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Exhibit 3.3(b)
FOURTH AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
RFS PARTNERSHIP, L.P.
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TABLE OF CONTENTS
Page
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ARTICLE I
DEFINED TERMS..................................................................... 1
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION....................................... 9
2.01 Continuation..................................................... 9
2.02 Name, Office and Registered Agent................................ 9
2.03 Partners......................................................... 9
2.04 Term and Dissolution............................................. 9
2.05 Filing of Certificate and Perfection of Limited Partnership...... 10
ARTICLE III
BUSINESS OF THE PARTNERSHIP....................................................... 10
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS................................................ 11
4.01 Capital Contributions............................................ 11
4.02 Additional Capital Contributions and Issuances of Additional
Partnership Interests............................................ 11
4.03 General Partner Loans............................................ 14
4.04 Capital Accounts................................................. 15
4.05 PERCENTAGE INTERESTS............................................. 15
4.06 No Interest on Contributions..................................... 15
4.07 Return of Capital Contributions.................................. 16
4.08 No Third Party Beneficiary....................................... 16
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS................................................. 16
5.01 Allocation of Profit and Loss.................................... 16
5.02 Distribution of Cash............................................. 20
5.03 REIT Distribution Requirements................................... 20
5.04 No Right to Distributions in Kind................................ 21
5.05 Limitations on Return of Capital Contributions................... 21
5.06 Distributions Upon Liquidation................................... 21
5.07 Substantial Economic Effect...................................... 22
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ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER..................................................... 22
6.01 Management of the Partnership.................................... 22
6.02 Delegation of Authority.......................................... 24
6.03 Indemnification and Exculpation of Indemnitees................... 25
6.04 Liability of the General Partner................................. 26
6.05 Expenditures by the Partnership.................................. 27
6.06 Outside Activities............................................... 27
6.07 Optional Conversion of Series A Preferred Shares................. 28
6.08 Redemption Right With Respect To Preferred Partnership Units..... 28
6.09 Employment or Retention of Affiliates............................ 30
6.10 Loans to the Partnership......................................... 30
6.11 Loans to the General Partner..................................... 30
6.12 General Partner Participation.................................... 30
ARTICLE VII
CHANGES IN GENERAL PARTNER........................................................ 31
7.01 Transfer of the General Partner's Partnership Interest........... 31
7.02 Admission of a Substitute or Successor General................... 32
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a
General Partner.................................................. 33
7.04 Removal of a General Partner..................................... 33
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS........................................................... 34
8.01 Management of the Partnership.................................... 34
8.02 Power of Attorney................................................ 35
8.03 Limitation on Liability of Limited Partners...................... 35
8.04 Ownership by Limited Partner of Corporate General Partner or
Affiliate........................................................ 35
8.05 Limited Partner Redemption Right................................. 35
8.06 Registration..................................................... 37
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS........................................ 42
9.01 Purchase for Investment.......................................... 42
9.02 Restrictions on Transfer of Limited Partnership Interests........ 42
9.03 Admission of Substitute Limited Partner.......................... 43
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9.04 Rights of Assignees of Partnership Interests..................... 45
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a
Limited Partner.................................................. 45
9.06 Joint Ownership of Interests..................................... 45
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS........................................ 46
10.01 Books and Records................................................ 46
10.02 Custody of Partnership Funds; Bank Accounts...................... 46
10.03 Fiscal and Taxable Year.......................................... 46
10.04 Annual Tax Information and Report................................ 46
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.... 47
10.06 Reports to Limited Partners...................................... 47
ARTICLE XI
AMENDMENT OF AGREEMENT............................................................ 48
ARTICLE XII
GENERAL PROVISIONS................................................................ 48
12.01 Notices.......................................................... 48
12.02 Survival of Rights............................................... 49
12.03 Additional Documents............................................. 49
12.04 Severability..................................................... 49
12.05 Entire Agreement................................................. 49
12.06 Pronouns and Plurals............................................. 49
12.07 Headings......................................................... 49
12.08 Counterparts..................................................... 49
12.09 Governing Law.................................................... 49
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FOURTH AMENDED AND RESTATED AGREEMENT
OF LIMITED PARTNERSHIP
OF
RFS PARTNERSHIP, L.P.
RECITALS
RFS Partnership, L.P. (the "Partnership") was formed as a limited
partnership under the laws of the State of Tennessee by a Certificate of Limited
Partnership filed with the Secretary of State of the State of Tennessee on
August 3, 1993. The Partnership was governed originally by an agreement of
limited partnership maintained at the offices of the Partnership (the "Original
Agreement"). The parties to the Original Agreement were RFS Hotel Investors,
Inc., a Tennessee corporation (the "Company" and in its capacity as the General
Partner, the "General Partner"), and RFS, Inc. (in its capacity as the Original
Limited Partner, the "Original Limited Partner"). The Original Agreement was
amended and restated on August 13, 1993 (the "First Amended and Restated
Agreement") (i) to admit Limited Partners to the Partnership and (ii) to provide
for the withdrawal of the Original Limited Partner. The First Amended and
Restated Agreement was amended on November 19, 1993 (the "First Amendment to the
First Amended and Restated Agreement") to change the cash distribution
provisions. The First Amendment to the First Amended and Restated Agreement was
amended and restated on August 24, 1994 (the "Second Amended and Restated
Agreement") to admit additional Limited Partners (the "Class B Limited
Partners") to the Partnership. The Second Amended and Restated Agreement was
amended and restated on February 27, 1996 (the "Third Amended and Restated
Agreement") to (i) issue to itself a preferred general partnership interest and
(ii) to restate the Second Amended and Restated Agreement in its entirety. The
General Partner now desires to (i) admit additional Class B Limited Partners to
the Partnership, (ii) amend certain provisions relating to allocations of items
of income, gain and loss on liquidation of the Partnership and (iii) to restate
the Third Amended and Restated Agreement in its entirety.
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree to amend the Third Amended and Restated Agreement to read in its entirety
as follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings
specified below:
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"ACT" means the Tennessee Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"ADMINISTRATIVE EXPENSES" means (i) all administrative and operating costs
and expenses incurred by the Partnership, (ii) all administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers and/or employees of the General Partner, and any accounting
and legal expenses of the General Partner, which expenses, the Partners have
agreed, are expenses of the Partnership and not the General Partner, and (iii)
to the extent not included in clause (ii) above, REIT Expenses; provided,
however, that Administrative Expenses shall not include any administrative
expenses incurred by the General Partner that are attributable to Properties
owned by the General Partner directly, or to activities of the General Partner
not related to the Partnership, the allocation of such administrative expenses
between the Partnership and the General Partner shall be determined by the
Partnership's independent accounting firm.
