<PAGE>
Exhibit 10.1
EXECUTION COPY
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SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
FELDMAN EQUITIES OPERATING PARTNERSHIP, LP
a Delaware limited partnership
--------------------
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 AUGUST 26, 2005
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ARTICLE I
DEFINED
TERMS..............................................................................1
ARTICLE II
ORGANIZATIONAL
MATTERS....................................................................17
Section 2.1.
Organization.........................................................................17
Section 2.2.
Name.................................................................................17
Section 2.3. Registered
Office and Agent; Principal
Office........................................18
Section 2.4. Power of
Attorney....................................................................18
Section 2.5.
Term.................................................................................19
ARTICLE III
PURPOSE...................................................................................19
Section 3.1. Purpose
and
Business.................................................................19
Section 3.2.
Powers...............................................................................19
Section 3.3.
Partnership Only for Partnership Purposes
Specified..................................20
Section 3.4. Representations and
Warranties by the
Parties........................................20
ARTICLE IV
CAPITAL
CONTRIBUTIONS.....................................................................21
Section 4.1. Capital
Contributions of the
Partners................................................21
Section 4.2. Classes of
Partnership
Units.........................................................21
Section 4.3. Issuances
of Additional Partnership
Interests........................................21
Section 4.4. Additional
Funds and Capital
Contributions...........................................22
Section 4.5. Stock
Option
Plan....................................................................24
Section 4.6. PI
Units.............................................................................24
Section 4.7. No
Interest; No
Return...............................................................27
Section 4.8.
Conversion
or Redemption of Earnout
Units............................................27
Section 4.9. Conversion
of PI
Units...............................................................28
Section 4.10. Other
Contribution
Provisions........................................................31
Section 4.11. Not Publicly
Traded..................................................................31
ARTICLE V
DISTRIBUTIONS.............................................................................31
Section 5.1.
Requirement and Characterization of
Distributions....................................31
Section 5.2. Property
Interests Not Held Through the General
Partner..............................31
Section 5.3.
Distributions
In-Kind................................................................32
Section 5.4. Amounts
Withheld.....................................................................32
Section 5.5.
Distributions Upon
Liquidation.......................................................32
Section 5.6.
Distributions to Reflect Issuance of Additional Partnership
Units....................32
Section 5.7. Restricted
Distributions.............................................................32
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ARTICLE VI
ALLOCATIONS...............................................................................32
Section 6.1. Timing and
Amount of Allocations of Net Income and Net
Loss..........................32
Section 6.2. General
Allocations..................................................................32
Section 6.3. Additional
Allocation
Provisions.....................................................34
Section 6.4. Tax
Allocations......................................................................37
ARTICLE VII
MANAGEMENT AND OPERATIONS OF
BUSINESS.....................................................37
Section 7.1.
Management...........................................................................37
Section 7.2.
Certificate of Limited
Partnership...................................................41
Section 7.3.
Restrictions on General Partner's
Authority..........................................41
Section 7.4.
Reimbursement of the General Partner and
Parent......................................42
Section 7.5. Outside
Activities of the General
Partner............................................43
Section 7.6. Contracts
with
Affiliates............................................................44
Section 7.7.
Indemnification......................................................................44
Section 7.8. Liability of the General
Partner.....................................................46
Section 7.9. Other
Matters Concerning the General Partner and the
Parent..........................47
Section 7.10. Title to
Partnership
Assets..........................................................47
Section 7.11. Reliance by
Third
Parties............................................................48
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED
PARTNERS................................................48
Section 8.1. Limitation
of
Liability..............................................................48
Section 8.2. Management
of
Business...............................................................48
Section 8.3. Outside
Activities of Limited
Partners...............................................48
Section 8.4. Return of
Capital....................................................................49
Section 8.5.
Adjustment
Factor....................................................................49
Section 8.6. Redemption
Rights....................................................................49
ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND
REPORTS....................................................51
Section 9.1. Records
and
Accounting...............................................................51
Section 9.2.
Partnership
Year.....................................................................52
Section 9.3.
