EXHIBIT 10(a)
SECOND AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
REGENCY CENTERS, L.P.
(formerly known as Regency Retail Partnership, L.P.)
TABLE OF CONTENTS
ARTICLE 1
DEFINED TERMS
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization; Application of Act . . . . . . . . 14
Section 2.2 Name . . . . . . . . . . . . . . . . . . . . . . 14
Section 2.3 Registered Office and Agent; Principal Office . . 15
Section 2.4 Term . . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business . . . . . . . . . . . . . . 15
Section 3.2 Powers . . . . . . . . . . . . . . . . . . . . . 15
ARTICLE 4
CAPITAL CONTRIBUTIONS; ISSUANCE OF UNITS;
CAPITAL ACCOUNTS
Section 4.1 Capital Contributions of the Partners . . . . . . 16
Section 4.2 Issuances of Additional Partnership Interests . . 17
Section 4.3 No Preemptive Rights . . . . . . . . . . . . . . 18
Section 4.4 Capital Accounts of the Partners . . . . . . . . 18
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of
Distributions . . . . . . . . . . . . . . . . . . 20
Section 5.2 Amounts Withheld . . . . . . . . . . . . . . . . 21
Section 5.3 Withholding . . . . . . . . . . . . . . . . . . . 22
Section 5.4 Distributions Upon Liquidation . . . . . . . . . 23
ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations of Net Income and Net Loss . . . . . 23
Section 6.2 Special Allocation Rules . . . . . . . . . . . . 27
Section 6.3 Allocations for Tax Purposes . . . . . . . . . . 28
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management . . . . . . . . . . . . . . . . . . . 30
Section 7.2 Certificate of Limited Partnership . . . . . . . 35
Section 7.3 Restriction on General Partner's Authority . . . 36
Section 7.4 Responsibility for Expenses . . . . . . . . . . . 36
Section 7.5 Outside Activities of the General Partner . . . . 37
Section 7.6 Contracts with Affiliates . . . . . . . . . . . . 37
Section 7.7 Indemnification . . . . . . . . . . . . . . . . . 38
Section 7.8 Liability of the General Partner . . . . . . . . 39
Section 7.9 Other Matters Concerning the General Partner . . 40
Section 7.10 Title to Partnership Assets . . . . . . . . . . . 41
Section 7.11 Reliance by Third Parties . . . . . . . . . . . . 41
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability . . . . . . . . . . . . . 42
Section 8.2 Management of Business . . . . . . . . . . . . . 42
Section 8.3 Outside Activities of Limited Partners . . . . . 42
Section 8.4 Priority Among Partners . . . . . . . . . . . . . 43
Section 8.5 Rights of Limited Partners Relating to the
Partnership . . . . . . . . . . . . . . . . . . . 43
Section 8.6 Redemption of Units . . . . . . . . . . . . . . . 44
Section 8.7 Regency's Assumption of Right . . . . . . . . . . 49
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting . . . . . . . . . . . . . 49
Section 9.2 Fiscal Year . . . . . . . . . . . . . . . . . . . 49
Section 9.3 Reports . . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns . . . . . . . . . . . 50
Section 10.2 Tax Elections . . . . . . . . . . . . . . . . . . 50
Section 10.3 Tax Matters Partner . . . . . . . . . . . . . . . 50
Section 10.4 Organizational Expenses . . . . . . . . . . . . . 52
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer . . . . . . . . . . . . . . . . . . . . 52
Section 11.2 Transfer of General Partner's Partnership
Interests . . . . . . . . . . . . . . . . . . . . 52
Section 11.3 Limited Partners' Rights to Transfer . . . . . . 54
Section 11.4 Substituted Limited Partners . . . . . . . . . . 56
Section 11.5 Assignees . . . . . . . . . . . . . . . . . . . . 56
Section 11.6 General Provisions . . . . . . . . . . . . . . . 57
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner . . . . . 58
Section 12.2 Admission of Additional Limited Partners . . . . 58
Section 12.3 Amendment of Agreement and Certificate . . . . . 58
Section 12.4 Representations and Warranties of Additional
Limited Partners . . . . . . . . . . . . . . . . 59
ARTICLE 13
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution . . . . . . . . . . . . . . . . . . . 59
Section 13.2 Winding Up . . . . . . . . . . . . . . . . . . . 60
Section 13.3 Compliance with Timing Requirements of
Regulations; Allowance for Contingent or
Unforeseen Liabilities or Obligations . . . . . . 63
Section 13.4 Deficit Capital Account Restoration . . . . . . . 64
Section 13.5 Deemed Distribution and Recontribution . . . . . 65
Section 13.6 Rights of Limited Partners . . . . . . . . . . . 65
Section 13.7 Notice of Dissolution . . . . . . . . . . . . . . 65
Section 13.8 Cancellation of Certificate of Limited
Partnership . . . . . . . . . . . . . . . . . . . 65
Section 13.9 Reasonable Time for Winding-Up . . . . . . . . . 65
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments . . . . . . . . . . . . . . . . . . . 66
Section 14.2 Meetings of Limited Partners . . . . . . . . . . 68
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice . . . . . . . . . . . . . . 69
Section 15.2 Titles and Captions . . . . . . . . . . . . . . . 69
Section 15.3 Pronouns and Plurals . . . . . . . . . . . . . . 69
Section 15.4 Further Action . . . . . . . . . . . . . . . . . 69
Section 15.5 Binding Effect . . . . . . . . . . . . . . . . . 69
Section 15.6 Waiver of Partition . . . . . . . . . . . . . . . 69
Section 15.7 Entire Agreement . . . . . . . . . . . . . . . . 69
Section 15.8 Remedies Not Exclusive . . . . . . . . . . . . . 70
Section 15.9 Time . . . . . . . . . . . . . . . . . . . . . . 70
Section 15.10 Creditors . . . . . . . . . . . . . . . . . . . . 70
Section 15.11 Waiver . . . . . . . . . . . . . . . . . . . . . 70
Section 15.12 Execution Counterparts . . . . . . . . . . . . . 70
Section 15.13 Applicable Law . . . . . . . . . . . . . . . . . 70
Section 15.14 Invalidity of Provisions . . . . . . . . . . . . 70
ARTICLE 16
POWER OF ATTORNEY
Section 16.1 Power of Attorney . . . . . . . . . . . . . . . . 70
SCHEDULES
Schedule 7.8(b) Regency's PFIC Obligations
Schedule 8.6(a) Transfer Restrictions in Regency's Articles of
Incorporation
Schedule 13.4(a) Electing Partners with Deficit Capital Account
Make-up Requirement
EXHIBITS
Exhibit A Partners, Contributions and Partnership Interests
(addresses)
Exhibit B Notice of Redemption
Exhibit C Security Capital Waiver and Consent Agreement
SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF
REGENCY CENTERS, L.P.
THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP is dated as of March 5, 1998, by and among Regency Realty
Corporation, a Florida corporation, as general partner (the "General
Partner"), and those additional persons who from time to time agree to be
bound by this Agreement as limited partners (the "Limited Partners"), and
amends and restates the Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of March 7, 1997 (the "Initial
Agreement").
Background
Limited Partners (the "Original Limited Partners") who formerly were
partners of Branch Properties, L.P. or its affiliates were admitted to the
Partnership on March 7, 1997, and certain partners in partnerships
affiliated with Branch Properties, L.P. were admitted to the Partnership
in May and June, 1997) as holders of Class A Units (as defined below).
In connection with the first admission of Class A Unit holders,
Regency Atlanta, Inc., which was then the general partner of the
Partnership, and Security Capital (as defined below) entered into
Amendment No. 1 to the Initial Agreement to permit the holders of Class A
Units to redeem their Units prior to the first Subsequent Closing (as
defined below) with the consent of the General Partner and Security
Capital.
Regency Realty Corporation ("Regency") has merged with Regency
Atlanta, Inc., formerly the General Partner of the Partnership, with
Regency being the surviving corporation in the merger, and Regency has
caused the merger into the Partnership of its subsidiary, Regency Centers,
Inc., which owned at least 35 shopping center properties immediately prior
to the merger. Accordingly, Regency is now the General Partner of the
Partnership. In addition, the name of the Partnership has been changed to
Regency Centers, L.P. Regency intends for the Partnership to be the
primary vehicle through which Regency acquires properties from time to
time in the future.
The General Partner wishes to amend and restate the Initial
Agreement, as amended, pursuant to authority granted to the General
Partner in Section 14.1(b) (i) to provide for admitting Additional Limited
Partners (as defined below) to the Partnership from time to time, (ii) to
make certain changes of an inconsequential nature to the form of the
provisions governing the maintenance of Capital Accounts, and (iii) to
delete matters of historical interest that are no longer relevant.
Pursuant to Section 4.2, the Limited Partnership Interests (as defined
below) of the Additional Limited Partners shall be subordinate to the
Limited Partnership Interests of the Original Limited Partners and the
holders of the Class A Units.
NOW, THEREFORE, the General Partner amends and restates the Initial
Agreement as follows (matters in italics are agreements with the Original
Limited Partners only).
ARTICLE 1
DEFINED TERMS
The following definitions shall be for all purposes, unless otherwise
clearly indicated to the contrary, applied to the terms used in this
Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership Act, as
it may be amended from time to time, and any successor to such statute.
"Additional Limited Partner" means a Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.2 hereof and who is
shown as such on the books and records of the Partnership.
"Additional Unit" means a Unit issued to an Original Limited Partner
(but not to any holder of a Class A Unit) at a Subsequent Closing pursuant
to the Contribution Agreement.
"Adjusted Capital Account" means the Capital Account maintained for
each Partner as of the end of each Partnership Year (i) increased by any
amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore
pursuant to the penultimate sentences of Regulations Sections 1.704-
2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and
1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital
Account is intended to comply with the provisions of Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital
Account as of the end of the relevant Partnership Year.
"Affiliate" means, with respect to any Person, any Person directly or
indirectly controlling, controlled by or under common control with such
Person.
"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
"Articles of Incorporation" means the Amended and Restated Articles
of Incorporation of Regency, as filed with the Florida Department of
State, as further amended or restated from time to time.
"Assignee" means a Person to whom one or more Partnership Units have
been transferred in a manner permitted under this Agreement, but who has
not become a Substituted Limited Partner, and who has the rights set forth
in Section 11.5.
"Available Cash" means with respect to any period for which such
calculation is being made,
(a) all cash revenues and funds received by the Partnership
from whatever source (excluding the proceeds of any Capital
Contribution other than a Capital Contribution made by the General
Partner for the purpose of funding distributions to Limited Partners
and excluding Capital Transaction Proceeds) plus the amount of any
reduction (including, without limitation, a reduction resulting
because the General Partner determines such amounts are no longer
necessary) in reserves of the Partnership, which reserves are
referred to in clause (b)(iv) below;
(b) less the sum of the following (except to the extent made
with the proceeds of any Capital Contribution and except to the
extent taken into account in determining Capital Transaction
Proceeds), all of which shall be paid subject to Section 7.1(h):
(i) all interest, principal and other debt payments made
during such period by the Partnership,
(ii) all other cash expenditures (including capital
expenditures) made by the Partnership during such period,
(iii) investments in any entity (including loans made
thereto) to the extent that such investments are not otherwise
described in clauses (b)(i) or (ii), and
(iv) the amount of any increase in reserves established
during such period which the General Partner determines is
necessary or appropriate in its sole and absolute discretion.
Notwithstanding the foregoing, Available Cash shall not include any cash
received or reductions in reserves, or take into account any disbursements
made or reserves established, after commencement of the dissolution and
liquidation of the Partnership.
"Business Day" means any day except a Saturday, Sunday or other day
on which commercial banks in New York City, New York are authorized or
required by law to close.
"Capital Account" means the Capital Account maintained for a Partner
pursuant to Section 4.4 hereof.
"Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the value (as set forth by separate agreement) of
property which such Partner contributes or is deemed to contribute to the
Partnership pursuant to Section 4.1 or 4.2 hereof and which shall be
treated as a contribution to the Partnership pursuant to Section 721(a) of
the Code.
"Capital Transaction" means a sale, exchange or other disposition
(other than in liquidation of the Partnership) or a financing or
refinancing by the Partnership (which shall not include any loan or
financing to the General Partner as permitted by Section 7.1(a)(iii)) of a
Partnership asset or any portion thereof.
"Capital Transaction Proceeds" means the net cash proceeds of a
Capital Transaction, after deducting all expenses incurred in connection
therewith and after application of any proceeds, at the sole discretion of
the General Partner, toward the payment of any indebtedness of the
Partnership secured by the property that is the subject of that Capital
Transaction, the purchase, improvement or expansion of Partnership
property, or the establishment of any reserves deemed reasonably necessary
by the General Partner; provided, however, that if the Partnership obtains
financing for Partnership properties for which no permanent financing has
previously been obtained, the proceeds of such financing shall not be
deemed to be Capital Transaction Proceeds if and to the extent that the
General Partner determines to reinvest such proceeds in additional and
existing real property investments of the Partnership.
"Cash Amount" means an amount of cash arrived at by multiplying (i)
the number of Partnership Units that are the subject of a Notice of
Redemption times (ii) the Unit Adjustment Factor times (iii) the Value on
the Valuation Date of a Share.
"Certificate" means the Certificate of Limited Partnership relating
to the Partnership filed in the office of the Secretary of State of the
State of Delaware, as amended from time to time in accordance with the
terms hereof and the Act.
"Class A Units" means the Partnership Interest in the Partnership
issued pursuant to Section 4.2 hereof which has the same rights as the
Original Limited Partnership Units (including the right to vote together
with the Original Limited Partners as a class, to receive distributions
pursuant to Article 5 and to receive allocations pursuant to Article 6),
except (i) the holder of such a Class A Unit shall not have the right to
receive Additional Units hereunder and (ii) the Redemption Rights with
respect to Class A Units shall be subordinate as set forth in Sections
8.6(a), 8.6(c)(i) and 8.6(c)(ii) hereof.
"Class B Units" means the Partnership Interest in the Partnership
owned by a Partner (including the General Partner or any Affiliate of
Regency other than a Property Affiliate), other than an Original Limited
Partner, an Additional Limited Partner and the holders of Class A Units.
As provided in Sections 5.1(a) and 5.1(b), the distribution rights for the
Class B Units are subordinate to the distribution rights for the Original
Limited Partnership Units, Class A Units and Class 2 Units.
"Class 2 Units" means the Partnership Interest in the Partnership
issued pursuant to Section 4.2 hereof to a Limited Partner other than an
Original Limited Partner or the holders of the Class A Units. As provided
in Section 5.2, the distribution rights of the Class 2 Units are
subordinate to the distribution rights of the Original Limited Partnership
Units and the Class A Units but senior to distribution rights of the Class
B Units.
"Closing Date" has the meaning set forth in the Contribution
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended. Any
reference herein to a specific section or sections of the Code shall be
deemed to include a reference to any corresponding provision of future
law.
"Common Stock" means the voting Common Stock, $0.01 par value, of
Regency.
"Consent" means with respect to Limited Partners holding any class of
Units, the written consent of those Limited Partners holding a majority of
such Units at the time in question. Consent of the Original Limited
Partners means the written consent of Original Limited Partners holding a
majority of the Original Limited Partnership Units outstanding at the time
in question. Consent of the Limited Partners means the written consent of
the Original Limited Partners and the Additional Limited Partners holding
a majority of the Units outstanding at the time in question.
"Contribution Agreement" means that certain Contribution Agreement
and Plan of Reorganization, dated as of February 10, 1997, by and among
Branch Properties, L.P., Branch Realty Inc. and Regency.
"Cumulative Unpaid Accrued Return Account" means, with respect to any
Original or Additional Limited Partner, an amount equal to (i) the
interest that would accrue at the Prime Rate plus two percent (2%) on such
Partner's Cumulative Unpaid Priority Distribution Account outstanding from
time to time, less (ii) the cumulative amount of Available Cash and the
cumulative amount of any Capital Transaction Proceeds distributed with
respect to the Limited Partnership Units of such Partner in reduction of
such Cumulative Unpaid Accrued Return Account pursuant to Sections
5.1(a)(ii), 5.1(a)(v), 5.1(b)(i) and 5.1(b)(iii).
"Cumulative Unpaid Priority Distribution Account" means, with respect
to any Original or Additional Limited Partner an amount equal to (i) the
aggregate of all Priority Distribution Amounts for Limited Partnership
Units held by such Partner, less (ii) the cumulative amount of Available
Cash and the cumulative amount of any Capital Transaction Proceeds
distributed with respect to such Limited Partnership Units of such Partner
in reduction of such Cumulative Unpaid Priority Distribution Account
pursuant to Sections 5.1(a)(i), 5.1(a)(iii), 5.1(a)(iv), 5.1(a)(vi),
5.1(b)(ii) and 5.1(b)(iv).
"Depreciation" means for each Partnership Year or other period, an
amount equal to the federal income tax depreciation, amortization, or
other cost recovery deduction allowable with respect to an asset for such
year or other period, except that if the Gross Asset Value of an asset
differs from its adjusted basis for federal income tax purposes at the
beginning of such year or other period, Depreciation shall be an amount
which bears the same ratio to such beginning Gross Asset Value as the
federal income tax depreciation, amortization, or other cost recovery
deduction for such year bears to such beginning adjusted tax basis;
provided, however, that if the federal income tax depreciation,
amortization, or other cost recovery deduction for such year is zero,
Depreciation shall be determined with reference to such beginning Gross
Asset Value using any reasonable method selected by the General Partner,
except that in the case of a zero basis property contributed by an
Original Limited Partner, such property shall be depreciated for book
purposes over a period of not more than ten years.
"Event of Dissolution" has the meaning set forth in Section 13.1.
"First Closing" has the meaning set forth in the Contribution
Agreement.
"General Partner" means Regency Realty Corporation or its permitted
successors as a general partner of the Partnership.
"General Partnership Interest" means a Partnership Interest held by a
General Partner that is a general partnership interest. A General
Partnership Interest may be expressed as a number of Class B Units.
"Gross Asset Value" means with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the fair market value (exclusive
of liabilities) of such asset, as determined by the General Partner,
unless required to be determined in some other manner herein;
(b) The Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective fair market values (exclusive of
liabilities), as determined by the General Partner, as of the
following times: (i) the acquisition of an additional interest in
the Partnership by any new or existing Partner in exchange for more
than a de minimis capital contribution; (ii) the distribution by the
Partnership to a Partner of more than a de minimis amount of property
as consideration for an interest in the Partnership; and (iii) the
liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g); provided, however, that adjustments
pursuant to clauses (i) and (ii) above shall be made only if the
General Partner reasonably determines that such adjustments are
necessary or appropriate to reflect the relative economic interests
of the Partners in the Partnership;
(c) The Gross Asset Value of any Partnership asset distributed
to any Partner shall be adjusted to equal the fair market value
(exclusive of liabilities) of such asset on the date of distribution
as determined by the General Partner; and
(d) The Gross Asset Values of Partnership assets shall be
increased (or decreased) to reflect any adjustments to the adjusted
basis of such assets pursuant to Code Section 734(b) or Code Section
743(b), but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset
Values shall not be adjusted pursuant to this paragraph (d) to the
extent the General Partner determines that an adjustment pursuant to
paragraph (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to
this paragraph (d).
If the Gross Asset Value of an asset has been determined or adjusted
pursuant to paragraphs (a), (b), or (d) above, such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with
respect to such asset for purposes of computing profits and losses.
"Immediate Family" means, with respect to any natural Person, such
natural Person's spouse, parents, descendants, nephews, nieces, brothers
and sisters and trusts for the benefit of any of the foregoing.
"Incapacity" or "Incapacitated" means, (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his
estate; (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter; (iii) as to any partnership which is a Partner,
the dissolution and commencement of winding up of the partnership; (iv) as
to any estate which is a Partner, the distribution by the fiduciary of the
estate's entire interest in the Partnership; (v) as to any trustee of a
trust which is a Partner, the termination of the trust (but not the
substitution of a new trustee); or (vi) as to any Partner, the bankruptcy
of such Partner. For purposes of this definition, bankruptcy of a Partner
shall be deemed to have occurred when the Partner (a) makes an assignment
for the benefit of creditors, (b) files a voluntary petition in
bankruptcy, (c) is adjudged a bankrupt or insolvent, or has entered
against him an order of relief in any bankruptcy or insolvency proceeding,
(d) files a petition or answer seeking for himself any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation, (e) files an answer
or other pleading admitting or failing to contest the material allegations
of a petition filed against him in any proceeding of this nature, (f)
seeks, consents to or acquiesces in the appointment of a trustee, receiver
or liquidator of the Partner or of all or any substantial part of his
properties, (g) is the debtor in any proceeding seeking reorganization,
arrangement, composition, readjustment, liquidation, dissolution or
similar relief under any statute, law or regulation, which has not been
dismissed within 120 days after the commencement thereof, or (h) is the
subject of a proceeding whereby a trustee, receiver or liquidator is
appointed for the Partner or all or any substantial part of its properties
without the Partner's consent or acquiescence of a trustee, receiver or
liquidator, and such appointment has not been vacated or stayed within 90
days after the appointment or such appointment is not vacated within 90
days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of his status as (a) the General Partner, (b) a Limited Partner or
(c) a director or officer of the Partnership or a Partner, and (ii) such
other Persons (including Affiliates of the General Partner or the
Partnership) acting in good faith on behalf of the Partnership as
determined by the General Partner in its good faith judgment other than
for any action by such Person involving fraud, willful misconduct or gross
negligence.