"AFFILIATE" means, (i) any Person that, directly or indirectly, controls or
is controlled by or is under common control with such Person, (ii) any other
Person that owns, beneficially, directly or indirectly, 5% or more of the
outstanding capital stock, shares or equity interests of such Person, or (iii)
any officer, director, employee, partner or trustee of such Person or any Person
controlling, controlled by or under common control with such Person (excluding
trustees and persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, "control"
(including the correlative meanings of the terms "controlled by" and "under
common control with"), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.
"AGREED VALUE" means the fair market value of a Partner's non-cash Capital
Contribution as of the date of its contribution to the Partnership as agreed to
by the contributing Partner and the General Partner. For purposes of this
Agreement, unless the General Partner in its sole discretion determines
otherwise, the Agreed Value of a Partner's non-cash Capital Contribution shall
be equal to the number of Partnership Units received by such Partner in exchange
for such contribution, multiplied by the "Market Price" on the date of
contribution calculated in accordance with the second and third sentences of the
definition of "Cash Amount." The names and addresses of the Partners, the number
of Partnership Units issued to each Partner, and the Agreed Value of non-cash
Capital Contributions is set forth on Exhibit A attached hereto ("Exhibit A").
"AGREEMENT" means this Fourth Amended and Restated Agreement of Limited
Partnership of the Partnership.
"CAPITAL ACCOUNT" has the meaning provided in Section 4.04 hereof.
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"CAPITAL CONTRIBUTION" means the total amount of capital initially
contributed or agreed to be contributed, as the context requires, to the
Partnership by each Partner pursuant to the terms of the Agreement. Any
reference to the Capital Contribution of a Partner shall include the Capital
Contribution made by a predecessor holder of the Partnership Interest of such
Partner. The paid-in Capital Contribution shall mean the cash amount or the
Agreed Value of other assets actually contributed by each Partner to the capital
of the Partnership.
"CAPITAL TRANSACTION" means the refinancing, sale, exchange, condemnation,
recovery of a damage award or insurance proceeds (other than business or rental
interruption insurance proceeds not reinvested in the repair or reconstruction
of Properties), or other disposition of any Property (or the Partnership's
interest therein).
"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the
value of the REIT Shares Amount on the date of receipt by the General Partner of
a Notice of Redemption. The value of the REIT Shares Amount shall be based on
the average of the daily market price of REIT Shares for the ten consecutive
trading days immediately preceding the date of such valuation. The market price
for each such trading day shall be: (i) if the REIT Shares are listed or
admitted to trading on any securities exchange or the Nasdaq-Stock Market, the
sale price, regular way, on such day, or if no sale takes place on such day, the
average of the closing bid and asked prices, regular way, on such day, (ii) if
the REIT Shares are 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 REIT Shares are 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 ten days prior to
the date in question, the value of the REIT Shares shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event the REIT Shares Amount includes rights that a holder of REIT Shares would
be entitled to receive, then the value of such rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"CERTIFICATE" means any instrument or document that is required under the
laws of the State of Tennessee, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Tennessee or such
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other jurisdiction to perfect or maintain the Partnership as a limited
partnership, to effect the admission, withdrawal, or substitution of any Partner
of the Partnership, or to protect the limited liability of the Limited Partners
as limited partners under the laws of the State of Tennessee or such other
jurisdiction.
"CHARTER" means the Charter of the General Partner filed with the Secretary
of State of the State of Tennessee on August 3, 1993, as amended and restated on
August 3, 1993, January 31, 1995, and February 27, 1996, and as further amended
or restated from time to time.
"CLASS A LIMITED PARTNER" means any Person named as a Class A Limited
Partner on Exhibit A, and any Person who becomes a Substitute or additional
Class A Limited Partner, in such Person's capacity as a Class A Limited Partner
in the Partnership.
"CLASS B LIMITED PARTNER" means any Person named as a Class B Limited
Partner on Exhibit A, and any Person who becomes a Substitute or additional
Class B Limited Partner, in such Person's capacity as a Class B Limited Partner
in the Partnership.
"CODE" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code as of the date hereof and any
successor provision of the Code.
"COMMISSION" means the United States Securities and Exchange Commission.
"COMPANY" means RFS Hotel Investors, Inc., a Tennessee corporation.
"CONVERSION FACTOR" means one (1), provided that in the event that the
General Partner (i) declares or pays a dividend on its outstanding REIT Shares
in REIT Shares or makes a distribution to all holders of its outstanding REIT
Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii)
combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination (assuming for such purposes that such dividend, distribution,
subdivision or combination has occurred as of such time), and the denominator of
which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date. Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
such event retroactive to the record date, if any, for such event.
"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition for
relief as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978
or similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same
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or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings relating to such
Person as a debtor under any other reorganization, arrangement, insolvency,
adjustment of debt or liquidation law of any jurisdiction, whether now in
existence or hereinafter in effect, either by such Person or by another,
provided that if such proceeding is commenced by another, such Person indicates
his approval of such proceeding, consents thereto or acquiesces therein, or such
proceeding is contested by such Person and has not been finally dismissed within
90 days.
"GENERAL PARTNER" means RFS Hotel Investors, Inc. and any Person who
becomes a substitute or additional General Partner as provided herein, and any
of their successors as General Partner.
"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by a
General Partner that is a general partnership interest.
"HOTELS" means hotel properties owned by the Partnership from time to time.
"INDEMNITEE" means (i) any Person made a party to a proceeding by reason of
his status as the General Partner or a director or officer of the Partnership or
the General Partner, and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from
time to time, in its sole and absolute discretion.
"INDEPENDENT DIRECTOR" means a Director of the Company who is not an
officer or employee of the Company or an Affiliate of (i) any advisor to the
Company under an advisory agreement, (ii) any lessee of any Property, (iii) any
subsidiary of the Company, or (iv) any partnership which is an Affiliate of the
Company.
"LIMITED PARTNER" means any Person named as a Class A Limited Partner or a
Class B Limited Partner on Exhibit A, and any Person who becomes a Substitute or
additional Class A Limited Partner or Class B Limited Partner, in such Person's
capacity as a Class A Limited Partner or a Class B Limited Partner in the
Partnership.
"LIMITED PARTNER REDEMPTION RIGHT" has the meaning provided in Section
8.05(a) hereof.
"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a Limited
Partner in the Partnership at any particular time, including the right of such
Limited Partner to any and all benefits to which such Limited Partner may be
entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act.
"LOSS" has the meaning provided in Section 5.01(h) hereof.
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"MINIMUM LIMITED PARTNERSHIP INTEREST" means the lesser of (i) 1% or (ii)
if the total Capital Contributions to the Partnership exceed $50 million, 1%
divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.
