EXHIBIT 10.4
FORM OF
LIMITED PARTNERSHIP AGREEMENT
OF
FIDELITY DIVIDEND CAPITAL OPERATING PARTNERSHIP LP
A DELAWARE LIMITED PARTNERSHIP
APRIL ___, 2004
TABLE OF CONTENTS
RECITALS
.............................................................
1
Article 1
DEFINED TERMS ..............................................
2
Article 2
PARTNERSHIP FORMATION AND IDENTIFICATION ...................
8
2.1 Formation
............................................................
8
2.2 Name, Office and Registered
Agent .................................... 8
2.3 Partners
.............................................................
8
2.4 Term and Dissolution
................................................. 8
2.5 Filing of Certificate and
Perfection of
Limited
Partnership ..................................................
9
2.6 Certificates Describing
Partnership Units ............................ 9
Article 3
BUSINESS OF THE PARTNERSHIP ................................
9
Article 4
CAPITAL CONTRIBUTIONS AND ACCOUNTS .........................
10
4.1 Capital Contributions
................................................ 10
4.2 Additional Capital
Contributions and Issuances of
Additional
Partnership Interests .....................................
10
4.3 Additional Funding
................................................... 11
4.4 Capital Accounts
..................................................... 11
4.5 Percentage Interests
................................................. 12
4.6 No Interest On Contributions
......................................... 12
4.7 Return Of Capital
Contributions ...................................... 12
4.8 No Third Party Beneficiary
........................................... 12
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Article 5
PROFITS AND LOSSES; DISTRIBUTIONS ..........................
12
5.1 Allocation of Profit and Loss
........................................ 12
5.2 Distribution of Cash
................................................. 14
5.3 REIT Distribution Requirements
....................................... 15
5.4 No Right to Distributions in
Kind .................................... 15
5.5 Limitations on Return of
Capital Contributions ....................... 15
5.6 Distributions Upon Liquidation
....................................... 16
5.7 Substantial Economic Effect
.......................................... 16
Article 6
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER ......
16
6.1 Management of the Partnership
........................................ 16
6.2 Delegation of Authority
.............................................. 18
6.3 Indemnification and
Exculpation of Indemnitees ....................... 18
6.4 Liability of the General
Partner ..................................... 19
6.5 Reimbursement of General
Partner ..................................... 20
6.6 Outside Activities
................................................... 20
6.7 Employment or Retention of
Affiliates ................................ 20
6.8 General Partner Participation
........................................ 21
6.9 Title to Partnership Assets
.......................................... 21
6.10Miscellaneous
........................................................
21
Article 7
CHANGES IN GENERAL PARTNER .................................
21
7.1 Transfer of the General
Partner's Partnership Interest ............... 21
7.2 Admission of a Substitute or
Additional General Partner .............. 23
7.3 Effect of Bankruptcy,
Withdrawal, Death or Dissolution
of a General
Partner .................................................
23
7.4 Removal of a General Partner
......................................... 24
Article 8 RIGHTS
AND OBLIGATIONS OF THE LIMITED PARTNERS ............. 24
8.1 Management of the Partnership
........................................ 24
8.2 Power of Attorney
.................................................... 24
8.3 Limitation on Liability of
Limited Partners .......................... 25
8.4 Ownership by Limited Partner
of Corporate
General Partner
or Affiliate ......................................... 25
8.5 Exchange Right
.......................................................
25
8.6 Registration
.........................................................
26
Article 9
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS .................
27
9.1 Purchase for Investment
.............................................. 27
9.2 Restrictions on Transfer of
Limited Partnership Interests ............ 27
9.3 Admission of Substitute
Limited Partner .............................. 28
9.4 Rights of Assignees of
Partnership Interests ......................... 29
9.5 Effect of Bankruptcy, Death,
Incompetence or
Termination of a
Limited Partner ..................................... 29
9.6 Joint Ownership of Interests
......................................... 29
Article 10 BOOKS
AND RECORDS; ACCOUNTING; TAX MATTERS ................ 30
10.1 Books and Records
.................................................... 30
10.2 Custody of Partnership Funds; Bank
Accounts .......................... 30
10.3 Fiscal and Taxable Year
.............................................. 30
10.4 Annual Tax Information and Report
.................................... 30
10.5 Tax Matters Partner; Tax
Elections;
Special Basis
Adjustments ............................................
30
10.6 Reports to Limited Partners
.......................................... 31
Article 11
AMENDMENT OF AGREEMENT; MERGER ............................
31
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Article 12
GENERAL PROVISIONS ........................................
32
12.1 Notices
..............................................................
32
12.2 Survival of Rights
................................................... 32
12.3 Additional Documents
................................................. 32
12.4 Severability
.........................................................
32
12.5 Entire Agreement
..................................................... 32
12.6 Pronouns and Plurals
................................................. 32
12.7 Headings
.............................................................
32
12.8 Counterparts
.........................................................
32
12.9 Governing Law
........................................................
32
EXHIBITS
EXHIBIT A - Partners, Capital Contributions
and Percentage Interests ...... 34
EXHIBIT B - Notice of Exercise of Exchange
Right .......................... 35
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LIMITED PARTNERSHIP AGREEMENT
OF
FIDELITY DIVIDEND CAPITAL OPERATING PARTNERSHIP LP
RECITALS
This Agreement of Limited Partnership (this "Agreement") is
entered into this ___ day of April 2004
between Fidelity Dividend Capital Inc.,
a Maryland corporation (the "General
Partner") and the Limited Partners set
forth on Exhibit A hereto. Capitalized
terms used herein but not otherwise
defined shall have the meanings given them
in Article 1.
