable to any Partner without such
Partner's
Consent. The General Partner also shall (i) make any
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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 that unanticipated
events
might otherwise cause this Agreement not to comply with
Regulations
Section
1.704-1(b) or Section 1.704-2.
"Capital
Account Deficit" has the meaning set forth in Section 13.2.C
hereof.
"Capital
Contribution" means, with respect to any Partner, the amount of
money and the initial Gross Asset Value of
any Contributed Property that such
Partner contributes to the Partnership or
is deemed to contribute pursuant to
Section 4.4 hereof.
"Cash
Amount" means, with respect to a Tendering Party, an amount of
cash
equal to the product of (A) the Value of a
REIT Share and (B) such Tendering
Party's REIT Shares Amount determined as of
the date of receipt by the General
Partner of such Tendering Party's Notice of
Redemption or, if such date is not a
Business Day, the immediately preceding
Business Day.
"Certificate" means the Certificate of Limited Partnership of
the
Partnership filed in the office of the
Secretary of State of the State of
Delaware on January 24, 2005, as amended
from time to time in accordance with
the terms hereof and the Act.
"Charter"
means the Articles of Incorporation of the Parent as filed with
the State Department of Assessments and
Taxation of Maryland, as amended,
supplemented or restated from time to
time.
"Closing
Price" has the meaning set forth in the definition of "Value."
"Code"
means the Internal Revenue Code of 1986, as amended and in
effect
from time to time or any successor statute
thereto, as interpreted by the
applicable Regulations thereunder. Any
reference herein to a specific section or
sections of the Code shall be deemed to
include a reference to any corresponding
provision of future law.
"Company
Employee" means any employee of the Partnership, the Parent and
any of their subsidiaries.
"Consent"
means the consent to, approval of, or vote in favor of a
proposed action by a Partner given in
accordance with Article XIV hereof.
"Constituent Person" shall have the meaning set forth in Section
4.7.F.
"Conversion Date" shall have the meaning set forth in Section
4.7.B.
"Conversion Notice" shall have the meaning set forth in Section
4.7.B.
"Conversion Right" shall have the meaning set forth in Section
4.7.A.
"Contributed Property" means each item of Property or other asset,
in such
form as may be permitted by the Act, but
excluding cash, contributed or deemed
contributed to the Partnership (or deemed
contributed by the Partnership to a
"new" partnership pursuant to Code Section
708) net of any liabilities assumed
by the Partnership relating to such
Contributed Property and any liability to
which such Contributed Property is
subject.
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"Debt"
means, as to any Person, as of any date of determination, (i)
all
indebtedness of such Person for borrowed
money or for the deferred purchase
price of property or services; (ii) all
amounts owed by such Person to banks or
other Persons in respect of reimbursement
obligations under letters of credit,
surety bonds and other similar instruments
guaranteeing payment or other
performance of obligations by such Person;
(iii) all indebtedness for borrowed
money or for the deferred purchase price of
property or services secured by any
lien on any property owned by such Person,
to the extent attributable to such
Person's interest in such property, even
though such Person has not assumed or
become liable for the payment thereof; and
(iv) lease obligations of such Person
that, in accordance with generally accepted
accounting principles, should be
capitalized.
"Depreciation" means, for each Partnership Year or other
applicable
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 period, Depreciation shall be in an
amount that 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 or other period 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 or
period is zero, Depreciation shall be
determined with reference to such
beginning Gross Asset Value using any
reasonable method selected by the General
Partner.
"Distributed Right" has the meaning set forth in the definition
of
"Adjustment Factor."
"Economic
Capital Account Balances" has the meaning set forth in Section
6.3.D hereof.
"Effective
Date" means the date of closing of the initial public offering
of REIT Shares.
"ERISA"
means the Employee Retirement Income Security Act of 1974, as
amended.
"Exchange
Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated
thereunder.
"Equity
Incentive Plan" means any equity incentive plan hereafter
adopted
by the Partnership or the Parent, including
the Parent's 2005 equity incentive
plan.
"Forced
Conversion" shall have the meaning set forth in Section 4.7.C.
"Forced
Conversion Notice" shall have the meaning set forth in Section
4.7.C.
"Funding
Debt" means the incurrence of any Debt for the purpose of
providing funds to the Partnership by or on
behalf of the Parent or any wholly
owned subsidiary of the Parent.
"General
Partner" means Vintage Wine Business Trust I, a Maryland
business
trust, and its successors and assigns, as
the general partner of the
Partnership.
"General
Partner Interest" means the Partnership Interest held by the
General Partner, which Partnership Interest
is an interest as a general partner
under the Act. A General Partner Interest
may be expressed as a number of OP
Units, Preferred Units, Junior Units or any
other Partnership Units.
"General
Partner Loan" has the meaning set forth in Section 4.3.D
hereof.
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"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 gross fair market value of such
asset as
determined by the General Partner.
(b) The Gross Asset Values of all Partnership assets
immediately
prior to
the occurrence of any event described in clause (i), clause
(ii),
clause
(iii), clause (iv) or clause (v) hereof shall be adjusted to
equal
their
respective gross fair market values, as determined by the
General
Partner
using such reasonable method of valuation as it may adopt, as
of
the
following times:
(i) the acquisition of an additional interest in the
Partnership (other than in connection with the execution of
this
Agreement but including, without limitation, acquisitions
pursuant
to Section 4.2 hereof or contributions or deemed contributions
by
the General Partner pursuant to Section 4.2 hereof) by a new or
existing Partner in exchange for more than a de minimis Capital
Contribution, if the General Partner reasonably determines that
such
adjustment is necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership; provided
that
the issuance of any LTIP Unit shall be deemed to require a
recalculation pursuant to this subsection;
(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, if the General Partner reasonably
determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners in the
Partnership;
(iii) the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); and
(iv) upon the admission of a successor General Partner
pursuant to Section 12.1 hereof;
(v) at such other times as the General Partner shall
reasonably determine necessary or advisable in order to comply
with
Regulations Sections 1.704-1(b) and 1.704-2.
(c) The Gross Asset Value of any Partnership asset distributed to
a
Partner
shall be the gross fair market value of such asset on the date
of
distribution as determined by the distributee and the General
Partner
provided
that, if the distributee is the General Partner or if the
distributee and the General Partner cannot agree on such a
determination,
such gross
fair market value shall be determined by an independent third
party
experienced in the valuation of similar assets, selected by the
General
Partner or the Parent in good faith.
(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
subsection (d) to the extent that the General Partner
reasonably
determines
that an adjustment pursuant to
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subsection
(b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant
to this
subsection
(d).
(e) If the Gross Asset Value of a Partnership asset has been
determined
or adjusted pursuant to subsection (a), subsection (b) or
subsection
(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 Net Income and Net Losses.
"Holder"
means either (a) a Partner or (b) an Assignee, owning a
Partnership Unit, that is treated as a
member of the Partnership for federal
income tax purposes.