"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit B hereto.
"PARTNER" means any General Partner or Limited Partner.
"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"PARTNERSHIP INTEREST" means an ownership interest in the Partnership held
by either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner's share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
"PARTNERSHIP RECORD DATE" means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.02 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its shareholders of some or all of its portion of
such distribution.
"PARTNERSHIP REDEMPTION RIGHT" has the meaning provided in Section 6.08(b)
hereof.
"PARTNERSHIP UNIT" means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. The allocation of Partnership Units
among the Partners shall be as set forth on Exhibit A, as may be amended from
time to time.
"PERCENTAGE INTEREST" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by such Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on Exhibit A, as
may be amended from time to time.
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"PERSON" means any individual, partnership, corporation, joint venture,
trust or other entity.
"PREFERENCE VALUE PER UNIT" means, with respect to the Preferred
Partnership Units held by the General Partner, the initial preference value of
$19 per Preferred Partnership Unit.
"PREFERRED PARTNERSHIP INTEREST" means an ownership interest in the
Partnership held by the General Partner and includes any and all benefits to
which the holder of such a Preferred 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.
"PREFERRED PARTNERSHIP UNIT" means a fractional, undivided share of the
Preferred Partnership Interests issued hereunder. The allocation of Preferred
Partnership Units among the Partners shall be as set forth on Exhibit A, as may
be amended from time to time.
"PREFERRED RETURN" means a fixed per annum rate of $1.45 per Preferred
Partnership Unit. The General Partner's Preferred Return (i) shall be
cumulative, (ii) if unpaid, shall accrue interest at an annual rate of 7.6%, and
(iii) shall be prorated for any partial calendar quarter.
"PREFERRED SHARE" means a share of preferred stock of the General Partner.
"PROFIT" has the meaning provided in Section 5.01(h) hereof.
"PROPERTY" means any hotel property or other investment in which the
Partnership holds an ownership interest.
"REDEEMING LIMITED PARTNER" has the meaning provided in Section 8.05(a)
hereof.
"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares Amount,
as selected by the General Partner in its sole discretion pursuant to Section
8.05(b) hereof.
"REGULATIONS" means the Federal Income Tax Regulations issued under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through 860
of the Code.
"REIT EXPENSES" means (i) costs and expenses relating to the formation and
continuity of existence of the General Partner and any Subsidiaries thereof
(which Subsidiaries shall, for purposes of this definition, be included within
the definition of General
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Partner), including taxes, fees and assessments associated therewith, any and
all costs, expenses or fees payable to any director, officer, or employee of the
General Partner, (ii) costs and expenses relating to the public offering and
registration of securities by the General Partner and all statements, reports,
fees and expenses incidental thereto, including underwriting discounts and
selling commissions applicable to any such offering of securities, (iii) costs
and expenses associated with the preparation and filing of any periodic reports
by the General Partner under federal, state or local laws or regulations,
including filings with the Commission, (iv) costs and expenses associated with
compliance by the General Partner with laws, rules and regulations promulgated
by any regulatory body, including the Commission, and (v) all other operating or
administrative costs of the General Partner incurred in the ordinary course of
its business on behalf of the Partnership.
"REIT SHARE" means a share of the common stock of the General Partner, par
value $.01 per share.
"REIT SHARES AMOUNT" shall mean a number of REIT Shares equal to the
product of the number of Partnership Units offered for redemption by a Redeeming
Limited Partner, multiplied by the Conversion Factor; provided that in the event
the General Partner issues to all holders of REIT Shares rights, options,
warrants or convertible or exchangeable securities entitling the shareholders to
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, the "rights"), then the REIT Shares Amount shall also include
such rights that a holder of that number of REIT Shares would be entitled to
receive.
"SERIES A PREFERRED SHARE" means a share of convertible preferred stock,
Series A, of the General Partner.
"SERVICE" means the Internal Revenue Service.
"SPECIFIED REDEMPTION DATE" means the first business day of the month that
is at least 5 business days after the receipt by the General Partner of the
Notice of Redemption (or any other date agreed to by the General Partner and the
Redeeming Limited Partner).
"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.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the Partnership
as a Limited Partner pursuant to Section 9.03 hereof.
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ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01 CONTINUATION. The Partners hereby agree to continue the Partnership
pursuant to the Act and upon the terms and conditions set forth in this
Agreement.
2.02 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership shall
be RFS Partnership, L.P. The specified office and place of business of the
Partnership shall be 889 Ridge Lake Blvd., Suite 100, Memphis, Shelby County,
Tennessee 38120. The General Partner may at any time change the location of such
office, provided the General Partner gives notice to the Partners of any such
change. The name and address of the Partnership's registered agent is Robert M.
Solmson, 889 Ridge Lake Blvd., Suite 100, Memphis, Shelby County, Tennessee
38120. The sole duty of the registered agent as such is to forward to the
Partnership any notice that is served on him as registered agent.
2.03 PARTNERS.
(a) The General Partner of the Partnership is RFS Hotel Investors,
Inc. Its principal place of business shall be the same as that of the
Partnership.
(b) The Limited Partners shall be those Persons identified as Limited
Partners on Exhibit A, as amended from time to time.
2.04 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in full force and
effect until December 31, 2050, except that the Partnership shall be dissolved
upon the happening of any of the following events:
(i) The occurrence of an Event of Bankruptcy as to a General
Partner or the dissolution, death or withdrawal of a General Partner
unless the business of the Partnership is continued pursuant to
Section 7.03(b) hereof; provided that if a General Partner is on the
date of such occurrence a partnership, the dissolution of such General
Partner as a result of the dissolution, death, withdrawal, removal or
Event of Bankruptcy of a partner in such partnership shall not be an
event of dissolution of the Partnership if the business of such
General Partner is continued by the remaining partner or partners,
either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this
Agreement;
(ii) The passage of 90 days after the sale or other disposition
of all or substantially all the assets of the Partnership (provided
that if the
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Partnership receives an installment obligation as consideration for
such sale or other disposition, the Partnership shall continue, unless
sooner dissolved under the provisions of this Agreement, until such
time as such note or notes are paid in full);
(iii) The redemption of all Limited Partnership Interests (other
than any of such interests held by the General Partner); or
(iv) The election by the General Partner that the Partnership
should be dissolved.
(b) Upon dissolution of the Partnership (unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind according to the order of priority set forth in Section 5.06
hereof.
2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the Partnership
is (i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act; provided, however, that such business
shall be limited and conducted in such a manner as to permit the General Partner
at all times to be classified as a REIT, unless the General Partner otherwise
ceases to qualify as a REIT, (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. The General Partner shall
also be empowered to do any and all acts and things necessary or prudent to
ensure that the Partnership will not be classified as a "publicly traded
partnership" for purposes of Section 7704 of the Code.