AGREEMENT
WHEREAS, the General Partner intends to qualify as a real
estate investment trust under the Internal
Revenue Code of 1986, as amended;
WHEREAS, Fidelity Dividend Capital Operating Partnership, LP
(the "Partnership"), was formed on March
24, 2004 as a limited partnership under
the laws of the State of Delaware, pursuant
to a Certificate of Limited
Partnership filed with the Office of the
Secretary of State of the State of
Delaware on March 24, 2004;
WHEREAS, the General Partner desires to conduct its current
and future business through the
Partnership;
WHEREAS, in furtherance of the foregoing, the General Partner
desires to contribute certain assets to the
Partnership from time to time;
WHEREAS, in exchange for the General Partner's contribution of
assets, the parties desire that the
Partnership issue Partnership Units to the
General Partner in accordance with the
terms of this Agreement;
WHEREAS, the Limited Partners will contribute certain of their
property to the Partnership in exchange for
Partnership Units in accordance with
the terms of this Agreement;
WHEREAS, in furtherance of the Partnership's business, the
Partnership will acquire Properties and
other assets from time to time by means
of the contribution of such Properties or
other assets to the Partnership by the
owners thereof in exchange for Partnership
Units; and
WHEREAS, the parties hereto wish to establish herein their
respective rights and obligations in
connection with all of the foregoing and
certain other matters;
NOW, THEREFORE, in consideration of the foregoing, of mutual
covenants
between the parties hereto, and of other
good and valuable consideration, the
receipt and sufficiency of which are hereby
acknowledged, the parties hereto
agree as follows:
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ARTICLE 1
DEFINED TERMS
The following defined terms used in this Agreement shall have
the
meanings specified below:
"ACT" means the Delaware Revised Uniform Limited Partnership Act,
as it
may be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.3
hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other
than
REIT Shares issued in connection with an
exchange pursuant to Section 8.5 hereof
or REIT Shares issued pursuant to a
dividend reinvestment plan of the General
Partner) or rights, options, warrants or
convertible or exchangeable securities
containing the right to subscribe for or
purchase REIT Shares, as set forth in
Section 4.2(a)(ii).
"ADMINISTRATIVE EXPENSES" means (i) all administrative and
operating
costs and expenses incurred by the
Partnership, (ii) those administrative costs
and expenses of the General Partner,
including any salaries or other payments to
directors, officers or employees of the
General Partner, and any accounting and
legal expenses of the General Partner,
which expenses, the Partners have agreed,
are expenses of the Partnership and not the
General Partner, and (iii) to the
extent not included in clause (ii) above,
REIT Expenses; provided, however, that
Administrative Expenses shall not include
any administrative costs and expenses
incurred by the General Partner that are
attributable to Properties or
partnership interests in a Subsidiary
Partnership that are owned by the General
Partner directly.
"ADVISOR" or "ADVISORS" means the Person or Persons, if any,
appointed,
employed or contracted with by the General
Partner and responsible for directing
or performing the day-to-day business
affairs of the General Partner, including
any Person to whom the Advisor subcontracts
substantially all of such functions.
"ADVISORY AGREEMENT" means the agreement between the General
Partner
and the Advisor pursuant to which the
Advisor will direct or perform the
day-to-day business affairs of the General
Partner.
"AFFILIATE" means, (i) any Person that, directly or indirectly,
controls or is controlled by or is under
common control with such Person, (ii)
any other Person that owns, beneficially,
directly or indirectly, 10% or more of
the outstanding capital stock, shares or
equity interests of such Person, or
(iii) any officer, director, employee,
partner or trustee of such Person or any
Person controlling, controlled by or under
common control with such Person
(excluding trustees and persons serving in
similar capacities who are not
otherwise an Affiliate of such Person). For
the purposes of this definition,
"control" (including the correlative
meanings of the terms "controlled by" and
"under common control with"), as used with
respect to any Person, shall mean the
possession, directly or indirectly, of the
power to direct or cause the
direction of the management and policies of
such Person, through the ownership
of voting securities or partnership
interests or otherwise.
"AGREED VALUE" means the fair market value of a Partner's
non-cash
Capital Contribution as of the date of
contribution as agreed to by such Partner
and the General Partner. The names and
addresses of the Partners, number of
Partnership Units issued to each Partner,
and the Agreed Value of non-cash
Capital Contributions as of the date of
contribution is set forth on Exhibit A.
"AGREEMENT" means this Agreement of Limited Partnership, as
amended,
modified supplemented or restated from time
to time, as the context requires.
"ARTICLES OF INCORPORATION" means the Articles of Incorporation of
the
General Partner filed with the Maryland
State Department of Assessments and
Taxation, as amended or restated from time
to time.
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"CAPITAL ACCOUNT" has the meaning provided in Section 4.4
hereof.
"CAPITAL CONTRIBUTION" means the total amount of cash, cash
equivalents, and the Agreed Value of any
Property or other asset (other than
cash) contributed or agreed to be
contributed, as the context requires, to the
Partnership by each Partner pursuant to the
terms of this Agreement. Any
reference to the Capital Contribution of a
Partner shall include the Capital
Contribution made by a predecessor holder
of the Partnership Interest of such
Partner.
"CARRYING VALUE" means, with respect to any asset of the
Partnership,
the asset's adjusted net basis for federal
income tax purposes or, in the case
of any asset contributed to the
Partnership, the fair market value of such asset
at the time of contribution, reduced by any
amounts attributable to the
inclusion of liabilities in basis pursuant
to Section 752 of the Code, except
that the Carrying Values of all assets may,
at the discretion of the General
Partner, be adjusted to equal their
respective fair market values (as determined
by the General Partner), in accordance with
the rules set forth in Regulations
Section 1.704-1(b)(2)(iv)(f), as provided
for in Section 4.4. In the case of any
asset of the Partnership that has a
Carrying Value that differs from its
adjusted tax basis, the Carrying Value
shall be adjusted by the amount of
depreciation, depletion and amortization
calculated for purposes of the
definition of Profit and Loss rather than
the amount of depreciation, depletion
and amortization determined for federal
income tax purposes.
"CASH AMOUNT" means an amount of cash per Partnership Unit equal to
the
Value of the REIT Shares Amount on the date
of receipt by the General Partner of
a Notice of Exchange.