"Incapacity" or "Incapacitated" means, (i) as to any Partner who is
an
individual, death, total physical
disability or entry by a court of competent
jurisdiction adjudicating such Partner
incompetent to manage his or her person
or his or her estate; (ii) as to any
Partner that is a corporation or limited
liability company, the filing of a
certificate of dissolution, or its
equivalent, or the revocation of the
corporation's charter; (iii) as to any
Partner that is a partnership, the
dissolution and commencement of winding up of
the partnership; (iv) as to any Partner
that is an estate, the distribution by
the fiduciary of the estate's entire
interest in the Partnership; (v) as to any
trustee of a trust that 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 (a) the
Partner commences a voluntary proceeding
seeking liquidation, reorganization or
other relief of or against such Partner
under any bankruptcy, insolvency or other
similar law now or hereafter in
effect, (b) the Partner is adjudged as
bankrupt or insolvent, or a final and
nonappealable order for relief under any
bankruptcy, insolvency or similar law
now or hereafter in effect has been entered
against the Partner, (c) the Partner
executes and delivers a general assignment
for the benefit of the Partner's
creditors, (d) the Partner files an answer
or other pleading admitting or
failing to contest the material allegations
of a petition filed against the
Partner in any proceeding of the nature
described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in
the appointment of a trustee,
receiver or liquidator for the Partner or
for all or any substantial part of the
Partner's properties, (f) any proceeding
seeking liquidation, reorganization or
other relief under any bankruptcy,
insolvency or other similar law now or
hereafter in effect has not been dismissed
within 120 days after the
commencement thereof, (g) the appointment
without the Partner's consent or
acquiescence of a trustee, receiver or
liquidator has not been vacated or stayed
within 90 days of such appointment, or (h)
an appointment referred to in clause
(g) above 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 its status as (A) the General Partner or
the Parent or any successor thereto
or (B) a trustee of the General Partner, a
director of the Parent or an officer
or employee of the Partnership, the General
Partner or the Parent and (ii) such
other Persons (including Affiliates of the
General Partner, the Partnership or
the Parent) as the General Partner may
designate from time to time (whether
before or after the event giving rise to
potential liability), in its sole and
absolute discretion.
"Independent Directors" means the independent directors of the
Board of
Directors of Parent as determined by the
rules and regulations of the New York
Stock Exchange then in effect.
"IPO"
means a public offering of the common stock of the Parent.
"IPO
Price" means the initial public offering price as shown on the
cover
page of the final prospectus used in
Parent's IPO as adjusted for stock splits,
special dividends or distributions or other
similar adjustments to the capital
structure of Parent.
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<PAGE>
"IRS"
means the Internal Revenue Service, which administers the
internal
revenue laws of the United States.
"Junior
Share" means a share of capital stock of the Parent now or
hereafter authorized or reclassified that
has dividend rights, or rights upon
liquidation, winding up and dissolution,
that are junior in rank to the REIT
Shares.
"Junior
Unit" means a fractional share of the Partnership Interests
that
the General Partner has authorized pursuant
to Section 4.1, 4.3 or 4.4 hereof
that has distribution rights, or rights
upon liquidation, winding up and
dissolution, that are junior in rank to the
OP Units.
"Limited
Partner" means any Person named as a Limited Partner in Exhibit
A
attached hereto, as such Exhibit A may be
amended from time to time, or any
Substituted Limited Partner or Additional
Limited Partner, in such Person's
capacity as a Limited Partner in the
Partnership.
"Limited
Partner Interest" means a Partnership Interest of a Limited
Partner in the Partnership representing a
fractional part of the Partnership
Interests of all Limited Partners and
includes any and all benefits to which the
holder of such a Partnership Interest may
be entitled as provided in this
Agreement, together with all obligations of
such Person to comply with the terms
and provisions of this Agreement. A Limited
Partner Interest may be expressed as
a number of OP Units, LTIP Units, Preferred
Units or other Partnership Units.
"Liquidating Event" has the meaning set forth in Section 13.1
hereof.
"Liquidating Gains" has the meaning set forth in Section 6.3.D
hereof.
"Liquidator" has the meaning set forth in Section 13.2.A
hereof.
"LTIP
Unit" means a Partnership Unit which is designated as an LTIP
Unit
and which has the rights, preferences and
other privileges designated in Section
4.6 hereof and elsewhere in this Agreement
in respect of Holders of LTIP Units.
The allocation of LTIP Units among the
Partners shall be set forth on Exhibit A,
as may be amended from time to time.
"LTIP
Unitholder" means a Partner that holds LTIP Units.
"Majority in
Interest of the Outside Limited Partners" means Limited
Partners (excluding for this purpose (i)
any Limited Partnership Interests held
by the Parent or its Subsidiaries, (ii) any
Person of which the Parent or its
Subsidiaries directly or indirectly owns or
controls more than 50% of the voting
interests and (iii) any Person directly or
indirectly owning or controlling more
than 50% of the outstanding interests of
the General Partner) holding more than
50% of the outstanding OP Units held by all
Limited Partners who are not
excluded for the purposes hereof.
"Market
Price" has the meaning set forth in the definition of "Value."
"Net
Income" or "Net Loss" means, for each Partnership Year of the
Partnership, an amount equal to the
Partnership's taxable income or loss for
such year, determined in accordance with
Code Section 703(a) (for this purpose,
all items of income, gain, loss or
deduction required to be stated separately
pursuant to Code Section 703(a)(1) shall be
included in taxable income or loss),
with the following adjustments:
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<PAGE>
(a) 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 of "Net Income" or "Net Loss" shall
be
added to
(or subtracted from, as the case may be) such taxable income
(or
loss);
(b) Any expenditure of the Partnership described in Code
Section
705(a)(2)(B) or treated as a Code Section 705(a)(2)(B)
expenditure
pursuant
to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise
taken into
account in computing Net Income (or Net Loss) pursuant to this
definition
of "Net Income" or "Net Loss," shall be subtracted from (or
added to,
as the case may be) such taxable income (or loss);
(c) In the event the Gross Asset Value of any Partnership asset
is
adjusted
pursuant to subsection (b) or subsection (c) of the definition
of
"Gross
Asset Value," the amount of such adjustment shall be taken into
account as
gain or loss from the disposition of such asset for purposes of
computing
Net Income or Net Loss;
(d) Gain or loss resulting from any disposition of property
with
respect to
which gain or loss is recognized for federal income tax
purposes
shall be computed by reference to the Gross Asset Value of the
property
disposed of, notwithstanding that the adjusted tax basis of
such
property
differs from its Gross Asset Value;
(e) In lieu of the depreciation, amortization and other cost
recovery
deductions that would otherwise be taken into account in
computing
such taxable income or loss, there shall be taken into account
Depreciation for such Partnership Year;
(f) To the extent that an adjustment to the adjusted tax basis
of
any
Partnership asset pursuant to Code Section 734(b) or Code
Section
743(b) is
required pursuant to Regulations Section
1.704-1(b)(2)(iv)(m)(4)
to be
taken into account in determining Capital Accounts as a result of
a
distribution other than in liquidation of a Partner's interest in
the
Partnership, the amount of such adjustment shall be treated as an
item of
gain (if
the adjustment increases the basis of the asset) or loss (if
the
adjustment
decreases the basis of the asset) from the disposition of the
asset and
shall be taken into account for purposes of computing Net
Income
or Net
Loss; and
(g) Notwithstanding any other provision of this definition of
"Net
Income" or
"Net Loss," any item that is specially allocated pursuant to
Section
6.3 hereof shall not be taken into account in computing Net
Income
or Net
Loss. The amounts of the items of Partnership income, gain, loss
or
deduction
available to be specially allocated pursuant to Section 6.3
hereof
shall be determined by applying rules analogous to those set
forth
in this
definition of "Net Income" or "Net Loss."
"New
Securities" means (i) any rights, options, warrants or convertible
or
exchangeable securities having the right to
subscribe for or purchase REIT
Shares, Preferred Shares or Junior Shares,
except that "New Securities" shall
not mean any Preferred Shares, Junior
Shares or grants under the Equity
Incentive Plans or (ii) any Debt issued by
the REIT that provides any of the
rights described in clause (i).
"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).
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<PAGE>
"Notice of
Redemption" means the Notice of Redemption substantially in the
form of Exhibit B attached to this
Agreement.
"Obligated
Partner" means a Partner who has agreed in writing to be an
Obligated Partner and has agreed and is
obligated to make certain contributions,
not in excess of such Obligated Partner's
Protected Amount, to the Partnership
with respect to such Partner's Capital
Account Deficit upon the occurrence of
certain events.
"Original
Agreement" means the original Agreement of Limited Partnership,
dated as of January 24, 2005.
"OP Unit"
means a fractional share of the Partnership Interests of all
Partners issued pursuant to Sections 4.1
and 4.2 hereof, but does not include
any LTIP Unit, Preferred Unit, Junior Unit
or any other Partnership Unit
specified in a Partnership Unit Designation
as being other than an OP Unit;
provided, however, that the General Partner
Interest and the Limited Partner
Interests shall have the differences in
rights and privileges as specified in
this Agreement.