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ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 CAPITAL CONTRIBUTIONS. The General Partner has contributed to the
capital of the Partnership cash in the amounts set forth on Exhibit A. The Class
A Limited Partners have contributed the Class A Limited Partners' proportionate
ownership interests in certain Hotels to the capital of the Partnership. The
Class B Limited Partners have contributed the Class B Limited Partners'
proportionate ownership interests in certain Hotels to the capital of the
Partnership. The Agreed Values of the Partners' Capital Contributions are as set
forth opposite their names on Exhibit A.
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in this Section 4.02 or in Section
4.03 hereof, the Partners shall have no right or obligation to make any
additional Capital Contributions or loans to the Partnership. The General
Partner may contribute additional capital to the Partnership, from time to time,
and receive additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.02.
(a) Issuances of Additional Partnership Interests.
(i) General. The General Partner is hereby authorized to cause
the Partnership to issue such additional Partnership Interests in the
form of Partnership Units for any Partnership purpose at any time or
from time to time, to the Partners (including the General Partner) or
to other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole
and absolute discretion, all without the approval of any Limited
Partners. Any additional Partnership Interests issued thereby may be
issued in one or more classes, or one or more series of any of such
classes, with such designations, preferences and relative,
participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partnership
Interests, all as shall be determined by the General Partner in its
discretion based upon its good faith determination that the
Partnership will receive adequate consideration therefor and without
the approval of any Limited Partner, subject to Tennessee law,
including, without limitation, (i) the allocation of items of
Partnership income, gain, loss, deduction and credit to each such
class or series of Partnership Interests; (ii) the right of each such
class or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the
Partnership; provided, however, that no additional Partnership
Interests shall be issued to the General Partner unless either:
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(1)(A) the additional Partnership Interests are issued in
connection with an issuance of shares of or other interests in
the General Partner, which shares or interests have designations,
preferences and other rights, all such that the economic
interests are substantially similar to the designations,
preferences and other rights of the additional Partnership
Interests issued to the General Partner by the Partnership in
accordance with this Section 4.02 and (B) except as provided in
Section 4.02(a)(ii) hereof, the General Partner shall make a
Capital Contribution to the Partnership in an amount equal to the
proceeds raised in connection with the issuance of such shares of
or other interests in the General Partner, or
(2) the additional Partnership Interests are issued to all
Partners in proportion to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for
less than fair market value, so long as the General Partner concludes
in good faith that such issuance is in the best interests of the
General Partner and the Partnership.
(ii) Upon Issuance of New Securities. The General Partner shall
not issue any additional REIT Shares (other than REIT Shares issued in
connection with a redemption pursuant to Section 8.05 hereof),
Preferred Shares, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or
purchase REIT Shares (collectively, "New Securities") other than to
all holders of REIT Shares or Preferred Shares, respectively, unless
(A) the General Partner shall cause the Partnership to issue to the
General Partner, Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the New Securities,
and (B) the General Partner contributes the proceeds from the issuance
of such New Securities and from the exercise of rights contained in
such New Securities to the Partnership; provided, however, that the
General Partner is allowed to issue New Securities in connection with
an acquisition of a property to be held directly by the General
Partner, but if and only if, such direct acquisition and issuance of
New Securities have been approved and determined to be in the best
interests of the General Partner and the Partnership by a majority of
the Independent Directors. Without limiting the foregoing, the General
Partner is expressly authorized to issue New Securities for less than
fair market value, and to cause the Partnership to issue to the
General Partner corresponding Partnership Interests, so long as (x)
the General Partner concludes in good faith that such issuance is in
the best interests of each of the General Partner
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and the Partnership (for example, and not by way of limitation, the
issuance of REIT Shares and corresponding Partnership Units pursuant
to an employee stock purchase plan providing for employee purchases of
REIT Shares at a discount from fair market value or employee stock
options that have an exercise price that is less than the fair market
value of the REIT Shares, either at the time of issuance or at the
time of exercise), and (y) the General Partner contributes all
proceeds from such issuance to the Partnership. By way of example, in
the event the General Partner issues REIT Shares for a cash purchase
price and contributes all of the proceeds of such issuance to the
Partnership as required hereunder, the General Partner shall be issued
a number of additional Partnership Units equal to the product of (A)
the number of such REIT Shares issued by the General Partner the
proceeds of which were so contributed, multiplied by (B) a fraction,
the numerator of which is one, and the denominator of which is the
Conversion Factor in effect on the date of such contribution.
(b) Certain Deemed Contributions of Proceeds of Issuance of Shares. In
connection with any and all issuances of REIT Shares and Preferred Shares, the
General Partner shall make a Capital Contribution to the Partnership of the
proceeds raised in connection with such issuance as required above, provided
that if the proceeds actually received by the General Partner are less than the
gross proceeds of such issuance as a result of any underwriter's discount or
other expenses paid or incurred in connection with such issuance, then the
General Partner shall be deemed to have made a Capital Contribution to the
Partnership in the amount of the gross proceeds of such issuance and the
Partnership shall be deemed simultaneously to have paid such underwriting
discount and offering expenses in connection with the required issuance of
additional Partnership Units to General Partner for such Capital Contribution
pursuant to Section 4.02(a) hereof.
(c) Minimum Limited Partnership Interest. In the event that either a
redemption pursuant to Section 8.05 hereof or an additional Capital Contribution
by the General Partner would result in the Limited Partners, in the aggregate,
owning less than the Minimum Limited Partnership Interest, the General Partner
and the Limited Partners shall form another partnership and contribute
sufficient Limited Partnership Interests together with such other Limited
Partners so that such partnership owns at least the Minimum Limited Partnership
Interest.
(d) 1993 Plan. The General Partner has established the Amended and
Restated 1993 Restricted Stock and Stock Option Plan and may from time to time
establish other compensation or other incentive plans to provide incentives to
directors, executive officers and certain key employees of the General Partner
or its subsidiaries. The following examples are illustrative of the operation of
the provisions of Section 4.02(a)(ii) with respect to issuances of New
Securities to such directors, officers and employees:
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(i) If the General Partner awards REIT Shares to any such
director, officer or other employee (A) the General Partner shall, as
soon as practicable, contribute to the Partnership (to be thereafter
taken into account for the purposes of calculating any cash
distributable to the Partners) an amount equal to the price, if any,
paid to the General Partner by such party for such REIT Shares, and
(B) the General Partner shall be issued by the Partnership a number of
additional Partnership Units equal to the product of (1) the number of
such REIT Shares issued by the General Partner, multiplied by (2) a
fraction, the numerator of which is one hundred percent (100%), and
the denominator of which is the Conversion Factor in effect on the
date of such contribution.