"IRS" means the Internal Revenue Service, which administers the
internal revenue laws of the United States.
"Limited Partner" means any Person named as a Limited Partner in
Exhibit A attached hereto, as such Exhibit may be amended from time to
time in accordance with the terms of this Agreement, or any Substituted
Limited Partner or Additional Limited Partner, in such Person's capacity
as a Limited Partner in the Partnership.
"Limited Partnership Interest" means a Partnership Interest of a
Limited Partner in the Partnership representing a fractional part of the
Partnership Interests of all Limited Partners and includes any and all
benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms and provisions of this Agreement. A
Limited Partnership Interest may be expressed as a number of Original
Limited Partnership Units, Class A Units, Class 2 Units or Class B Units
as provided herein.
"Liquidating Transaction" means any sale or other disposition of all
or substantially all of the assets of the Partnership following the
adoption by the General Partner of a plan of liquidation for the
Partnership.
"Liquidator" has the meaning set forth in Section 13.2.
"Management Business" has the meaning set forth in Section 7.1(g).
"Net Income" and "Net Loss" means for any taxable period, an amount
equal to the Partnership's taxable income or loss for such taxable period
determined in accordance with Section 703(a) of the Code (for this purpose
all items of income, gain, loss or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), with the following adjustments:
(a) Except as otherwise provided in Regulations Section 1.704-
1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under
Section 754 of the Code which may be made by the Partnership;
provided, that the amounts of any adjustments to the adjusted bases
of the assets of the Partnership made pursuant to Section 734 of the
Code as a result of the distribution of property by the Partnership
to a Partner (to the extent that such adjustments have not previously
been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to
the limitations prescribed in Regulations Section 1.704-
1(b)(2)(iv)(m).
(b) Any income of the Partnership that is exempt from federal
income tax and not otherwise taken into account in computing Net
Income or Net Loss pursuant to this definition shall be added to such
Net Income or Net Loss.
(c) The computation of all items of income, gain, loss and
deduction shall be made without regard to the fact that items
described in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are
not includable in gross income or are neither currently deductible
nor capitalized for federal income tax purposes.
(d) Any income, gain or loss attributable to the taxable
disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were
equal in amount to the Partnership's Gross Asset Value with respect
to such property as of such date.
(e) In lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for
such fiscal year.
(f) In the event the Gross Asset Value of any Partnership asset
is adjusted pursuant to clause (b) or (c) of the definition thereof,
the amount of any such adjustment shall be taken into account as gain
or loss from the disposition of such asset and shall be allocated
pursuant to Section 6.2(g).
(g) Any items specially allocated under Sections 6.2 and 6.3
hereof shall not be taken into account.
"Non-U.S. Person" means with respect to the acquisition, ownership or
transfer of any Partnership Interest or Shares, the direct or indirect
acquisition or ownership thereof by or a transfer that results in the
direct or indirect ownership thereof by any Person who is not (i) a
citizen or resident of the United States, (ii) a partnership or
corporation created or organized in the United States or under the laws of
the United States or any state therein (including the District of
Columbia), or (iii) a foreign estate or trust within the meaning of
Section 7701(a)(31) of the Code.
"Nonrecourse Deductions" has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Regulations
Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption, Security
Agreement and Investor Questionnaire substantially in the form of Exhibit
B to this Agreement, as it may be amended from time to time by the General
Partner effective upon written notice to the Limited Partners.
"Option Date" means the four hundred twentieth (420th) day after the
date of the First Closing.
"Original Limited Partner" means the Partners who received Original
Limited Partnership Units distributed by Branch Properties, L.P. to its
respective partners pursuant to the Contribution Agreement. The Original
Limited Partners are listed on Exhibit A attached hereto. The term
"Original Limited Partner" shall also include any permitted transferee of
an Original Limited Partner pursuant to Section 11.3 other than the
General Partner or any Affiliate of the General Partner other than a
Property Affiliate.
"Original Limited Partnership Unit" means a Partnership Unit
(including any Additional Units) issued to an Original Limited Partner.
The term "Original Limited Partnership Unit" does not include or refer to
any Class A Units, Class 2 Units or Class B Units.
"Partner" means a General Partner or a Limited Partner, and
"Partners" means the General Partner and the Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result
if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in Regulations
Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership
Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(i)(2).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
representing a Capital Contribution and includes any and all benefits to
which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person
to comply with the terms and provisions of this Agreement. A Partnership
Interest may be expressed as a number of Original Limited Partnership
Units, Class A Units, Class 2 Units or Class B Units.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well
as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(d).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash pursuant to Section
5.1 hereof, which record date shall be the same as the record date
established by Regency for a dividend to the holders of Common Stock.
"Partnership Unit" or "Unit" means the Partnership Interest in the
Partnership to be issued to and held by the Limited Partners pursuant to
Sections 4.1 and 4.2. The ownership of Units may be evidenced by such
form of certificate as the General Partner may determine, in its
discretion, and the transfer of the Units evidenced by such certificates
shall be governed by Article 11.
"Partnership Year" means the fiscal year of the Partnership, which
shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing (i) the Original Limited Partnership
Units, Class A Units, Class 2 Units and Class B Units owned by such
Partner by (ii) the total number of Original Limited Partnership Units,
Class A Units, Class 2 Units and Class B Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended
from time to time in accordance with the terms of this Agreement.
"Person" means an individual or a corporation, limited liability
company, partnership, trust, unincorporated organization, association or
other entity.
"Pledged Units" has the meaning set forth in Section 8.6(f) with
respect to Original Limited Partnership Units and means any other Units
pledged by an Additional Limited Partner to the Partnership or the General
Partner, whether pursuant to this Agreement or by separate agreement.
"Property Affiliate" means a Person, other than any Subsidiary of
Regency, who contributed property in exchange for a Limited Partnership
Interest and who may be deemed an Affiliate of the General Partner, e.g.,
because such person is a director of Regency or owns a significant number
of Units or shares of Regency stock.
"Prime Rate" means, on any date, a fluctuating rate of interest per
annum equal to the rate of interest most recently established by Wachovia
Bank of Georgia, N.A. at its Atlanta, Georgia office (or, at the General
Partner's election, another major lender to the Partnership, at the office
with which the Partnership deals), as its prime rate of interest for loans
in United States dollars.
"Priority Distribution Amount" means with respect to an Original
Limited Partnership Unit or a Class 2 Unit outstanding on a Partnership
Record Date (i) the cash dividend per share of Common Stock (including any
dividend designated by Regency as capital gain pursuant to Section
857(b)(3)(C) of the Code) declared by Regency on the Partnership Record
Date, multiplied by (ii) the Unit Adjustment Factor in effect on such
Partnership Record Date except that on the first Partnership Record Date
that occurs with respect to a Class 2 Unit, the General Partner may
require that the Priority Distribution Amount be prorated to the extent
that the Unit has not been outstanding each day since the immediately
preceding Partnership Record Date.
"Recapture Income" means any gain recognized by the Partnership
(computed without regard to any adjustment required by Section 734 or
Section 743 of the Code) upon the disposition of any property or asset of
the Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to
such property or asset.
"Recourse Liabilities" has the meaning set forth in Regulations
Section 1.752-1(a)(1).
"Redeeming Partner" means a Limited Partner who duly exercised a
Redemption Right.
"Redemption Amount" means the Share Amount or, as determined by the
General Partner in its sole and absolute discretion after the Option Date,
the Cash Amount or any combination of the Share Amount and the Cash
Amount. As provided in Section 8.6(b), in the event a Specified Redemption
Date occurs on or before the Option Date, then the General Partner shall
be required to cause the Partnership to issue the Share Amount (and not
the Cash Amount) in satisfaction of the Redemption Amount, except as
otherwise provided in Section 8.6(c).
"Redemption Right" with respect to the Original Limited Partners and
the holders of Class A Units has the meaning set forth in Section 8.6(a)
hereof and with respect to Additional Limited Partners means any right
granted to such Partners by separate agreement of the Partnership to
redeem such Partners' Limited Partnership Interests.
"Regency" means Regency Realty Corporation, a Florida corporation.
"Regulations" means the Income Tax Regulations, including the
Temporary Regulations, promulgated under the Code, as such regulations may
be amended from time to time (including corresponding provisions of
succeeding regulations).
"REIT" means a real estate investment trust under Section 856 of the
Code.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Capital" means Security Capital U.S. Realty, a Luxembourg
corporation, Security Capital Holdings, S.A., a Luxembourg corporation,
and their Affiliates.
"Share Amount" means a number of Shares arrived at by multiplying (i)
the number of Partnership Units that are the subject of a Notice of
Redemption times (ii) the Unit Adjustment Factor.
"Shares" means (i) the Common Stock of Regency, and (ii) any
securities issuable with respect to Shares as a result of the application
of Section 11.2(b).
"Specified Redemption Date" means the later of (i) 5:00 p.m. Eastern
time, on the date specified by the Redeeming Partner in such Partner's
Notice of Redemption, or (ii) the close of business, Eastern time, on the
first Business Day after the date in clause (i) if such date is not a
Business Day, or (iii) 5:00 p.m. Eastern time, on the tenth Business Day
after receipt by the General Partner of a Notice of Redemption.
"Subsequent Closing" has the meaning set forth in the Contribution
Agreement.
"Subsidiary" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting
equity securities or (ii) the outstanding equity interests is owned,
directly or indirectly, by such Person.
"Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 11.4.
"Transaction" has the meaning set forth in Section 11.2(b).
"Unit Adjustment Factor" means initially 1.0; provided that, in order
to prevent dilution of the Redemption Right, in the event that Regency (i)
declares or pays a dividend on its outstanding Common Stock in Common
Stock or makes a distribution to all holders of its outstanding Common
Stock in Common Stock, (ii) subdivides its outstanding Common Stock, or
(iii) combines its outstanding Common Stock into a smaller number of
shares, the Unit Adjustment Factor shall be adjusted by multiplying the
Unit Adjustment Factor by a fraction, the numerator of which shall be the
number of Shares issued and outstanding on the record date (assuming for
such purposes that such dividend, distribution, subdivision or combination
has occurred as of such time), and the denominator of which shall be the
actual number of Shares (determined without the above assumption) issued
and outstanding on the record date for such dividend, distribution,
subdivision or combination. Any adjustment to the Unit Adjustment Factor
shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event.
"Valuation Date" means the date of receipt by the General Partner of
a Notice of Redemption or, if such date is not a Business Day, the first
Business Day thereafter.
"Value" means, with respect to a Share, the average of the daily
market price of the Common Stock for the ten (10) consecutive trading days
immediately preceding the Valuation Date. The market price for each such
trading day shall be: (i) if the Common Stock is listed or admitted to
trading on any securities exchange or the Nasdaq-National Market, the
closing price, regular way, on such day, or if no such sale takes place on
such day, the average of the closing bid and asked prices on such day,
(ii) if the Common Stock is not listed or admitted to trading on any
securities exchange or the Nasdaq-National Market, the last reported sale
price on such day or, if no sale takes place on such day, the average of
the closing bid and asked prices on such day, as reported by a reliable
quotation source designated by the General Partner, or (iii) if the Common
Stock is not listed or admitted to trading on any securities exchange or
the Nasdaq-National Market and no such last reported sale price or closing
bid and asked prices are available, the average of the reported high bid
and low asked prices on such day, as reported by a reliable quotation
source designated by the General Partner, or if there shall be no bid and
asked prices on such day, the average of the high bid and low asked
prices, as so reported, on the most recent day (not more than 10 days
prior to the date in question) for which prices have been so reported;
provided, that if there are no bid and asked prices reported during the 10
days prior to the date in question, the Value of the Common Stock shall be
determined by Regency's board of directors acting in good faith on the
basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization; Application of Act.
(a) Organization and Formation of Partnership. The Partnership
has been formed as a limited partnership under the Act, the initial
general and limited partners have withdrawn from the Partnership and
the General Partner and the Limited Partners do hereby amend and
restate this Agreement to provide for the continuation of the
Partnership according to all of the terms and provisions of this
Agreement and otherwise in accordance with the Act. The General
Partner is the sole general partner and the Limited Partners are the
sole limited partners of the Partnership.
(b) Application of Act. The Partnership is a limited
partnership pursuant to the provisions of the Act and upon the terms
and conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership
shall be governed by the Act. No Partner has any interest in any
Partnership property, and the Partnership Interest of each Partner
shall be personal property for all purposes.
Section 2.2 Name. The name of the Partnership is Regency Centers,
L.P. The Partnership's business may be conducted under any other name or
names deemed advisable by the General Partner, including the name of the
General Partner or any Affiliate thereof. The words "Limited
Partnership," "L.P.," "Ltd." or similar words or letters shall be included
in the Partnership's name where necessary for the purposes of complying
with the laws of any jurisdiction that so requires. The General Partner
in its sole and absolute discretion may change the name of the Partnership
at any time and from time to time and shall promptly notify the Limited
Partners of such change; provided, that the name of the Partnership may
not be changed to include the name, or any variant thereof, of any Limited
Partner without the written consent of that Limited Partner.
Section 2.3 Registered Office and Agent; Principal Office. The
address of the registered office of the Partnership in the State of
Delaware is located at 1013 Centre Road, City of Wilmington, County of New
Castle, Delaware 19801, and the registered agent for service of process on
the Partnership in the State of Delaware at such registered office is
Corporation Service Company. The principal office of the Partnership is
121 W. Forsyth Street, Suite 200, Jacksonville, Florida 32202, or such
other place as the General Partner may from time to time designate by
notice to the Limited Partners. The Partnership may maintain offices at
such other place or places within or outside the State of Florida as the
General Partner deems advisable.
Section 2.4 Term. The term of the Partnership shall commence on
the date hereof and shall continue until December 31, 2097, unless it is
dissolved sooner pursuant to the provisions of Article 13 or as otherwise
provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business. The purpose and nature of the
business to be conducted by the Partnership is (i) to conduct any business
that may be lawfully conducted by a limited partnership organized pursuant
to the Act and in connection therewith to sell or otherwise dispose of
Partnership assets, (ii) to enter into any partnership, joint venture or
other similar arrangement to engage in any of the foregoing or the
ownership of interests in any entity engaged in any of the foregoing and
(iii) to do anything necessary or incidental to the foregoing which, in
each case, is not in breach of this Agreement; provided, however, that
each of the foregoing clauses (i), (ii), and (iii) shall be limited and
conducted in such a manner as to permit Regency at all times to be
classified as a REIT, unless Regency provides notice to the Partnership
that it intends to cease or has ceased to qualify as a REIT.
Section 3.2 Powers. The Partnership is empowered to do any and
all acts and things necessary, appropriate, proper, advisable, incidental
to or convenient for the furtherance and accomplishment of the purposes
and business described herein and for the protection and benefit of the
Partnership; provided, however, that the Partnership shall not take, or
refrain from taking, any action which, in the judgment of the General
Partner, (i) could adversely affect the ability of Regency to continue to
qualify as a REIT, unless Regency provides notice to the Partnership that
it intends to cease or has ceased to qualify as a REIT, (ii) could subject
Regency to any additional taxes under Section 857 or Section 4981 of the
Code or (iii) could violate any law or regulation of any governmental body
or agency having jurisdiction over the General Partner, Regency or their
securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.
ARTICLE 4
CAPITAL CONTRIBUTIONS; ISSUANCE OF UNITS;
CAPITAL ACCOUNTS
Section 4.1 Capital Contributions of the Partners.
(a) Initial Capital Contributions of Original Limited Partners.
Branch Properties, L.P. has contributed property to the Partnership
which shall be deemed to have been contributed by its respective
partners as Original Limited Partners. The Original Limited Partners
who have not exercised a Redemption Right with respect to all their
Units are set forth on Exhibit A, together with the respective
amounts of the Capital Contributions deemed to have been made by them
and their respective Percentage Interests. The holders of Class A
Units who have not exercised a Redemption Right with respect to all
their Class A Units are set forth on Exhibit A, together with the
respective amounts of the Capital Contributions deemed to have been
made by them and their respective Percentage Interests. Percentage
Interests of the Original Limited Partners and the holders of the
Class A Units shall be adjusted in Exhibit A from time to time by the
General Partner to the extent permitted by this Agreement to reflect
accurately redemptions, Capital Contributions, the issuance of
Additional Units, Class 2 Units or Class B Units, or similar events
having an effect on a Partner's Percentage Interest. The number of
Units (but not the number of Class A Units) shall be increased and
the Percentage Interests adjusted in the event that and each time
that a Subsequent Closing occurs. Any Partnership Interests held by
the General Partner or any Affiliate other than a Property Affiliate
(including Partnership Interests acquired under Sections 4.2, 8.6 and
8.7) shall be Class B Units.
(b) Initial Capital Contributions of Class 2 Unit Holders.
Pursuant to authority granted by Section 4.2, the General Partner may
issue Class 2 Units from time to time to Additional Limited Partners
who contribute property to the Partnership. The distribution rights
for the Class 2 Units shall be subordinate to the distribution rights
of the Original Limited Partnership Units and the Class A Units but
senior to the distribution rights of the Class B Units. Exhibit A
shall be amended from time to time to reflect the admission of such
Additional Limited Partners to the Partnership, the number of Class 2
Units issued to each such Additional Limited Partner and the
respective Capital Contributions and Percentage Interests of each.
(c) Capital Contributions by General Partner. The General
Partner has contributed cash to the Partnership in the amount set
forth on Exhibit A in exchange for the number of Class B Units set
forth thereon. The General Partner also owns the number of Class B
Units set forth on Exhibit A which were acquired by Regency upon the
exchange by Regency of Shares pursuant to the exercise by former
Limited Partners of Redemption Rights.
(d) Additional Capital Contributions or Assessments. No
Partner shall be assessed or be required to contribute additional
funds or other property to the Partnership, except for any such
amounts which a Limited Partner may be obligated to repay under
Section 5.3 or Section 13.4 and such amounts which the General
Partner may be obligated to contribute as provided under Section
7.1(a)(iii). Any additional funds required by the Partnership, as
determined by the General Partner in its reasonable business
judgment, may, at the option of the General Partner and without an
obligation to do so, be contributed by the General Partner as
additional Capital Contributions. If and as the General Partner or
any other Partner makes additional Capital Contributions to the
Partnership, each such Partner shall receive Class 2 Units, Class B
Units or other Partnership Interests, subject to the provisions of
Section 4.2, and such Partner's Capital Account shall be adjusted as
provided in Section 4.4.
(e) Return of Capital Contributions. Except as otherwise
expressly provided herein, the Capital Contribution of each Partner
will be returned to that Partner only in the manner and to the extent
provided in Article 5 and Article 13 hereof, and no Partner may
withdraw from the Partnership or otherwise have any right to demand
or receive the return of its Capital Contribution to the Partnership
(as such), except as specifically provided herein. Under
circumstances requiring a return of any Capital Contribution, no
Partner shall have the right to receive property other than cash,
except as specifically provided herein. No Partner shall be entitled
to interest on any Capital Contribution or Capital Account
notwithstanding any disproportion therein as between the Partners.
Except as specifically provided herein, the General Partner shall not
be liable for the return of any portion of the Capital Contribution
of any Limited Partner, and the return of such Capital Contributions
shall be made solely from Partnership assets. The General Partner
may, but shall not be obligated to, make Capital Contributions for
the purpose of enabling the Partnership to make distributions of
Available Cash to Limited Partners.
(f) Liability of Limited Partners. No Limited Partner shall
have any further personal liability to contribute money to, or in
respect of, the liabilities or the obligations of the Partnership,
nor shall any Limited Partner be personally liable for any
obligations of the Partnership, except as otherwise provided in
Section 4.1(d) or in the Act. No Limited Partner shall be required
to make any contributions to the capital of the Partnership other
than its Capital Contribution.
Section 4.2 Issuances of Additional Partnership Interests. The
Contribution Agreement sets forth the provisions upon which Additional
Units shall be issued to the Original Limited Partners, and separate
agreements relating to the admission of Additional Limited Partners set
forth the provisions, if any, upon which any additional Class 2 Units
shall be issued to Additional Limited Partners in the form of earn-out or
as consideration for additional assets to be contributed by such
Additional Limited Partners to the Partnership. The General Partner and
Regency (i) shall cause the Additional Units to be issued to the Original
Limited Partners as set forth in the Contribution Agreement, (ii) shall
cause the additional Class 2 Units to be issued to the Additional Limited
Partners entitled to receive the same, and (iii) shall cause the amendment
of this Agreement to reflect the issuance of any such Additional Units and
additional Class 2 Units. Subject to the restrictions set forth below,
the General Partner is hereby authorized to cause the Partnership at any
time or from time to time to issue to the Partners or to other Persons
such additional Class B Units or other Partnership Interests in one or
more classes, or one or more series of any such classes, with such
designations, preferences and relative, participating, optional or other
special rights, powers and duties, and for such consideration as shall be
determined by the General Partner in its sole and absolute discretion,
subject to Delaware law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and
credit to each such class or series of Partnership Interests, (ii) the
right of each such class or series of Partnership Interests to share in
Partnership distributions, and (iii) the rights of each such class or
series of Partnership Interests upon dissolution and liquidation of the
Partnership; provided, however, that so long as there shall be any
Original Limited Partnership Units outstanding, without the Consent of the
Original Limited Partners, (a) any Partnership Interests issued shall be
subordinate to the Original Limited Partnership Units and will not affect
the priority of distributions with respect to the Original Limited
Partnership Units as set forth in Section 5.1 hereof, (b) no Partnership
Interests other than Class B Units shall be issued to the General Partner
or any Affiliate of the General Partner other than a Property Affiliate,
and (c) no Partnership Interests on a parity with the Original Limited
Partnership Units shall be issued to any Person, and provided, further,
that without the Consent of the Additional Limited Partners holding Class
2 Units, (a) no Partnership Interests other than Class B Units shall be
issued to the General Partner or any Affiliate of the General Partner
other than a Property Affiliate, and (b) except as provided in Section
6.2(g), no Partnership Interests senior to the Class 2 Units shall be
issued to any Person other than Additional Units issued to an Original
Limited Partner at a Subsequent Closing.