"OP Unit
Economic Balance" has the meaning set forth in Section 6.3.D
hereof.
"Outside
Director" shall mean a director of the Parent who is not also
an
officer or employee of the Parent.
"Ownership
Limit" means the applicable restriction or restrictions on
ownership of shares of the Parent imposed
under the Charter.
"Parent"
means Vintage Wine Trust, Inc., a Maryland corporation.
"Parent
Limited Partner" means Vintage Wine Business Trust II, a
Maryland
business trust, and its successors and
assigns, as a limited partner of the
Partnership in its capacity as limited
partner of the Partnership.
"Partner"
means the 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 held
by either a Limited Partner or the General
Partner and includes any and all
benefits to which the holder of such a
Partnership Interest may be entitled as
provided in this Agreement, together with
all obligations of such Person to
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<PAGE>
comply with the terms and provisions of
this Agreement. A Partnership Interest
may be expressed as a number of OP Units,
LTIP Units, Preferred Units, Junior
Units or other Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations
Section 1.704-2(b)(2), and the amount of
Partnership Minimum Gain, as well as
any net increase or decrease in 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 a record date established by the
General
Partner for the distribution of Available
Cash pursuant to Section 5.1 hereof,
which record date shall generally be the
same as the record date established by
the General Partner for a distribution to
its stockholders of some or all of its
portion of such distribution.
"Partnership Unit" shall mean an OP Unit, an LTIP Unit, a Preferred
Unit,
a Junior Unit or any other fractional share
of the Partnership Interests that
the General Partner has authorized pursuant
to Section 4.1, 4.2, 4.3 or 4.4
hereof.
"Partnership Unit Designation" has the meaning set forth in Section
4.3
hereof.
"Partnership Unit Distribution" shall have the meaning set forth
in
Section 4.6.A hereof.
"Partnership Year" means the fiscal year of the Partnership, which
shall
be the calendar year.
"Percentage Interest" means, as to a Partner holding a class or
series of
Partnership Interests, its interest in such
class or series as determined by
dividing the Partnership Units of such
class or series owned by such Partner by
the total number of Partnership Units of
such class then outstanding as
specified in Exhibit A attached hereto, as
such Exhibit may be amended from time
to time. If the Partnership issues
additional classes or series of Partnership
Interests other than as contemplated
herein, the interest in the Partnership
among the classes or series of Partnership
Interests shall be determined as set
forth in the amendment to the Partnership
Agreement setting forth the rights and
privileges of such additional classes or
series of Partnership Interest, if any,
as contemplated by Section 4.3.
"Person"
means an individual or a corporation, partnership, trust,
unincorporated organization, association,
limited liability company or other
entity.
"Preferred
Share" means a share of capital stock of the Parent now or
hereafter authorized or reclassified that
has dividend rights, or rights upon
liquidation, winding up and dissolution,
that are superior or prior to the REIT
Shares.
"Preferred
Unit" means a fractional share of the Partnership Interests
that the General Partner has authorized
pursuant to Section 4.1, 4.3 or 4.4
hereof that has distribution rights, or
rights upon liquidation, winding up and
dissolution, that are superior or prior to
the OP Units.
"Properties" means any assets and property of the Partnership such
as, but
not limited to, interests in real property
and personal property, including,
without limitation, fee interests,
interests in ground leases, interests in
limited liability companies, joint ventures
or partnerships, interests in
mortgages, and Debt instruments as the
Partnership may hold from time to time
and "Property" shall mean any one such
asset or property.
"Protected
Amount" means the amount specified on Exhibit C with respect to
any Obligated Partner, as such Exhibit may
be amended from time to time.
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<PAGE>
"Publicly
Traded" means listed or admitted to trading on the New York
Stock Exchange, the American Stock Exchange
or another national securities
exchange or designated for quotation on the
NASDAQ National Market, or any
successor to the foregoing.
"Qualified
REIT Subsidiary" means a qualified REIT subsidiary of the
Parent within the meaning of Code Section
856(i)(2).
"Qualified
Transferee" means an "Accredited Investor" as defined in Rule
501 promulgated under the Securities
Act.
"Qualifying Party" means (a) a Limited Partner set forth in
Schedule A
hereto, (b) an Additional Limited Partner
or (c) a Substituted Limited Partner
succeeding to all or part of the Limited
Partner Interest of (i) a Limited
Partner set forth in Schedule A hereto or
(ii) an Additional Limited Partner.
"Redemption" has the meaning set forth in Section 8.6.A hereof.
"Regulations" means the applicable income tax regulations under the
Code,
whether such regulations are in proposed,
temporary or final form, as such
regulations may be amended from time to
time (including corresponding provisions
of succeeding regulations).
"Regulatory Allocations" has the meaning set forth in Section
6.3.A(vii)
hereof.
"REIT"
means a real estate investment trust qualifying under Code
Section
856.
"REIT
Payment" has the meaning set forth in Section 15.11 hereof.
"REIT
Requirements" has the meaning set forth in Section 5.1 hereof.
"REIT
Share" means a share of the Parent's common stock, par value
$0.01
per share. Where relevant in this
Agreement, "REIT Share" includes shares of the
Parent's common stock, par value $0.01 per
share, issued upon conversion of
Preferred Shares or Junior Shares.
"REIT
Shares Amount" means a number of REIT Shares equal to the product
of
(a) the number of Tendered Units and (b)
the Adjustment Factor in effect on the
Specified Redemption Date with respect to
such Tendered Units; provided,
however, that, in the event that the Parent
issues to all holders of REIT Shares
as of a certain record date rights,
options, warrants or convertible or
exchangeable securities entitling the
Parent's stockholders to subscribe for or
purchase REIT Shares, or any other
securities or property (collectively, the
"Rights"), with the record date for such
Rights issuance falling within the
period starting on the date of the Notice
of Redemption and ending on the day
immediately preceding the Specified
Redemption Date, which Rights will not be
distributed before the relevant Specified
Redemption Date, then the REIT Shares
Amount shall also include such Rights that
a holder of that number of REIT
Shares would be entitled to receive,
expressed, where relevant hereunder, in a
number of REIT Shares determined by the
Parent in good faith.
"Rights"
has the meaning set forth in the definition of "REIT Shares
Amount."
"Securities Act" means the Securities Act of 1933, as amended, and
the
rules and regulations promulgated
thereunder.
"Services
Agreement" means any management, development or advisory
agreement with a property and/or asset
manager for the provision of property
management, asset management, leasing,
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<PAGE>
development and/or similar services with
respect to the Properties and any
agreement for the provision of services of
accountants, legal counsel,
appraisers, insurers, brokers, transfer
agents, registrars, developers,
financial advisors and other professional
services.
"Specified
Redemption Date" means the 10th Business Day following receipt
by the General Partner of a Notice of
Redemption; provided that, if the REIT
Shares are not Publicly Traded, the
Specified Redemption Date means the 30th
Business Day following receipt by the
General Partner of a Notice of Redemption.
"Subsidiary" means, with respect to any Person, any other Person
(which is
not an individual) 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 hereof.
"Tax
Items" has the meaning set forth in Section 6.4.A hereof.
"Tendered
Units" has the meaning set forth in Section 8.6.A hereof.
"Tendering
Partner" has the meaning set forth in Section 8.6.A hereof.
"Tendering
Party" has the meaning set forth in Section 8.6.A hereof.
"Terminating Capital Transaction" means any sale or other
disposition of
all or substantially all of the assets of
the Partnership or a related series of
transactions that, taken together, result
in the sale or other disposition of
all or substantially all of the assets of
the Partnership.
"Transaction" shall have the meaning set forth in Section
4.7.F.