Reports..............................................................................52
ARTICLE X
TAX
MATTERS...............................................................................52
Section 10.1. Preparation of
Tax
Returns...........................................................52
Section 10.2. Tax
Elections........................................................................52
Section 10.3. Tax Matters
Partner..................................................................53
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Section 10.4.
Withholding..........................................................................54
Section 10.5. Organizational
Expenses..............................................................54
ARTICLE XI
TRANSFERS AND
WITHDRAWALS.................................................................54
Section 11.1.
Transfer.............................................................................54
Section 11.2. Transfer of
General Partner's Partnership
Interest...................................55
Section 11.3. Transfer of
Limited Partners' Partnership
Interests..................................56
Section 11.4. Substituted
Limited
Partners.........................................................57
Section 11.5.
Assignees............................................................................57
Section 11.6. General
Provisions...................................................................58
ARTICLE XII
ADMISSION OF
PARTNERS.....................................................................59
Section 12.1. Admission of
Successor General
Partner...............................................59
Section 12.2. Admission of
Additional Limited
Partners.............................................59
Section 12.3. Amendment of
Agreement and Certificate of Limited
Partnership........................60
Section 12.4. Limit on Number
of
Partners..........................................................60
ARTICLE XIII
DISSOLUTION, LIQUIDATION AND
TERMINATION..................................................60
Section 13.1.
Dissolution..........................................................................60
Section 13.2. Winding
Up...........................................................................61
Section 13.3. Deemed
Distribution and
Recontribution...............................................63
Section 13.4. Rights of
Limited
Partners...........................................................63
Section 13.5. Notice of
Dissolution................................................................63
Section 13.6. Cancellation of
Certificate of Limited
Partnership...................................64
Section 13.7. Reasonable Time
for
Winding-Up.......................................................64
ARTICLE XIV
PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS;
MEETINGS.....................64
Section 14.1. Procedures for
Actions and Consents of
Partners......................................64
Section
14.2.
Amendments...........................................................................64
Section 14.3. Meetings of the
Partners.............................................................65
ARTICLE XV
GENERAL
PROVISIONS........................................................................66
Section 15.1. Addresses and
Notice.................................................................66
Section 15.2. Titles and
Captions..................................................................66
Section 15.3. Pronouns and
Plurals.................................................................66
Section 15.4. Further
Action.......................................................................66
Section 15.5. Binding
Effect.......................................................................66
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Section 15.6.
Waiver...............................................................................66
Section 15.7.
Counterparts.........................................................................67
Section 15.8. Applicable
Law.......................................................................67
Section 15.9. Entire
Agreement.....................................................................67
Section 15.10. Invalidity of
Provisions.............................................................67
Section 15.11. Limitation to Preserve
REIT
Status...................................................67
Section 15.12. No
Partition.........................................................................68
Section 15.13. No Third-Party Rights
Created
Hereby.................................................68
Section 15.14. No Rights as
Shareholders of General Partner or Stockholders of
Parent...............68
Section 15.15.
Creditors............................................................................68
Exhibit A PARTNERS AND PARTNERSHIPS
UNITS......................................................................A-1
Exhibit B NOTICE OF
REDEMPTION.................................................................................B-1
Exhibit C OBLIGATED PARTNERS AND PROTECTED
AMOUNTS.............................................................C-1
Exhibit D CONVERSION
NOTICE....................................................................................D-1
Exhibit E FORCED CONVERSION
NOTICE.............................................................................E-1
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THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
FELDMAN EQUITIES OPERATING PARTNERSHIP, LP,
dated as of August 26, 2005 is
entered into by and among Feldman Holdings
Business Trust I, a Maryland business
trust (the "General Partner"), and the
limited partners listed on Exhibit A
hereto (each a "Limited Partner").
WHEREAS, Feldman Equities Operating Partnership, LP, a Delaware
limited
partnership (the "Partnership"), was formed
on August 6, 2004, pursuant to, and
in accordance with, the Delaware Revised
Uniform Limited Partnership Act (4 Del.