Section 4.3 No Preemptive Rights. No Person shall have any
preemptive, preferential or other similar right with respect to (i)
additional Capital Contributions or loans to the Partnership or (ii)
issuance or sale of any Partnership Interests.
Section 4.4 Capital Accounts of the Partners.
(a) General. The Partnership shall maintain for each Partner a
separate Capital Account in accordance with the rules of Regulations
Section 1.704-1(b)(2)(iv). Such Capital Account shall be increased
by (i) the amount of all Capital Contributions made by such Partner
to the Partnership pursuant to this Agreement, (ii) all items of
Partnership income and gain (including income and gain exempt from
tax) allocated to such Partner pursuant to Sections 6.1 and 6.2 of
this Agreement, and (iii) the amount of any Partnership liabilities
assumed by such Partner or which are secured by any property
distributed to such Partner, and decreased by (x) the amount of cash
or Gross Asset Value of all actual and deemed distributions of cash
or property made to such Partner pursuant to this Agreement, (y) all
items of Partnership deduction and loss allocated to such Partner
pursuant to Sections 6.1 and 6.2 of this Agreement, and (z) the
amount of any liabilities of such Partner assumed by the Partnership
or which are secured by any property contributed by such Partner to
the Partnership. Upon the issuance of any Additional Units to an
Original Limited Partner, the aggregate value of the property
contributed by such Partner to the Partnership shall be increased by
the value of such Additional Units (which is agreed to be $22-1/8 per
Additional Unit), and such increase shall be allocated among the
items of property contributed by such Partner in proportion to their
then book values. The increase in the value of such property shall
be credited to such Partner's Capital Account under this Section
4.4(a). Additional Capital Contributions shall be deemed to be made
by reason of the issuance, and the Additional Limited Partner's
Capital Account shall be adjusted by an amount equal to the agreed
value (as set forth by separate agreement), of additional Partnership
Interests issued to an Additional Limited Partner pursuant to any
earn-out provisions in the agreement governing such Additional
Limited Partner's admission to the Partnership. Any such additional
Capital Contributions shall be allocated to the items of contributed
property contributed by each such Additional Limited Partner in
proportion to their book values at the time of issuance of the
additional Partnership Interests.
(b) Transfers of Partnership Units. A transferee of an
Original Limited Partnership Unit, Class A Unit, Class 2 Unit, Class
B Unit or other Partnership Interest shall succeed to a pro rata
portion of the Capital Account of the transferor; provided, however,
that, if the transfer causes a termination of the Partnership under
Section 708(b)(1)(B) of the Code, the Partnership's properties shall
be deemed to have been transferred in accordance with Regulations
Section 1.708-1 and appropriate adjustments resulting from such
deemed transfers shall be made hereunder.
(c) Modification by General Partner. The provisions of this
Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with such Regulations.
In the event the General Partner shall determine that it is prudent
to modify the manner in which the Capital Accounts, or any debits or
credits thereto (including, without limitation, debits or credits
relating to liabilities which are secured by contributed or
distributed property or which are assumed by the Partnership, the
General Partner, or any Limited Partners), are computed in order to
comply with such Regulations, the General Partner may make such
modification without regard to Article 14 of this Agreement. The
General Partner also shall (i) make any adjustments that are
necessary or appropriate to maintain equality between the Capital
Accounts of the Partners and the amount of Partnership capital
reflected on the Partnership's balance sheet, as computed for book
purposes, in accordance with Regulations Section 1.704-
1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the
event unanticipated events might otherwise cause this Agreement not
to comply with Regulations Section 1.704-1(b).
ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions.
(a) The General Partner shall distribute quarterly an amount
equal to 100% of Available Cash generated by the Partnership during
such quarter to the Partners who are Partners on the Partnership
Record Date with respect to such quarter as follows (and for this
purpose, the holders of Class A Units shall be treated as if they
were Original Limited Partners):
(i) First, one hundred percent (100%) to the Original
Limited Partners, pro rata based on the number of Original
Limited Partnership Units held by each such Partner on the
applicable Partnership Record Date, until each has received an
amount equal to the Priority Distribution Amount for the quarter
for each such Unit;
(ii) Next, if any Original Limited Partners have a positive
Cumulative Unpaid Accrued Return Account, one hundred percent
(100%) to such Original Limited Partners, pro rata based on the
relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(iii) Next, if any Original Limited Partners have a
positive Cumulative Unpaid Priority Distribution Account, one
hundred percent (100%) to such Original Limited Partners, pro
rata based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero;
(iv) Next, one hundred percent (100%) to the Additional
Limited Partners, pro rata based on the relative amounts of
their Priority Distribution Amounts, until each has received an
amount equal to the Priority Distribution Amount for the quarter
for each Unit held by such Additional Limited Partner on the
applicable Partnership Record Date;
(v) Next, if any Additional Limited Partners have a
positive Cumulative Unpaid Accrued Return Account, one hundred
percent (100%) to such Limited Partners, pro rata based on the
relative amounts of their Cumulative Unpaid Accrued Return
Accounts, until each such Cumulative Unpaid Accrued Return
Account reaches zero;
(vi) Next, if any Additional Limited Partners have a
positive Cumulative Unpaid Priority Distribution Account, one
hundred percent (100%) to such Additional Limited Partners, pro
rata based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero; and
(vii) Thereafter, to the General Partner and any other
holders of Class B Units, pro rata in accordance with the
relative number of Class B Units held by each.
(b) The General Partner shall distribute Capital Transaction
Proceeds received by the Partnership within 30 days after the date of
such Capital Transaction, provided that the General Partner has given
the Limited Partners 20 days' prior written notice of the date for
any such distribution (the "Capital Transaction Record Date"), as
follows (and for this purpose, the holders of Class A Units shall be
treated as if they were Original Limited Partners):
(i) First, if any Original Limited Partners have a
positive Cumulative Unpaid Accrued Return Account, one hundred
percent (100%) to such Original Limited Partners, pro rata based
on the relative amounts of their Cumulative Unpaid Accrued
Return Accounts, until each such Cumulative Unpaid Accrued
Return Account reaches zero;
(ii) Next, if any Original Limited Partners have a positive
Cumulative Unpaid Priority Distribution Account, one hundred
percent (100%) to such Original Limited Partners, pro rata based
on the relative amounts of their Cumulative Unpaid Priority
Distribution Accounts, until each such Cumulative Unpaid
Priority Distribution Account reaches zero;
(iii) Next, if any Additional Limited Partners have a
positive Cumulative Unpaid Accrued Return Account, one hundred
percent (100%) to such Additional Limited Partners, pro rata
based on the relative amounts of their Cumulative Unpaid Accrued
Return Accounts, until each such Cumulative Unpaid Accrued
Return Account reaches zero;
(iv) Next, if any Additional Limited Partners have a
positive Cumulative Unpaid Priority Distribution Account, one
hundred percent (100%) to such Additional Limited Partners, pro
rata based on the relative amounts of their Cumulative Unpaid
Priority Distribution Accounts, until each such Cumulative
Unpaid Priority Distribution Account reaches zero; and
(v) Thereafter, to the General Partner and any other
holders of Class B Units, pro rata in accordance with the
relative number of Class B Units held by each.
Section 5.2 Amounts Withheld. All amounts withheld pursuant to
the Code or any provisions of any state or local tax law and Section 5.3
hereof with respect to any allocation, payment or distribution to the
General Partner, or any Limited Partners or Assignees shall be promptly
paid, solely out of funds of the Partnership (except as otherwise provided
in Section 5.3 in connection with the exercise by a Limited Partner of a
Redemption Right), by the General Partner to the appropriate taxing
authority and treated as amounts distributed to the General Partner or
such Limited Partners or Assignees pursuant to Section 5.1 for all
purposes under this Agreement.
Section 5.3 Withholding. Each Limited Partner hereby authorizes
the Partnership to withhold from or pay on behalf of or with respect to
such Limited Partner any amount of federal, state, local, or foreign taxes
that the General Partner determines that the Partnership is required to
withhold or pay with respect to any amount distributable or allocable to
such Limited Partner pursuant to this Agreement or with respect to the
exercise by such Limited Partner of the Redemption Rights set forth in
Section 8.6 or in any separate agreement, including, without limitation,
any taxes required to be withheld or paid by the Partnership pursuant to
Section 1441, 1442, 1445, or 1446 of the Code and Section 48-7-129 of the
Official Code of Georgia Annotated. Any amount paid on behalf of or with
respect to a Limited Partner shall constitute a loan by the Partnership to
such Limited Partner, which loan shall be repaid by such Limited Partner
within 15 days after notice from the General Partner that such payment
must be made unless (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner or (ii)
the General Partner determines, in its sole and absolute discretion, that
such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the
Limited Partner. Any amounts withheld pursuant to the foregoing clauses
(i) or (ii) shall be treated as having been distributed to such Limited
Partner and shall be promptly paid, solely out of funds of the
Partnership, by the General Partner to the appropriate taxing authority.
Each Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner's Partnership
Interest as to secure such Limited Partner's obligation to pay to the
Partnership any amounts required to be paid pursuant to this Section 5.3
(together with attorney's fees and other costs in enforcing the
Partnership's rights against the collateral). In the event that a Limited
Partner or Redeeming Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 5.3 when due, the General Partner
may, in its sole and absolute discretion, elect to make the payment on
behalf of such defaulting Partner, and in such event shall be deemed to
have loaned such amount to such defaulting Partner and shall succeed to
all rights and remedies of the Partnership as against such defaulting
Partner (including, without limitation, in the case of a default by other
than a Redeeming Partner the right to receive distributions from the
Partnership). Any amounts payable by a Limited Partner or a Redeeming
Partner hereunder shall bear interest at the Prime Rate, plus two
percentage points (but not higher than the maximum lawful rate) from the
date such amount is due (i.e., 15 days after demand) until such amount is
paid in full. In the event that the Partnership or the General Partner is
required to withhold tax with respect to the exercise by a Limited Partner
of a Redemption Right, the Limited Partner exercising the Redemption Right
shall make arrangements with the Partnership or the General Partner, as
the case may be, to provide the funds to the Partnership necessary to
effect the required withholding. In the event that, pursuant to
applicable laws and regulations, the General Partner may withhold a
reduced amount pending a determination by applicable taxing authorities as
to whether any additional withholding tax must subsequently be deposited,
the General Partner shall have the right to require the Redeeming Partner
to pledge a first priority security interest in a portion of the
Redemption Amount as collateral for the Redeeming Partner's obligation to
provide the funds necessary to effect any subsequent required holding
(together with attorney's fees and other costs in enforcing the
Partnership's rights against the collateral), in an amount in the case of
a Share Amount equal to Shares having a Value on the date of the pledge
equal to 125% of the maximum possible subsequent required withholding (or
100% of the maximum possible subsequent required withholding if the
Redemption Amount is paid in the form of the Cash Amount) (the
"Withholding Collateral"). The General Partner shall be entitled to
retain possession of the Withholding Collateral until either the Redeeming
Partner provides funds to the General Partner sufficient to make any
subsequent required withholding deposit or the General Partner receives a
determination from the applicable authorities that no subsequent
withholding is required. All dividends, distributions, interest or other
income on the Withholding Collateral while subject to the pledge hereunder
shall be paid to the Redeeming Partner pledging the Withholding
Collateral. If the applicable authorities advise that subsequent
withholding is required and the Redeeming Partner does not deliver the
necessary funds to the General Partner within 20 days after receipt of the
General Partner's request therefor, the General Partner shall be entitled
to exercise all rights and remedies of a secured party under the Uniform
Commercial Code with respect to the Withholding Collateral. Each Limited
Partner and each Redeeming Partner shall take such actions as the
Partnership or the General Partner shall request in order to perfect or
enforce the security interest created hereunder.
Section 5.4 Distributions Upon Liquidation. Notwithstanding
anything contained in Section 5.1 to the contrary, proceeds from a
Liquidating Transaction shall be distributed to the Partners in accordance
with Section 13.2.
ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations of Net Income and Net Loss. For purposes
of maintaining the Capital Accounts and in determining the rights of the
Partners among themselves, the Partnership's Net Income and Net Loss shall
be allocated among the Partners for each taxable year (or portion thereof)
as provided herein below.
(a) Net Income. After giving effect to the special allocations
set forth in Section 6.2 below, Net Income shall be allocated as
follows (and for this purpose, the holders of Class A Units shall be
treated as if they were Original Limited Partners):
(i) First, one hundred percent (100%) to the General
Partner in an amount equal to the excess, if any, of (A) the
cumulative Net Losses allocated to the General Partner pursuant
to Section 6.1(b)(viii) and the last sentence of Section 6.1(b)
for all prior fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(i) for all prior
fiscal years;
(ii) Second, one hundred percent (100%) to the Original
Limited Partners in an amount equal to the excess, if any, of
(A) the cumulative Net Losses allocated to such Partners
pursuant to Section 6.1(b)(iv) for all prior fiscal years, over
(B) the cumulative Net Income allocated pursuant to this
Section 6.1(a)(ii) for all prior fiscal years, which amount
shall be allocated among the Partners in the same proportions
and in the reverse order as the Net Losses were allocated
pursuant to Section 6.1(b)(iv);
(iii) Third, one hundred percent (100%) to the Original
Limited Partners in an amount equal to the excess, if any, of
(A) the cumulative Net Losses allocated to such Partners
pursuant to Section 6.1(b)(iii) for all prior fiscal years, over
(B) the cumulative Net Income allocated pursuant to this Section
6.1(a)(iii) for all prior fiscal years, which amount shall be
allocated among such Partners in the same proportions and in the
reverse order as the Net Losses were allocated pursuant to
Section 6.1(b)(iii);
(iv) Fourth, one hundred percent (100%) to the Original
Limited Partners until the cumulative allocations of Net Income
to each Original Limited Partner under this Section 6.1(a)(iv)
for the current and all prior fiscal years equal the cumulative
distributions paid to the Original Limited Partner pursuant to
Section 5.1(a)(i) and Section 13.2(a)(iii);
(v) Fifth, one hundred percent (100%) to the Original
Limited Partners until the cumulative allocations of Net Income
to each Original Limited Partner under this Section 6.1(a)(v)
for the current and all prior fiscal years equal the sum of the
cumulative amounts credited to such Partner's Cumulative Unpaid
Priority Distribution Account and Cumulative Unpaid Accrued
Return Account for the current and all prior fiscal years;
(vi) Sixth, one hundred percent (100%) to the Additional
Limited Partners in an amount equal to the excess, if any, of
(A) the cumulative Net Losses allocated to the Additional
Limited Partners pursuant to Section 6.1(b)(vii) for all prior
fiscal years, over (B) the cumulative Net Income allocated
pursuant to this Section 6.1(a)(vi) for all prior fiscal years,
which amount shall be allocated among the Additional Limited
Partners in the same proportions and in the reverse order as the
Net Losses were allocated pursuant to Section 6.1(b)(vii);
(vii) Seventh, one hundred percent (100%) to the
Additional Limited Partners in an amount equal to the excess, if
any, of (A) the cumulative Net Losses allocated to the
Additional Limited Partners pursuant to Section 6.1(b)(vi) for
all prior fiscal years, over (B) the cumulative Net Income
allocated pursuant to this Section 6.1(a)(vii) for all prior
fiscal years, which amount shall be allocated among such
Partners in the same proportions and in the reverse order as the
Net Losses were allocated pursuant to Section 6.1(b)(vi);
(viii) Eighth, one hundred percent (100%) to the
Additional Limited Partners until the cumulative allocations of
Net Income to each Additional Limited Partner under this Section
6.1(a)(viii) for the current and all prior fiscal years equal
the cumulative distributions paid to the Additional Limited
Partners pursuant to Section 5.1(a)(iv) and Section 13.2(a)(iv);
(ix) Ninth, one hundred percent (100%) to the Additional
Limited Partners until the cumulative allocations of Net Income
to each Additional Limited Partner under this Section 6.1(a)(ix)
for the current and all prior fiscal years equal the sum of the
cumulative amounts credited to such Partner's Cumulative Unpaid
Priority Distribution Account and Cumulative Unpaid Accrued
Return Account for the current and all prior fiscal years; and
(x) Thereafter, to the General Partner and any other
holders of Class B Units, pro rata in accordance with the
relative number of Class B Units held by each.
(b) Net Losses. After giving effect to the special allocations
set forth in Section 6.2 below, Net Losses shall be allocated as
follows (and for this purpose, the holders of Class A Units shall be
treated as if they were Original Limited Partners):
(i) First, one hundred percent (100%) to the General
Partner and the Class B Unit holders in an amount equal to the
excess, if any, of (A) the cumulative Net Income allocated
pursuant to Section 6.1(a)(x) hereof for all prior fiscal years,
over (B) the cumulative Net Losses allocated pursuant to this
Section 6.1(b)(i) for all prior fiscal years;
(ii) Second, to the Original Limited Partners until the
cumulative allocations of Net Losses under this Section
6.1(b)(ii) equal the excess, if any, of the cumulative
allocations of Net Income under Section 6.1(a)(v) to such
Partners for all prior fiscal years over the cumulative
distributions to such Partners under Section 5.1(a)(ii) and
(iii) and Section 5.1(b)(i) and (ii) for the current and all
prior fiscal years (such allocation being made in proportion to
such Partners' respective excess amounts);
(iii) Third, to the Original Limited Partners with
positive Adjusted Capital Account balances (determined, solely
for purposes of this Section 6.1(b)(iii), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances, until such
balances are reduced to zero;
(iv) Fourth, to the Original Limited Partners in proportion
to their relative Percentage Interests; provided, however, that
to the extent that an allocation under this Section 6.1(b)(iv)
would cause or increase an Adjusted Capital Account Deficit for
such Partner, such Net Loss shall be allocated to those Original
Limited Partners (in proportion to their relative Percentage
Interests) for whom such allocation would not cause or increase
an Adjusted Capital Account Deficit; and
(v) Fifth, to the Additional Limited Partners until the
cumulative allocations of Net Losses under this Section
6.1(b)(v) equal the excess, if any, of the cumulative
allocations of Net Income under Section 6.1(a)(ix) to such
Partners for all prior fiscal years over the cumulative
distributions to such Partners under Section 5.1(a)(v) and (vi)
and Section 5.1(b)(iii) and (iv) for the current and all prior
fiscal years (such allocation being made in proportion to such
Partners' respective excess amounts);
(vi) Sixth, to the Additional Limited Partners with
positive Adjusted Capital Accounts balances (determined, solely
for purposes of this Section 6.1(b)(vi), without regard to any
obligation of a Partner to restore a negative Capital Account
under Section 13.4), in proportion to such balances, until such
balances are reduced to zero;
(vii) Seventh, to the Additional Limited Partners in
proportion to their relative Percentage Interests; provided,
however, that to the extent that an allocation under this
Section 6.1(b)(vii) would cause or increase an Adjusted Capital
Account Deficit for such Partner, such Net Loss shall be
allocated to those Additional Limited Partners (in proportion to
their relative Percentage Interests) for whom such allocation
would not cause or increase an Adjusted Capital Account Deficit;
and
(viii) Any remaining Net Loss shall be allocated solely
to the General Partner.
Notwithstanding the foregoing, Net Losses shall not be allocated to any
Limited Partner pursuant to this Section 6.1(b) to the extent that such
allocation would cause such Limited Partner to have an Adjusted Capital
Account Deficit at the end of such taxable year (or increase any existing
Adjusted Capital Account Deficit). All Net Losses in excess of the
limitations set forth in the preceding sentence of this Section 6.1(b)
shall be allocated to the General Partner.
(c) Nonrecourse Liabilities. The Partners agree that excess
Nonrecourse Liabilities of the Partnership (within the meaning of
Section 1.752-3(a)(3) of the Regulations) will be allocated among the
partners for purposes of Section 752 of the Code in accordance with
their respective Percentage Interests.
(d) Gains. Any gain allocated to the Partners upon the sale or
other taxable disposition of any Partnership asset shall to the
extent possible, after taking into account other required allocations
of gain pursuant to Section 6.2 below, be characterized as Recapture
Income in the same proportions and to the same extent as such
Partners have been allocated any deductions directly or indirectly
giving rise to the treatment of such gains as Recapture Income.