"CERTIFICATE" means any instrument or document that is required
under
the laws of the State of Delaware, or any
other jurisdiction in which the
Partnership conducts business, to be signed
and sworn to by the Partners of the
Partnership (either by themselves or
pursuant to the power-of-attorney granted
to the General Partner in Section 8.2
hereof) and filed for recording in the
appropriate public offices within the State
of Delaware or such other
jurisdiction to perfect or maintain the
Partnership as a limited partnership, to
effect the admission, withdrawal, or
substitution of any Partner of the
Partnership, or to protect the limited
liability of the Limited Partners as
limited partners under the laws of the
State of Delaware or such other
jurisdiction.
"CODE" means the Internal Revenue Code of 1986, as amended, and
as
hereafter amended from time to time.
Reference to any particular provision of
the Code shall mean that provision in the
Code at the date hereof and any
successor provision of the Code.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"CONVERSION FACTOR" means 1.0, provided that in the event that
the
General Partner (i) declares or pays a
dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to
all holders of its outstanding REIT
Shares in REIT Shares, (ii) subdivides its
outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a
smaller number of REIT Shares, the
Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a
fraction, the numerator of which shall be
the number of REIT Shares issued and
outstanding on the record date for such
dividend, distribution, subdivision or
combination (assuming for such purposes
that such dividend, distribution,
subdivision or combination has occurred as
of such time), and the denominator of
which shall be the actual number of REIT
Shares (determined without the above
assumption) issued and outstanding on such
date and, provided further, that in
the event that an entity other than an
Affiliate of the General Partner shall
become General Partner pursuant to any
merger, consolidation or combination of
the General Partner with or into another
entity (the "Successor Entity"), the
Conversion Factor shall be adjusted by
multiplying the Conversion Factor by the
number of shares of the Successor Entity
into which one REIT Share is converted
pursuant to such merger, consolidation or
combination, determined as of the date
of such merger, consolidation or
combination. Any adjustment to the Conversion
Factor shall become effective immediately
after the effective date of such event
retroactive to the record date, if any, for
such event; provided, however, that
if the General Partner receives a Notice of
Exchange after the record date, but
prior to the effective date of such
dividend, distribution, subdivision or
combination, the Conversion Factor shall
be
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determined as if the General Partner had
received the Notice of Exchange
immediately prior to the record date for
such dividend, distribution,
subdivision or combination.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a
petition
for relief as to such Person as debtor or
bankrupt under the Bankruptcy Code of
1978 or similar provision of law of any
jurisdiction (except if such petition is
contested by such Person and has been
dismissed within 90 days); insolvency or
bankruptcy of such Person as finally
determined by a court proceeding; filing by
such Person of a petition or application to
accomplish the same or for the
appointment of a receiver or a trustee for
such Person or a substantial part of
his assets; commencement of any proceedings
relating to such Person as a debtor
under any other reorganization,
arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction,
whether now in existence or hereinafter in
effect, either by such Person or by
another, provided that if such proceeding is
commenced by another, such Person indicates
his approval of such proceeding,
consents thereto or acquiesces therein, or
such proceeding is contested by such
Person and has not been finally dismissed
within 90 days.
"EXCHANGE AMOUNT" means either the Cash Amount or the REIT
Shares
Amount, as selected by the General Partner
in its sole and absolute discretion
pursuant to Section 8.5(b) hereof.
"EXCHANGE RIGHT" has the meaning provided in Section 8.5(a)
hereof.
"EXCHANGING PARTNER" has the meaning provided in Section 8.5(a)
hereof.
"GENERAL PARTNER" means Fidelity Dividend Capital Inc., a
Maryland
corporation, and any Person who becomes a
substitute or additional General
Partner as provided herein, and any of
their successors as General Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by
the
General Partner that is a general
partnership interest.
"INDEMNITEE" means (i) any Person made a party to a proceeding
by
reason of its status as the General Partner
or a director, officer or employee
of the General Partner or the Partnership,
and (ii) such other Persons
(including Affiliates of the General
Partner or the Partnership) as the General
Partner may designate from time to time, in
its sole and absolute discretion.
"INDEPENDENT DIRECTOR" means a director of the General Partner who
is
not an officer or employee of the General
Partner, any Affiliate of an officer
or employee or any Affiliate of (i) any
lessee of any property of the General
Partner or any Subsidiary of the General
Partner, (ii) any Subsidiary of the
General Partner, or (iii) any partnership
that is an Affiliate of the General
Partner.
"LIMITED PARTNER" means any Person named as a Limited Partner
on
Exhibit A attached hereto, and any Person
who becomes a Substitute Limited
Partner, in such Person's capacity as a
Limited Partner in the Partnership.
"LIMITED PARTNERSHIP INTEREST" means the ownership interest of
a
Limited Partner in the Partnership at any
particular time, including the right
of such Limited Partner to any and all
benefits to which such Limited Partner
may be entitled as provided in this
Agreement and in the Act, together with the
obligations of such Limited Partner to
comply with all the provisions of this
Agreement and of such Act.
"LISTING" means the listing of the shares of the General
Partner's
stock, previously issued by the General
Partner pursuant to an effective
registration statement and such shares
currently registered with the Commission
pursuant to an effective registration
statement, on a national securities
exchange or over-the-counter market.
"LOSS" has the meaning provided in Section 5.1(h) hereof.
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"NET SALES PROCEEDS" means (i) in the case of a transaction
described
in clause (i) of the definition of Sale,
the proceeds of any such transaction
less the amount of all real estate
commissions and closing costs paid by the
Partnership; (ii) in the case of a
transaction described in clause (ii) of the
definition of Sale, the proceeds of any
such transaction less the amount of any
legal and other selling expenses incurred
by the Partnership in connection with
such transaction; (iii) in the case of a
transaction described in clause (iii)
of the definition of Sale, the proceeds of
any such transaction actually
distributed to the Partnership from the
joint venture or general partnership
arrangement less any expenses incurred by
the Partnership in connection with
such transaction; (iv) in the case of a
transaction described in clause (iv) of
the definition of Sale, the proceeds of any
such transaction or series of
transactions less the amount of all
commissions and closing costs paid by the
Partnership; (v) in the case of a
transaction described in clause (v) of the
definition of Sale, the proceeds of such
transaction less the amount of all
selling costs and other expenses incurred
by the Partnership in connection with
such transaction; and (vi) in the case of
any lease of a Real Property
consisting of a building only, any amounts
from tenants, borrowers or lessees
that the General Partner determines, in its
discretion, to be economically
equivalent to the proceeds of a Sale. Net
Sales Proceeds shall not include any
amounts used to repay outstanding
indebtedness secured by the asset disposed of
in the Sale.