C. ss. 17-101, et seq.) by the filing of a
Certificate of Limited Partnership
with the Delaware Secretary of State;
WHEREAS, at the time of the Partnership's formation, the Partners
at
such time, entered into that certain
Agreement of Limited Partnership of Feldman
Equities Operating Partnership, LP dated as
of August 13, 2004 (the "Original
Agreement"), pursuant to which the
Partnership commenced its business;
WHEREAS, the Original Agreement was amended by that certain Amended
and
Restated Agreement of Limited Partnership
of Feldman Equities Operating
Partnership, LP dated as of December 21,
2004 (the "Amended Partnership
Agreement"), at which time the Partners
amended and restated the Original
Agreement in its entirety;
WHEREAS, the Amended Partnership Agreement was amended by that
certain
First Amendment to First Amended and
Restated Agreement of Limited Partnership,
dated as of December 21, 2004, at which
time the Partnership admitted additional
Limited Partners as described in the First
Amendment;
WHEREAS, the Partners desire to amend Sections 5.2 and 6.3.D of
the
Amended Partnership Agreement to reflect
the treatment of property interests
held by the General Partner, the Parent or
any Affiliate of the General Partner
or the Parent that are not held through the
Partnership; and
WHEREAS, the Partners desire to amend and restate the Amended
Partnership Agreement in its entirety by
entering into this Second Amended and
Restated Agreement of Limited Partnership
and to hereafter continue the business
of the Partnership in accordance with its
terms.
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 Partners 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. ss. 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.
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"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.
"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.
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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; provided,
however, that any Limited Partner may
waive, by written notice to the General
Partner, the effect of any adjustment to
the Adjustment Factor applicable to the OP
Units held by such Limited Partner,
and, thereafter, such adjustment will not
be effective as to such OP Units.
"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 voting securities,
by contract or otherwise, and the
terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"Agreement" means this Second Amended and Restated Agreement of
Limited
Partnership of Feldman Equities Operating
Partnership, LP, as it may be amended,
supplemented or restated from time to
time.
"Amended Partnership Agreement" means the Amended and Restated
Agreement of Limited Partnership of Feldman
Equities Operating Partnership, LP,
dated as of December 21, 2004, as amended
by the First Amendment to Amended and
Restated Agreement of Limited Partnership
of Feldman Equities Operating
Partnership, LP, dated as of December 21,
2004.
"Appraised Value" means the appraised value of the Harrisburg
Property
immediately prior to a Merger Event as
determined by an appraiser selected by
the Board (including a majority of the
Independent Directors).
"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.
"Average Market Price" means, on any day as to one OP Unit, the
closing
sales price of one REIT Share (provided
that one REIT Share would be received in
exchange for one OP Unit under this
Agreement, otherwise the number of REIT
Shares (or fraction thereof) that would be
received in exchange for one OP Unit)
as listed on the New York Stock Exchange
averaged over a period of 21 Business
Days consisting of the day as of which
"Average Market Price" is being
determined and the 20 consecutive business
days prior to such day. If the day of
determination of Average Market Price is
other than Business Day, Average Market
Price shall be determined as of the
business day immediately preceding such day
as if it were the day of determination of
Average Market Price. If at any time
such security is not listed on the New York
Stock Exchange then, if there has
been a sale of REIT Shares for an aggregate
amount exceeding $1 million to
persons or entities that are not affiliates
of Parent within 90 days prior to
such time, the price per REIT Share
(subject to proviso in the first sentence of
this definition) in the most recent such
sale shall be deemed to be the Average
Market Price hereunder.
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"Board" means the board of directors of the Parent.
"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 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.
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"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.
"Capitalized Base Rent" means the quotient obtained by dividing (x)
the
average annual net base rental payable
under the applicable lease for the entire
non-cancelable portion of the term thereof
(excluding any initial "free rent"
period of 120 days or less) divided by (y)
8%.
"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 August 6, 2004, 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 Employees" means the employees 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
4.9.F.
"Conversion Date" shall have the meaning set forth in Section
4.9.B.
"Conversion Notice" shall have the meaning set forth in Section
4.9.B.
"Conversion Right" shall have the meaning set forth in Section
4.9.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."