Section 6.2 Special Allocation Rules. Notwithstanding any other
provision of the Agreement, the following special allocations shall be
made in the following order:
(a) Minimum Gain Chargeback. Notwithstanding any other
provisions of Article 6, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Partner shall be
specially allocated items of Partnership income and gain for such
year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as
determined under Regulations Section 1.704-2(g). Allocations
pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in
accordance with Regulations Section 1.704-2(f)(6). This Section
6.2(a) is intended to comply with the minimum gain chargeback
requirements in Regulations Section 1.704-2(f) and for purposes of
this Section 6.2(a) only, each Partner's Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant
to Section 6.1 of the Agreement with respect to such fiscal year and
without regard to any decrease in Partner Minimum Gain during such
Partnership Year.
(b) Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Article 6 (except Section 6.2(a) hereof), if there is a
net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Partnership Year, each Partner who has a
share of the Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership
income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Partner's share of the net decrease in
Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5).
Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each
Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(i)(4).
This Section 6.2(b) is intended to comply with the minimum gain
chargeback requirement in such Section of the Regulations and shall
be interpreted consistently therewith. Solely for purposes of this
Section 6.2(b), each Partner's Adjusted Capital Account Deficit shall
be determined prior to any other allocations pursuant to Article 6 of
this Agreement with respect to such Partnership Year, other than
allocations pursuant to Section 6.2(a) hereof.
(c) Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions
described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-
1(b)(2)(ii)(d)(5), or 1.704-1(b)(2)(ii)(d)(6), and after giving
effect to the allocations required under Sections 6.2(a) and 6.2(b)
hereof, such Partner has an Adjusted Capital Account Deficit, items
of Partnership income and gain shall be specially allocated to such
Partner in an amount and manner sufficient to eliminate, to the
extent required by the Regulations, its Adjusted Capital Account
Deficit created by such adjustments, allocations or distributions as
quickly as possible.
(d) Nonrecourse Deductions. Nonrecourse Deductions for any
taxable period shall be allocated to the Partners in accordance with
their respective Percentage Interests.
(e) Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to
the Partner who bears the economic risk of loss with respect to the
Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions
are attributable in accordance with Regulations Section 1.704-
2(i)(2).
(f) Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to
Section 734(b) or 743(b) of the Code is required, pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m), to be taken into account in
determining Capital Accounts, the amount of such adjustment to the
Capital Accounts shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the
adjustment decreases such basis), and such item of gain or loss shall
be specially allocated to the Partners in a manner consistent with
the manner in which their Capital Accounts are required to be
adjusted pursuant to such Section of the Regulations.
(g) Capital Account Adjustments. Notwithstanding anything
herein to the contrary, any gain or loss arising from an adjustment
to the Gross Asset Value of any Partnership asset pursuant to clause
(b) or (c) of the definition thereof shall be allocated one hundred
percent (100%) to the General Partner and the Additional Limited
Partners pro-rata in accordance with the relative number of Units
held by each; provided, however, that for this purpose, the General
Partner shall be treated as owning all of the outstanding Class A
Units and all of the outstanding Original Limited Partnership Units
in addition to the actual number of Units which the General Partner
holds. An Additional Limited Partner, at the time of admission to
the Partnership, may elect with the consent of the General Partner to
not receive special allocations of any gain or loss resulting from
such adjustments.
Section 6.3 Allocations for Tax Purposes.
(a) General. Except as otherwise provided in this Section 6.3,
for federal income tax purposes, each item of income, gain, loss and
deduction shall be allocated among the Partners in the same manner as
its correlative item of "book" income, gain, loss or deduction is
allocated pursuant to Sections 6.1 and 6.2 of this Agreement.
(b) Other Allocation Rules.
(i) For purposes of determining Net Income, Net Losses, or
other items allocable to any period, Net Income, Net Losses, and
any such other items shall be determined on a daily, monthly, or
other basis, as determined by the General Partner using any
permissible method under Section 706 of the Code and the
Regulations thereunder.
(ii) In accordance with Code Section 704(c) and the
Regulations thereunder, income, gain, loss and deduction with
respect to any property contributed to the capital of the
Partnership shall, solely for tax purposes, be allocated among
the Partners so as to take account of any variation between the
adjusted basis of such property to the Partnership for federal
income tax purposes and its initial Gross Asset Value.
(iii) To the extent that the fair market value of a
property contributed to the Partnership by Branch Properties,
L.P. differed from its adjusted tax basis at the time it was
originally contributed to Branch Properties, L.P. (the "Original
Book-Tax Disparity"), the allocation of tax items with respect
to such contributed property shall take into account any
remaining Original Book-Tax Disparity at the time such property
is contributed to the Partnership in a manner consistent with
the principles of Section 704(c) of the Code, using the
"traditional method" under Section 1.704-3(b) of the
Regulations, so that the Limited Partners who originally
contributed such property to Branch Properties, L.P. (or their
successors-in-interest) bear the tax burden (or benefit, if
applicable) of the remaining Original Book-Tax Disparity.
(iv) In the event the Gross Asset Value of any Partnership
asset is adjusted, subsequent allocations of income, gain, loss,
and deductions with respect to such asset shall take account of
any variation between the adjusted basis of such asset for
federal income tax purposes and its Gross Asset Value in the
same manner as under Code Section 704(c) and the Regulations
thereunder. Any elections or other decisions relating to Code
Section 704(c) allocations shall be made by the General Partner;
provided, however, that the "traditional method" of making
Section 704(c) allocations without curative allocations
described in Section 1.704-3(b) of the Regulations shall be
used. Allocations pursuant to Sections 6.3(b)(ii), (iii) and
(iv) hereof are solely for purposes of federal, state, and local
taxes and shall not affect, or in any way be taken into account
in computing, any Partner's Capital Account or share of Net
Income, Net Losses, other items, or distributions pursuant to
any provision of this Agreement.
ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management.
(a) Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business
and affairs of the Partnership are exclusively vested in the General
Partner, and no Limited Partner shall have any right to participate
in or exercise control or management power over the business and
affairs of the Partnership. Notwithstanding anything to the contrary
in this Agreement, the General Partner may not be removed by the
Limited Partners with or without cause. In addition to the powers
now or hereafter granted a general partner of a limited partnership
under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner
shall have full power and authority to do all things deemed necessary
or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 hereof and to effectuate
the purposes set forth in Section 3.1 hereof, including, without
limitation:
(i) the making of any expenditures, the lending or
borrowing of money (including, without limitation, borrowing
money to permit the Partnership to make distributions to its
Partners in such amounts as will permit Regency (so long as
Regency desires to qualify as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise
tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit Regency
to maintain REIT status), the assumption or guarantee of, or
other contracting for, indebtedness and other liabilities, the
issuance of evidences of indebtedness (including the securing of
same by mortgage, deed of trust or other lien or encumbrance on
the Partnership's assets), the incurring of any obligations it
deems necessary for the conduct of the activities of the
Partnership, and the repayment (including prepayment) of such
indebtedness, liabilities and obligations;
(ii) the making of tax, regulatory and other filings, or
rendering of periodic or other reports to governmental or other
agencies having jurisdiction over the business or assets of the
Partnership;
(iii) the acquisition, disposition, conveyance,
mortgage, pledge, encumbrance, hypothecation or exchange of all
or any assets of the Partnership or the merger or other
combination of the Partnership with or into another entity
(provided that such merger or other combination does not result
in the Partnership recognizing taxable gain or loss for federal
income tax purposes) on such terms as the General Partner deems
proper (subject to Section 7.6 in the case of transactions
between the Partnership and the General Partner or any
Affiliate), and no approval of the Limited Partners shall be
required for the exercise of such powers, which powers shall
include, without limitation, the power to pledge any or all of
the assets of the Partnership to secure a loan or other
financing to the General Partner (the proceeds of which are not
required to be contributed or loaned to the Partnership),
provided, however, that to the extent that any payment of debt
service or closing costs on any such mortgage, pledge,
encumbrance or hypothecation shall result in the Partnership
being unable to pay the maximum amount payable with respect to
any distributions to the Limited Partners pursuant to Section
5.1, then Regency shall cause the General Partner to make such
additional Capital Contributions as are necessary to enable the
Partnership to pay the maximum amount payable with respect to
any distributions to the Limited Partners pursuant to Section
5.1 (provided that the General Partner shall have no obligation
to make such additional Capital Contributions in an amount
exceeding the amount of debt service and closing costs paid),
and provided, further, that the General Partner shall use
reasonable efforts to effect all dispositions of the
Partnership's assets that were contributed by the Limited
Partners in accordance with Section 1031 of the Code although,
except as provided in Section 7.1(c) hereof, it shall not be
required to do so;
(iv) subject to the provisions of Section 7.1(h) hereof,
the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the
terms of this Agreement and on any terms it sees fit, including,
without limitation, the financing of the conduct of the
operations of the General Partner, the Partnership or any of the
Partnership's Subsidiaries, the lending of funds to other
Persons (including Regency or any of the Partnership's
Subsidiaries) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which
it has an equity investment and the making of capital
contributions to its Subsidiaries, the holding of any real,
personal and mixed property of the Partnership in the name of
the Partnership or in the name of a nominee or trustee (subject
to Section 7.10), the creation, by grant or otherwise, of
easements or servitudes, and the performance of any and all acts
necessary or appropriate to the operation of the Partnership
assets including, but not limited to, applications for rezoning,
objections to rezoning, constructing, altering, improving,
repairing, renovating, rehabilitating, razing, demolishing or
condemning any improvements or property of the Partnership;
(v) the negotiation, execution, and performance of any
contracts, conveyances or other instruments (including with
Affiliates of the Partnership to the extent provided in Section
7.6) that the General Partner considers useful or necessary to
the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this
Agreement, including, without limitation, the execution and
delivery of a REIT management agreement on behalf of or in the
name of the Partnership providing for the day-to-day management
and operation of the Partnership and including, without
limitation, the execution and delivery of leases on behalf of or
in the name of the Partnership (including the lease of
Partnership property for any purpose and without limit as to the
term thereof, whether or not such term (including renewal terms)
shall extend beyond the date of termination of the Partnership
and whether or not the portion so leased is to be occupied by
the lessee or, in turn, subleased in whole or in part to
others);
(vi) the opening and closing of bank accounts, the
investment of Partnership funds in securities, certificates of
deposit and other instruments, and the distribution of
Partnership cash or other Partnership assets in accordance with
this Agreement;
(vii) the selection and dismissal of employees of the
Partnership or the General Partner (including, without
limitation, employees having titles such as "president," "vice
president," "secretary" and "treasurer"), and the engagement and
dismissal of agents, outside attorneys, accountants, engineers,
appraisers, consultants, contractors and other professionals on
behalf of the General Partner or the Partnership and the
determination of their compensation and other terms of
employment or hiring;
(viii) the maintenance of such insurance for the benefit
of the Partnership and the Partners as it deems necessary or
appropriate;
(ix) subject to the provisions of Sections 4.2 and 7.1(h)
hereof, the formation of, or acquisition of an interest in, and
the contribution of property to any further limited or general
partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition
of interests in, and the contribution of property to, its
Subsidiaries and any other Person in which it has an equity
investment from time to time) (provided that such transaction
does not result in the Partnership recognizing taxable gain or
loss for federal income tax purposes);
(x) the control of any matters affecting the rights and
obligations of the Partnership, including the conduct of
litigation and the incurring of legal expense and the settlement
of claims and litigation, the submission of any matter to
arbitration, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;
(xi) subject to the provisions of Section 7.1(h) hereof,
the undertaking of any action in connection with the
Partnership's direct or indirect investment in its Subsidiaries
or any other Person (including, without limitation, the
contribution or loan of funds by the Partnership to such
Persons) (provided that such action does not result in the
Partnership recognizing taxable gain or loss for federal income
tax purposes);
(xii) the distribution in kind of the Briarcliff
Village property pursuant to Section 13.2(c);
(xiii) the determination of the fair market value of any
Partnership property distributed in kind using such reasonable
method of valuation as it may adopt; and
(xiv) the execution, acknowledgment and delivery of any
and all documents and instruments to effectuate any or all of
the foregoing.
(b) No Approval Required for Above Powers. Subject to any
other restriction set forth in this Agreement, each of the Limited
Partners agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions
on behalf of the Partnership without any further act, approval or
vote of the Partners, notwithstanding any other provision of this
Agreement (except where Limited Partner Consent or Original Limited
Partner Consent is expressly required herein), the Act or any
applicable law, rule or regulation. The execution, delivery or
performance by the General Partner or the Partnership of any
agreement authorized or permitted under this Agreement shall not
constitute a breach by the General Partner of any duty that the
General Partner may owe the Partnership or the Limited Partners or
any other Persons under this Agreement or of any duty stated or
implied by law or equity.
(c) Approval of Sale of Briarcliff Village. Except pursuant to
the dissolution and liquidation of the Partnership in accordance with
Article 13 hereof, the property commonly known as Briarcliff Village
(the "Briarcliff Village Property") shall not be sold by the
Partnership or the General Partner on or before December 19, 2005
(other than in a transaction in which the Partnership recognizes no
taxable gain or loss for federal income purposes) without the
approval of a Majority-in-Interest of the Original Briarcliff
Partners (as defined below) who continue, as of such time, to hold
Original Limited Partnership Units attributable to the contribution
of the Briarcliff Village Property to Branch Properties, L.P. and
Branch Properties, L.P.'s subsequent contribution of the Briarcliff
Village Property to the Partnership (the "Original Briarcliff
Partners"). Such approval right of the Original Briarcliff Partners
is personal to the Original Briarcliff Partners and shall terminate
upon the death of an Original Briarcliff Partner or a sale,
assignment, conveyance, or other transfer by an Original Briarcliff
Partner, with respect to that Partner's Original Limited Partnership
Units, and shall not be exercisable by any successor, transferee or
assignee of an Original Briarcliff Partner. In the event of a like-
kind exchange involving the Briarcliff Village Property by the
Partnership, then such approval right for the benefit of the Original
Briarcliff Partners will continue to be enforceable after such like-
kind exchange, but shall relate to the property (whether real,
personal or mixed, tangible or intangible) acquired by the
Partnership in such like-kind exchange. Nothing herein shall be
deemed to require that the Partnership or the General Partner take
any action to avoid or prevent an involuntary disposition of all or
part of said Briarcliff Village pursuant to a condemnation proceeding
or other taking. For purposes of this Section 7.1(c), Majority-In-
Interest of the Original Briarcliff Partners shall mean the Original
Briarcliff Partners who hold, in the aggregate, more than fifty
percent (50%) of the Percentage Interests then allocable to and held
by all of the Original Briarcliff Partners with respect to the
Original Limited Partnership Units received by the Original
Briarcliff Partners as a result of the contribution of the Briarcliff
Village Property to Branch Properties, L.P. and Branch Properties,
L.P.'s subsequent contribution of the Briarcliff Village Property to
the Partnership. The Partnership shall not engage in any merger,
consolidation or other business combination with or into another
Person unless the Partnership has entered into an agreement with such
Person in which such Person expressly agrees to be bound by the
provisions of this Section 7.1(c).
(d) Insurance. At all times from and after the date hereof,
the General Partner may cause the Partnership to obtain and maintain
casualty, liability and other insurance on the properties of the
Partnership and liability insurance for the Indemnitees hereunder.
(e) Working Capital Reserves. At all times from and after the
date hereof, the General Partner may cause the Partnership to
establish and maintain working capital reserves in such amounts as
the General Partner, in its sole and absolute discretion, deems
appropriate and reasonable from time to time subject to the
provisions of Section 7.1(h) hereof.
(f) No Obligation to Consider Tax Consequences to Limited
Partners. Except as provided in Sections 7.1(c) and 13.2(c) with
respect to Briarcliff Village, except as provided in Section 7.1(g)
with respect to the sale of the Management Business, and except for
the obligation of the General Partner set forth in Section
7.1(a)(iii) to use reasonable efforts to effect all dispositions of
the Partnership's assets that were contributed by the Limited
Partners in accordance with Section 1031 of the Code, (i) in
exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax
consequences to any Partner of any action taken by it, and (ii) the
General Partner and the Partnership shall not have liability to a
Limited Partner under any circumstances as a result of an income tax
liability incurred by such Limited Partner as a result of an action
(or inaction) by the General Partner pursuant to its authority under
this Agreement.
(g) Approval of Sale of Management Business. Notwithstanding
anything contained herein to the contrary, the Third Party Management
Business (as defined in the Contribution Agreement) contributed by
Branch Properties, L.P. to the Partnership as part of its initial
Capital Contribution (the "Management Business") shall not be sold by
the Partnership on or before the tenth (10th) anniversary of the
First Closing (other than in a transaction in which the Partnership
recognizes no taxable gain or loss for federal income tax purposes);
provided, however, that the Partnership shall be permitted to
undertake the following transactions: (i) contribution of the
Management Business to a corporation (the "New Management Company")
in which the Partnership owns five percent (5%) of the issued and
outstanding voting common stock and 100% of the issued and
outstanding non-voting preferred stock and in which The Regency
Group, Inc., a Florida corporation, owns ninety-five percent (95%) of
the issued and outstanding voting common stock and in which no other
shares of stock are issued and outstanding following the
contribution; (ii) a distribution by the Partnership of part or all
of the stock of the New Management Company to the General Partner on
or after the fifth (5th) anniversary of the First Closing; or (iii) a
sale of part or all of the stock of the New Management Company if no
Original Limited Partners hold Units which they received on the date
of this Agreement or any Additional Units received by them subsequent
to the date of this Agreement, or with the unanimous written consent
of the Original Limited Partners then holding such Units (but
excluding the holders of any Class A Units).
(h) Distributions. Notwithstanding anything contained in this
Agreement to the contrary, the General Partner, acting as a
fiduciary, shall use its reasonable best efforts and act in good
faith to operate the Partnership's assets and manage the
Partnership's business, including its indebtedness, so as to produce
sufficient Available Cash and Capital Transaction Proceeds to fund to
the Limited Partners the Priority Distribution Amount on a current
basis and any balance in the Cumulative Unpaid Accrued Return
Accounts and Cumulative Unpaid Priority Distribution Accounts of the
Limited Partners pursuant to Section 5.1 hereof.
(i) Designated Properties. Notwithstanding anything contained
in this Agreement to the contrary, the General Partner, acting as a
fiduciary, shall use its reasonable best efforts and act in good
faith to acquire, develop, lease and operate the Designated
Properties (as defined in the Contribution Agreement) in a manner to
maximize the Annualized NOI (as defined in the Contribution
Agreement) for the Designated Properties.
Nothing in Sections 7.1(h) or 7.1(i) shall require the General Partner to
contribute additional capital to the Partnership.
Section 7.2 Certificate of Limited Partnership. To the extent
that such action is determined by the General Partner to be reasonable and
necessary or appropriate, the General Partner shall file amendments to and
restatements of the Certificate and do all the things to maintain the
Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of
Delaware and each other jurisdiction in which the Partnership may elect to
do business or own property. Subject to the terms of Section
8.5(a)(iv)hereof, the General Partner shall not be required, before or
after filing, to deliver or mail a copy of the Certificate or any
amendment thereto to any Limited Partner. The General Partner shall use
all reasonable efforts to cause to be filed such other certificates or
documents as may be reasonable and necessary or appropriate for the
formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the Limited Partners have limited
liability) in the State of Delaware and any other jurisdiction in which
the Partnership may elect to do business or own property.
Section 7.3 Restriction on General Partner's Authority. Without
the consent of all the Limited Partners, the General Partner may not:
(a) Take any action that would make it impossible to carry on
the ordinary business of the Partnership, except as otherwise
provided in this Agreement;
(b) Possess Partnership property for other than a Partnership
purpose;
(c) Admit a Person as a Partner, except as otherwise provided
in this Agreement; or
(d) perform any act that would subject a Limited Partner to
liability as a general partner.
Section 7.4 Responsibility for Expenses.
(a) No Compensation. Except as provided in this Section 7.4
and elsewhere in this Agreement (including the provisions of Articles
5 and 6 regarding distributions, payments, and allocations to which
it may be entitled), the General Partner shall not be compensated for
its services as general partner of the Partnership.
(b) Responsibility for Ownership and Operation Expenses. The
Partnership shall be responsible for and shall pay all expenses
relating to the Partnership's ownership of its assets, and the
operation of, or for the benefit of, the Partnership, and the General
Partner shall be reimbursed on a monthly basis, or such other basis
as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to the Partnership's
ownership of its assets and the operation of, or for the benefit of,
the Partnership; provided, that the amount of any such reimbursement
shall be reduced by any interest earned by the General Partner with
respect to bank accounts or other instruments held by it as permitted
in Section 7.10. Such reimbursements shall be in addition to any
reimbursement to the General Partner pursuant to Section 10.3(c) and
as a result of indemnification pursuant to Section 7.7. The General
Partner shall determine in good faith the amount of expenses incurred
by it relating to the operation of, or that inure to the benefit of,
the Partnership. In the event that certain expenses are incurred for
the benefit of the Partnership and other Persons (including the
General Partner), such expenses will be allocated to the Partnership
and such other Persons in such a manner as the General partner deems
fair and reasonable, subject to the provisions of Section 7.1(h)
hereof.