"NOTICE OF EXCHANGE" means the Notice of Exercise of Exchange
Right
substantially in the form attached as
Exhibit B hereto.
"NYSE" means the New York Stock Exchange.
"OFFER" has the meaning set forth in Section 7.1(c) hereof.
"OFFERING" means the initial offer and sale of REIT Shares to
the
public.
"OP UNITHOLDERS"
means all holders of Partnership Interests.
"ORIGINAL LIMITED PARTNER" means the Limited Partners designated
as
"Original Limited Partners" on Exhibit A
hereto.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth
in
Regulations Section 1.704-2(i). A Partner's
share of Partner Non-recourse Debt
Minimum Gain shall be determined in
accordance with Regulations Section
1.704-2(i)(5).
"PARTNERSHIP" means
Fidelity Dividend Capital Operating Partnership LP,
a Delaware limited partnership.
"PARTNERSHIP INTEREST" means an ownership interest in the
Partnership
held by either a Limited Partner or the
General Partner and includes any and all
benefits to which the holder of such a
Partnership Interest may be entitled as
provided in this Agreement, together with
all obligations of such Person to
comply with the terms and provisions of
this Agreement.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in
Regulations
Section 1.704-2(d). In accordance with
Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is
determined by first computing, for each
Partnership non-recourse liability, any
gain the Partnership would realize if it
disposed of the property subject to that
liability for no consideration other
than full satisfaction of the liability,
and then aggregating the separately
computed gains. A Partner's share of
Partnership Minimum Gain shall be
determined in accordance with Regulations
Section 1.704-2(g)(1).
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"PARTNERSHIP RECORD DATE" means the record date established by
the
General Partner for the distribution of
cash pursuant to Section 5.2 hereof,
which record date shall be the same as the
record date established by the
General Partner for a distribution to its
shareholders of some or all of its
portion of such distribution.
"PARTNERSHIP UNIT" means a fractional, undivided share of the
Partnership Interests of all Partners
issued hereunder. The allocation of
Partnership Units among the Partners shall
be as set forth on Exhibit A, as such
Exhibit may be amended from time to
time.
"PERCENTAGE INTEREST" means the percentage ownership interest in
the
Partnership of each Partner, as determined
by dividing the Partnership Units
owned by a Partner by the total number of
Partnership Units then outstanding.
The Percentage Interest of each Partner
shall be as set forth on Exhibit A, as
such Exhibit may be amended from time to
time.
"PERSON" means any individual, partnership, Limited Liability
Company,
corporation, joint venture, trust or other
entity.
"PROFIT" has the meaning provided in Section 5.1(h) hereof.
"PROPERTY" means any office, commercial or industrial property or
other
investment in which the Partnership holds
an ownership interest.
"PROSPECTUS" means the final prospectus delivered to purchasers of
REIT
Shares in the Offering.
"REAL PROPERTIES" means (i) the real properties, including the
buildings located thereon, or (ii) the real
properties only, or (iii) the
buildings only, which are acquired by the
Partnership, either directly or
through joint venture arrangements or other
partnerships.
"REGULATIONS" means the Federal income tax regulations
promulgated
under the Code, as amended and as hereafter
amended from time to time. Reference
to any particular provision of the
Regulations shall mean that provision of the
Regulations on the date hereof and any
successor provision of the Regulations.
"REGULATORY ALLOCATIONS" has the meaning set forth in Section
5.1(i)
hereof.
"REIT" means a real estate investment trust under Sections 856
through
860 of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the
formation
and continuity of existence and operation
of the General Partner and any
Subsidiaries thereof (which Subsidiaries
shall, for purposes hereof, be included
within the definition of General Partner),
including taxes, fees and assessments
associated therewith, any and all costs,
expenses or fees payable to any
director, officer, or employee of the
General Partner, (ii) costs and expenses
relating to any public offering and
registration of securities by the General
Partner and all statements, reports, fees
and expenses incidental thereto,
including, without limitation, underwriting
discounts and selling commissions
applicable to any such offering of
securities, and any costs and expenses
associated with any claims made by any
holders of such securities or any
underwriters or placement agents thereof,
(iii) costs and expenses associated
with any repurchase of any securities by
the General Partner, (iv) costs and
expenses associated with the preparation
and filing of any periodic or other
reports and communications by the General
Partner under federal, state or local
laws or regulations, including filings with
the Commission, (v) costs and
expenses associated with compliance by the
General Partner with laws, rules and
regulations promulgated by any regulatory
body, including the Commission and any
securities exchange, (vi) costs and
expenses associated with any 401(k) plan,
incentive plan, bonus plan or other plan
providing for compensation for the
employees of the General Partner, (vii)
costs and expenses incurred by the
General Partner relating to any issuing or
redemption of Partnership Interests,
and (viii) all other operating or
administrative costs of the General Partner
incurred in the ordinary course of its
business on behalf of or in connection
with the Partnership.
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"REIT SHARE" means a common share of beneficial interest in the
General
Partner (or successor entity, as the case
may be).
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the
product
of the number of Partnership Units offered
for exchange by an Exchanging
Partner, multiplied by the Conversion
Factor as adjusted to and including the
Specified Exchange Date; provided that in
the event the General Partner issues
to all holders of REIT Shares rights,
options, warrants or convertible or
exchangeable securities entitling the
shareholders to subscribe for or purchase
REIT Shares, or any other securities or
property (collectively, the "rights"),
and the rights have not expired at the
Specified Exchange Date, then the REIT
Shares Amount shall also include the rights
issuable to a holder of the REIT
Shares Amount of REIT Shares on the record
date fixed for purposes of
determining the holders of REIT Shares
entitled to rights.