"Transfer," when used with respect to a Partnership Unit, or all or
any
portion of a Partnership Interest, means
any sale, assignment, bequest,
conveyance, devise, gift (outright or in
trust), pledge, encumbrance,
hypothecation, mortgage, exchange, transfer
or other disposition or act of
alienation, whether voluntary or
involuntary or by operation of law; provided,
however, that when the term is used in
Article XI hereof, "Transfer" does not
include (a) any Redemption of Partnership
Units by the Partnership or the
Parent, or acquisition of Tendered Units by
the General Partner or the Parent,
pursuant to Section 8.6 hereof or (b) any
redemption of Partnership Units
pursuant to any Partnership Unit
Designation. The terms "Transferred" and
"Transferring" have correlative
meanings.
"Value"
means, on any date of determination with respect to a REIT
Share,
the average of the daily Market Prices for
ten consecutive trading days
immediately preceding the date of
determination except that, as provided in
Section 4.5.B hereof, the Market Price for
the trading day immediately preceding
the date of exercise of a stock option
under any Equity Incentive Plan shall be
substituted for such average of daily
market prices for purposes of Section 4.5
hereof; provided, however, that for
purposes of Section 8.6, the "date of
determination" shall be the date of receipt
by the Parent of a Notice of
Redemption or, if such date is not a
Business Day, the immediately preceding
Business Day. The term "Market Price" on
any date shall mean, with respect to
any class or series of outstanding REIT
Shares, the Closing Price for such REIT
Shares on such date. The "Closing Price" on
any date shall mean the last sale
price for such REIT Shares, regular way,
or, in case no such sale takes place on
such day, the average of the closing bid
and asked prices, regular way, for such
REIT Shares, in either case as reported in
the principal consolidated
transaction reporting system with respect
to securities listed or admitted to
trading
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<PAGE>
on the New York Stock Exchange or, if such
REIT Shares are not listed or
admitted to trading on the New York Stock
Exchange, as reported on the principal
consolidated transaction reporting system
with respect to securities listed on
the principal national securities exchange
on which such REIT Shares are listed
or admitted to trading or, if such REIT
Shares are not listed or admitted to
trading on any national securities
exchange, the last quoted price, or, if not
so quoted, the average of the high bid and
low asked prices in the
over-the-counter market, as reported by the
National Association of Securities
Dealers, Inc. Automated Quotation System
or, if such system is no longer in use,
the principal other automated quotation
system that may then be in use or, if
such REIT Shares are not quoted by any such
organization, the average of the
closing bid and asked prices as furnished
by a professional market maker making
a market in such REIT Shares selected by
the Board of Directors of the Parent
or, in the event that no trading price is
available for such REIT Shares, the
fair market value of the REIT Shares, as
determined in good faith by the Board
of Directors of the Parent.
In the
event that the REIT Shares Amount includes Rights (as defined
in
the definition of "REIT Shares Amount")
that a holder of REIT Shares would be
entitled to receive, then the Value of such
Rights shall be determined by the
Parent acting in good faith on the basis of
such quotations and other
information as it considers, in its
reasonable judgment, appropriate.
"Vesting
Agreement" means each or any, as the context implies, Equity
Incentive Plan entered into by an LTIP
Unitholder upon acceptance of an award of
LTIP Units under an Equity Incentive
Plan.
ARTICLE II
ORGANIZATIONAL MATTERS
Section
2.1. Organization. The Partnership is a limited partnership
organized pursuant to the provisions of the
Act and upon the terms and subject
to the 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.
The Partnership Interest of each Partner
shall be personal property for all
purposes.
Section
2.2. Name. The name of the Partnership is "VINTAGE WINE TRUST
LP."
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," "LP," "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 notify
the Partners of such change in the next
regular communication to the Partners.
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
Corporation Service Company, 1013 Centre
Road, Wilmington, Delaware 19805, 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 located at
1101 Fifth Avenue, Suite 315, San
Rafael, CA 94901 or such other place as the
General Partner may from time to
time designate by notice to the Limited
Partners. The Partnership may maintain
offices at such other place or places
within or outside the State of Delaware as
the General Partner deems advisable.
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<PAGE>
Section
2.4. Power of Attorney.
A. Each Limited Partner and each Assignee hereby irrevocably
constitutes and appoints the General
Partner, any Liquidator, and authorized
officers and attorneys-in-fact of each, and
each of those acting singly, in each
case with full power of substitution, as
its true and lawful agent and
attorney-in-fact, with full power and
authority in its name, place and stead to:
(i) execute, swear to, seal, acknowledge, deliver, file and
record in
the appropriate public offices (a) all certificates, documents
and other
instruments (including, without limitation, this Agreement and
the
Certificate and all amendments, supplements or restatements
thereof)
that the
General Partner or the Liquidator deems appropriate or
necessary
to form,
qualify or continue the existence or qualification of the
Partnership as a limited partnership (or a partnership in which
the
limited
partners have limited liability to the extent provided by
applicable
law) in the State of Delaware and in all other jurisdictions in
which the Partnership
may conduct business or own property; (b) all
instruments that the General Partner or the Liquidator deems
appropriate
or
necessary to reflect any amendment, change, modification or
restatement
of this
Agreement in accordance with its terms; (c) all conveyances and
other
instruments or documents that the General Partner or the
Liquidator
deems
appropriate or necessary to reflect the dissolution and
liquidation
of the
Partnership pursuant to the terms of this Agreement, including,
without
limitation, a certificate of cancellation; (d) all conveyances
and
other
instruments or documents that the General Partner or the
Liquidator
deems
appropriate or necessary to reflect the distribution or exchange
of
assets of
the Partnership pursuant to the terms of this Agreement; (e)
all
instruments relating to the admission, withdrawal, removal or
substitution
of any
Partner pursuant to, or other events described in, Article XI,
Article
XII or Article XIII hereof or the Capital Contribution of any
Partner;
and (f) all certificates, documents and other instruments
relating
to the determination of the rights, preferences and privileges
relating
to Partnership Interests; and
(ii) execute, swear to, acknowledge and file all ballots,
consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of
the
General
Partner or the Liquidator, to make, evidence, give, confirm or
ratify any
vote, consent, approval, agreement or other action that is made
or given
by the Partners hereunder or is consistent with the terms of
this
Agreement
or appropriate or necessary, in the sole and absolute
discretion
of the
General Partner or the Liquidator, to effectuate the terms or
intent of
this Agreement.
Nothing contained herein shall be construed
as authorizing the General Partner
or the Liquidator to amend this Agreement
except in accordance with Article XIV
hereof or as may be otherwise expressly
provided for in this Agreement.
B. The foregoing power of attorney is hereby declared to be
irrevocable and a special power coupled
with an interest, in recognition of the
fact that each of the Limited Partners and
Assignees will be relying upon the
power of the General Partner or the
Liquidator to act as contemplated by this
Agreement in any filing or other action by
it on behalf of the Partnership, and
it shall survive and not be affected by the
subsequent Incapacity of any Limited
Partner or Assignee and the Transfer of all
or any portion of such Limited
Partner's or Assignee's Partnership Units
or Partnership Interest and shall
extend to such Limited Partner's or
Assignee's heirs, successors, assigns and
personal representatives. Each such Limited
Partner or Assignee hereby agrees to
be bound by any representation made by the
General Partner or the Liquidator,
acting in good faith pursuant to such power
of attorney; and each such Limited
Partner or Assignee hereby waives any and
all defenses that may be available to
contest, negate or disaffirm the action of
the General Partner or the
Liquidator, taken in good faith under such
power of
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attorney. Each Limited Partner or Assignee
shall execute and deliver to the
General Partner or the Liquidator, within
15 days after receipt of the General
Partner's or the Liquidator's request
therefor, such further designation, powers
of attorney and other instruments as the
General Partner or the Liquidator, as
the case may be, deems necessary to
effectuate this Agreement and the purposes
of the Partnership.
Section
2.5. Term. Pursuant to Section 17-217(d) of the Act, the term
of
the Partnership commenced on January 24,
2005 and shall continue perpetually
unless it is dissolved pursuant to the
provisions of Article XIII hereof or as
otherwise provided by law.