(c) Responsibility for Organizational Expenses. The
Partnership shall be responsible for and shall pay all expenses
incurred relating to the organization of the Partnership.
(d) Partnership Interest Issuance Expenses. The General
Partner shall be reimbursed for all expenses either incurs relating
to any issuance of additional Partnership Interests pursuant to
Section 4.2 hereof.
Section 7.5 Outside Activities of the General Partner. Nothing
contained in this Agreement shall prevent or prohibit the General Partner
or any employee, officer, director, agent, shareholder or Affiliate of the
General Partner from entering into, engaging in or conducting any other
activity or performing for a fee any service including (without limiting
the generality of the foregoing) engaging in any business dealing with
real property of any type or location, including, without limitation,
property of a type similar to those properties owned by the Partnership,
its Subsidiaries or any other Person in which the Partnership has an
equity investment; acting as a director, officer or employee of any
corporation, as a trustee of any trust, as a general partner of any
partnership, or as an administrative official of any other business
entity; or receiving compensation for services to, or participating in
profits derived from, the investments of any such corporation, trust,
partnership or other entity, regardless of whether such activities are
competitive, directly or indirectly, with the Partnership. Nothing herein
shall require the General Partner or any employee, agent, shareholder or
Affiliate thereof to offer any interest in such activities or any
particular opportunity to the Partnership or any Partner, and neither the
Partnership nor any Partner shall have any right by virtue of this
Agreement or the partnership relationship established hereby in or to such
other activities or to the income or proceeds derived therefrom. The
pursuit of such activities, even if competitive with the business of the
Partnership (including, without limitation, causing tenants to transfer
from one of the Partnership's properties to other properties in which the
General Partner has an interest, directly or indirectly, without
compensation to the Partnership, or taking other actions for the benefit
of the General Partner or Affiliates of the General Partner that are
detrimental to the Partnership), shall not be deemed wrongful or improper.
Section 7.6 Contracts with Affiliates.
(a) General. The General Partner or any of its Affiliates may
enter into transactions or agreements with the Partnership, including
transactions and agreements (i) to sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly
or indirectly, or (ii) for the provision of services to the
Partnership, provided that such transactions or agreements, including
transactions and agreements with Security Capital Investment
Research, Inc. or any of its Affiliates, are on terms that are fair
and reasonable and no less favorable to the Partnership than would be
obtained from an unaffiliated third party in connection therewith.
In entering into such transactions with Affiliates the General
Partner shall not allocate expenses and similar items
disproportionately between the General Partner and the Partnership.
(b) Employee Benefit Plans. The General Partner may propose
and adopt on behalf of the Partnership employee benefit plans funded
by the Partnership for the benefit of employees of the General
Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them in respect of services performed, directly
or indirectly, for the benefit of the Partnership, the General
Partner, or any of the Partnership's Subsidiaries, subject to the
provisions of Section 7.1(h) hereof.
(c) Conflict Avoidance Agreements. The General Partner is
expressly authorized to enter into, in the name and on behalf of the
Partnership, a right of first opportunity arrangement and other
conflict avoidance agreements with various Affiliates of the
Partnership and the General Partner, on such terms as the General
Partner believes are advisable, subject to the provisions of Sections
7.6(a) and 7.1(h) hereof.
Section 7.7 Indemnification.
(a) General. The Partnership shall indemnify an Indemnitee
from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including legal fees and expenses),
judgments, fines, settlements, and other amounts arising from any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which any Indemnitee
may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the
proceeding and constituted willful misconduct or fraud; (ii) the
Indemnitee actually received an improper personal benefit in money,
property or services; or (iii) in the case of any criminal
proceeding, the Indemnitee had reasonable cause to believe that the
act or omission was unlawful. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the
Indemnitee did not meet the requisite standard of conduct set forth
in this Section 7.7(a). The termination of any proceeding by
conviction or upon a plea of nolo contendere or its equivalent, or an
entry of an order of probation prior to judgment, creates a
rebuttable presumption that the Indemnitee acted in a manner contrary
to that specified in this Section 7.7(a). Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of
the Partnership.
(b) Advancement of Expenses. Reasonable expenses incurred by
an Indemnitee who is, or is threatened to be made, a party to a
proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee's good faith belief that the standard of conduct necessary
for indemnification by the Partnership as authorized in this Section
7.7 has been met and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
(c) No Limitation of Rights. The indemnification provided by
this Section 7.7 shall be in addition to any other rights to which an
Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to
serve in such capacity.
(d) Insurance. The Partnership may purchase and maintain
insurance, on behalf of the Indemnitees and such other Persons as the
General Partner shall determine, against any liability that may be
asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether
the Partnership would have the power to indemnify such Person against
such liability under the provisions of this Agreement.
(e) No Personal Liability for Partners. In no event may an
Indemnitee subject any Partner to personal liability by reason of the
indemnification provisions set forth in this Agreement.
(f) Interested Transactions. An Indemnitee shall not be denied
indemnification in whole or in part under this Section 7.7 because
the Indemnitee had an interest in the transaction with respect to
which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
(g) Benefit. The provisions of this Section 7.7 are for the
benefit of the Indemnitees, their heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the
benefit of any other Persons.
Section 7.8 Liability of the General Partner.
(a) General. Notwithstanding anything to the contrary set
forth in this Agreement, the General Partner shall not be liable for
monetary damages to the Partnership, any Partners or any Assignees
for losses sustained or liabilities incurred as a result of errors in
judgment or of any act or omission if the General Partner acted in
good faith.
(b) No Obligation to Consider Interests of Limited Partners.
The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership, the General Partner and
Regency's shareholders collectively, that except as provided in
Section 7.1(e) with respect to the establishment and maintenance of
working capital reserves, except as provided in Section 7.1(f) with
respect to tax consequences, except as provided in Section 7.1(h)
with respect to the generation of funds for distributions and except
as expressly provided otherwise in Sections 7.1(a)(iv), 7.1(a)(ix)
and 7.1(a)(xi) with respect to the powers of the General Partner, the
General Partner is under no obligation to consider the separate
interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or Assignees except as expressly
provided otherwise in Sections 7.1(f) and 7.1(h)) in deciding whether
to cause the Partnership to take (or decline to take) any actions
which the General Partner has undertaken in good faith on behalf of
the Partnership, and that the General Partner shall not be liable for
monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such
decisions, provided that the General Partner has acted in good faith
and in accordance with the provisions of this Agreement. For
purposes hereof, a Person acting in a manner which furthers
compliance by Regency with the REIT requirements of the Code, shall
be deemed to satisfy the standards of conduct hereunder. The Limited
Partners further expressly acknowledge that Regency is obligated to
cause the Partnership to take (or decline to take) certain actions in
order to assist Security Capital and its Affiliates in avoiding
classification as a passive foreign investment company within the
meaning of Section 1296 of the Code. Such obligation is set forth on
Schedule 7.8(b).
(c) Acts of Agents. Subject to its obligations and duties as
General Partner set forth in Section 7.1(a) hereof, the General
Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder
either directly or by or through its agents. The General Partner
shall not be responsible for any misconduct or negligence on the part
of any such agent appointed by it in good faith.
(d) Effect of Amendment. Any amendment, modification or repeal
of this Section 7.8 or any provision hereof shall be prospective only
and shall not in any way affect the limitations on the General
Partner's liability to the Partnership and the Limited Partners under
this Section 7.8 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
Section 7.9 Other Matters Concerning the General Partner.
(a) Reliance on Documents. The General Partner may rely and
shall be protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, bond, debenture, or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties.
(b) Reliance on Consultants and Advisers. The General Partner
may consult with legal counsel, accountants, appraisers, management
consultants, investment bankers and other consultants and advisers
selected by it, and any act taken or omitted to be taken in reliance
upon and in accordance with the opinion of such Persons as to matters
which such General Partner reasonably believes to be within such
Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance
with such opinion.
(c) Action Through Officers and Attorneys. The General Partner
shall have the right, in respect of any of its powers or obligations
hereunder, to act through any of its duly authorized officers and a
duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of
attorney, have full power and authority to do and perform all and
every act and duty which is permitted or required to be done by the
General Partner hereunder.
(d) Actions to Maintain REIT Status or Avoid Taxation of the
General Partner. Notwithstanding any other provisions of this
Agreement or the Act, any action of the General Partner on behalf of
the Partnership or any decision of the General Partner to refrain
from acting on behalf of the Partnership, undertaken in the good
faith belief that such action or omission is necessary or advisable
in order (i) to protect the ability of Regency to continue to qualify
as a REIT or (ii) to avoid Regency incurring any taxes under Section
857 or Section 4981 of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
(e) Sales of Assets. In the event that Regency or any of its
Affiliates in which it owns, directly or indirectly, an interest
disposes of properties or assets (other than those properties or
assets owned by the Partnership) in transactions or exchanges which
Regency reasonably believes create capital gains to Regency and a
resulting distribution or dividend to Regency's shareholders, the
General Partner shall provide the Original Limited Partners with at
least 20 days prior written notice of the record date for any
distribution of the proceeds thereof, together with relevant
information concerning such dividend, including the amount, to enable
the Original Limited Partners to exercise the Redemption Right prior
to said record date.
Section 7.10 Title to Partnership Assets. Title to Partnership
assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity,
and no Partner, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any
or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General
Partner may determine, including Affiliates of the General Partner. The
General Partner hereby declares and warrants that any Partnership assets
for which legal title is held in the name of the General Partner or any
nominee or Affiliate of the General Partner shall be held by the General
Partner for the use and benefit of the Partnership in accordance with the
provisions of this Agreement; provided, however, that the General Partner
shall use its best efforts to cause beneficial and record title to such
assets to be vested in the Partnership as soon as reasonably practicable.
All Partnership assets shall be recorded as the property of the
Partnership in its books and records, irrespective of the name in which
legal title to such Partnership assets is held.
Section 7.11 Reliance by Third Parties. Notwithstanding anything
to the contrary in this Agreement, any Person dealing with the Partnership
shall be entitled to assume that the General Partner has full power and
authority to encumber, sell or otherwise use in any manner any and all
assets of the Partnership (including, without limitation, in connection
with any pledge of Partnership assets to secure a loan or other financing
to the General Partner as provided by Section 7.1(a)(iii)) and to enter
into any contracts on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if it were the Partnership's
sole party in interest, both legally and beneficially. Each Limited
Partner hereby waives any and all defenses or other remedies which may be
available against such Person to contest, negate or disaffirm any action
of the General Partner in connection with any such dealing. In no event
shall any Person dealing with the General Partner or its representatives
be obligated to ascertain that the terms of this Agreement have been
complied with or to inquire into the necessity or expedience of any act or
action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be
conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of
such certificate, document or instrument, this Agreement was in full force
and effect, (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and
on behalf of the Partnership and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms
and provisions of this Agreement and is binding upon the Partnership.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability. The Limited Partners shall
have no liability under this Agreement except as expressly provided in
Section 5.3 hereof, or under the Act.
Section 8.2 Management of Business. No Limited Partner or
Assignee (other than the General Partner, any of its Affiliates or any
officer, director, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as
such) shall take part in the operation, management or control (within the
meaning of the Act) of the Partnership's business, transact any business
in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by
the General Partner, any of its Affiliates or any officer, director,
employee, partner, agent or trustee of the General Partner, the
Partnership or any of their Affiliates, in their capacity as such, shall
not affect, impair or eliminate the limitations on the liability of the
Limited Partners or Assignees under this Agreement.
Section 8.3 Outside Activities of Limited Partners. Subject to
any agreements entered into by a Limited Partner or its Affiliates with
the General Partner, the Partnership or a Subsidiary or an Affiliate of
any of them, the following rights shall govern outside activities of
Limited Partners: (i) any Limited Partner and any officer, director,
employee, agent, trustee, Affiliate, partner, beneficiary or shareholder
of any such Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating
to the Partnership, including business interests and activities in direct
competition with the Partnership, the General Partner or their Affiliates;
(ii) neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement in any business ventures of any Partner or
Assignee; (iii) none of the Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person, and such
Person shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures to the Partnership, any Partner or
any such other Person, even if such opportunity is of a character which,
if presented to the Partnership, any Partner or such other Person, could
be taken by such Person; (iv) the fact that a Partner may encounter
opportunities to purchase, otherwise acquire, lease, sell or otherwise
dispose of real or personal property and may take advantage of such
opportunities himself or introduce such opportunities to entities in which
it has or has not any interest, shall not subject such Partner to
liability to the Partnership or any of the other Partners on account of
the lost opportunity; and (v) except as otherwise specifically provided
herein, nothing contained in this Agreement shall be deemed to prohibit a
Partner or any Affiliate of a Partner from dealing, or otherwise engaging
in business, with Persons transacting business with the Partnership or
from providing services relating to the purchase, sale, rental, management
or operation of real or personal property (including real estate brokerage
services) and receiving compensation therefor, from any Persons who have
transacted business with the Partnership or other third parties.
Section 8.4 Priority Among Partners. Except to the extent
provided by Sections 4.2, 5.1(a), 5.1(b), 6.1, 6.2 or 6.3 hereof (with
respect to the priority of the Original Limited Partnership Units), or
otherwise expressly provided in this Agreement, no Partner (Limited or
General) or Assignee shall have priority over any other Partner (Limited
or General) or Assignee either as to the return of Capital Contributions
or as to profits, losses or distributions.
Section 8.5 Rights of Limited Partners Relating to the
Partnership.
(a) Copies of Business Records. In addition to other rights
provided by this Agreement or by the Act, and except as limited by
Section 8.5(c) hereof, each Limited Partner shall be provided the
following without demand, except as otherwise provided below, at the
Partnership's expense:
(i) promptly after becoming available, a copy of the most
recent annual, quarterly and current reports and proxy
statements filed with the Securities and Exchange Commission by
Regency pursuant to the Securities Exchange Act of 1934, if any;
(ii) promptly after becoming available, a copy of the
Partnership's federal, state and local income tax returns for
each Partnership Year;
(iii) upon written demand and for a purpose reasonably
related to such Limited Partner's interest as a Limited Partner
in the Partnership, a current list of the name and last known
business, residence or mailing address of each Partner;
(iv) a copy of this Agreement and the Certificate and all
amendments hereto and thereto, together with executed copies of
all powers of attorney pursuant to which this Agreement, the
Certificate and all amendments hereto and thereto have been
executed; and
(v) upon written demand, true and full information
regarding the amount of cash and a description and statement of
any other property or services contributed by each Partner and
which each Partner has agreed to contribute in the future, and
the date on which each became a Partner.
(b) Notification of Changes in Unit Adjustment Factor. The
General Partner shall notify each Limited Partner in writing of any
change made to the Unit Adjustment Factor within 10 Business Days of
the date such change becomes effective.
(c) Confidential Information. Notwithstanding any other
provision of this Section 8.5, the General Partner may keep
confidential from the Limited Partners, for such period of time as
the General Partner determines in its discretion to be reasonable,
any information (i) relating to the General Partner or any of its
Affiliates or the conduct of their business that the General Partner
believes, in its good faith judgment, the disclosure of which
information would adversely affect a material financing, acquisition,
disposition of assets or securities or other comparable transaction
to which the General Partner or any of its Affiliates is a party,
(ii) that the General Partner believes to be in the nature of trade
secrets of Regency or its Affiliates or (iii) that the Partnership,
Regency or any of their Affiliates is required by law or by
agreements with unaffiliated third parties to keep confidential.
Nothing contained in this Section 8.5(c) shall permit the General
Partner to keep confidential from the Limited Partners any
information relating to the Partnership or its business.
Section 8.6 Redemption of Units. The Redemption Rights of the
Original Limited Partners (including the holders of Class A Units) are set
forth in this Section 8.6. Any Redemption Rights granted to Additional
Limited Partners shall be set forth in amendments to this Agreement or in
separate redemption agreements and shall be subordinate, to the extent set
forth therein, to the Redemption Rights of the Original Limited Partners
set forth in this Section 8.6.
(a) Exercise. Subject to the provisions of this Section
8.6, the Original Limited Partners shall have the right (the
"Redemption Right") to require the Partnership to redeem any Unit
held by such Original Limited Partner in exchange for the Redemption
Amount to be paid by the Partnership. A Redemption Right shall be
exercised pursuant to a Notice of Redemption delivered to the General
Partner by the Original Limited Partner who is exercising the
Redemption Right (the "Redeeming Partner"), which shall be
irrevocable except as set forth in this Section 8.6(a). The
redemption shall occur on the Specified Redemption Date; provided,
however, a Specified Redemption Date shall not occur until such later
date as may be specified pursuant to any agreement with an Original
Limited Partner; and provided further that a holder of Class A Units
shall not exercise a Redemption Right until as of the first
Subsequent Closing without the prior written consent of the General
Partner and Security Capital. An Original Limited Partner may
exercise a Redemption Right any time and any number of times;
provided, however, that a holder of Class A Units shall not exercise
a Redemption Right until as of the first Subsequent Closing without
the prior written consent of the General Partner and Security
Capital. A Redeeming Partner may not exercise the Redemption Right
for less than 1,000 Units or, if such Redeeming Partner holds less
than 1,000 Units, all of the Units held by such Redeeming Partner.
If (i) an Original Limited Partner acquires any Units after the First
Closing from another Original Limited Partner or holds or acquires
any Shares otherwise than pursuant to the exercise of a Redemption
Right hereunder and (ii) the issuance of a Share Amount pursuant to
the exercise of a Redemption Right would violate the provisions of
Section 5.2 of the Articles of Incorporation as a result of the
ownership of such additional Units or Shares so acquired by such
Original Limited Partner (the number of Shares in excess of the
number of Shares permitted pursuant to said Section 5.2 is herein
referred to as the "Excess Shares") and (iii) such Original Limited
Partner does not revoke or amend the exercise of such Redemption
Right to comply with the provisions of said Section 5.2 of the
Articles of Incorporation within five days after receipt of written
notice from the General Partner that the redemption would be in
violation thereof, then the Partnership shall pay to such Redeeming
Partner, in lieu of the Share Amount or the Cash Amount attributable
to the Excess Shares, the amount which would be payable to such
Redeeming Partner pursuant to Section 5.3 of the Articles of
Incorporation if such Excess Shares were issued in violation of
Section 5.2 of the Articles of Incorporation and Regency exercised
the remedies pursuant to said Section 5.3 of the Articles of
Incorporation. The relevant provisions of the Articles of
Incorporation as presently in effect are attached hereto as Schedule
8.6(a). This Section 8.6(a) shall in no way or manner be construed
as limiting the application of the Articles of Incorporation or
constitute any form of waiver or exemption thereunder.
(b) Payment. The General Partner shall have the right to
elect to fund the Redemption Amount through the issuance of (i) the
Share Amount or (ii) the Cash Amount; provided, however, in the event
a Specified Redemption Date occurs on or before the Option Date, then
the General Partner shall be required to cause the Partnership to
issue the Share Amount (and not the Cash Amount) in satisfaction of
the Redemption Amount, except as otherwise provided in Section 8.6(c)
below. The Redeeming Partner shall have no right, with respect to
any Unit so redeemed, to receive any distributions paid by the
Partnership after the Specified Redemption Date.
(c) Exceptions for Payment. Notwithstanding anything contained
in this Section 8.6 to the contrary, the following provisions shall
apply with respect to the payment of a Redemption Amount:
(i) If the funding of the Share Amount with respect to the
exercise of a Redemption Right would cause the issuance of the
Shares in connection therewith to violate Article 5.14 of the
Articles of Incorporation of Regency, then the Redeeming Partner
shall not have the right to receive the Share Amount with
respect to the issuance of any Shares resulting in such a
violation, and the balance of any Redemption Amount relating to
the exercise of such Redemption Right shall be paid by a Cash
Amount. A Non-U.S. Person who (i) has signed a Waiver and
Consent Agreement in the form of Exhibit C attached hereto for
the benefit of Regency and Security Capital (the "Security
Capital Waiver and Consent") and (ii) is exercising a Redemption
Right (and will receive a Share Amount) in compliance with the
Security Capital Waiver and Consent, will not be in violation of
the provisions of Article 5.14 of the Articles of Incorporation
if (x) the aggregate number of Shares to be issued on such
Specified Redemption Date to all Redeeming Partners who are Non-
U.S. Persons is equal to or less than (y) the aggregate number
of Shares to be issued on such Specified Redemption Date to all
Redeeming Partners who are other than Non-U.S. Persons (the
maximum number of Shares which may be issued to Redeeming
Partners on a Specified Redemption Date who are Non-U.S. Persons
in order to satisfy the foregoing requirement is herein referred
to as the "Matching Share Amount"). If more than one Redeeming
Partner who is a Non-U.S. Person exercises a Redemption Right
for the same Specified Redemption Date and if the aggregate
Share Amount payable to all such Redeeming Partners would cause
the issuance of Shares to such Non-U.S. Persons to exceed the
Matching Share Amount on such Specified Redemption Date, then
the Matching Share Amount shall be allocated among such
Redeeming Partners who are Non-U.S. Persons pro rata in
proportion to the respective Share Amounts otherwise payable to
such Redeeming Partners, and any balance of a Redemption Amount
payable to any such Redeeming Partner on such Specified
Redemption Date shall be paid by a Cash Amount. If the holders
of any Class A Units who are Non-U.S. Persons are exercising
Redemption Rights on a Specified Redemption Date and the
aggregate Share Amount issuable to all Non-U.S. Persons on such
Specified Redemption Date exceeds the Matching Share Amount,
then the Shares otherwise issuable to the holders of Class A
Units shall be reduced first, pro rata by those holders whose
Class A Units were issued in exchange for interests in Roswell
Village, and next, pro rata by those holders whose Class A Units
were issued in exchange for cash and interests in Peartree
Village until such aggregate Share Amount equals the Matching
Share Amount, and the holders of such Class A Units shall
receive the Cash Amount for any balance of the Redemption Amount
due such holders of the Class A Units.