(ii) If the General Partner awards an option or warrant relating
to REIT shares, whether or not qualifying as an incentive stock option
under the Code, to any director, officer or other employee, then the
Partnership shall grant to the General Partner a corresponding option
or warrant to acquire Partnership Units. Upon the exercise of such
option or warrant, (A) the General Partner shall, as soon as
practicable after such exercise, contribute to the capital of the
Partnership (to be thereafter taken into account for the purposes of
calculating distributable cash) an amount equal to the exercise price,
if any, paid to the General Partner by such exercising party in
connection with the exercise of the option or warrant, and (B) the
General Partner shall be issued by the Partnership a number of
additional Partnership Units equal to the product of (1) the number of
REIT Shares issued by the General Partner in satisfaction of such
exercised option or warrant, multiplied by (2) a fraction, the
numerator of which is one hundred percent (100%), and the denominator
of which is the Conversion Factor in effect on the date of such
contribution.
(iii) If the General Partner grants any director, officer or
employee share appreciation rights, performance share awards or other
similar rights ("Incentive Rights"), then simultaneously, the
Partnership shall grant to the General Partner corresponding and
economically equivalent rights. Consequently, upon the cash payment by
General Partner to its directors, officers or employees pursuant to
such Incentive Rights, the Partnership shall make an equal cash
payment to the General Partner.
4.03 GENERAL PARTNER LOANS. The General Partner may from time to time
advance funds to the Partnership for any proper Partnership purpose as a loan
("Funding Loan"), provided that any such funds must first be obtained by the
General Partner from a third party lender, and then all of such funds must be
loaned by the General Partner to the Partnership on the same terms and
conditions, including principal amount, interest rate, repayment schedule and
costs and expenses, as shall be applicable with respect to or incurred in
connection with such loan from such third party lender. Except for Funding
Loans, the
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General Partner shall not incur any indebtedness for borrowed funds; provided,
however, that upon a majority vote of the Independent Directors, any loan
proceeds received by the General Partner may be distributed to its shareholders
or other equity holders if such loan and distribution have been determined by a
majority of the Independent Directors to be necessary to enable the General
Partner to maintain its status as a REIT under Sections 856-860 of the Code.
4.04 CAPITAL ACCOUNTS. A separate capital account (a "Capital Account")
shall be established and maintained for each Partner in accordance with
Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires
additional Partnership Units in exchange for more than a de minimis Capital
Contribution, (ii) the Partnership distributes to a Partner more than a de
minimis amount of Partnership property in redemption or liquidation of
Partnership Units, or (iii) the Partnership is liquidated within the meaning of
Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the
General Partner and taking into account Section 7701(g) of the Code) in
accordance with Regulations Section 1.704-1(b)(2)(iv)(f). When the Partnership's
property is revalued by the General Partner, the Capital Accounts of the
Partners shall be adjusted in accordance with Regulations Sections
1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to
be adjusted to reflect the manner in which the unrealized gain or loss inherent
in such property (that has not been reflected in the Capital Accounts
previously) would be allocated among the Partners pursuant to Section 5.01
hereof if there were a taxable disposition of such property for its fair market
value (as determined by the General Partner and taking into account Section
7701(g) of the Code) on the date of the revaluation.
4.05 PERCENTAGE INTERESTS. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner's Percentage Interest
shall be adjusted to a percentage equal to the number of Partnership Units held
by such Partner divided by the aggregate number of outstanding Partnership
Units. If the Partners' Percentage Interests are adjusted pursuant to this
Section 4.05, the Profits and Losses for the taxable year in which the
adjustment occurs shall be allocated between the part of the year ending on the
day when the Partnership's property is revalued by the General Partner and the
part of the year beginning on the following day either (i) as if the taxable
year had ended on the date of the adjustment or (ii) based on the number of days
in each part. The General Partner, in its sole discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part shall be
based on the adjusted Percentage Interests.
4.06 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to interest
on its Capital Contribution.
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4.07 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08 NO THIRD PARTY BENEFICIARY. No creditor or other third party having
dealings with the Partnership shall have the right to enforce the right or
obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) Profit. Profit of the Partnership for each fiscal year of the
Partnership shall be allocated as follows:
(i) First, if the Partners previously have been allocated Loss
under Section 5.01(b)(v), to the Partners in accordance with their
respective Percentage Interests until the aggregate amount of Profit
allocated under this Section 5.01(a)(i) equals the aggregate amount of
Loss allocated under Section 5.01(b)(v);
(ii) Second, if the General Partner previously has been allocated
Loss under Section 5.01(b)(iv), to the General Partner until the
aggregate amount of
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Profit allocated under this Section 5.01(a)(ii) equals the aggregate
amount of Loss allocated under Section 5.01(b)(iv);
(iii) Third, if the General Partner and the Class B Limited
Partners previously have been allocated Loss under Section
5.01(b)(iii), to the General Partner and the Class B Limited Partners
in proportion to their Percentage Interests until the aggregate amount
of Profit allocated under this Section 5.01(a)(iii) equals the
aggregate amount of Loss allocated under Section 5.01(b)(iii);
(iv) Fourth, if the Class A Limited Partners previously have been
allocated Loss under Section 5.01(b)(ii), to the Class A Limited
Partners in proportion to their Percentage Interests until the
aggregate amount of Profit allocated under this Section 5.01(a)(iv)
equals the aggregate amount of Loss allocated under Section
5.01(b)(ii);
(v) Fifth, to the General Partner until the aggregate amount of
Profit allocated to the General Partner under this Section 5.01(a)(v)
for the current and all prior years equals the aggregate amount of
cash distributed to the General Partner under Section 5.02(a)(i) for
the current and all prior years;
(vi) Sixth, to the General Partner and the Class B Limited
Partners in proportion to their Percentage Interests until the
aggregate amount of Profit allocated to the General Partner and the
Class B Limited Partners under this Section 5.01(a)(vi) for the
current and all prior years equals the aggregate amount of cash
distributed to the General Partner and the Class B Limited Partners
under Section 5.02(a)(ii) for the current and all prior years;
(vii) Seventh, to the Class A Limited Partners in proportion to
their Percentage Interests until the aggregate amount of Profit
allocated to the Class A Limited Partners under this Section
5.01(a)(vii) for the current and all prior years equals the aggregate
amount of cash distributed to the Class A Limited Partners under
Section 5.02(a)(iii) for the current and all prior years; and
(viii) Thereafter, any remaining Profit shall be allocated among
the Partners in accordance with their respective Percentage Interests.