ARTICLE III
PURPOSE
Section
3.1. Purpose and Business. The purpose and nature of the
Partnership is to conduct any business,
enterprise or activity permitted by or
under the Act; provided, however, such
business and arrangements and interests
may be limited to and conducted in such a
manner as to permit the Parent, in the
sole and absolute discretion of the General
Partner, at all times to be
classified as a REIT unless the Parent, in
accordance with its Articles of
Incorporation and Bylaws, as amended, in
its sole discretion has chosen to cease
to qualify as a REIT or has chosen not to
attempt to qualify as a REIT for any
reason or for reasons whether or not
related to the business conducted by the
Partnership. Without limiting the General
Partner's right in its sole discretion
to cease qualifying as a REIT, the Partners
acknowledge that the status of the
Parent as a REIT inures to the benefit of
all Partners and not solely to the
Parent, the General Partner or its
Affiliates. In connection with the foregoing,
the Partnership shall have full power and
authority to enter into, perform and
carry out contracts of any kind, to borrow
and lend money and to issue and
guarantee evidence of indebtedness, whether
or not secured by mortgage, deed of
trust, pledge or other lien and, directly
or indirectly, to acquire and
construct additional Properties necessary,
useful or desirable in connection
with its business.
Section
3.2. Powers.
A. The Partnership shall be 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.
B. The
Partnership may contribute from time to time Partnership
capital to one or more newly formed
entities solely in exchange for equity
interests therein (or in a wholly owned
subsidiary entity thereof).
C. Notwithstanding any other provision in this Agreement, the
General Partner may cause the Partnership
not to take, or to refrain from
taking, any action that, in the judgment of
the General Partner, in its sole and
absolute discretion, (i) could adversely
affect the ability of the Parent to
continue to qualify as a REIT, (ii) could
subject the Parent to any additional
taxes under Code Section 857 or Code
Section 4981 or any other related or
successor provision of the Code or (iii)
could violate any law or regulation of
any governmental body or agency having
jurisdiction over the General Partner,
the Parent, their securities or the
Partnership.
Section
3.3. Partnership Only for Partnership Purposes Specified. This
Agreement shall not be deemed to create a
company, venture or partnership
between or among the Partners with respect
to any activities whatsoever other
than the activities within the purposes of
the Partnership as specified in
Section 3.1 hereof. Except as otherwise
provided in this Agreement, no Partner
shall have any authority to act for, bind,
commit or assume any obligation or
responsibility on behalf of the
Partnership, its
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properties or any other Partner. No
Partner, in its capacity as a Partner under
this Agreement, shall be responsible or
liable for any indebtedness or
obligation of another Partner, and the
Partnership shall not be responsible or
liable for any indebtedness or obligation
of any Partner, incurred either before
or after the execution and delivery of this
Agreement by such Partner, except as
to those responsibilities, liabilities,
indebtedness or obligations incurred
pursuant to and as limited by the terms of
this Agreement and the Act.
Section
3.4. Representations and Warranties by the Parties.
A. Each Partner (including, without limitation, each Additional
Limited Partner or Substituted Limited
Partner as a condition to becoming an
Additional Limited Partner or a Substituted
Limited Partner, respectively)
represents and warrants to each other
Partner that (i) the consummation of the
transactions contemplated by this Agreement
to be performed by such Partner will
not result in a breach or violation of, or
a default under, any material
agreement by which such Partner or any of
such Partner's property is bound, or
any statute, regulation, order or other law
to which such Partner is subject,
(ii) subject to the last sentence of this
Section 3.4.A, such Partner is neither
a "foreign person" within the meaning of
Code Section 1445(f) nor a "foreign
partner" within the meaning of Code Section
1446(e), (iii) such Partner does not
own, directly or indirectly, (a) 9.9% or
more of the total combined voting power
of all classes of stock entitled to vote,
or 9.9% or more of the total number of
shares of all classes of stock, of any
corporation that is a tenant of either
(I) the Parent or any Qualified REIT
Subsidiary, (II) the Partnership or (III)
any partnership, venture or limited
liability company of which the Parent, any
Qualified REIT Subsidiary or the
Partnership is a member or (b) an interest of
9.9% or more in the assets or net profits
of any tenant of either (I) the Parent
or any Qualified REIT Subsidiary, (II) the
Partnership or (III) any partnership,
venture, or limited liability company of
which the Parent, any Qualified REIT
Subsidiary or the Partnership is a member
and (iv) this Agreement is binding
upon, and enforceable against, such Partner
in accordance with its terms.
Notwithstanding anything contained herein
to the contrary, in the event that the
representation contained in the foregoing
clause (ii) would be inaccurate if
given by a Partner, such Partner (w) shall
not be required to make and shall not
be deemed to have made such representation,
if it delivers to the General
Partner in connection with or prior to its
execution of this Agreement written
notice that it may not truthfully make such
representation, (x) hereby agrees
that it is subject to, and hereby
authorizes the General Partner to withhold,
all withholdings to which such a "foreign
person" or "foreign partner," as
applicable, is subject under the Code and
(y) hereby agrees to cooperate fully
with the General Partner with respect to
such withholdings, including by
effecting the timely completion and
delivery to the General Partner of all
governmental forms required in connection
therewith.
B. Each Partner (including, without limitation, each
Substituted
Limited Partner as a condition to becoming
a Substituted Limited Partner)
represents, warrants and agrees that it has
acquired and continues to hold its
interest in the Partnership for its own
account for investment purposes only and
not for the purpose of, or with a view
toward, the resale or distribution of all
or any part thereof, and not with a view
toward selling or otherwise
distributing such interest or any part
thereof at any particular time or under
any predetermined circumstances. Each
Partner further represents and warrants
that it is a sophisticated investor, able
and accustomed to handling
sophisticated financial and tax matters for
itself, particularly real estate
investments, and that it has a sufficiently
high net worth that it does not
anticipate a need for the funds that it has
invested in the Partnership in what
it understands to be a highly speculative
and illiquid investment.
C. The representations and warranties contained in Sections
3.4.A
and 3.4.B hereof shall survive the
execution and delivery of this Agreement by
each Partner (and, in the case of an
Additional Limited Partner or a Substituted
Limited Partner, the admission of such
Additional Limited
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Partner or Substituted Limited Partner as a
Limited Partner in the
Partnership) and the dissolution,
liquidation and termination of the
Partnership.
D. Each Partner (including, without limitation, each
Substituted
Limited Partner as a condition to becoming
a Substituted Limited Partner) hereby
acknowledges that no representations as to
potential profit, cash flows, funds
from operations or yield, if any, in
respect of the Partnership or the General
Partner have been made by the Parent, any
Partner or any employee or
representative or Affiliate of the Parent
or any Partner, and that projections
and any other information, including,
without limitation, financial and
descriptive information and documentation,
that may have been in any manner
submitted to such Partner shall not
constitute any representation or warranty of
any kind or nature, express or implied.
ARTICLE IV
CAPITAL CONTRIBUTIONS
Section
4.1. Capital Contributions of the Partners. Each Partner has
made
a Capital Contribution to the Partnership
and owns Partnership Units in the
amount and designation set forth for such
Partner on Exhibit A, as the same may
be amended from time to time by the General
Partner to the extent necessary to
reflect accurately sales, exchanges,
conversions or other Transfers,
redemptions, Capital Contributions, the
issuance of additional Partnership
Units, or similar events having an effect
on a Partner's ownership of
Partnership Units. Except as provided by
law or in Section 4.4, 10.4 or 13.2.D
hereof, the Partners shall have no
obligation or right to make any additional
Capital Contributions or loans to the
Partnership.
Section
4.2. Classes of Partnership Units. From and after the Effective
Date, subject to Section 4.3.A below, the
Partnership shall have two classes of
Partnership Units, entitled "OP Units" and
"LTIP Units." Subject to Section 4.9,
either OP Units or LTIP Units, at the
election of the General Partner, in its
sole and absolute discretion, may be issued
to newly admitted Partners in
exchange for any Capital Contributions by
such Partners and/or the provision of
services by such Partners; provided that
any Partnership Unit that is not
specifically designated by the General
Partner as being of a particular class
shall be deemed to be an OP Unit.