(ii) If the issuance of Shares for a Share Amount to a
Redeeming Partner would be in violation of the Securities Act
and applicable state securities laws then such Redeeming Partner
shall not have the right to receive the Share Amount, and the
Redemption Amount shall be paid by the Cash Amount; provided,
however, the issuance of Shares for a Share Amount shall not
violate the registration requirements of the Securities Act as
in effect on the date hereof if such Shares are issued to an
"accredited investor" as defined in the Securities Act.
(d) Additional Units. Each Original Limited Partner has the
right to receive certain Additional Units pursuant to the provisions
of the Contribution Agreement. If a Redeeming Partner exercises a
Redemption Right on one or more occasions with respect to Units
issued at the First Closing ("Initial Redeemed Units"), then such
Redeeming Partner shall be deemed to have exercised a Redemption
Right with respect to the corresponding percentage of Additional
Units issuable with respect to such Initial Redeemed Units, based on
the number of Initial Redeemed Units being redeemed as a percentage
of the total number of Units issued to the Redeeming Partner at the
First Closing (the "Redemption Percentage"), all as provided in the
Contribution Agreement. In such event, Regency shall assume the
obligation to pay the Redemption Amount with respect to any such
Additional Units issued with respect to the Initial Redeemed Units,
and if a Share Amount has been funded to a Redeeming Partner with
respect to the Initial Redeemed Units, then Regency shall be required
to pay the Share Amount for a number of Additional Units equal to the
corresponding Redemption Percentage multiplied by the Additional
Units issuable to such Original Limited Partner, subject, however, to
the restrictions set forth in Section 8.6(a) and 8.6(c) above.
(e) Conditions. As a condition to exercising a Redemption
Right, each Redeeming Partner shall execute a Notice of Redemption in
the form attached as Exhibit B and, if a Non-U.S. Person, the
Security Capital Waiver and Consent in the form attached as Exhibit
C; and execute such other documents and take such other actions as
the General Partner may reasonably require, including a Foreign
Investment and Real Property Tax Act ("FIRPTA") or similar state
and/or local affidavit (or make appropriate arrangements for deposit
with the General Partner for payment to the Internal Revenue Service
or any state or local governmental authority of the amount required
for the General Partner to comply with the withholding provisions of
such federal, state and local laws, and if applicable, providing a
withholding certificate evidencing the Redeeming Partner's right to a
reduced rate of FIRPTA withholding). As a further condition to
exercising a Redemption Right, the Units to be redeemed shall be
delivered to the Partnership or Regency, as the case may be, free and
clear of all liens, security interests, deeds of trust, pledges and
other encumbrances of any nature whatsoever (collectively the
"Liens"), subject to the provisions of Sections 5.3 and 8.6(f)
hereof. In the event any Lien exists on the Specified Redemption
Date with respect to the Units to be redeemed, neither the
Partnership nor Regency (if Regency assumes the Redemption Right
pursuant to Section 8.6(d) or Section 8.7) shall have any obligation
to redeem such Units, unless, in connection therewith, the General
Partner has elected to pay a portion of the Redemption Amount in cash
and such cash is sufficient to discharge such Lien, subject to the
provisions of Sections 5.3 and 8.6(f) hereof. Each Redeeming Partner
hereby expressly authorizes the General Partner to apply such portion
of such cash as may be necessary to discharge such Lien in full.
(f) Security Interest. Additional Units issued on the First
Earn-Out Closing Date (as defined in the Contribution Agreement)
pursuant to Section 2.3.2 of the Contribution Agreement may be
required to be pledged to Regency and the Partnership pursuant to
Article 15 of the Contribution Agreement (the "Pledged Units"). In
the event a Redeeming Partner exercises a Redemption Right with
respect to Pledged Units, or in the event a Redeeming Partner has
previously exercised a Redemption Right with respect to Units and the
corresponding Additional Units to be redeemed are Pledged Units, as
described in Section 8.6(d) above, then such Redeeming Partner, as a
condition to the receipt of the Redemption Amount with respect to
such Pledged Units, shall be required to pledge and grant to Regency
and the Partnership a first priority security interest in any and all
Shares and/or cash delivered in payment of the Redemption Amount with
respect to such Pledged Units and shall be required to consent to
Regency holding such Shares and/or cash as "Collateral" under Article
15 of the Contribution Agreement; provided, however, if a Cash Amount
is to be paid to the Redeeming Partner with respect to such Pledged
Units, then such Redeeming Partner shall have the right to substitute
a letter of credit for such Cash Amount as provided in Section
15.7.2(e) of the Contribution Agreement.
(g) Regency Agreement. Regency agrees (i) to perform Regency's
obligations described in this Section 8.6, (ii) to cause the General
Partner to perform the General Partner's obligations described in
this Section 8.6 and (iii) to cause the General Partner to cause the
Partnership to perform the Partnership's obligations described in
this Section 8.6.
(h) Additional Rights. In case Regency shall issue rights,
options or warrants to all holders of its Shares entitling them to
subscribe for or purchase Shares or other securities convertible into
Shares at a price per share less than the current per share market
price as of the day before the "ex date" with respect to the issuance
or distribution requiring such computation, each Original Limited
Partner holding Redemption Rights shall be entitled to receive such
number of such rights, options or warrants, as the case may be, as he
would have been entitled to receive had he exercised all of his then
existing Redemption Rights immediately prior to the record date for
such issuance by Regency. The term "ex date" shall mean the first
date on which Shares trade regularly without the right to receive
such issuance or distribution. In case the Shares shall be changed
into the same or a different number of shares of any class or classes
of stock, whether by capital reorganization, reclassification, or
otherwise (other than subdivision or combination of Shares or a stock
dividend described in this definition), then and in each such event
the Original Limited Partners holding Redemption Rights shall have
the right thereafter to exercise their Redemption Rights for the kind
and amount of shares and other securities and property that would
have been received upon such reorganization, reclassification or
other change by holders of the number of Shares with respect to which
such Redemption Rights could have been exercised immediately prior to
such reorganization, reclassification or change.
(i) Distributions. A Redeeming Partner exercising a Redemption
Right with a Specified Redemption Date after a Partnership Record
Date and prior to the payment of the distribution of Available Cash
relating to such Partnership Record Date shall retain the right to
receive such distribution with respect to such Units redeemed on such
Specified Redemption Date.
Section 8.7 Regency's Assumption of Right. Notwithstanding the
provisions of Section 8.6, Regency may, in its sole and absolute
discretion, assume directly and satisfy a Redemption Right by paying to
the Redeeming Partner the Share Amount on the Specified Redemption Date,
whereupon Regency shall acquire the Units offered for redemption by the
Redeeming Partner and shall be treated for all purposes of this Agreement
as the owner of such Units, which shall become Class B Units. In the
event Regency shall exercise its right to satisfy the Redemption Right in
the manner described in the preceding sentence, the Partnership shall have
no obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner's exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership, the General Partner and Regency shall
treat the transaction between Regency and the Redeeming Partner as a sale
of the Redeeming Partner's Units to Regency for federal income tax
purposes. Regency agrees that it shall assume the General Partner's
obligation to pay the Redemption Amount by the payment of the Share
Amount through the Option Date, and Regency further agrees that if the
General Partner elects to pay the Redemption Amount through the payment of
the Share Amount, Regency shall guarantee the General Partner's payment
thereof.
ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting. The General Partner shall
keep or cause to be kept at the principal office of the Partnership
appropriate books and records with respect to the Partnership's business,
including, without limitation, all books and records necessary to provide
to the Limited Partners any information, lists and copies of documents
required to be provided pursuant to Sections 8.5 or 9.3 hereof. Any
records maintained by or on behalf of the Partnership in the regular
course of its business may be kept on, or be in the form of, magnetic
tape, photographs, micrographics or any other information storage device;
provided, that the records so maintained are convertible into clearly
legible written form within a reasonable period of time. The books of the
Partnership shall be maintained for financial purposes on an accrual basis
in accordance with generally accepted accounting principles and for tax
reporting purposes on the accrual basis.
Section 9.2 Fiscal Year. The fiscal year of the Partnership shall
be the calendar year.
Section 9.3 Reports.
(a) Annual Reports. As soon as practicable, but in no event
later than the date when mailed to Regency's shareholders, the
General Partner shall cause to be mailed to each Limited Partner as
of the close of the Partnership Year, an annual report containing
financial statements of the Partnership, or of Regency if such
statements are prepared solely on a consolidated basis with Regency
for such Partnership Year, presented in accordance with generally
accepted accounting principles, such statements to be audited by a
nationally recognized firm of independent public accountants selected
by the General Partner.
(b) Quarterly Reports. As soon as practicable, but in no event
later than the date when mailed to Regency's shareholders, the
General Partner shall cause to be mailed to each Limited Partner as
of the last day of the calendar quarter (except the last calendar
quarter of each year) who has asked to be placed on the mailing list
for the same, a report containing unaudited financial statements of
the Partnership, or of Regency if such statements are prepared solely
on a consolidated basis with Regency, and such other information as
may be required by applicable law or regulation, or as the General
Partner determines to be appropriate.
(c) Other. During the pendency of the Redemption Rights,
Limited Partners holding Redemption Rights shall receive in a timely
manner all other communications transmitted from time to time by
Regency to its shareholders.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns. The General Partner shall
arrange for the preparation and timely filing of all returns of
Partnership income, gains, deductions, losses and other items required of
the Partnership for federal and state income tax purposes and shall use
all reasonable efforts to furnish, within 90 days of the close of each
taxable year, the tax information reasonably required by Limited Partners
for federal and state income tax reporting purposes.
Section 10.2 Tax Elections. Except as otherwise provided herein,
the General Partner shall, in its sole and absolute discretion, determine
whether to make any available election pursuant to the Code; provided,
however, that the General Partner shall make the election under Section
754 of the Code in accordance with applicable Regulations thereunder. The
General Partner shall have the right to seek to revoke any such election
(including, without limitation, the election under Section 754 of the
Code) upon the General Partner's determination in its sole and absolute
discretion that such revocation is in the best interests of the Partners.
Section 10.3 Tax Matters Partner.
(a) General. The General Partner shall be the "tax matters
partner" of the Partnership for federal income tax purposes.
Pursuant to Section 6223(c) of the Code, upon receipt of notice from
the IRS of the beginning of an administrative proceeding with respect
to the Partnership, the tax matters partner shall furnish the IRS
with the name, address and profit interest of each of the Limited
Partners; provided, however, that such information is provided to the
Partnership by the Limited Partners.
(b) Powers. The tax matters partner is authorized, but not
required:
(i) to enter into any settlement with the IRS with respect
to any administrative or judicial proceedings for the adjustment
of Partnership items required to be taken into account by a
Partner for income tax purposes (such administrative proceedings
being referred to as a "tax audit" and such judicial proceedings
being referred to as "judicial review"), and in the settlement
agreement the tax matters partner may expressly state that such
agreement shall bind all Partners, except that such settlement
agreement shall not bind any Partner (1) who (within the time
prescribed pursuant to the Code and Regulations) files a
statement with the IRS providing that the tax matters partner
shall not have the authority to enter into a settlement
agreement on behalf of such Partner or (2) who is a "notice
partner" (as defined in Section 6231 of the Code) or a member of
a "notice group" (as defined in Section 6223(b)(2) of the Code),
and, to the extent provided by law, the General Partner shall
cause each Limited Partner to be designated a notice partner;
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be
taken into account by a Partner for tax purposes (a "final
adjustment") is mailed or otherwise given to the tax matters
partner, to seek judicial review of such final adjustment,
including the filing of a petition for readjustment with the Tax
Court or the United States Claims Court, or the filing of a
complaint for refund with the District Court of the United
States for the district in which the Partnership's principal
place of business is located;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative adjustment
with the IRS at any time and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition,
complaint or other document) for judicial review with respect to
such request;
(v) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any item
required to be taken into account by a Partner for tax purposes,
or an item affected by such item; and
(vi) to take any other action on behalf of the Partners of
the Partnership in connection with any tax audit or judicial
review proceeding to the extent permitted by applicable law or
regulations.
The taking of any action and the incurring of any expense by the
tax matters partner in connection with any such proceeding, except to
the extent required by law, is a matter in the sole and absolute
discretion of the tax matters partner, and the provisions relating to
indemnification of the General Partner set forth in Section 7.7 of
this Agreement shall be fully applicable to the tax matters partner
in its capacity as such.
(c) Reimbursement. The tax matters partner shall receive no
compensation for its services. All third-party costs and expenses
incurred by the tax matters partner in performing its duties as such
(including legal and accounting fees) shall be borne by the
Partnership. Nothing herein shall be construed to restrict the
Partnership from engaging an accounting firm and a law firm to assist
the tax matters partner in discharging his duties hereunder, so long
as the compensation paid by the Partnership for such services is
reasonable.
Section 10.4 Organizational Expenses. The Partnership shall elect
to deduct expenses, if any, incurred by it in organizing the Partnership
ratably over a 60 month period as provided in Section 709 of the Code.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer.
(a) Definition. The term "transfer," when used in this Article
11 with respect to a Partnership Unit, shall be deemed to refer to a
transaction by which the General Partner purports to assign its
General Partnership Interest to another Person or by which a Limited
Partner purports to assign its Limited Partnership Interest to
another Person, and includes a sale, assignment, gift, pledge,
encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise. The term "transfer" when used in
this Article 11 does not include any redemption of Partnership Units
by a Limited Partner.
(b) Requirements. No Partnership Interest shall be
transferred, in whole or in part, except in accordance with the terms
and conditions set forth in this Article 11. Any transfer or
purported transfer of a Partnership Interest not made in accordance
with this Article 11 shall be null and void.
Section 11.2 Transfer of General Partner's Partnership Interests.
(a) General Partnership Interest. The General Partner may not
transfer any of its General Partnership Interest (other than any
transfer to an Affiliate of the General Partner) or withdraw as
General Partner (other than pursuant to a permitted transfer), other
than in connection with a transaction described in Section 11.2(b).
Any transfer or purported transfer of the General Partner's
Partnership Interest not made in accordance with this Section 11.2
shall be null and void. Notwithstanding any permitted transfer of
its General Partnership Interest or withdrawal as General Partner
hereunder (other than in connection with a transaction described in
Section 11.2(b)), Regency shall remain subject to Sections
7.1(a)(iii), 7.9(e), 8.6 and 8.7 of this Agreement unless such
transferee General Partner provides substantially similar rights to
the Limited Partners and Limited Partner Consent is obtained.
Nothing contained in this Section 11.2(a) shall entitle the General
Partner to withdraw as General Partner unless a successor General
Partner has been appointed and approved by the Original Limited
Partners and the Additional Limited Partners. Any General Partner
other than Regency admitted to the Partnership by reason of being an
Affiliate of Regency shall be a subsidiary of Regency so long as it
is the General Partner, unless (i) the Consent of the Original
Limited Partners and (ii) the Consent of the Additional Limited
Partners is obtained.
(b) Transfer in Connection With Reclassification,
Recapitalization, or Business Combination Involving General Partner.
Neither the General Partner nor Regency shall engage in any merger,
consolidation or other business combination or transaction with or
into another Person or sale of all or substantially all of its
assets, or any reclassification, or recapitalization (other than a
change in par value, or a change in the number of shares of Common
Stock resulting from a subdivision or combination as described in the
definition of Unit Adjustment Factor) ("Transaction"), unless as a
result of the Transaction such other Person (i) agrees that each
Limited Partner who holds a Redemption Right shall thereafter remain
entitled to exchange each Partnership Unit owned by such Limited
Partner (after application of the Unit Adjustment Factor) for an
amount of cash, securities, or other property equal to the greatest
amount of cash, securities or other property paid to a holder of one
Share in consideration of one Share which a Limited Partner would
have received at any time during the period from and after the date
on which the Transaction is consummated, as if the Limited Partner
had exercised its Redemption Right immediately prior to the
Transaction and received the Share Amount, and (ii) agrees to assume
the General Partner's obligations pursuant to Section 8.6 hereof,
provided, that if, in connection with the Transaction, a purchase,
tender or exchange offer shall have been made to and accepted by the
holders of more than 50 percent of the outstanding shares of Common
Stock, the holders of such Partnership Units shall receive the
greatest amount of cash, securities, or other property which a
Limited Partner would have received had it exercised the Redemption
Right and received the Share Amount in redemption of its Partnership
Units immediately prior to the expiration of such purchase, tender or
exchange offer. Prior to consummating any such Transaction, Regency
shall cause appropriate amendments to be made to this Agreement
pursuant to Section 14.1(b) (including the definitions of Shares,
Unit Adjustment Factor and Value) to carry out the intent of the
parties that the rights of the Limited Partners hereunder shall not
be prejudiced as the result of any such Transaction. Notwithstanding
anything contained in this Section 11.2(b) to the contrary, the
General Partner shall not engage in a Transaction that causes the
Original Limited Partners to recognize gain or loss for federal
income tax purposes.
(c) Limited Partnership Interests. The General Partner may
transfer all or any portion of its Limited Partnership Interests
represented by Class B Units, or any of the rights associated with
such Limited Partnership Interests, to any party without the consent
of the Partnership or any Partner (regardless of whether such
transfer triggers a termination of the Partnership for tax purposes
under Section 708 of the Code).
(d) Admission of Additional General Partner. Except as
provided in Sections 11.2(a) and 11.2(b), the General Partner may not
admit an additional general partner other than an Affiliate of the
General Partner pursuant to Section 11.2(a).
Section 11.3 Limited Partners' Rights to Transfer.
(a) General. No transfer of a Limited Partnership Interest by
a Limited Partner is permitted without the prior written consent of
the General Partner, which it may withhold in its sole and absolute
discretion; provided, that a Limited Partner may transfer Units
without the consent of the General Partner: (i) to members of the
Limited Partner's Immediate Family or one or more trusts for their
benefit pursuant to applicable laws of descent and distribution, gift
or otherwise; (ii) among its Affiliates; (iii) to a lender, provided
that the Units are not Pledged Units, where such Units are pledged to
secure a bona fide obligation of the Limited Partner and any transfer
in accordance with the rights of such lender under the instruments
evidencing such obligation (provided that the General Partner
receives 10 days prior written notice of any transfer under this
clause (a)); (iv) if the Limited Partner is a trust, to the
beneficiaries of the Limited Partner or to another trust (1) that is
either established by the same grantor as the Limited Partner or (2)
whose beneficiaries consist of members of the Immediate Family of the
grantor of the Limited Partner or (3) whose beneficiaries consist of
beneficiaries of the transferor trust or members of their Immediate
Family; (v) if the Limited Partner is an entity, to the direct or
indirect equity holders of the Limited Partner; and (vi) to other
Limited Partners. In order to effect any transfer under this Section
11.3, the Limited Partner must deliver to the General Partner a duly
executed copy of the instrument making such transfer and such
instrument must evidence the written acceptance by the assignee of
all of the terms and conditions of this Agreement, including, where
applicable, the security interest, described in Sections 5.3 and
8.6(f), and represent that such assignment was made in accordance
with all applicable laws and regulations. For a period of one year
following the First Closing, each Original Limited Partner agrees not
(A) to request the General Partner to consent to any transfer of
Units requiring the consent of the General Partner or (B) to transfer
any economic or other interest, right or attribute therein except to
a Person to whom such Partner may transfer Units without the consent
of the General Partner.
(b) Incapacitated Limited Partners. If a Limited Partner is
subject to Incapacity, the executor, administrator, trustee,
committee, guardian, conservator or receiver of such Limited
Partner's estate shall have all the rights of a Limited Partner, but
not more rights than those enjoyed by other Limited Partners for the
purpose of settling or managing the estate and such power as the
Incapacitated Limited Partner possessed to transfer all or any part
of his or its interest in the Partnership. The Incapacity of a
Limited Partner, in and of itself, shall not dissolve or terminate
the Partnership.
(c) No Transfers Violating Securities Laws. The General
Partner may prohibit any transfer by a Limited Partner of his
Partnership Units if, in the opinion of legal counsel to the
Partnership, such transfer would require filing of a registration
statement under the Securities Act of 1933 or would otherwise violate
any federal or state securities laws or regulations applicable to the
Partnership or the Partnership Units.
(d) Transfers Resulting in Corporation Status. Regardless of
whether the General Partner is required to provide or has provided
its consent under Section 11.3(a), no transfer by a Limited Partner
of his Partnership Units (or any economic or other interest, right or
attribute therein) may be made to any Person if legal counsel for the
Partnership renders an opinion letter that it creates a substantial
risk that the Partnership would be treated as an association taxable
as a corporation.