"SALE" means any transaction or series of transactions whereby:
(i)
the Partnership sells, grants, transfers,
conveys, or relinquishes its ownership
of any Real Property or portion thereof,
including the lease of any Real
Property consisting of the building only,
and including any event with respect
to any Real Property which gives rise to a
significant amount of insurance
proceeds or condemnation awards; (ii) the
Partnership sells, grants, transfers,
conveys, or relinquishes its ownership of
all or substantially all of the
interest of the Partnership in any joint
venture or general partnership
arrangement in which the Partnership is a
co-venturer or general partner which
are established to acquire Real Properties;
(iii) any joint venture or general
partnership arrangement in which the
Partnership is a co-venturer or general
partner sells, grants, transfers, conveys,
or relinquishes its ownership of any
Real Property or portion thereof, including
any event with respect to any Real
Property which gives rise to insurance
claims or condemnation awards; (iv) the
Partnership sells, grants, conveys or
relinquishes its interest in any asset, or
portion thereof, including any event with
respect to any asset which gives rise
to a significant amount of insurance
proceeds or similar awards; or (v) the
Partnership sells or otherwise disposes of
or distributes all of its assets in
liquidation of the Partnership.
"SECURITIES ACT" means the Securities Act of 1933, as amended and
the
rules and regulations promulgated
thereunder.
"SERVICE" means the United States Internal Revenue Service.
"SPECIFIED EXCHANGE DATE" means the first business day of the
month
that is at least 60 business days after the
receipt by the General Partner of
the Notice of Exchange.
"SUBSIDIARY" means, with respect to any Person, any corporation
or
other entity of which a majority of (i) the
voting power of the voting equity
securities or (ii) the outstanding equity
interests is owned, directly or
indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership of which the
partnership
interests therein are owned by the General
Partner or a direct or indirect
subsidiary of the General Partner.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the
Partnership as a Limited Partner pursuant
to Section 9.3 hereof.
"SUCCESSOR ENTITY" has the meaning provided in the definition
of
"Conversion Factor" contained herein.
"SURVIVOR " has the meaning set forth in Section 7.1(d) hereof.
"TERMINATION EVENT" means the termination or non-renewal of the
Advisory Agreement (i) in connection with a
merger, sale of assets or
transaction involving the General Partner
pursuant to which a majority of the
directors of the General Partner then in
office are replaced or removed, (ii) by
the Advisor for "good reason" (as defined
in the Advisory Agreement) or (iii) by
the General Partner other than for "cause"
(as defined in the Advisory
Agreement).
"TRANSACTION" has the meaning set forth in Section 7.1(c)
hereof.
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"TRANSFER" has the meaning set forth in Section 9.2(a) hereof.
"VALUE" means, with respect to any security, the average of the
daily
market price of such security for the ten
consecutive trading days immediately
preceding the date of such valuation. The
market price for each such trading day
shall be: (i) if the security is listed or
admitted to trading on any securities
exchange or the NYSE, the sale price,
regular way, on such day, or if no such
sale takes place on such day, the average
of the closing bid and asked prices,
regular way, on such day, (ii) if the
security is not listed or admitted to
trading on any securities exchange or the
NYSE, the last reported sale price on
such day or, if no sale takes place on such
day, the average of the closing bid
and asked prices on such day, as reported
by a reliable quotation source
designated by the General Partner, or (iii)
if the security is not listed or
admitted to trading on any securities
exchange or the NYSE and no such last
reported sale price or closing bid and
asked prices are available, the average
of the reported high bid and low asked
prices on such day, as reported by a
reliable quotation source designated by the
General Partner, or if there shall
be no bid and asked prices on such day, the
average of the high bid and low
asked prices, as so reported, on the most
recent day (not more than ten days
prior to the date in question) for which
prices have been so reported; provided
that if there are no bid and asked prices
reported during the ten days prior to
the date in question, the value of the
security shall be determined by the
General Partner acting in good faith on the
basis of such quotations and other
information as it considers, in its
reasonable judgment, appropriate. In the
event the security includes any additional
rights, then the value of such rights
shall be determined by the General Partner
acting in good faith on the basis of
such quotations and other information as it
considers, in its reasonable
judgment, appropriate.
ARTICLE 2
PARTNERSHIP FORMATION AND IDENTIFICATION
2.1 FORMATION. The Partnership was formed as a limited
partnership pursuant to the Act and all
other pertinent laws of the State of
Delaware, for the purposes and upon the
terms and conditions set forth in this
Agreement.
2.2 NAME, OFFICE AND REGISTERED AGENT. The name of the
Partnership is Fidelity Dividend Capital
Operating Partnership, LP. The
specified office and place of business of
the Partnership shall be Suite 52-A,
Smoke Ridge Rd, Queensbury, New York 12804.
The General Partner may at any time
change the location of such office,
provided the General Partner gives notice to
the Partners of any such change. The name
and address of the Partnership's
registered agent is The Company
Corporation, 2711 Centerville Road, Suite 400,
Wilmington, Delaware 19801. The sole duty
of the registered agent as such is to
forward to the Partnership any notice that
is served on him as registered agent.
2.3 PARTNERS.
(a) The General Partner of the Partnership is
Fidelity Dividend Capital Inc., a Maryland
corporation. Its principal place of
business is the same as that of the
Partnership.
(b) The Limited Partners are those Persons identified
as Limited Partners on Exhibit A hereto, as
amended from time to time.