Section
4.3. Issuances of Additional Partnership Interests.
A. General. Notwithstanding Section 7.3.B hereof, the General
Partner is hereby authorized to cause the
Partnership to issue additional
Partnership Interests, in the form of
Partnership Units, for any Partnership
purpose, at any time or from time to time,
to the Partners (including the
General Partner or Parent Limited Partner)
or to other Persons, and to admit
such Persons as Additional Limited
Partners, for such consideration and on such
terms and conditions as shall be
established by the General Partner in its sole
and absolute discretion, all without the
approval of any Limited Partners.
Without limiting the foregoing, the General
Partner is expressly authorized to
cause the Partnership to issue Partnership
Units (i) upon the conversion,
redemption or exchange of any Debt,
Partnership Units or other securities issued
by the Partnership, (ii) for less than fair
market value, so long as the General
Partner concludes in good faith that such
issuance is in the best interests of
the Parent and the Partnership and (iii) in
connection with any merger of any
other Person into the Partnership or any
Subsidiary of the Partnership if the
applicable merger agreement provides that
Persons are to receive Partnership
Units in exchange for their interests in
the Person merging into the Partnership
or any Subsidiary of the Partnership.
Subject to Delaware law, any additional
Partnership Interests may be issued in one
or more classes, or one or more
series of any of such classes, with such
designations, preferences and relative,
participating, optional or other special
rights, powers and duties as shall be
determined by the General Partner, in its
sole and absolute discretion without
the approval of any Limited Partner, and
set forth in a
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written document thereafter attached to and
made an exhibit to this Agreement
(each, a "Partnership Unit Designation").
Without limiting the generality of the
foregoing, the General Partner shall have
authority to specify (a) the
allocations of items of Partnership income,
gain, loss, deduction and credit to
each such class or series of Partnership
Interests; (b) the right of each such
class or series of Partnership Interests to
share in Partnership distributions;
(c) the rights of each such class or series
of Partnership Interests upon
dissolution and liquidation of the
Partnership; (d) the voting rights, if any,
of each such class or series of Partnership
Interests; and (e) the conversion,
redemption or exchange rights applicable to
each such class or series of
Partnership Interests. Upon the issuance of
any additional Partnership Interest,
the General Partner shall amend Exhibit A
as appropriate to reflect such
issuance.
B. Issuances to the General Partner and REIT Limited Partner.
No
additional Partnership Units shall be
issued to the General Partner or Parent
Limited Partner unless (i) the additional
Partnership Units are issued to all
Partners in proportion to their respective
Percentage Interests with respect to
the class of Partnership Units so issued,
(ii) (a) the additional Partnership
Units are (x) OP Units issued in connection
with an issuance of REIT Shares or
(y) Partnership Units (other than OP Units)
issued in connection with an
issuance of Preferred Shares, Junior
Shares, New Securities or other interests
in the Parent (other than REIT Shares),
which Preferred Shares, Junior Shares,
New Securities or other interests have
designations, preferences and other
rights, terms and provisions that are
substantially the same as the
designations, preferences and other rights,
terms and provisions of the
additional Partnership Units issued to the
General Partner and (b) the Parent
directly or indirectly contributes or
otherwise causes to be transferred to the
Partnership the cash proceeds or other
consideration, if any, received in
connection with the issuance of such REIT
Shares, Preferred Shares, Junior
Shares, New Securities or other interests
in the Parent or (iii) the additional
Partnership Units are issued upon the
conversion, redemption or exchange of
Debt, Partnership Units or other securities
issued by the Partnership. Of the
total number of additional Partnership
Units issued to the General Partner and
the REIT Limited Partner, a number of
additional Partnership Units equal to 1%
of the aggregate number of Partnership
Units issued and outstanding shall be
deemed the General Partner Partnership
Units, and the remainder shall be deemed
the REIT Limited Partner Partnership Units.
In the event that the Partnership
issues additional Partnership Units
pursuant to this Section 4.3.B, the General
Partner shall make such revisions to this
Agreement (including but not limited
to the revisions described in Sections
6.2.B and 8.6) as it determines are
necessary to reflect the issuance of such
additional Partnership Interests.
C. No Preemptive Rights. No Person, including, without
limitation,
any Partner or Assignee, shall have any
preemptive, preferential, participation
or similar right or rights to subscribe for
or acquire any Partnership Interest.
Section
4.4. Additional Funds and Capital Contributions.
A. General. The General Partner may, at any time and from time
to
time, determine that the Partnership
requires additional funds ("Additional
Funds") for the acquisition or development
of additional Properties, for the
redemption of Partnership Units or for such
other purposes as the General
Partner may determine in its sole and
absolute discretion. Additional Funds may
be obtained by the Partnership, at the
election of the General Partner, in any
manner provided in, and in accordance with,
the terms of this Section 4.4
without the approval of any Limited
Partners.
B. Additional Capital Contributions. The General Partner, on
behalf
of the Partnership, may obtain any
Additional Funds by accepting Capital
Contributions from any Partners or other
Persons. In connection with any such
Capital Contribution (of cash or property),
the General Partner is hereby
authorized to cause the Partnership from
time to time to issue additional
Partnership Units (as set forth in Section
4.3 above) in consideration therefor
and the Percentage Interests of the
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General Partner and the Limited Partners
shall be adjusted to reflect the
issuance of such additional Partnership
Units.
C. Loans by Third Parties. The General Partner, on behalf of
the
Partnership, may obtain any Additional
Funds by causing the Partnership to incur
Debt to any Person upon such terms as the
General Partner determines
appropriate, including making such Debt
convertible, redeemable or exchangeable
for Partnership Units; provided, however,
that the Partnership shall not incur
any such Debt if (i) a breach, violation or
default of such Debt would be deemed
to occur by virtue of the Transfer by any
Limited Partner of any Partnership
Interest or (ii) such Debt is recourse to
any Partner (unless the Partner
otherwise agrees).
D. General Partner/Parent Loans. The General Partner and/or the
Parent, as the case may be, on behalf of
the Partnership, may obtain any
Additional Funds by causing the Partnership
to incur Debt with the General
Partner and/or the Parent, as the case may
be (each, a "General Partner Loan"),
if (i) such Debt is, to the extent
permitted by law, on substantially the same
terms and conditions (including interest
rate, repayment schedule, and
conversion, redemption, repurchase and
exchange rights) as Funding Debt incurred
by the General Partner and/or the Parent,
as the case may be, the net proceeds
of which are loaned to the Partnership to
provide such Additional Funds or (ii)
such Debt is on terms and conditions no
less favorable to the Partnership than
would be available to the Partnership from
any third party; provided, however,
that the Partnership shall not incur any
such Debt if (a) a breach, violation or
default of such Debt would be deemed to
occur by virtue of the Transfer by any
Limited Partner of any Partnership Interest
or (b) such Debt is recourse to any
Partner and/or the Parent, as the case may
be (unless the Partner and/or the
Parent, as the case may be, otherwise
agrees).