(b) Loss. Loss of the Partnership for each fiscal year of the
Partnership shall be allocated as follows:
(i) First, if the Partners previously have been allocated Profit
under Section 5.01(a)(viii), Loss shall be allocated among the
Partners in accordance with their respective Percentage Interests
until the aggregate amount of Loss
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allocated under this Section 5.01(b)(i) equals the aggregate amount of
Profit allocated under Section 5.01(a)(viii);
(ii) Second, if the Class A Limited Partners previously have been
allocated Profit under Section 5.01(a)(vii), Loss shall be allocated
to the Class A Limited Partners in proportion to their Percentage
Interests until the aggregate amount of Loss allocated under this
Section 5.01(b)(ii) equals the aggregate amount of Profit allocated
under Section 5.01(a)(vii);
(iii) Third, if the General Partner and the Class B Limited
Partners previously have been allocated Profit under Section
5.01(a)(vi), Loss shall be allocated to the General Partner and the
Class B Limited Partners in proportion to their Percentage Interests
until the aggregate amount of Loss allocated under this Section
5.01(b)(iii) equals the aggregate amount of Profit allocated under
Section 5.01(a)(vi);
(iv) Fourth, if the General Partner previously has been allocated
Profit under Section 5.01(a)(v), Loss shall be allocated to the
General Partner until the aggregate amount of Loss allocated under
this Section 5.01(b)(iv) equals the aggregate amount of Profit
allocated under Section 5.01(a)(v); and
(v) Thereafter, any remaining Loss shall be allocated among the
Partners in accordance with their respective Percentage Interests.
(c) Depreciation and Amortization Deductions. Depreciation and
amortization deductions for each fiscal year of the Partnership shall be
allocated among the Partners in accordance with their respective Percentage
Interests.
(d) Minimum Gain Chargeback. Notwithstanding any provision to the
contrary, (i) any expense of the Partnership that is a "nonrecourse deduction"
within the meaning of Regulations Section 1.704-2(b)(1) shall be allocated among
the Partners in accordance with their respective Percentage Interests, (ii) any
expense of the Partnership that is a "partner nonrecourse deduction" within the
meaning of Regulations Section 1.704-2(i)(2) shall be allocated in accordance
with Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(f) and the
ordering rules contained in Regulations Section 1.704-2(j), and (iv) if there is
a net decrease in Partner Nonrecourse Debt Minimum Gain within the meaning of
Regulations Section 1.704-2(i)(4) for any Partnership taxable year, items of
gain and income shall be allocated among the Partners in accordance with
Regulations Section 1.704-2(i)(4) and the ordering rules contained in
Regulations Section 1.704-2(j). A Partner's "interest in partnership profits"
for purposes of determining its share of the nonrecourse liabilities of the
Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be
such Partner's Percentage Interest.
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(e) Qualified Income Offset. If a Limited Partner receives in any
taxable year an adjustment, allocation, or distribution described in
subparagraphs (4), (5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that
causes or increases a negative balance in such Partner's Capital Account that
exceeds the sum of such Partner's shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations
Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated specially
for such taxable year (and, if necessary, later taxable years) items of income
and gain in an amount and manner sufficient to eliminate such negative Capital
Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to
a Limited Partner in accordance with this Section 5.01(e), to the extent
permitted by Regulations Section 1.704-1(b) and Section 5.01(f), items of
expense or loss shall be allocated to such Partner in an amount necessary to
offset the income or gain previously allocated to such Partner under this
Section 5.01(e).
(f) Capital Account Deficits. Loss shall not be allocated to a Limited
Partner to the extent that such allocation would cause a deficit in such
Partner's Capital Account (after reduction to reflect the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.01(f), to the extent permitted by
Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in an
amount necessary to offset the Loss previously allocated to such Partner under
this Section 5.01(f).
(g) Allocations Between Transferor and Transferee. If a Partner
transfers any part or all of its Partnership Interest, and the transferee is
admitted as a substitute Partner as provided herein, the distributive shares of
the various items of Profit and Loss allocable among the Partners during such
fiscal year of the Partnership shall be allocated between the transferor and the
substitute Partner either (i) as if the Partnership's fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal
year that each was a Partner without regard to the results of Partnership
activities in the respective portions of such fiscal year in which the
transferor and the transferee were Partners. The General Partner, in its sole
discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the
transferor and the substitute Partner.
(h) Definition of Profit and Loss. "Profit" and "Loss" and any items
of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially allocated
pursuant to Section 5.01(c), 5.01(d), 5.01(e), 5.01(f), or 5.06(a)(ii). All
allocations of income, Profit, gain, Loss, and expense (and all items contained
therein) for federal income tax purposes shall be identical to all allocations
of such items set forth in this Section 5.01, except as otherwise required by
Section 704(c) of the
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Code and Regulations Section 1.704-1(b)(4). The General Partner shall have the
authority to elect the method to be used by the Partnership for allocating items
of income, gain, and expense as required by Section 704(c) of the Code and such
election shall be binding on all Partners.
5.02 DISTRIBUTION OF CASH.
(a) The General Partner shall distribute cash on a quarterly (or, at
the election of the General Partner, more frequent) basis, in an amount
determined by the General Partner in its sole discretion, to the Partners who
are Partners on the Partnership Record Date with respect to such quarter (or
other distribution period), as follows:
(i) First, to the General Partner until the General Partner has
received an amount equal to the excess, if any, of (A) its cumulative
Preferred Return for the current and all prior years over (B) the sum
of all prior distributions to the General Partner pursuant to this
Section 5.02(a)(i);
(ii) Second, to the General Partner and the Class B Limited
Partners in proportion to their Percentage Interests until the General
Partner has received, on a cumulative basis, an amount sufficient to
provide the General Partner with Funds From Operations (net income
(computed in accordance with generally accepted accounting principles)
excluding gains (or losses) from debt restructuring and sales of
property, plus depreciation and amortization, and after adjustments
for unconsolidated partnerships and joint ventures) each year equal to
$1.00 per share of common stock of the General Partner, based on the
weighted average number of such shares outstanding during such year;
(iii) Third, to the Class A Limited Partners in proportion to
their Percentage Interests until the Class A Limited Partners have
received, on a cumulative basis, an amount per Partnership Unit equal
to the amount per Partnership Unit received by the General Partner and
Class B Limited Partners under Section 5.02(a)(ii) hereof; and
(iv) Thereafter, to the Partners in accordance with their
respective Percentage Interests.
(b) In no event may a Partner receive a distribution of cash with
respect to a Partnership Unit if such Partner is entitled to receive a dividend
with respect to a REIT Share for which all or part of such Partnership Unit has
been or will be exchanged.