2.4 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in
full force and effect until December 31,
2034, except that the Partnership shall
be dissolved upon the first to occur of any
of the following events:
(i) The occurrence of an Event of Bankruptcy
as to a General Partner or the dissolution,
death, removal or withdrawal of a
General Partner unless the business of the
Partnership is continued pursuant to
Section 7.3(b) hereof; provided that if a
General Partner is on the date of such
occurrence a partnership, the dissolution
of such General Partner as a result of
the dissolution, death, withdrawal, removal
or Event of
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Bankruptcy of a partner in such partnership
shall not be an event of
dissolution of the Partnership if the
business of such General Partner is
continued by the remaining partner or
partners, either alone or with additional
partners, and such General Partner and such
partners comply with any other
applicable requirements of this
Agreement;
(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of
the assets of the Partnership
(provided that if the Partnership receives
an installment obligation as
consideration for such sale or other
disposition, the Partnership shall
continue, unless sooner dissolved under the
provisions of this Agreement, until
such time as such note or notes are paid in
full);
(iii) The exchange of all Limited Partnership
Interests (other than any of such interests
held by the General Partner or
Affiliates of the General Partner) for REIT
Shares or the securities of any
other entity; or
(iv) The election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business
of the Partnership is continued pursuant to
Section 7.3(b) hereof), the General
Partner (or its trustee, receiver,
successor or legal representative) shall
amend or cancel the Certificate and
liquidate the Partnership's assets and apply
and distribute the proceeds thereof in
accordance with Section 5.6 hereof.
Notwithstanding the foregoing, the
liquidating General Partner may either (i)
defer liquidation of, or withhold from
distribution for a reasonable time, any
assets of the Partnership (including those
necessary to satisfy the
Partnership's debts and obligations), or
(ii) distribute the assets to the
Partners in kind.
2.5 FILING OF CERTIFICATE AND PERFECTION OF LIMITED
PARTNERSHIP. The General Partner shall
execute, acknowledge, record and file at
the expense of the Partnership, any and all
amendments to the Certificate and
all requisite fictitious name statements
and notices in such places and
jurisdictions as may be necessary to cause
the Partnership to be treated as a
limited partnership under, and otherwise to
comply with, the laws of each state
or other jurisdiction in which the
Partnership conducts business.
2.6 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request
of a Limited Partner, the General Partner,
at its option, may issue a
certificate summarizing the terms of such
Limited Partner's interest in the
Partnership, including the number of
Partnership Units owned and the Percentage
Interest represented by such Partnership
Units as of the date of such
certificate. Any such certificate (i) shall
be in form and substance as approved
by the General Partner, (ii) shall not be
negotiable and (iii) shall bear a
legend to the following effect:
This certificate is not negotiable. The Partnership Units
represented by this certificate are
governed by and transferable only in
accordance with the provisions of the
Agreement of Limited Partnership of
Fidelity Dividend Capital Operating
Partnership, LP, as amended from time to
time.
ARTICLE 3
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business
that may be lawfully conducted by a
limited partnership organized pursuant to
the Act, provided, however, that such
business shall be limited to and conducted
in such a manner as to permit the
General Partner at all times to qualify as
a REIT, unless the General Partner
otherwise ceases to qualify as a REIT, and
in a manner such that the General
Partner will not be subject to any taxes
under Section 857 or 4981 of the Code,
(ii) to enter into any partnership, joint
venture or other similar arrangement
to engage in any of the foregoing or the
ownership of interests in any entity
engaged in any of the foregoing and (iii)
to do anything necessary or incidental
to the foregoing. In connection with the
foregoing, and without limiting the
General Partner's right in its sole and
absolute discretion to cease qualifying
as a REIT, the Partners acknowledge that
the General Partner's current status as
a REIT and the avoidance of income and
excise taxes on the General Partner
inures to the benefit of all
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<PAGE>
the Partners and not solely to the General
Partner. Notwithstanding the
foregoing, the Limited Partners agree that
the General Partner may terminate its
status as a REIT under the Code at any time
to the full extent permitted under
the Articles of Incorporation. The General
Partner on behalf of the Partnership
shall also be empowered to do any and all
acts and things necessary or prudent
to ensure that the Partnership will not be
classified as a "publicly traded
partnership" for purposes of Section 7704
of the Code.
ARTICLE 4
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.1 CAPITAL CONTRIBUTIONS. The General Partner and the initial
Limited Partners have made capital
contributions to the Partnership in exchange
for the Partnership Interests set forth
opposite their names on Exhibit A, as
such Exhibit may be amended from time to
time.
4.2 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF
ADDITIONAL PARTNERSHIP INTERESTS. Except as
provided in this Section 4.2 or in
Section 4.3, the Partners shall have no
right or obligation to make any
additional Capital Contributions or loans
to the Partnership. The General
Partner may contribute additional capital
to the Partnership, from time to time,
and receive additional Partnership
Interests in respect thereof, in the manner
contemplated in this Section 4.2.
(a) Issuances of Additional Partnership Interests.
(i) General. The General Partner is hereby authorized
to cause the Partnership to issue such
additional Partnership Interests in the
form of Partnership Units for any
Partnership purpose at any time or from time
to time, to the Partners (including the
General Partner) or to other Persons for
such consideration and on such terms and
conditions as shall be established by
the General Partner in its sole and
absolute discretion, all without the
approval of any Limited Partners. Any
additional Partnership Interests issued
thereby may be issued in one or more
classes, or one or more series of any of
such classes, with such designations,
preferences and relative, participating,
optional or other special rights, powers
and duties, including rights, powers
and duties senior to Limited Partnership
Interests, all as shall be determined
by the General Partner in its sole and
absolute discretion and without the
approval of any Limited Partner, subject to
Delaware law, including, without
limitation, (i) the allocations of items of
Partnership income, gain, loss,
deduction and credit to each such class or
series of Partnership Interests; (ii)
the right of each such class or series of
Partnership Interests to share in
Partnership distributions; and (iii) the
rights of each such class or series of
Partnership Interests upon dissolution and
liquidation of the Partnership;
provided, however, that no additional
Partnership Interests shall be issued to
the General Partner unless:
(1) (A) the additional Partnership Interests are
issued in connection with an issuance of
REIT Shares of or other interests in
the General Partner, which shares or
interests have designations, preferences
and other rights, all such that the
economic interests are substantially similar
to the designations, preferences and other
rights of the additional Partnership
Interests issued to the General Partner by
the Partnership in accordance with
this Section 4.2 and (B) the General
Partner shall make a Capital Contribution
to the Partnership in an amount equal to
the proceeds raised in connection with
the issuance of such shares of stock of or
other interests in the General
Partner;
(2) the additional Partnership Interests are issued
in exchange for property owned by the
General Partner with a fair market value,
as determined by the General Partner, in
good faith, equal to the value of the
Partnership Interests; or
(3) the additional Partnership Interests are issued
to all Partners holding Partnership Units
in proportion to their respective
Percentage Interests. Without limiting the
foregoing, the General Partner is
expressly authorized to cause the
Partnership to issue Partnership Units for
less than fair market value, so long as the
General Partner concludes in good
faith that such issuance is in the best
interests of the General Partner and the
Partnership.