E. Issuance of Securities by the Parent. The Parent shall not
issue
any additional REIT Shares, Preferred
Shares, Junior Shares or New Securities
unless the Parent contributes directly or
indirectly the cash proceeds or other
consideration, if any, received from the
issuance of such additional REIT
Shares, Preferred Shares, Junior Shares or
New Securities, as the case may be,
and from the exercise of the rights
contained in any such additional New
Securities, to the Partnership in exchange
for (x) in the case of an issuance of
REIT Shares, Partnership Units or (y) in
the case of an issuance of Preferred
Shares, Junior Shares or New Securities,
Partnership Units with designations,
preferences and other rights, terms and
provisions that are substantially the
same as the designations, preferences and
other rights, terms and provisions of
such Preferred Shares, Junior Shares or New
Securities; provided, however, that
notwithstanding the foregoing, the Parent
may issue REIT Shares, Preferred
Shares, Junior Shares or New Securities (a)
pursuant to Section 4.5 or 8.6.B
hereof, (b) pursuant to a dividend or
distribution (including any stock split)
of REIT Shares, Preferred Shares, Junior
Shares or New Securities to all of the
holders of REIT Shares, Preferred Shares,
Junior Shares or New Securities, as
the case may be, (c) upon a conversion,
redemption or exchange of Preferred
Shares, (d) upon a conversion of Junior
Shares into REIT Shares, (e) upon a
conversion, redemption, exchange or
exercise of New Securities or, (f) pursuant
to share grants or awards made pursuant to
any equity incentive plan of the
Parent. In the event of any issuance of
additional REIT Shares, Preferred
Shares, Junior Shares or New Securities by
the Parent, and the direct or
indirect contribution to the Partnership,
by the Parent, of the cash proceeds or
other consideration received from such
issuance, the Partnership shall pay the
Parent's expenses associated with such
issuance, including any underwriting
discounts or commissions (it being
understood that if the proceeds actually
received by the Parent are less than the
gross proceeds of such issuance as a
result of any underwriter's discount or
other expenses paid or incurred by the
Parent and the General Partner in
connection with such issuance, then the Parent
shall be deemed to have made, through the
General Partner, a Capital
Contribution to the Partnership in the
amount of the gross proceeds of such
issuance and the Partnership shall be
deemed simultaneously to have reimbursed
the Parent of General Partner, as
applicable, pursuant to Section 7.4.B for the
amount of such underwriter's discount or
other expenses).
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<PAGE>
Section
4.5. Equity Incentive Plan.
A. Options Granted to Company Employees and Independent
Directors.
If at any time or from time to time, in
connection with an Equity Incentive
Plan, a stock option granted to a Company
Employee or Outside Director is duly
exercised:
(i) the Parent shall, as soon as practicable after such
exercise,
make or cause to be made directly or indirectly a Capital
Contribution to the Partnership in an amount equal to the exercise
price
paid to
the Parent by such exercising party in connection with the
exercise
of such stock option.
(ii) Notwithstanding the amount of the Capital Contribution
actually
made pursuant to Section 4.5.A(i) hereof, the Parent shall be
deemed to
have contributed directly or indirectly to the Partnership, as
a
Capital
Contribution, in consideration of an additional Limited Partner
Interest
(expressed in and as additional Partnership Units), an amount
equal to
the Value of a REIT Share as of the date of exercise multiplied
by the
number of REIT Shares then being issued in connection with the
exercise
of such stock option.
(iii) An equitable Percentage Interest adjustment shall be
made in
which the General Partner shall be treated as having made a
cash
contribution equal to the amount described in Section 4.5.A(ii)
hereof.
B. Special Valuation Rule. For purposes of this Section 4.5, in
determining the Value of a REIT Share, only
the trading date immediately
preceding the exercise of the relevant
stock option under the Stock Option Plan
shall be considered.
C. Future Equity Incentive Plans. Nothing in this Agreement shall
be
construed or applied to preclude or
restrain the Parent from adopting, modifying
or terminating any Equity Incentive Plan,
for the benefit of employees,
directors or other business associates of
the Parent, the Partnership or any of
their Affiliates. The Limited Partners
acknowledge and agree that, in the event
that any such plan is adopted, modified or
terminated by the Parent, amendments
to this Section 4.5 may become necessary or
advisable and that any approval or
consent of the Limited Partners required
pursuant to the terms of this Agreement
in order to effect any such amendments
requested by the General Partner shall
not be unreasonably withheld or
delayed.
Section
4.6. LTIP Units.
A. Issuance of LTIP Units. The General Partner may from time to
time
issue LTIP Units to Persons who provide
services to the Partnership, for such
consideration as the General Partner may
determine to be appropriate, and admit
such Persons as Limited Partners. Subject
to the following provisions of this
Section 4.6 and the special provisions of
Sections 6.3.D and 4.7, LTIP Units
shall be treated as OP Units, with all of
the rights, privileges and obligations
attendant thereto. For purposes of
computing the Partners' Percentage Interests,
holders of LTIP Units shall be treated as
OP Unitholders and LTIP Units shall be
treated as OP Units. In particular, the
Partnership shall maintain at all times
a one-to-one correspondence between LTIP
Units and OP Units for conversion,
distribution and other purposes, including
without limitation complying with the
following procedures:
(i) If an Adjustment Event (as defined below) occurs, then the
General
Partner shall make a corresponding adjustment to the LTIP Units
to
maintain a
one-for-one conversion and economic equivalence ratio between
OP Units
and LTIP Units. The following shall be Adjustment Events: (A)
the
Partnership makes a distribution on all outstanding OP Units
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in
Partnership Units, (B) the Partnership subdivides the outstanding
OP
Units into
a greater number of units or combines the outstanding OP Units
into a
smaller number of units, or (C) the Partnership issues any
Partnership Units in exchange for its outstanding OP Units by way
of a
reclassification or recapitalization of its OP Units. If more than
one
Adjustment
Event occurs, the adjustment to the LTIP Units need be made
only once
using a single formula that takes into account each and every
Adjustment
Event as if all Adjustment Events occurred simultaneously. For
the
avoidance of doubt, the following shall not be Adjustment Events:
(x)
the
issuance of Partnership Units in a financing, reorganization,
acquisition or other similar business transaction, (y) the issuance
of
Partnership Units pursuant to any employee benefit or compensation
plan or
distribution reinvestment plan, or (z) the issuance of any
Partnership
Units to
the Company in respect of a capital contribution to the
Partnership of proceeds from the sale of securities by the Company.
If the
Partnership takes an action affecting the OP Units other than
actions
specifically described above as "Adjustment Events" and in the
opinion of
the
General Partner such action would require an adjustment to the
LTIP
Units to
maintain the one-to-one correspondence described above, the
General
Partner shall have the right to make such adjustment to the
LTIP
Units, to
the extent permitted by law and by any Equity Incentive Plan,
in
such
manner and at such time as the General Partner, in its sole
discretion, may determine to be appropriate under the
circumstances. If an
adjustment
is made to the LTIP Units as herein provided the Partnership
shall
promptly file in the books and records of the Partnership an
officer's
certificate setting forth such adjustment and a brief statement
of the
facts requiring such adjustment, which certificate shall be
conclusive
evidence of the correctness of such adjustment absent manifest
error.
Promptly after filing of such certificate, the Partnership
shall
mail a
notice to each LTIP Unitholder setting forth the adjustment to
his
or her
LTIP Units and the effective date of such adjustment; and
(ii) The LTIP Unitholders shall, when, as and if authorized
and
declared by the General Partner out of assets legally available
for
that
purpose, be entitled to receive distributions in an amount per
LTIP
Unit equal
to the distributions per OP Unit (the "Partnership Unit
Distribution"), paid to holders of OP Units on such Partnership
Record
Date
established by the General Partner with respect to such
distribution.
So long as
any LTIP Units are outstanding, no distributions (whether in
cash or in
kind) shall be authorized, declared or paid on OP Units, unless
equal
distributions have been or contemporaneously are authorized,
declared
and paid on the LTIP Units.
B. Priority. Subject to the provisions of this Section 4.6 and
the
special provisions of Sections 6.3.D and
4.9, the LTIP Units shall rank pari
passu with the OP Units as to the payment
of regular and special periodic or
other distributions and distribution of
assets upon liquidation, dissolution or
winding up. As to the payment of
distributions and as to distribution of assets
upon liquidation, dissolution or winding
up, any class or series of Partnership
Units or Partnership Interests which by its
terms specifies that it shall rank
junior to, on a parity with, or senior to
the OP Units shall also rank junior
to, or pari passu with, or senior to, as
the case may be, the LTIP Units.
Subject to the terms of any Vesting
Agreement, an LTIP Unitholder shall be
entitled to transfer his or her LTIP Units
to the same extent, and subject to
the same restrictions as holders of OP
Units are entitled to transfer their OP
Units pursuant to Article XI.