(e) Transfers Causing Termination. Regardless of whether the
General Partner is required to provide or has provided its consent
under Section 11.3(a), no transfer of any Partnership Interests other
than the exercise of Redemption Rights shall be effective if such
transfer would, in the opinion of counsel for the Partnership, result
in the termination of the Partnership for federal income tax
purposes, in which event such transfer shall be made effective as of
the first fiscal quarter in which such termination would not occur,
if the Partner making such transfer continues to desire to effect the
transfer.
(f) Transfer to Certain Lenders. Notwithstanding anything
contained herein to the contrary, no transfer of any Partnership
Units may be made to a lender to the Partnership or any Person who is
related (within the meaning of Section 1.752-4(b) of the Regulations)
to any lender to the Partnership whose loan constitutes a Nonrecourse
Liability, without the consent of the General Partner, which consent
may be given or withheld by the General Partner in its sole and
absolute discretion, provided, that as a condition to such consent
the lender will be required to enter into an arrangement with the
Partnership and the General Partner to redeem for the Redemption
Amount any Partnership Units in which a security interest is held,
simultaneously with the time at which such lender would be deemed to
be a partner in the Partnership for purposes of allocating
liabilities to such lender under Section 752 of the Code.
(g) Transfers by Additional Limited Partners Requiring 1934 Act
Registration. Regardless of whether the General Partner is required
to provide or has provided its consent under Section 11.3(a), no
transfer by an Additional Limited Partner of his Limited Partnership
Interest (or any economic or other interest, right or attribute
therein) may be made to any Person if such transfer would require the
Partnership to register its equity securities under the Securities
Exchange Act of 1934.
Section 11.4 Substituted Limited Partners.
(a) Consent of General Partner Required. The Limited Partner
shall have the right to substitute a transferee as a Limited Partner
in his place, but only if such transferee is a permitted transferee
under Section 11.3, in which event such substitution shall occur if
the Limited Partner so provides. With respect to any other
transfers, the General Partner shall have the right to consent to the
admission of a transferee of the interest of a Limited Partner
pursuant to this Section 11.4 as a Substituted Limited Partner, which
consent may be given or withheld by the General Partner in its sole
and absolute discretion. The General Partner's failure or refusal to
permit a transferee of any such interests to become a Substituted
Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner.
(b) Rights and Duties of Substituted Limited Partners. A
transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited
Partner under this Agreement.
(c) Amendment of Exhibit A. Upon the admission of a
Substituted Limited Partner, the General Partner shall amend Exhibit
A to reflect the name, address, number of Partnership Units, and
Percentage Interest of such Substituted Limited Partner and to
eliminate or adjust, if necessary, the name, address and interest of
the predecessor of such Substituted Limited Partner.
Section 11.5 Assignees. If a transferee is not admitted as a
Substituted Limited Partner in accordance with Section 11.4(a), such
transferee shall be considered an Assignee for purposes of this Agreement.
An Assignee shall be entitled to all the rights of an assignee of a
limited partnership interest under the Act, including (if applicable) the
right to redeem Units under Section 8.6 or any separate redemption
agreement, and the right to receive distributions from the Partnership and
the share of Net Income, Net Losses, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, but
shall not be deemed to be a holder of Partnership Units for any other
purpose under this Agreement, and shall not be entitled to vote such
Partnership Units in any matter presented to the Limited Partners for a
vote (such Partnership Units being deemed to have been voted on such
matter in the same proportion as all Partnership Units held by Limited
Partners are voted). In the event any such transferee desires to make a
further assignment of any such Partnership Units, such transferee shall be
subject to all the provisions of this Article 11 to the same extent and in
the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.
Section 11.6 General Provisions.
(a) Withdrawal of Limited Partner. No Limited Partner may
withdraw from the Partnership other than as a result of a permitted
transfer of all of such Limited Partner's Partnership Units in
accordance with this Article 11 or pursuant to the redemption of all
of his Partnership Units.
(b) Termination of Status as Limited Partner. Any Limited
Partner who shall transfer all of his Partnership Units in a transfer
permitted pursuant to this Article 11 or pursuant to the redemption
of all of his Partnership Units shall cease to be a Limited Partner.
(c) Timing of Transfers. Transfers pursuant to this Article 11
may only be made on the first day of a fiscal quarter, unless the
General Partner otherwise agrees, or unless resulting by operation of
law.
(d) Allocation When Transfer Occurs. If any Partnership
Interest is transferred during any quarterly segment of the
Partnership's fiscal year in compliance with the provisions of this
Article 11 or redeemed pursuant to Section 8.6, Net Income, Net
Losses, each item thereof and all other items attributable to such
interest for such fiscal year shall be divided and allocated between
the transferor Partner and the transferee Partner by taking into
account their varying interests during the fiscal year in accordance
with Section 706(d) of the Code, using the interim closing of the
books method (other than Net Income or Net Loss attributable to a
Capital Transaction, which shall be allocated as of the Capital
Transaction Record Date). Solely for purposes of making such
allocations, each of such items for the calendar month in which the
transfer or redemption occurs shall be allocated to the Person who is
a Partner as of midnight on the last day of said month. All
distributions of Available Cash with respect to which the Partnership
Record Date is before the date of such transfer or redemption shall
be made to the transferor Partner, and all distributions of Available
Cash thereafter shall be made to the transferee Partner.
(e) Continued Obligations Following Redemption by Certain
Additional Limited Partners. Anything herein to the contrary
notwithstanding, if an Additional Limited Partner is an Electing
Partner (as defined in Section 13.4), and if such Additional Limited
Partner exercises a Redemption Right with respect to such Additional
Limited Partner's entire Limited Partnership Interest, and the
General Partner determines in good faith that such Redeeming Partner
has exercised a Redemption Right in order to avoid such Additional
Limited Partner's deficit Capital Account restoration obligations in
Section 13.4, the General Partner may require, upon delivery of
written notice to the Redeeming Partner no later than thirty (30)
days after the applicable Specified Redemption Date, that the
Redeeming Partner remain liable to restore his "Hypothetical Negative
Capital Account Balance" if the Partnership adopts a plan of
liquidation within three hundred sixty five (365) days following such
applicable Specified Redemption Date. A Redeeming Partner's
Hypothetical Negative Capital Account Balance is the hypothetical
amount such Redeeming Partner would have had to pay to the
Partnership pursuant to his obligations under Section 13.4 hereof if
he had remained as an Additional Limited Partner until the
liquidation of the Partnership.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Successor General Partner. A successor
to all of the General Partner's General Partnership Interest pursuant to
Section 11.2 hereof who is proposed and permitted to be admitted as a
successor General Partner shall be admitted to the Partnership as the
General Partner, effective upon such transfer. Any such transferee shall
assume all of the General Partner's obligations under this Agreement and
shall carry on the business of the Partnership without dissolution. In
each case, the admission shall be subject to the successor General Partner
executing and delivering to the Partnership an acceptance of all of the
terms and conditions of this Agreement and such other documents or
instruments as may be required to effect the admission.
Section 12.2 Admission of Additional Limited Partners.
(a) General. A Person who makes a Capital Contribution to the
Partnership in accordance with Section 4.2 of this Agreement shall be
admitted to the Partnership as an Additional Limited Partner upon
furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and
conditions of this Agreement, including, without limitation, the
power of attorney granted in Article 16 hereof and (ii) such other
documents or instruments as may be required in the sole and absolute
discretion of the General Partner in order to effect such Person's
admission as an Additional Limited Partner.
(b) Consent of General Partner Required. Notwithstanding
anything to the contrary in this Section 12.2, no Person shall be
admitted as an Additional Limited Partner without the consent of the
General Partner (other than a Person to whom a Limited Partner may
transfer Units pursuant to Section 11.3(a) without the consent of the
General Partner), which consent may be given or withheld in the
General Partner's sole and absolute discretion. The admission of any
Person as an Additional Limited Partner shall become effective on the
date upon which the name of such Person is recorded on the books and
records of the Partnership, following the consent of the General
Partner to such admission.
Section 12.3 Amendment of Agreement and Certificate. For the
admission to the Partnership of any Partner, the General Partner shall,
subject to the requirements of Section 4.2, take all steps necessary and
appropriate under the Act to amend the records of the Partnership and, if
necessary, to prepare as soon as practical an amendment of this Agreement
(including an amendment of Exhibit A) and, if required by law, shall
prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Article 16 hereof.
Section 12.4 Representations and Warranties of Additional Limited
Partners. As inducement for their admission to the Partnership, each
Additional Limited Partner hereby represents and warrants that such
Limited Partner (a) has such knowledge and experience in financial and
business matters that it is capable of evaluating the merits and risks of
an investment in the Partnership; (b) has been given the opportunity to
examine all documents and to ask questions of, and to receive answers
from, the General Partner and its representatives concerning the terms and
conditions of the acquisition by it of Units in the Partnership, and to
obtain any additional information which it deems necessary to verify the
accuracy of the information with respect thereto; and (c) understands that
there will be no public market for the Units. Such Additional Limited
Partner has received and carefully reviewed copies of the reports filed by
Regency for its two most recent fiscal years and the interim period to
date under the Securities Exchange Act of 1934 and such additional
information concerning Regency and the transactions contemplated by this
Agreement, to the extent that Regency could acquire such information
without unreasonable effort or expense, as such Limited Partner deems
necessary for purposes of making an investment in the Partnership. The
Units in the Partnership acquired by such Additional Limited Partner are
being acquired by such Limited Partner for its own account for investment
and not with a view to, or for resale in connection with, the public
distribution or other disposition thereof. Such Additional Limited
Partner agrees as a condition to the issuance of such Units in its name
that any transfer, sale, assignment, hypothecation, offer or other
disposition of such Units may not be effected except in accordance with
the terms of this Agreement and pursuant to an effective registration
statement under the Securities Act and the rules and regulations
promulgated thereunder, or an exemption therefrom, and in compliance with
all other applicable securities and "blue sky" laws. Each Additional
Limited Partner acknowledges that the Partnership is not required to
register any of the Units under the Securities Act or any other applicable
securities or "blue sky" laws. Each such Additional Limited Partner
represents and warrants that it has relied on its own advisors for advice
in connection with structuring the transactions contemplated by this
Agreement and is not relying on the General Partner or its accountants,
attorneys or other advisors with regard to such matters.
ARTICLE 13
DISSOLUTION AND LIQUIDATION
Section 13.1 Dissolution. The Partnership shall not be dissolved
by the admission of Substituted Limited Partners or Additional Limited
Partners or by the admission of a successor General Partner in accordance
with the terms of this Agreement. Upon the withdrawal of the General
Partner, any successor General Partner shall continue the business of the
Partnership. Notwithstanding anything contained herein to the contrary,
except as provided below in this Section 13.1, the General Partner and the
Partnership shall not dissolve the Partnership, adopt a plan of
liquidation for the Partnership or sell all or substantially all of the
assets of the Partnership in a Liquidating Transaction or otherwise
without (i) the Consent of the Original Limited Partners and (ii) the
Consent of the Additional Limited Partners. The Partnership shall
dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following (each an "Event of Dissolution"):
(a) Expiration of Term-the expiration of its term as provided
in Section 2.4 hereof;
(b) Withdrawal of General Partner-an event of withdrawal of the
last remaining General Partner, as defined in the Act (other than an
event of bankruptcy), unless, within 90 days after the withdrawal,
all the remaining Original Limited Partners and Additional Limited
Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of withdrawal, of a
substitute General Partner;
(c) Judicial Dissolution Decree-entry of a decree of judicial
dissolution of the Partnership pursuant to the provisions of the Act;
or
(d) Bankruptcy or Insolvency of General Partner-the last
remaining General Partner shall be Incapacitated by reason of its
bankruptcy unless, within 90 days after the withdrawal, all the
remaining Original Limited Partners and Additional Limited Partners
agree in writing to continue the business of the Partnership and to
the appointment, effective as of the date of withdrawal, of a
substitute General Partner.
Section 13.2 Winding Up.
(a) General. The General Partner shall provide written notice
to the Limited Partners of the occurrence of an Event of Dissolution,
giving them at least 20 days in which to exercise any Redemption
Right prior to the distribution of any proceeds from the liquidation
of the Partnership pursuant to this Section 13.2(a). Upon the
occurrence of an Event of Dissolution, the Partnership shall continue
solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its
creditors and Partners. No Partner shall take any action that is
inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership's business and affairs. The General
Partner (or, in the event there is no remaining General Partner, any
Person elected by a majority in interest of the Limited Partners (the
"Liquidator")) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the
Partnership's liabilities and property and the Partnership property
(subject to Sections 13.2(b) and 13.2(c)) shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and
the proceeds therefrom shall be applied and distributed in the
following order:
(i) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the
Partners;
(ii) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the Partners, pro rata in
accordance with amounts owed to each such Partner;
(iii) Third, one hundred percent (100%) to the Original
Limited Partners, pro rata based on the number of Original
Limited Partnership Units held by such Partners, until each such
Partner has received an amount equal to the aggregate Priority
Distribution Amounts for each Partnership Record Date (if any)
occurring subsequent to the Event of Dissolution;
(iv) Fourth, one hundred percent (100%) to the Additional
Limited Partners, pro rata based on the number of Class 2 Units
held by such Partners, until each such Partner has received an
amount equal to the aggregate Priority Distribution Amounts for
each Partnership Record Date (if any) occurring subsequent to
the Event of Dissolution; and
(v) The balance, if any, to the General Partner and
Limited Partners in accordance with their Capital Accounts,
after giving effect to all contributions, distributions, and
allocations for all periods.
The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article 13.
(b) Deferred Liquidation. Notwithstanding the provisions of
Section 13.2(a) hereof which require liquidation of the assets of the
Partnership, but subject to the order of priorities set forth
therein, and further subject to Section 13.2(c) hereof and any
separate agreement of the Partnership or the General Partner with
respect to the distribution in kind to Additional Limited Partners of
assets contributed by such Additional Limited Partners (or assets
exchanged for such assets), if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part
or all of the Partnership's assets would be impractical or would
cause undue loss to the Partners, the Liquidator may, in its sole and
absolute discretion, defer for a reasonable time the liquidation of
any assets except those necessary to satisfy liabilities of the
Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and
in accordance with the provisions of Section 13.2(a) and Section
13.2(c) hereof and any such separate agreement, undivided interests
in such Partnership assets as the Liquidator deems not suitable for
liquidation. Any such distributions in kind shall be made only if,
in the good faith judgment of the Liquidator, such distributions in
kind are in the best interest of the Partners, and shall be subject
to such conditions relating to the disposition and management of such
properties as the Liquidator deems reasonable and equitable and to
any agreements governing the operation of such properties at such
time. The Liquidator shall determine the fair market value of any
property distributed in kind using such reasonable method of
valuation as it may adopt.
(c) Distribution of Briarcliff Village.
(i) In the event that the Partnership is dissolved in
accordance with this Article 13, the Briarcliff Village Property
(as defined in Section 7.1(c)) will be distributed in-kind to
the Original Briarcliff Partners (as defined in Section 7.1(c))
who continue, as of such time, to hold Original Limited
Partnership Units attributable to the contribution of the
Briarcliff Village Property to Branch Properties, L.P. and
Branch Properties, L.P.'s subsequent contribution of the
Briarcliff Village Property to the Partnership, with such
Partners to take title to the Briarcliff Village Property in any
manner which they are able to agree among themselves. In the
event that such Partners are to receive the Briarcliff Village
Property pursuant to this Section 13.2(c), then the Briarcliff
Village Property shall have the net value agreed upon by the
General Partner and the Partners receiving an interest in the
Briarcliff Village Property, or, if they cannot agree, then the
Briarcliff Village Property shall be valued in accordance with
Section 13.2(d).
(ii) If the net value of the Briarcliff Village Property
determined pursuant to Section 13.2(c)(i) exceeds the amount to
which the Partners receiving the Briarcliff Village Property are
entitled pursuant to this Article 13, then such partners may
contribute to the capital of the Partnership the amount of cash
equal to such excess, pro rata in proportion to the relative
number of Units of each such Partners attributable to the
contribution of the Briarcliff Village Property to Branch
Properties, L.P. and Branch Properties, L.P.'s subsequent
contribution of the Briarcliff Village Property to the
Partnership. If such a contribution is not made in full, then
Section 13.2(c)(i) shall not apply and the Liquidator shall be
entitled to sell the Briarcliff Village Property in connection
with the dissolution of the Partnership.
(d) Appraisal. In the event that the Briarcliff Village
Property is to be distributed to the Original Briarcliff Partners in
liquidation of the Partnership pursuant to the provisions of this
Section 13.2, then the amount of such distribution shall be
determined as follows if the net value thereof has not been agreed on
pursuant to Section 13.2(c)(i):
(i) Within twenty (20) days after the determination that
the Partnership shall distribute the Briarcliff Village Property
to the Original Briarcliff Partners, the General Partner and a
Majority-In-Interest of the Original Briarcliff Partners (as
defined in Section 7.1(c)) shall each select an independent,
regionally or nationally recognized appraiser or appraisal group
which is experienced in valuing separate real estate property
("Appraiser"), and the two Appraisers selected by the parties
shall jointly select a third Appraiser. Each party shall pay
the cost of their respective Appraiser and shall split the cost
of the third Appraiser.
(ii) Within sixty (60) days of selection of the third
Appraiser, each of the three Appraisers shall determine the
gross fair market value of the Briarcliff Village Property as of
the date of the election to liquidate the Partnership,
calculated based on the net fair market value of Briarcliff
Village (net of the loans encumbering Briarcliff Village),
taking into consideration the terms and relative value of the
loans encumbering Briarcliff Village, the fact that Briarcliff
Village is not being sold and the loans are not being repaid.
(iii) Upon receipt of the three appraisals determining
the gross fair market value of the Briarcliff Village Property,
the two closest gross fair market values shall be averaged, with
such average to constitute the distribution value of the
Briarcliff Village Property.
Section 13.3 Compliance with Timing Requirements of Regulations;
Allowance for Contingent or Unforeseen Liabilities or Obligations.
Notwithstanding anything to the contrary in this Agreement, in the event
the Partnership is "liquidated" within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article
13 to the General Partner and Limited Partners who have positive Capital
Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2)
(including any timing requirements therein). Except as provided in
Section 13.4, if any Limited Partner has a deficit balance in his Capital
Account (after giving effect to all contributions, distributions and
allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such
deficit, and such deficit shall not be considered a debt owed to the
Partnership or to any other Person for any purpose whatsoever. In the
sole and absolute discretion of the General Partner, a pro rata portion of
the distributions that would otherwise be made to the General Partner and
Limited Partners pursuant to this Article 13 may be: (i) distributed to a
liquidating trust established for the benefit of the General Partner and
Limited Partners for the purposes of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership (the assets
of any such trust shall be distributed to the General Partner and Limited
Partners from time to time, in the reasonable discretion of the General
Partner, in the same proportions as the amount distributed to such trust
by the Partnership would otherwise have been distributed to the General
Partner and Limited Partners pursuant to this Agreement); or (ii) withheld
to provide a reasonable reserve for Partnership liabilities (contingent or
otherwise) and to reflect the unrealized portion of any installment
obligations owed to the Partnership; provided, that such withheld amounts
shall be distributed to the General Partner and Limited Partners as soon
as practicable.
Section 13.4 Deficit Capital Account Restoration.
(a) Subject to Section 13.4(b), if an Original Limited Partner
listed on Schedule 13.4(a) (who constituted an "Electing Partner" of
Branch and is referred to hereinafter as an "Electing Partner") and
any Additional Limited Partner who elects to be added to such
Schedule (also an "Electing Partner"), on the date of the
"liquidation" of his respective interest in the Partnership (within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), has a
negative balance in his Capital Account, then such Electing Partner
shall contribute in cash to the capital of the Partnership the lesser
of (i) the maximum amount (if any such maximum amount is stated)
listed beside such Electing Partner's name on Schedule 13.4(a) or
(ii) the amount required to increase his Capital Account as of such
date to zero. Any such contribution required of a Partner hereunder
shall be made on or before the later of (i) the end of the
Partnership fiscal year in which the interest of such Partner is
liquidated or (ii) the ninetieth (90th) day following the date of
such liquidation. Notwithstanding any provision hereof to the
contrary, all amounts so contributed by a partner to the capital of
the Partnership shall, upon the liquidation of the Partnership under
this Article 13, be first paid to any then creditors of the
Partnership, including Partners that are Partnership creditors (in
the order provided in Section 13.2(a)), and any remaining amount
shall be distributed to the other Partners then having positive
balances in their respective Capital Accounts in proportion to such
positive balances.
(b) After the death of an Electing Partner, the executor of the
estate of such an Electing Partner may elect to reduce (or eliminate)
the deficit Capital Account restoration obligation of such an
Electing Partner pursuant to Section 13.4(a). Such election may be
made by such executor by delivering to the General Partner within two
hundred seventy (270) days of the death of such an Electing Partner a
written notice setting forth the maximum deficit balance in his
Capital Account that such executor agrees to restore under Section
13.4(a), if any. If such executor does not make a timely election
pursuant to this Section 13.4(b) (whether or not the balance in his
Capital Account is negative at such time), then such Electing
partner's estate (and the beneficiaries thereof who receive
distribution of Partnership Units therefrom) shall be deemed to have
a deficit Capital Account restoration obligation as set forth
pursuant to the terms of Section 13.4(a).