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<PAGE>
(ii) Upon Issuance of Additional Securities. The
General Partner shall not issue any
Additional Securities other than to all
holders of REIT Shares, unless (A) the
General Partner shall cause the
Partnership to issue to the General
Partner, as the General Partner may
designate, Partnership Interests or rights,
options, warrants or convertible or
exchangeable securities of the Partnership
having designations, preferences and
other rights, all such that the economic
interests are substantially similar to
those of the Additional Securities, and (B)
the General Partner contributes the
proceeds from the issuance of such
Additional Securities and from any exercise
of rights contained in such Additional
Securities, directly and through the
General Partner, to the Partnership;
provided, however, that the General Partner
is allowed to issue Additional Securities
in connection with an acquisition of a
property to be held directly by the General
Partner, but if and only if, such
direct acquisition and issuance of
Additional Securities have been approved and
determined to be in the best interests of
the General Partner and the
Partnership by a majority of the Directors
(as defined in the General Partner's
Articles of Incorporation). Without
limiting the foregoing, the General Partner
is expressly authorized to issue Additional
Securities for less than fair market
value, and to cause the Partnership to
issue to the General Partner
corresponding Partnership Interests, so
long as (x) the General Partner
concludes in good faith that such issuance
is in the best interests of the
General Partner and the Partnership,
including without limitation, the issuance
of REIT Shares and corresponding
Partnership Units pursuant to an employee share
purchase plan providing for employee
purchases of REIT Shares at a discount from
fair market value or employee stock options
that have an exercise price that is
less than the fair market value of the REIT
Shares, either at the time of
issuance or at the time of exercise, and
(y) the General Partner contributes all
proceeds from such issuance to the
Partnership. For example, in the event the
General Partner issues REIT Shares for a
cash purchase price and contributes all
of the proceeds of such issuance to the
Partnership as required hereunder, the
General Partner shall be issued a number of
additional Partnership Units equal
to the product of (A) the number of such
REIT Shares issued by the General
Partner, the proceeds of which were so
contributed, multiplied by (B) a
fraction, the numerator of which is 100%,
and the denominator of which is the
Conversion Factor in effect on the date of
such contribution.
(b) Certain Deemed Contributions of Proceeds of
Issuance of REIT Shares. In connection with
any and all issuances of REIT
Shares, the General Partner shall make
Capital Contributions to the Partnership
of the proceeds therefrom, provided that if
the proceeds actually received and
contributed by the General Partner are less
than the gross proceeds of such
issuance as a result of any underwriter's
discount or other expenses paid or
incurred in connection with such issuance,
then the General Partner shall be
deemed to have made Capital Contributions
to the Partnership in the aggregate
amount of the gross proceeds of such
issuance and the Partnership shall be
deemed simultaneously to have paid such
offering expenses in accordance with
Section 6.5 hereof and in connection with
the required issuance of additional
Partnership Units to the General Partner
for such Capital Contributions pursuant
to Section 4.2(a) hereof.
4.3 ADDITIONAL FUNDING. If the General Partner determines that it
is
in the best interests of the Partnership to
provide for additional Partnership
funds ("Additional Funds") for any
Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such
funds from outside borrowings, or (ii)
elect to have the General Partner or any of
its Affiliates provide such
Additional Funds to the Partnership through
loans or otherwise.
4.4 CAPITAL ACCOUNTS. A separate capital account (a "Capital
Account") shall be established and
maintained for each Partner in accordance
with Regulations Section 1.704-1(b)(2)(iv).
If (i) a new or existing Partner
acquires an additional Partnership Interest
in exchange for more than a de
minimis Capital Contribution, (ii) the
Partnership distributes to a Partner more
than a de minimis amount of Partnership
property or money as consideration for a
Partnership Interest, or (iii) the
Partnership is liquidated within the meaning
of Regulation Section 1.704-1(b)(2)(ii)(g),
the General Partner shall revalue
the property of the Partnership to its fair
market value (as determined by the
General Partner, in its sole and absolute
discretion, and taking into account
Section 7701(g) of the Code) in accordance
with Regulations Section
1.704-1(b)(2)(iv)(f). When the
Partnership's property is revalued by the General
Partner, the Capital Accounts of the
Partners shall be adjusted in accordance
with Regulations Sections 1.704
1(b)(2)(iv)(f) and (g), which generally require
such Capital Accounts to be adjusted to
reflect the manner in which the
unrealized gain or loss inherent in such
property (that has not been reflected
in the Capital Accounts previously) would
be allocated among the Partners
pursuant to Section 5.1 if there were a
taxable disposition of such property for
its fair market value (as determined by the
General Partner, in its sole and
absolute discretion, and taking into
account Section 7701(g) of the Code) on the
date of the revaluation.
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4.5 PERCENTAGE INTERESTS. If the number of outstanding
Partnership Units increases or decreases
during a taxable year, each Partner's
Percentage Interest shall be adjusted by
the General Partner effective as of the
effective date of each such increase or
decrease to a percentage equal to the
number of Partnership Units held by such
Partner divided by the aggregate number
of Partnership Units outstanding after
giving effect to such increase or
decrease. If the Partners' Percentage
Interests are adjusted pursuant to this
Section 4.5, the Profits and Losses for the
taxable year in which the adjustment
occurs shall be allocated between the part
of the year ending on the day when
the Partnership's property is revalued by
the General Partner and the part of
the year beginning on the following day
either (i) as if the taxable year had
ended on the date of the adjustment or (ii)
based on the number of days in each
part. The General Partner, in its sole and
absolute discretion, shall determine
which method shall be used to allocate
Profits and Losses for the taxable year
in which the adjustment occurs. The
allocation of Profits and Losses for the
earlier part of the year shall be based on
the Percentage Interests before
adjustment, and the allocation of Profits
and Losses for the later part shall be
based on the adjusted Percentage
Interests.