"Earnout Participant" means each of Feldman Partners, LLC, an
Arizona
limited liability company, James Bourg, an
individual, and Scott Jensen, an
individual.
"Earnout Term" means the period commencing on the date of the
closing
of the IPO and ending on the earliest of
(A) December 31, 2009; (B) the date of
the closing of a Property Sale; and (C) the
date of the closing of the Interest
Sale; and (D) a Merger Event.
"Earnout Unit" means a Partnership Unit which is designated as
an
Earnout Unit and which has the rights,
preferences and other privileges
designated in Section 4.8 hereof and
elsewhere in this Agreement in respect of
Holders of Earnout Units. The allocation of
Earnout Units among the Partners
shall be set forth on Exhibit A, as may be
amended from time to time.
"Economic Capital Account Balances" has the meaning set forth
in
Section 6.3.E 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.
"Forced Conversion" shall have the meaning set forth in Section
4.9.C.
"Forced Conversion Notice" shall have the meaning set forth in
Section
4.9.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 Feldman Holdings Business Trust I, a
Maryland
business trust, and its successors and
assigns, as the general partner of the
Partnership.
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<PAGE>
"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, Earnout Units, Preferred Units,
Junior Units or any other Partnership
Units.
"General Partner Loan" has the meaning set forth in Section
4.4.D
hereof.
"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;
(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);
(v) the conversion of any Earnout Units pursuant to
Section 4.8.A hereof; and
(vi) 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.
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<PAGE>
(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
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.
"Hard Costs" means the aggregate costs of all construction
materials,
direct labor charges, general contractor
fees (without overhead and profit)
relating to all site work, grading and
utility connections.
"Harrisburg IRR" means the IRR achieved by Parent or any of its
subsidiaries (without duplication) from all
funds received from the Harrisburg
Partnership based on an assumed investment
of $8,486,000 from the date of the
closing of the IPO through the end of the
Earnout Term, provided, however, that,
(x) if any Management Fees are received by
Parent or any of its subsidiaries
related to the Harrisburg Property; and (y)
if Parent or any of its subsidiaries
makes additional capital contributions to
or receives cash flow and/or capital
distributions from the Harrisburg
Partnership, in each case, the foregoing IRR
calculation shall take into account the
positive amounts and date of Management
Fees earned, the negative amounts of
additional capital contributions and the
dates of such contributions, if any, the
negative amounts required if Parent or
any of its subsidiaries elects to acquire
the interests of some or all of the
other partners in the Harrisburg
Partnership and the positive amounts of cash
flow and/or capital distributions paid to
Parent or any of its subsidiaries in
determining the Harrisburg IRR. In
addition:
(i) if no Property Sale or Interest Sale has occurred prior to
December 31, 2009, there shall also be included in the calculation
of
the Harrisburg IRR the amount that Parent or any of its
subsidiaries
would have received under the terms of the Harrisburg
Partnership
Agreement then in effect (unless Parent or any of its subsidiaries
then
owns all of the partnership interests in the Harrisburg
Partnership, in
which case the terms of the Harrisburg Partnership Agreement shall
not
apply) if the Harrisburg Property were sold (without any sale
expenses
such as brokerage commissions, loan prepayment fees, transfer taxes
or
closing costs) on December 31, 2009 for an amount equal to the
Harrisburg NOI divided by 8.5% and the Harrisburg Partnership had
then
dissolved and distributed all of its assets to its respective
partners
concurrently with such date (unless Parent or any of its
subsidiaries
then owns all of the partnership interests in the Harrisburg
Partnership, in which case the terms of the Harrisburg
Partnership
Agreement shall not apply);
(ii) if a Property Sale has occurred prior to December 31,
2009, there shall also be included in the calculation of the
Harrisburg
IRR the amount of proceeds received by Parent or any of its
subsidiaries under the Harrisburg Partnership Agreement then in
effect
in connection with such sale based on the assumption that the
Harrisburg Partnership is dissolved and all of its assets are
distributed to its respective partners concurrently with the
closing of
the Property Sale;
(iii) if an Interest Sale has occurred prior to December 31,
2009, there shall also be included in the calculation of the
Harrisburg
IRR the amount of proceeds received by Parent or any of its
subsidiaries in connection with such sale;
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<PAGE>
(iv) if a Merger Event has occurred prior to December 31,
2009, Parent shall promptly obtain the Appraised Value and there
shall
also be included in the calculation of the Harrisburg IRR the
amount of
proceeds that Parent or any of its subsidiaries would have received
had
the Harrisburg Property been sold for the Appraised Value; and
(v) if some or all of a Merger Event, an Interest Sale and a
Property Sale occur concurrently, the foregoing calculation shall
be
based on the Interest Sale or, if not applicable, a Property
Sale.