C. Special Provisions. LTIP Units shall be subject to the
following
special provisions:
(i) Vesting Agreements. LTIP Units may, in the sole discretion
of the
General Partner, be issued subject to vesting, forfeiture and
additional
restrictions on transfer pursuant to the terms of a Vesting
Agreement.
The terms of any Vesting Agreement may be
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modified
by the General Partner from time to time in its sole
discretion,
subject to
any restrictions on amendment imposed by the relevant Vesting
Agreement
or by the Equity Incentive Plan, if applicable. LTIP Units that
have
vested under the terms of a Vesting Agreement are referred to
as
"Vested
LTIP Units"; all other LTIP Units shall be treated as "Unvested
Incentive
Units."
(ii) Forfeiture. Unless otherwise specified in the Vesting
Agreement,
upon the occurrence of any event specified in a Vesting
Agreement
as resulting in either the right of the Partnership or the
General
Partner to repurchase LTIP Units at a specified purchase price
or
some other
forfeiture of any LTIP Units, then if the Partnership or the
General
Partner exercises such right to repurchase or forfeiture in
accordance
with the applicable Vesting Agreement, the relevant LTIP Units
shall
immediately, and without any further action, be treated as
cancelled
and no
longer outstanding for any purpose. Unless otherwise specified
in
the
Vesting Agreement, no consideration or other payment shall be due
with
respect to
any LTIP Units that have been forfeited, other than any
distributions declared with respect to a Partnership Record Date
prior to
the
effective date of the forfeiture. In connection with any repurchase
or
forfeiture
of LTIP Units, the balance of the portion of the Capital
Account of
the LTIP Unitholder that is attributable to all of his or her
LTIP Units
shall be reduced by the amount, if any, by which it exceeds the
target
balance contemplated by Section 6.3.D, calculated with respect
to
the LTIP
Unitholder's remaining LTIP Units, if any.
(iii) Allocations. LTIP Unitholders shall be entitled to
certain
special allocations of gain under Section 6.3.D.
(iv) Redemption. The Redemption Right provided to Limited
Partners
under Section 8.6 shall not apply with respect to LTIP Units
unless and
until they are converted to OP Units as provided in clause (v)
below and
Section 4.7.
(v) Conversion To OP Units. Vested LTIP Units are eligible to
be converted into OP
Units under Section 4.7.
D. Voting. LTIP Unitholders shall (a) have the same voting rights
as
a holder of OP Units, with the LTIP Units
voting as a single class with the OP
Units and having one vote per LTIP Unit;
and (b) have the additional voting
rights that are expressly set forth below.
So long as any LTIP Units remain
outstanding, the Partnership shall not,
without the affirmative vote of the
holders of at least a majority of the LTIP
Units outstanding at the time, given
in person or by proxy, either in writing or
at a meeting (voting separately as a
class), amend, alter or repeal, whether by
merger, consolidation or otherwise,
the provisions of this Agreement applicable
to LTIP Units so as to materially
and adversely affect any right, privilege
or voting power of the LTIP Units or
the LTIP Unitholders as such, unless such
amendment, alteration, or repeal
affects equally, ratably and
proportionately the rights, privileges and voting
powers of the holders of OP Units; but
subject, in any event, to the following
provisions:
(i) With respect to any Transaction, so long as the LTIP Units
are
treated in accordance with Section 4.7.F hereof, the consummation
of
such
Transaction shall not be deemed to materially and adversely
affect
such
rights, preferences, privileges or voting powers of the LTIP Units
or
the LTIP
Unitholders as such; and
(ii) Any creation or issuance of any Partnership Units or of
any class
or series of Partnership Interest including without limitation
additional
OP Units, LTIP Units or Preferred Units, whether ranking senior
to, junior
to, or on a parity with the LTIP Units with respect to
distributions and the distribution of assets upon liquidation,
dissolution
or winding
up,
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<PAGE>
shall not
be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers of the LTIP Units or the
LTIP
Unitholders as such.
The foregoing voting provisions will not apply if, at or prior
to the
time when the act with respect to which such vote would
otherwise
be
required will be effected, all outstanding LTIP Units shall have
been
converted
into OP Units.
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<PAGE>
Section
4.7. Conversion of LTIP Units.
A. An LTIP Unitholder shall have the right (the "Conversion
Right"),
at his or her option, at any time to
convert all or a portion of his or her
Vested LTIP Units into OP Units; provided,
however, that a holder may not
exercise the Conversion Right for less than
300 Vested LTIP Units or, if such
holder holds less than one thousand Vested
LTIP Units, all of the Vested LTIP
Units held by such holder. LTIP Unitholders
shall not have the right to convert
Unvested Incentive Units into OP Units
until they become Vested LTIP Units;
provided, however, that when an LTIP
Unitholder is notified of the expected
occurrence of an event that will cause his
or her Unvested Incentive Units to
become Vested LTIP Units, such LTIP
Unitholder may give the Partnership a
Conversion Notice conditioned upon and
effective as of the time of vesting and
such Conversion Notice, unless subsequently
revoked by the LTIP Unitholder,
shall be accepted by the Partnership
subject to such condition. The General
Partner shall have the right at any time to
cause a conversion of Vested LTIP
Units into OP Units. In all cases, the
conversion of any LTIP Units into OP
Units shall be subject to the conditions
and procedures set forth in this
Section 4.7.
B. A holder of Vested LTIP Units may convert such Units into an
equal number of fully paid and
non-assessable OP Units, giving effect to all
adjustments (if any) made pursuant to
Section 4.6. Notwithstanding the
foregoing, in no event may a holder of
Vested LTIP Units convert a number of
Vested LTIP Units that exceeds (x) the
Economic Capital Account Balance of such
Limited Partner, to the extent attributable
to its ownership of LTIP Units,
divided by (y) the OP Unit Economic
Balance, in each case as determined as of
the effective date of conversion (the
"Capital Account Limitation").
In order
to exercise his or her Conversion Right, an LTIP Unitholder
shall
deliver a notice (a "Conversion Notice") in
the form attached as Exhibit D to
the Partnership (with a copy to the General
Partner) not less than 10 nor more
than 60 days prior to a date (the
"Conversion Date") specified in such
Conversion Notice; provided, however, that
if the General Partner has not given
to the LTIP Unitholders notice of a
proposed or upcoming Transaction (as defined
below in Section 4.9.F) at least 30 days
prior to the effective date of such
Transaction, then LTIP Unitholders shall
have the right to deliver a Conversion
Notice until the earlier of (x) the 10th
day after such notice from the General
Partner of a Transaction or (y) the third
business day immediately preceding the
effective date of such Transaction. A
Conversion Notice shall be provided in the
manner provided in Section 15.1. Each LTIP
Unitholder covenants and agrees with
the Partnership that all Vested LTIP Units
to be converted pursuant to this
Section 4.7.B shall be free and clear of
all liens. Notwithstanding anything
herein to the contrary, a holder of LTIP
Units may deliver a Notice of
Redemption pursuant to Section 8.6.A of
this Agreement relating to those OP
Units that will be issued to such holder
upon conversion of such LTIP Units into
OP Units in advance of the Conversion Date;
provided, however, that the
redemption of such OP Units by the
Partnership shall in no event take place
until after the Conversion Date. For
clarity, it is noted that the objective of
this paragraph is to put an LTIP Unitholder
in a position where, if he or she so
wishes, the OP Units into which his or her
Vested LTIP Units will be converted
can be redeemed by the Partnership
simultaneously with such conversion, with the
further consequence that, if the Company
elects to assume the Partnership's
redemption obligation with respect to such
OP Units under Section 8.6.B of this
Agreement by delivering to such holder REIT
Shares rather than cash, then such
holder can have such REIT Shares issued to
him or her simultaneously with the
conversion of his or her Vested LTIP Units
into OP Units. The General Partner
shall reasonably cooperate with an LTIP
Unitholder to coordinate the tim