(c) If the General Partner, on the date of "liquidation" of its
interest in the Partnership, within the meaning of Section 1.704-
1(b)(2)(ii)(g) of the Regulations, has a negative balance in its
Capital Account, then the General Partner shall contribute in cash to
the capital of the Partnership the amount needed to restore its
Capital Account balance to zero. Any such contribution required to
be made by the General Partner shall be made by the General Partner
on or before the later of (i) the end of the Partnership Year in
which the General Partner's interest is liquidated, or (ii) the
ninetieth (90th) calendar day following the date of such liquidation.
Notwithstanding any provision of this Agreement to the contrary, all
amounts so contributed to the capital of the Partnership in
accordance with this Section 13.4 shall be distributed in accordance
with Section 13.2(a). Regency unconditionally guarantees the
obligation of the General Partner under this Section 13.4(c) for the
benefit of the Partnership and the other Partners.
Section 13.5 Deemed Distribution and Recontribution. Notwith-
standing any other provision of this Article 13 (but subject to
Section 13.3), in the event the Partnership is liquidated within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Event of
Dissolution has occurred, the Partnership's property shall not be
liquidated, the Partnership's liabilities shall not be paid or discharged,
and the Partnership's affairs shall not be wound up. Instead, the
Partnership shall be deemed to have distributed the Property in kind to
the General Partner and Limited Partners, who shall be deemed to have
assumed and taken such property subject to all Partnership liabilities,
all in accordance with their respective Capital Accounts. Immediately
thereafter, the General Partner and Limited Partners shall be deemed to
have recontributed the Partnership property in kind to the Partnership,
which shall be deemed to have assumed and taken such property subject to
all such liabilities.
Section 13.6 Rights of Limited Partners. Except as specifically
provided in this Agreement, including Sections 7.1(a)(iii), 8.6, 8.7 and
13.4, each Limited Partner shall look solely to the assets of the
Partnership for the return of his Capital Contribution and shall have no
right or power to demand or receive property other than cash from the
Partnership. Except as specifically provided in this Agreement, no
Limited Partner shall have priority over any other Limited Partner as to
the return of his Capital Contributions, distributions, or allocations.
Section 13.7 Notice of Dissolution. In the event an Event of
Dissolution or an event occurs that would, but for the provisions of
Section 13.1, result in a dissolution of the Partnership, the General
Partner shall, within 30 days thereafter, provide written notice thereof
to each of the Partners and to all other parties with whom the Partnership
regularly conducts business (as determined in the sole and absolute
discretion of the General Partner) and shall publish notice thereof in a
newspaper of general circulation in each place in which the Partnership
regularly conducts business (as determined in the sole and absolute
discretion of the General Partner).
Section 13.8 Cancellation of Certificate of Limited Partnership.
Upon the completion of the liquidation of the Partnership as provided in
Section 13.2 hereof, the Partnership shall be terminated and the
Certificate and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be
canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.
Section 13.9 Reasonable Time for Winding-Up. A reasonable time
shall be allowed for the orderly winding-up of the business and affairs of
the Partnership and the liquidation of its assets pursuant to Section 13.2
hereof, in order to minimize any losses otherwise attendant upon such
winding-up, and the provisions of this Agreement shall remain in effect
between the Partners during the period of liquidation.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
Section 14.1 Amendments.
(a) General. Amendments to this Agreement may be proposed only
by the General Partner, who shall submit any proposed amendment
(other than an amendment pursuant to Section 14.1(b)) to the Limited
Partners. The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote
thereon and to transact any other business that it may deem
appropriate. Except as provided in Section 14.1(b), 14.1(c),
14.1(d), 14.1(e) or 14.1(f), a proposed amendment shall be adopted
and be effective as an amendment hereto if it is approved by the
General Partner and it receives (i) the Consent of the Original
Limited Partners and (ii) the Consent of the Additional Limited
Partners.
(b) General Partner's Power to Amend. Notwithstanding Section
14.1(a), the General Partner shall have the power, without the
consent of the Limited Partners, to amend this Agreement as may be
required to facilitate or implement any of the following purposes:
(i) to add to the obligations of the General Partner or
surrender any right or power granted to the General Partner or
any Affiliate of the General Partner for the benefit of the
Limited Partners;
(ii) to add to or change the name of the Partnership;
(iii) to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance with this
Agreement;
(iv) to set forth the rights, powers, duties and
preferences of the holders of any additional Partnership
Interests issued pursuant to Section 4.2;
(v) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any
material respect, or to cure any ambiguity, correct or
supplement any provision in this Agreement not inconsistent with
law or with other provisions, or make other changes with respect
to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement;
and
(vi) to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation
of a federal or state agency or contained in federal or state.
The General Partner will provide 10 days' prior written notice to the
Limited Partners when any action under this Section 14.1(b) is taken.
(c) Consent of Adversely Affected Partner Required.
Notwithstanding Section 14.1(a) hereof, this Agreement shall not be
amended without the consent of each Partner adversely affected if
such amendment would (i) convert a Limited Partner's interest in the
Partnership into a general partner's interest, (ii) modify the
limited liability of a Limited Partner, (iii) alter rights of the
Partner to receive distributions pursuant to Articles 5 or 13, or the
allocations specified in Article 6 (except as permitted pursuant to
Sections 4.2 or 4.4(c) hereof), (iv) alter or modify the Redemption
Right or Redemption Amount as set forth in Section 8.6 and related
definitions hereof, or (v) amend Sections 4.2 (issuances of
additional Partnership Interests), 7.1(a)(iii) (Section 1031
exchanges), 7.1(h) (distributions), 7.3 (restrictions on General
Partner's authority), or (vi) amend this Section 14.1(c).
(d) When Consent of Limited Partnership Interests Required.
Notwithstanding Section 14.1(a) hereof, the General Partner shall not
amend Sections 4.2 (issuances of additional Partnership Interests),
7.1(h) (distributions), 7.6 (contracts with Affiliates) or 11.2
(transfer of General Partnership Interest) without the Consent of the
Limited Partners and the General Partner shall not amend this Section
14.1(d) without the unanimous consent of the Limited Partners.
(e) When Consent of Other Limited Partners Required.
(i) Matters Relating to Briarcliff. Notwithstanding
Section 14.1(a) hereof, Section 7.1(c) (sale of Briarcliff
Village), 13.2(c) (distribution of Briarcliff Village) and this
Section 14.1(e)(i) may be amended only with the Consent of a
Majority in Interest of the Original Briarcliff Partners (as
defined in Section 7.1(c).
(ii) Matters Relating to Other Classes of Partners.
Notwithstanding Section 14.1(a) hereof, except as provided in
Section 14.1(c), any amendment that would adversely affect only
a class of Limited Partners other than the Original Limited
Partners may be amended with the Consent of such class of
Limited Partners.
(f) Security Capital Consent. So long as the Stockholders
Agreement referred to in Schedule 7.8(b) remains in effect, this
Agreement shall not be amended, modified or supplemented, in any such
case, without the prior written consent of Security Capital. Any
amendment, modification or supplement adopted without Security
Capital's consent shall be void.
Section 14.2 Meetings of Limited Partners.
(a) General. Meetings of the Limited Partners may be called
only by the General Partner. Such meeting shall be held at the
principal office of the Partnership, or at such other place as may be
designated by the General Partner. Notice of any such meeting shall
be given to all Limited Partners not less than fifteen days nor more
than sixty days prior to the date of such meeting. The notice shall
state the purpose or purposes of the meeting. Limited Partners may
vote in person or by proxy at such meeting. Whenever the vote or
consent of Limited Partners is permitted or required under this
Agreement, such vote or consent may be given at a meeting of Limited
Partners or may be given in accordance with the procedure prescribed
in Section 14.1 hereof. Except as otherwise expressly provided in
this Agreement, the consent of holders of a majority of the
Percentage Interests of the Limited Partners (other than Units held
by the General Partner, Regency or any Affiliate of Regency other
than a Property Affiliate) shall control.
(b) Actions Without a Meeting. Any action required or
permitted to be taken at a meeting of the Limited Partners may be
taken without a meeting if a written consent setting forth the action
so taken is signed by a majority of the Percentage Interests of the
Limited Partners (other than Units held by the General Partner,
Regency or any Affiliate of Regency other than a Property Affiliate)
(or such other percentage as is expressly required by this
Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a
majority of the Percentage Interests of the Original Limited Partners
(other than Units held by the General Partner, Regency or any
Affiliate of Regency other than a Property Affiliate)(or such other
percentage as is expressly required by this Agreement). Such consent
shall be filed with the General Partner. An action so taken shall be
deemed to have been taken at a meeting held on the effective date so
certified.
(c) Proxy. Each Limited Partner may authorize any Person or
Persons to act for him by proxy on all matters in which a Limited
Partner is entitled to participate, including waiving notice of any
meeting, or voting or participating at a meeting. Every proxy must
be signed by the Limited Partner or his attorney-in-fact. No proxy
shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Limited Partner executing it.
(d) Conduct of Meeting. Each meeting of Limited Partners shall
be conducted by the General Partner or such other Person as the
General Partner may appoint pursuant to such rules for the conduct of
the meeting as the General Partner or such other Person deems
appropriate.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice. All notices and demands under
this Agreement shall be in writing, and may be either delivered personally
(which shall include deliveries by courier) by U.S. mail or a nationally
recognized overnight courier, by telefax, telex or other wire transmission
(with request for assurance of receipt in a manner appropriate with
respect to communications of that type; provided, that a confirmation copy
is concurrently sent by a nationally recognized express courier for
overnight delivery) or mailed, postage prepaid, by certified or registered
mail, return receipt requested, directed to the parties at their
respective addresses set forth on Exhibit A attached hereto, as it may be
amended from time to time, and, if to the Partnership, such notices and
demands sent in the aforesaid manner must be delivered at its principal
place of business set forth above. Notices and demands shall be effective
upon receipt. Any party hereto may designate a different address to which
notices and demands shall thereafter be directed by written notice given
in the same manner and directed to the Partnership at its office
hereinabove set forth.
Section 15.2 Titles and Captions. All article or section titles or
captions in this Agreement are for convenience only. They shall not be
deemed part of this Agreement and in no way define, limit, extend or
describe the scope or intent of any provisions hereof. Except as
specifically provided otherwise, references to "Articles" and "Sections"
are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals. Whenever the context may
require, any pronoun used in this Agreement shall include the
corresponding masculine, feminine or neuter forms, and the singular form
of nouns, pronouns and verbs shall include the plural and vice versa.
Section 15.4 Further Action. The parties shall execute and deliver
all documents, provide all information and take or refrain from taking
action as may be necessary or appropriate to achieve the purposes of this
Agreement.
Section 15.5 Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.
Section 14.1(f) shall inure to the benefit of Security Capital.
Section 15.6 Waiver of Partition. The Partners hereby agree that
the Partnership properties are not and will not be suitable for partition.
Accordingly, each of the Partners hereby irrevocably waives any and all
rights (if any) that it may have to maintain any action for partition of
any of the Partnership properties.
Section 15.7 Entire Agreement. This Agreement supersedes any prior
agreements or understandings among the parties with respect to the matters
contained herein and it may not be modified or amended in any manner other
than pursuant to Article 14. Matters (including but not limited to
Redemption Rights) affecting Additional Limited Partners who are admitted
to the Partnership from time to time may be set forth from time to time in
separate agreements, provided that such agreements would not require the
consent of any other Limited Partners if included as part of this
Agreement, and in the event of any inconsistency between this Agreement
and any such separate agreement permitted hereunder, the provisions of the
separate agreement shall control.
Section 15.8 Remedies Not Exclusive. Any remedies herein contained
for breaches of obligations hereunder shall not be deemed to be exclusive
and shall not impair the right of any party to exercise any other right or
remedy, whether for damages, injunction or otherwise.
Section 15.9 Time. Time is of the essence of this Agreement.
Section 15.10 Creditors. None of the provisions of this Agreement
shall be for the benefit of, or shall be enforceable by, any creditor of
the Partnership.
Section 15.11 Waiver. No failure by any party to insist upon the
strict performance of any covenant, duty, agreement or condition of this
Agreement or to exercise any right or remedy consequent upon a breach
thereof shall constitute waiver of any such breach or any other covenant,
duty, agreement or condition.
Section 15.12 Execution Counterparts. This Agreement may be
executed in counterparts, all of which together shall constitute one
agreement binding on all the parties hereto, notwithstanding that all such
parties are not signatories to the original or the same counterpart.
Section 15.13 Applicable Law. This Agreement shall be construed in
accordance with and governed by the laws and judicial decisions of the
State of Delaware, without regard to the principles of conflicts of law.
Section 15.14 Invalidity of Provisions. If any provision of this
Agreement is or becomes invalid, illegal or unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions
contained herein shall not be affected thereby.
ARTICLE 16
POWER OF ATTORNEY
Section 16.1 Power of Attorney.
(a) Scope. Each Limited Partner and each Assignee hereby
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 and
resubstitution, 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, acknowledge, deliver, file and
record in the appropriate public offices (1) all certificates,
documents and other instruments (including, without limitation,
this Agreement and the Certificate and all amendments 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) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or
own property; (2) all instruments that the General Partner deems
appropriate or necessary to reflect any amendment, change,
modification or restatement of this Agreement in accordance with
its terms; (3) all conveyances and other instruments or
documents that the General Partner 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; (4) all
instruments or documents and all certificates and
acknowledgments relating to any mortgage, pledge, or other form
of encumbrance in connection with any loan or other financing to
the General Partner as provided by Section 7.1(a)(iii); (5) all
instruments relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to, or other events
described in, Article 11, 12 or 13 hereof or the Capital
Contribution of any Partner; (6) all certificates, documents and
other instruments relating to the determination of the rights,
preferences and privileges of Partnership Interests; and (7) all
financing statements, continuation statements and similar
documents which the General Partner deems appropriate to perfect
and to continue perfection of the security interest referred to
in Section 5.3; and
(ii) execute, swear to, acknowledge and file all ballots,
consents, approvals, waivers, certificates and other instruments
appropriate or necessary, to evidence, confirm or ratify any
vote, consent, approval, agreement or other action which is made
or given by the Partners hereunder or is consistent with the
terms of this Agreement or appropriate or necessary, to
effectuate the terms or intent of this Agreement.
Nothing contained herein shall be construed as authorizing the
General Partner to amend this Agreement except in accordance with
Article 14 hereof or as may be otherwise expressly provided for in
this Agreement.
(b) Additional Power of Attorney of Limited Partners. Each
Original Limited Partner hereby grants to the General Partner and any
Liquidator and authorizes officers and attorneys-in-fact of such
Persons, and each of those acting singly, in each case with full
power of substitution and resubstitution, as its true and lawful
agent and attorney-in-fact, with full power and authority in its
name, place and stead to execute and file in such Original Limited
Partner's name any financing statements, continuation statements and
similar documents and to perform all other acts which the General
Partner deems appropriate to perfect and to continue perfection of
the security interest in the Pledged Units referred to in Section
8.6(f). Each Additional Limited Partner hereby grants to the General
Partner and any Liquidator and authorizes officers and attorneys-in-
fact of such Persons, and each of those acting singly, in each case
with full power of substitution and resubstitution, as its true and
lawful agent and attorney-in-fact, with full power and authority in
its name, place and stead to execute and file in such Additional
Limited Partner's name any financing statements, continuation
statements and similar documents and to perform all other acts which
the General Partner deems appropriate to perfect and to continue
perfection of the security interest in any Pledged Units owned by
such Additional Limited Partner.
(c) Irrevocability. The foregoing power of attorney is hereby
declared to be irrevocable and a power coupled with an interest, in
recognition of the fact that each of the Partners will be relying
upon the power of the General Partner and any 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 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, acting
in good faith pursuant to such power of attorney; and each such
Limited Partner or Assignee hereby waives any and all defenses which
may be available to contest, negate or disaffirm the action of the
General Partner, 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 request therefor, such further designations,
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.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first written above.
GENERAL PARTNER:
REGENCY REALTY CORPORATION
By: /s/ Bruce M. Johnson
Name: Bruce M. Johnson
Title: Managing Director
SECURITY CAPITAL U.S. REALTY,
a Luxembourg corporation
By: /s/ Gerald Morgan
Name: Gerald Morgan
Title: Senior Vice President
SECURITY CAPITAL HOLDINGS, S.A.,
a Luxembourg corporation
By: /s/ Gerald Morgan
Name: Gerald Morgan
Title: Senior Vice President
Third Party Management Assets
MIDLAND DEVELOPMENT GROUP, INC.,
a Missouri Corporation
By: /s/ Lee S. Wielansky
Lee S. Wielansky, President
OTR Eastern Properties
Bent Tree Plaza (North Carolina)
Westchester Plaza (Ohio)
Hamilton Meadows (Ohio)
Brookville Plaza (Virginia)
Lakeshore (Michigan)
Evans Crossing (Georgia)
Statler Square (Virginia)
Kernersville Marketplace (North Carolina)
Maynard Crossing (North Carolina)
Shoppes at Mason (Ohio)
Lake Pine Plaza (North Carolina)
OTR/MIDLAND REALTY HOLDINGS, LTD.,
an Ohio Limited Liability Company
By: Midland Realty Holdings L.L.C.,
a Missouri Limited Liability Company,
Managing Member
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Managing Member
Beckett Commons Shopping Center
No. 1712
BECKETT PARTNERS LIMITED PARTNER-
SHIP, an Ohio Limited Partnership
By: Midland-Beckett Limited Partnership,
a Missouri Limited Partnership, General
Partner
By: Beckett Equities, Inc., a Missouri
Corporation, General Partner
By: /s/ Lee S. Wielansky
Lee S. Wielansky, President
East Pointe Shopping Center
No. 1709
REYNOLDSBURG PARTNERS,
an Ohio General Partnership
By: Midland Reynoldsburg Development
Company Limited Partnership, a
Missouri Limited Partnership, Managing
General Partner
By: Reynoldsburg Equities, Inc., a
Missouri Corporation, General
Partner
By: /s/ Lee S. Wielansky
Lee S. Wielansky
Managing Member
Franklin Square
No. 1705
MIDLAND FRANKFORT DEVELOPMENT CO.
L.L.C., a Kentucky Limited Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
By: /s/ Ned M. Brickman
Ned M. Brickman, Manager
By: /s/ Stephen M. Notestine
Stephen M. Notestine, Manager
Maxtown Road Shopping Center
No. 1710
MAXTOWN PARTNERS, LTD.,
an Ohio Limited Liability Company
By: Maxtown Development Company L.L.C.,
a Missouri Limited Liability Company,
Voting Member
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Managing Member
By: /s/ Ned M. Brickman
Ned M. Brickman, Managing Member
St. Ann Square
No. 1706
K & M DEVELOPMENT COMPANY,
a Missouri General Partnership
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Managing Partner
Worthington Park Centre
No. 1711
WORTHINGTON DEVELOPMENT COMPANY,
an Ohio General Partnership
By: /s/ Ned M. Brickman
Ned M. Brickman, Managing General
Partner
Acquisition Contracts
MIDLAND ACQUISITIONS, INC.
By: /s/ Lee S. Wielansky
Lee S. Wielansky, President
Acquisition Contracts
MIDLAND RALEIGH ACQUISITIONS, LLC,
a North Carolina Limited Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Acquisition Contracts
MIDLAND DALLAS ACQUISITIONS, INC.
By: /s/ Lee S. Wielansky
Lee S. Wielansky, President
Acquisition Contracts
MIDLAND MICHIGAN ACQUISITIONS, INC.
By: /s/ Lee S. Wielansky
Lee S. Wielansky, President
Monument
MIDLAND MONUMENT DEVELOPMENT
COMPANY, a Colorado Limited
Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Cheyenne, WY
MIDLAND CHEYENNE, WY DEVELOPMENT
COMPANY, a Wyoming Limited
Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Charlottesville
MIDLAND CHARLOTTESVILLE DEVELOP-
MENT COMPANY, a Virginia Limited
Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Waterford
MIDLAND WATERFORD DEVELOPMENT
COMPANY, a Michigan Limited
Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Parker/Stroh
MIDLAND PARKER DEVELOPMENT
LLC, a Colorado Limited
Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Manager
Creekside
Village Center
Garner
Windmiller
MIDLAND REALTY HOLDINGS, L.L.C.,
a Missouri Limited Liability Company
By: /s/ Lee S. Wielansky
Lee S. Wielansky, Managing Member
EXHIBIT A
PARTNERS, CONTRIBUTIONS, UNITS AND
PARTNERSHIP INTERESTS
[TO BE ATTACHED]
SCHEDULE 7.8(b)
REGENCY'S PFIC OBLIGATIONS
SCHEDULE 8.6(a)
TRANSFER RESTRICTIONS IN REGENCY'S
ARTICLES OF INCORPORATION
SCHEDULE 13.4(a)
ELECTING PARTNERS WITH DEFICIT
CAPITAL ACCOUNT MAKE-UP REQUIREMENT
[to be completed prior to execution]