"Harrisburg NOI" means the total actual property revenues of
the
Harrisburg Property for calendar year 2009
(excluding non-cash income such as
straight-line rent, but including all rent
that accrues to the calendar year
2009) less the Property Related
Expenses.
"Harrisburg Partnership" means Feldman Lubert Adler Harrisburg LP,
a
Pennsylvania limited partnership, the owner
of the Harrisburg Property.
"Harrisburg Partnership Agreement" means the agreement of
limited
partnership of the Harrisburg
Partnership.
"Harrisburg Property" means the land and improvements commonly
known as
Harrisburg Mall, Harrisburg,
Pennsylvania.
"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.
"Incumbent Directors" has the meaning set forth in the definition
of
the term Other Change in Control.
- 9
-
<PAGE>
"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 as
determined by the rules and regulations of
the New York Stock Exchange then in
effect.
"Interest Sale" means a sale of the partnership interests in
the
Harrisburg Property owned by Parent or any
of its subsidiaries.
"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.
"IRR" means an internal rate of annual return (compounded
quarterly).
The calculation of IRR shall be performed
by Parent's accounting staff and shall
be reviewed by Parent's independent
accountants whose review shall be deemed
final and binding absent manifest error and
fraud.
"IRR Excess" means 50% of the excess, if any, of (a) the
amounts
received or deemed received by Parent or
any of its subsidiaries (without
duplication) in calculating the Harrisburg
IRR over (b) the amounts required to
be received or deemed received by Parent or
any of its subsidiaries (without
duplication) in order to obtain a
Harrisburg IRR of 15%, with such amount to be
determined upon the expiration of the
Earnout Term.
"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.
"Lease-Up Condition" means with respect to the applicable lease,
that
the tenant under such lease has taken
occupancy of the space demised thereunder
and has commenced the payment of rent
therefor.
"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, Earnout Units, PI
Units, Preferred Units or other
Partnership Units.
- 10 -
<PAGE>
"Liquidating Event" has the meaning set forth in Section 13.1
hereof.
"Liquidating Gains" has the meaning set forth in Section 6.3.E
hereof.
"Liquidator" has the meaning set forth in Section 13.2.A
hereof.
"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.
"Management Fees" means collectively, management fees, leasing
commissions and construction management
fees.
"Market Price" has the meaning set forth in the definition of
"Value."
"Merger Event" means a merger, consolidation, sale of all or
substantially all of the assets of the
Parent or the Partnership or, at the
option of Earnout Participant given within
10 business days after notice of such
transaction is given to Earnout
Participant, the occurrence of any Other Change
in Control.
"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:
(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;
- 11 -
<PAGE>
(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 Stock Option
Plans or (ii) any Debt issued by the REIT
that provides any of the rights
described in clause (i).
"NOI Calculation" has the meaning set forth in Section 4.8.
"Nonrecourse Deductions" has the meaning set forth in
Regulations
Section 1.704-2(b)(1), and the amount of
Nonrecourse Deductions for a
Partnership Year shall be determined in
accordance with the rules of Regulations
Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption 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 August 13,
2004.
"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 Earnout Unit, PI 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.E
hereof.