5.03 REIT DISTRIBUTION REQUIREMENTS. The General Partner shall use its
reasonable efforts to cause the Partnership to distribute amounts sufficient to
enable the General Partner (i) to meet its distribution requirement for
qualification as a REIT as set
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forth in Section 857(a)(1) of the Code and (ii) to avoid any federal income or
excise tax liability imposed by the Code.
5.04 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be entitled to
demand property other than cash in connection with any distributions by the
Partnership.
5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS. Notwithstanding any of
the provisions of this Article V, no Partner shall have the right to receive and
the General Partner shall not have the right to make, a distribution which
includes a return of all or part of a Partner's Capital Contributions, unless
after giving effect to the return of a Capital Contribution, the sum of all
Partnership liabilities, other than the liabilities to a Partner for the return
of his Capital Contribution, does not exceed the fair market value of the
Partnership's assets.
5.06 DISTRIBUTIONS UPON LIQUIDATION.
(a) Upon liquidation of the Partnership, after payment of, or adequate
provision for, debts and obligations of the Partnership, including any Partner
loans, any remaining assets of the Partnership shall be distributed to all
Partners with positive Capital Accounts in accordance with their respective
positive Capital Account balances. For purposes of this Section 5.06(a), the
Capital Account of each Partner shall be determined (i) after all adjustments
made in accordance with Sections 5.01 and 5.02 hereof resulting from Partnership
operations and from all sales and dispositions of all or any part of the
Partnership's assets and (ii), if the General Partner's cumulative Preferred
Return for the current and all prior years exceeds the sum of all prior
distributions to the General Partner pursuant to Section 5.02(a)(i) hereof,
after the General Partner has been allocated income or gain equal to such
excess. Any distributions pursuant to this Section 5.06 shall be made by the end
of the Partnership's taxable year in which the liquidation occurs (or, if later,
within 90 days after the date of the liquidation). To the extent deemed
advisable by the General Partner, appropriate arrangements (including the use of
a liquidating trust) may be made to assure that adequate funds are available to
pay any contingent debts or obligations of the Partnership.
(b) If the General Partner has a negative balance in its Capital
Account following a liquidation of the Partnership, as determined after taking
into account all Capital Account adjustments in accordance with Sections 5.01
and 5.02 hereof resulting from Partnership operations and from all sales and
dispositions of all or any part of the Partnership's assets, the General Partner
shall contribute to the Partnership an amount of cash equal to the negative
balance in its Capital Account and such cash shall be paid or distributed by the
Partnership to creditors, if any, and then to the Limited Partners in accordance
with Section 5.06(a). Such contribution by the General Partner shall be made by
the end of the Partnership's taxable year in which the liquidation occurs (or,
if later, within 90 days after the date of the liquidation).
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5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that the
allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 MANAGEMENT OF THE PARTNERSHIP.
(a) Except as otherwise expressly provided in this Agreement, the
General Partner shall have full, complete and exclusive discretion to manage and
control the business of the Partnership for the purposes herein stated, and
shall make all decisions affecting the business and assets of the Partnership.
Subject to the restrictions specifically contained in this Agreement, the powers
of the General Partner shall include, without limitation, the authority to take
the following actions on behalf of the Partnership:
(i) to acquire, purchase, own, lease and dispose of any real
property and any other property or assets that the General Partner
determines are necessary or appropriate or in the best interests of
the business of the Partnership;
(ii) to construct buildings and make other improvements on the
properties owned or leased by the Partnership;
(iii) to borrow money for the Partnership, issue evidences of
indebtedness in connection therewith, refinance, guarantee, increase
the amount of, modify, amend or change the terms of, or extend the
time for the payment of, any indebtedness or obligation to the
Partnership, and secure such indebtedness by mortgage, deed of trust,
pledge or other lien on the Partnership's assets;
(iv) to pay, either directly or by reimbursement, for all
operating costs and general administrative expenses of the General
Partner or the Partnership, to third parties or to the General Partner
as set forth in this Agreement;
(v) to lease all or any portion of any of the Partnership's
assets, whether or not the terms of such leases extend beyond the
termination date of
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the Partnership and whether or not any portion of the Partnership's
assets so leased are to be occupied by the lessee, or, in turn,
subleased in whole or in part to others, for such consideration and on
such terms as the General Partner may determine;
(vi) to prosecute, defend, arbitrate, or compromise any and all
claims or liabilities in favor of or against the Partnership, on such
terms and in such manner as the General Partner may reasonably
determine, and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the Partnership's
assets; provided, however, that the General Partner may not, without
the consent of all of the Partners, confess a judgment against the
Partnership;
(vii) to file applications, communicate, and otherwise deal with
any and all governmental agencies having jurisdiction over, or in any
way affecting, the Partnership's assets or any other aspect of the
Partnership business;
(viii) to make or revoke any election permitted or required of
the Partnership by any taxing authority;
(ix) to maintain such insurance coverage for public liability,
fire and casualty, and any and all other insurance for the protection
of the Partnership, for the conservation of Partnership assets, or for
any other purpose convenient or beneficial to the Partnership, in such
amounts and such types, as it shall determine from time to time;
(x) to determine whether or not to apply any insurance proceeds
for any property to the restoration of such property or to distribute
the same;
(xi) to retain legal counsel, accountants, consultants, real
estate brokers, and such other persons, as the General Partner may
deem necessary or appropriate in connection with the Partnership
business and to pay therefor such reasonable remuneration as the
General Partner may deem reasonable and proper;
(xii) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xiii) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner;
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(xiv) to maintain accurate accounting records and to file
promptly all federal, state and local income tax returns on behalf of
the Partnership;
(xv) to distribute Partnership cash or other Partnership assets
in accordance with this Agreement;
(xvi) to form or acquire an interest in, and contribute 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 contributions of
property to, its Subsidiaries and any other Person in which it has an
equity interest from time to time);
(xvii) to establish Partnership reserves for working capital,
capital expenditures, contingent liabilities, or any other valid
Partnership purpose; and
(xviii) to take such other action, execute, acknowledge, swear to
or deliver such other documents and instruments, and perform any and
all other acts the General Partner deems necessary or appropriate for
the formation, continuation and conduct of the business and affairs of
the Partnership and to possess and enjoy all of the rights and powers
of a general partner as provided by the Act.
Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.
(b) In no event shall the General Partner incur or allow to exist as
of the end of any month Indebtedness (as defined below) in an amount in excess
of thirty percent (30%) of the General Partner's investment in hotel properties,
at cost, after giving effect to the General Partner's use of proceeds from any
Indebtedness. For purposes of the foregoing restrictions, "Indebtedness" of the
General Partner shall mean all obligations of the General Partner, the
Partnership or any other subsidiaries or partnerships in which the General
Partner serves as general partner, for borrowed money (including all notes
payable and drafts accepted representing extensions of credit) and all
obligations evidenced by bonds, debentures, notes or other similar instruments
on which interest charges are customarily paid, including obligations under
capital leases.