4.6 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled
to interest on its Capital
Contribution.
4.7 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be
entitled to withdraw any part of its
Capital Contribution or its Capital Account
or to receive any distribution from the
Partnership, except as specifically
provided in this Agreement. Except as
otherwise provided herein, there shall be
no obligation to return to any Partner or
withdrawn Partner any part of such
Partner's Capital Contribution for so long
as the Partnership continues in
existence.
4.8 NO THIRD PARTY BENEFICIARY. No creditor or other third
party
having dealings with the Partnership shall
have the right to enforce the right
or obligation of any Partner to make
Capital Contributions or loans or to pursue
any other right or remedy hereunder or at
law or in equity, it being understood
and agreed that the provisions of this
Agreement shall be solely for the benefit
of, and may be enforced solely by, the
parties hereto and their respective
successors and assigns. None of the rights
or obligations of the Partners herein
set forth to make Capital Contributions or
loans to the Partnership shall be
deemed an asset of the Partnership for any
purpose by any creditor or other
third party, nor may such rights or
obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered
by the Partnership to secure any
debt or other obligation of the Partnership
or of any of the Partners. In
addition, it is the intent of the parties
hereto that no distribution to any
Limited Partner shall be deemed a return of
money or other property in violation
of the Act. However, if any court of
competent jurisdiction holds that,
notwithstanding the provisions of this
Agreement, any Limited Partner is
obligated to return such money or property,
such obligation shall be the
obligation of such Limited Partner and not
of the General Partner. Without
limiting the generality of the foregoing, a
deficit Capital Account of a Partner
shall not be deemed to be a liability of
such Partner nor an asset or property
of the Partnership.
ARTICLE 5
PROFITS AND LOSSES; DISTRIBUTIONS
5.1 ALLOCATION OF PROFIT AND LOSS.
(a) General. Profit and Loss (or items thereof) of
the Partnership for each fiscal year or
other applicable period of the Partnership
shall be allocated among the OP Unit
holders in accordance with their respective
Percentage Interests.
(b) General Partner Gross Income Allocation. There
shall be specially allocated to the
General
Partner an amount of (i) first, items of
Partnership income and (ii) second,
items of Partnership gain during each
fiscal year or other applicable period,
before any other allocations are made
hereunder, in an amount equal to the
excess, if any, of the cumulative
distributions made to the General Partner
under Section 6.5(b) over the cumulative
allocations of Partnership income and
gain to the General Partner under this
Section 5.1(b).
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(c) Special Allocation with Respect to Sales. The items of
Profit
and Loss of the Partnership for each fiscal
year or other applicable period from
Sales, other than any such items allocated
under Section 5.1(b), shall be
allocated among the Partners in a manner
that will, as nearly as possible (after
giving effect to the allocations under
Section 5.1(a), 5.1(b) and 5.1(d), cause
the Capital Account balance of each Partner
at the end of such fiscal year or
other applicable period to equal (i) the
amount of the hypothetical distribution
that such Partner would receive if the
Partnership were liquidated on the last
day of such period and all assets of the
Partnership, including cash, were sold
for cash equal to their Carrying Value,
taking into account any adjustments
thereto for such period, all liabilities of
the Partnership were satisfied in
full in cash according to their terms
(limited with respect to each non-recourse
liability to the Carrying Value of the
assets securing such liability) and Net
Sales Proceeds (after satisfaction of such
liabilities) were distributed in full
pursuant to Section 5.2(b)(i), minus (ii)
the sum of such Partner's share of
Partnership Minimum Gain and Partner
Non-recourse Debt Minimum Gain and the
amount, if any and without duplication,
that the Partner would be obligated to
contribute to the capital of the
Partnership, all computed as of the date of the
hypothetical sale of assets.
(d) Non-recourse Deductions; Minimum Gain Charge back.
Notwithstanding any provision to the
contrary, (i) any expense of the
Partnership that is a "no-recourse
deduction" within the meaning of Regulations
Section 1.704-2(b)(1) shall be allocated in
accordance with the Partners'
respective Percentage Interests, (ii) any
expense of the Partnership that is a
"partner non-recourse deduction" within the
meaning of Regulations Section
1.704-2(i)(2) shall be allocated to the
Partner that bears the "economic risk of
loss" with respect to the liability to
which such deductions are attributable in
accordance with Regulations Section
1.704-2(i)(1), (iii) if there is a net
decrease in Partnership Minimum Gain within
the meaning of Regulations Section
1.704-2(f)(1) for any Partnership taxable
year, then, subject to the exceptions
set forth in Regulations Section
1.704-2(f)(2),(3), (4) and (5), items of gain
and income shall be allocated among the
Partners in accordance with Regulations
Section 1.704-2(f) and the ordering rules
contained in Regulations Section
1.704-2(j), and (iv) if there is a net
decrease in Partner Non-recourse Debt
Minimum Gain within the meaning of
Regulations Section 1.704-2(i)(4) for any
Partnership taxable year, then, subject to
the exceptions set forth in
Regulations Section 1.704-(2)(g), items of
gain and income shall be allocated
among the Partners in accordance with
Regulations Section 1.704-2(i)(4) and the
ordering rules contained in Regulations
Section 1.704-2(j). A Partner's
"interest in partnership profits" for
purposes of determining its share of the
excess non-recourse liabilities of the
Partnership within the meaning of
Regulations Section 1.752-3(a)(3) shall be
such Partner's Percentage Interest.
(e) Qualified Income Offset. If a Partner unexpectedly
receives in any taxable year an adjustment,
allocation, or distribution
described in subparagraphs (4), (5), or (6)
of Regulations Section
1.704-1(b)(2)(ii)(d) that causes or
increases a deficit balance in such
Partner's Capital Account that exceeds the
sum of such Partner's shares of
Partnership Minimum Gain and Partner
Non-recourse Debt Minimum Gain, as
determined in accor