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<PAGE>
"Other Change in Control" means the occurrence of any of the
following:
(1) the members of the Board at the beginning of any
consecutive
24-calendar-month period (the "Incumbent
Directors") cease for any reason other
than due to death to constitute at least a
majority of the members of the Board;
provided that any director whose election,
or nomination for election by
Parent's stockholders, was approved by a
vote of at least a majority of the
members of the Board then still in office
who were members of the Board at the
beginning of such 24-calendar-month period,
shall be deemed to be an Incumbent
Director; or
(2) the general partner of the Partnership ceases to be a
wholly-owned
direct or indirect subsidiary of
Parent.
"Outside Director" shall mean a director of the Parent who is not
also
an officer or employee of the Parent.
"Outside Interest" has the meaning set forth in Section 5.2
hereof.
"Ownership Limit" means the applicable restriction or restrictions
on
ownership of shares of the Parent imposed
under the Charter.
"Parent" means Feldman Mall Properties, Inc., a Maryland
corporation.
"Parent Limited Partner" means Feldman Holdings Business Trust II,
a
Maryland business trust, and its successors
and assigns, as a 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
comply with the terms and provisions of
this Agreement. A Partnership Interest
may be expressed as a number of OP Units,
Earnout Units, PI 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).
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<PAGE>
"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, a PI Unit, an Earnout
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 this 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.
"PI Unit" means a Partnership Unit which is designated as a PI 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 PI Units. The
allocation of PI Units among the Partners
shall be set forth on Exhibit A, as
may be amended from time to time.
"PI Unitholder" means a Partner that holds PI Units.
"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.
"Property Related Expenses" means all normal and customary
operating
expenses of the Harrisburg Property which
are expensed for GAAP accounting
purposes, but specifically excluding: (a)
any non-cash items such as
depreciation and amortization; (b) any
Management Fees related to the Harrisburg
Property (whether or not such fees are
payable to Parent or any of its
subsidiaries); and (c) debt service
payments and reserves, if any.
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<PAGE>
"Property Sale" means a sale of the Harrisburg 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.
"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.B(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.
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<PAGE>
"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,
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.
"Stock Option Plan" means any stock option plan hereafter adopted
by
the Partnership or the Parent, including
the Parent's 2004 equity incentive
plan.
"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.
"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.
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<PAGE>
"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 Stock Option 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 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 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.
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.
"Transaction" shall have the meaning set forth in Section
4.9.F.
"Vesting Agreement" means each or any, as the context implies,
Profits
Interest Plan (PI Plan) Vesting Agreement
entered into by a PI Unitholder upon
acceptance of an award of PI Units under
the Plan (as such agreement may be
amended, modified or supplemented from time
to time).
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 "FELDMAN
EQUITIES
OPERATING PARTNERSHIP, 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.
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<PAGE>
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 3225 North Central Avenue,
Suite 1205 Phoenix, Arizona 85012, 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.
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.
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<PAGE>
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 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 August 6,
2004, the date that the original
Certificate was filed in the office of the
Secretary of the State of Delaware,
and shall continue until December 31, 2104
unless it is dissolved sooner
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
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.
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<PAGE>
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 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 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.
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<PAGE>
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 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 three classes
of Partnership Units entitled "OP Units,"
"Earnout Units," and " PI Units."
Subject to Section 4.10, either OP Units or
PI 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 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. Each
Earnout Unit shall be converted
automatically into an OP Unit as provided
in Section 4.8 hereof without the
requirement for any action by either the
Partnership or the Partner holding the
Earnout Units.
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 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.
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<PAGE>
B. Issuances to the General 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. 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.
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<PAGE>
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 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, (f) pursuant to
share grants or awards made pursuant to any
equity incentive plan of the Parent
(including the Parent's 2004 Long Term
Incentive Compensation Plan) or (g) if
the Parent determines that the best
interests of the Parent would be served by
contributing such cash proceeds or other
consideration to another Subsidiary 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 payment of some or all of
such expenses may be made by the Parent on
behalf of the Partnership out of the
gross proceeds of such issuance prior to
the direct or indirect contribution of
such proceeds by the Parent to the
Partnership).
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<PAGE>
Section 4.5. Stock Option Plan.
A. Options Granted to Company Employees and Independent Directors.
If
at any time or from time to time, in
connection with a Stock Option 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 Stock Incentive Plans. Nothing in this Agreement shall
be
construed or applied to preclude or
restrain the Parent from adopting, modifying
or terminating stock incentive plans,
including any Stock Option 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. PI Units.
A. Issuance of PI Units. The General Partner may from time to
time
issue PI 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.E and 4.9, PI 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 PI Units shall be treated as OP
Unitholders and PI Units shall be
treated as OP Units. In particular, the
Partnership shall maintain at all times
a one-to-one correspondence between PI
Units and OP Units for conversion,
distribution and other purposes, including
without limitation complying with the
following procedures:
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<PAGE>
(i) If an Adjustment Event (as defined below) occurs, then the
General Partner shall make a corresponding adjustment to the PI
Units
to maintain a one-for-one conversion and economic equivalence
ratio
between OP Units and PI Units. The following shall be
Adjustment
Events: (A) the Partnership makes a distribution on all outstanding
OP
Units 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 PI 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 PI Units to maintain the one-to-one correspondence
described
above, the General Partner shall have the right to make such
adjustment
to the PI Units, to the extent permitted by law and by any Stock
Option
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 PI 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
PI Unitholder setting forth the adjustment to his or her PI Units
and
the effective date of such adjustment; and
(ii)
The PI 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
PI
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 PI 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 PI Units.
B. Priority. Subject to the provisions of this Section 4.6 and
the
special provisions of Sections 6.3.E and
4.9, the PI 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 PI Units. Subject
to the terms of any Vesting Agreement, a PI
Unitholder shall be entitled to
transfer his or her PI 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.
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<PAGE>
C. Special Provisions. PI Units shall be subject to the
following
special provisions:
(i) Vesting Agreements. PI 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 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 Stock Option Plan, if applicable. PI Units that have
vested
under the terms of a Vesting Agreement are referred to as "Vested
PI
Units"; all other PI 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 PI Units at a specified purchase
price or
some other forfeiture of any PI Units, then if the Partnership or
the
General Partner exercises such right to repurchase or forfeiture
in
accordance with the applicable Vesting Agreement, then the relevant
PI
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 PI 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 PI Units, the
balance
of the portion of the Capital Account of the PI Unitholder that
is
attributable to all of his or her PI Units shall be reduced by
the
amount, if any, by which it exceeds the target balance contemplated
by
Section 6.3.E, calculated with respect to the PI Unitholder's
remaining
PI Units, if any.
(iii) Allocations. PI Unitholders shall be entitled to certain
special allocations of gain under Section 6.3.E.
(iv) Redemption. The Redemption Right provided to Limited
Partners under Section 8.6 shall not apply with respect to PI
Units
unless and until they are converted to OP Units as provided in
clause
(v) below and Section 4.9.
(v) Conversion To OP Units. Vested PI Units are eligible to be
converted into OP Units under Section 4.9.
D. Voting. PI Unitholders shall (a) have the same voting rights as
a
holder of OP Units, with the PI Units
voting as a single class with the OP Units
and having one vote per PI Unit; and (b)
have the additional voting rights that
are expressly set forth below. So long as
any PI Units remain outstanding, the
Partnership shall not, without the
affirmative vote of the holders of at least a
majority of the PI 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 PI Units so as to
materially and adversely affect any
right, privilege or voting power of the PI
Units or the PI 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 PI Units
are treated in accordance with Section 4.9.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
PI
Units or the PI 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, PI Units or Preferred Units,
whether
ranking senior to, junior to, or on a parity with the PI Units
with
respect to distributions and the distribution of assets upon
liquidation, dissolution or winding up, shall not be deemed to
materially and adversely affect such rights, preferences,
privileges or
voting powers of the PI Units or the PI Unitholders as such.
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<PAGE>
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 PI Units
shall
have been converted into OP Units.
Section 4.7. No Interest; No Return. No Partner shall be entitled
to
interest on its Capital Contribution or on
such Partner's Capital Account.
Except as provided herein or by law, no
Partner shall have any right to demand
or receive the return of its Capital
Contribution from the Partnership.
Section 4.8.
Conversion or Redemption of Ea