6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any or all
of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person
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may, under supervision of the General Partner, perform any acts or services for
the Partnership as the General Partner may approve.
6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a) The Partnership shall indemnify an Indemnitee from and against any
and all losses, claims, damages, liabilities (joint or several), expenses
(including reasonable 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 either
was committed in bad faith or was the result of active and deliberate
dishonesty; (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 6.03(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 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
(b) The Partnership may reimburse an Indemnitee for reasonable
expenses incurred by an Indemnitee who is a party to a proceeding 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 6.03 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) The indemnification provided by this Section 6.03 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) 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.
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(e) For purposes of this Section 6.03, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit
plan whenever the performance by it of its duties to the Partnership also
imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to
personal liability by reason of the indemnification provisions set forth in this
Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in
part under this Section 6.03 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.
(h) The provisions of this Section 6.03 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.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners 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) The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the General Partner's
shareholders collectively, that 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) in deciding whether to
cause the Partnership to take (or decline to take) any actions, 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.
(c) Subject to its obligations and duties as General Partner set forth
in Section 6.01 hereof, the General Partner may exercise any of the powers
granted to it under 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.
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(d) 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 the General Partner to continue
to qualify as a REIT or (ii) to prevent the General Partner from incurring any
taxes under Section 857, Section 4981, or any other provision of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.04 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 6.04 as in effect immediately prior to such
amendment, modification or repeal with respect to matters occurring, in whole or
in part, prior to such amendment, modification or repeal, regardless of when
claims relating to such matters may arise or be asserted.
6.05 EXPENDITURES BY THE PARTNERSHIP. The General Partner is hereby
authorized to pay compensation for accounting, administrative, legal, technical,
management and other services rendered to the Partnership. All of the aforesaid
expenditures (including Administrative Expenses) shall be made on behalf of the
Partnership, and the General Partner shall be entitled to reimbursement by the
Partnership for any expenditure (including Administrative Expenses) incurred by
it on behalf of the Partnership which shall be made other than out of the funds
of the Partnership. The Partnership shall also assume, and pay when due, all
Administrative Expenses.
6.06 OUTSIDE ACTIVITIES; REDEMPTION/TENDER OFFER OF REIT SHARES.
(a) Subject to Section 6.12 hereof, the Charter and any agreements
entered into by the General Partner or its Affiliates with the Partnership or a
Subsidiary, any officer, director, employee, agent, trustee, Affiliate or
shareholder of the General 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 substantially similar
or identical to those of the Partnership. Neither the Partnership nor any of the
Limited Partners shall have any rights by virtue of this Agreement in any such
business ventures, interests or activities. None of the Limited Partners nor any
other Person shall have any rights by virtue of this Agreement or the
partnership relationship established hereby in any such business ventures,
interests or activities, and the General Partner shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures,
interests and activities to the Partnership or any Limited Partner, even if such
opportunity is of a character which, if presented to the Partnership or any
Limited Partner, could be taken by such Person.
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(b) In the event the General Partner redeems any REIT Shares, then the
General Partner shall cause the Partnership to purchase from it a number of
Partnership Units as determined based on the application of the Conversion
Factor on the same terms that the General Partner redeemed such REIT Shares.
Moreover, if the General Partner makes a cash tender offer or other offer to
acquire REIT Shares, then the General Partner shall cause the Partnership to
make a corresponding offer to the General Partner to acquire an equal number of
Partnership Units held by the General Partner. In the event any REIT Shares are
redeemed by the General Partner pursuant to such offer, the Partnership shall
redeem an equivalent number of the General Partner's Partnership Units for an
equivalent purchase price based on the application of the Conversion Factor.
6.07 OPTIONAL CONVERSION OF SERIES A PREFERRED SHARES. In the event any
holder of the Series A Preferred Shares exercises its option to convert its
Series A Preferred Shares into REIT Shares on or after February 27, 2003, then
the General Partner shall cause the Partnership to convert an equivalent number
of the Preferred Partnership Units held by the General Partner into Partnership
Units held by such Partner. The portion of Preferred Partnership Units to be
converted shall be determined based on the same ratio pursuant to which the
Series A Preferred Shares were converted into REIT Shares. Upon the conversion
of all of the Series A Preferred Shares into REIT Shares, the General Partner
shall no longer hold Preferred Partnership Units and, thus, shall no longer be
entitled to distribution under Sections 5.02(a)(i) hereof.
6.08 REDEMPTION RIGHT WITH RESPECT TO PREFERRED PARTNERSHIP UNITS.
(a) Mandatory Redemption. In the event the General Partner redeems all
of the Series A Preferred Shares as a result of the termination of the General
Partner's status as a REIT, the Partnership shall redeem all of the Series A
Preferred Partnership Units held by the General Partner at a redemption price
per Series A Preferred Partnership Unit equal to the greater of (i) the Series A
Preference Value per Unit plus the excess, if any, of (A) the General Partner's
cumulative Preferred Return for the current and all prior years (up to and
including the date of redemption) with respect to the Preferred Partnership Unit
over (B) the sum of all prior distributions to with respect to such Unit
pursuant to Section 5.02(a)(i) hereof, or (ii) the product of (A) the weighted
average of the sales prices for a REIT Share as reported on the NASDAQ-National
Market System, or the principal exchange on which REIT Shares are then traded,
for the ten (10) business days prior to the second business day preceding the
date of repurchase, or if the REIT Shares no longer traded on the Nasdaq-Stock
Market or a recognized exchange, the fair market value thereof as determined by
the General Partner and the holders of the Series A Preferred Shares for
purposes of the redemption of the Series A Preferred Shares, multiplied by (B)
the number of REIT Shares into which a Series A Preferred Share would be
convertible, if converted on the business day preceding the date of redemption.
(b) Optional Redemption. On and after February 27, 2003, the
Partnership may, at its option following notice as described below, redeem at
any time all or a portion of
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the Preferred Partnership Units held by the General Partner (the "Partnership
Redemption Right") at a redemption price per Preferred Partnership Unit, payable
in cash, equal to the sum of (i) the Preference Value per Preferred Partnership
Unit and (ii) the excess, if any, of (A) the General Partner's cumulative
Preferred Return for the current and all prior years (up to and including the
date of redemption) with respect to the Preferred Partnership Unit over (B) the
sum of all prior distributions to the General Partner with respect to such Unit
pursuant to Section 5.02(a)(i) hereof. The Partnership shall exercise the
Partnership Redemption Right by notifying the General Partner of the redemption
not less than 30 nor more than 60 days prior to the redemption date and by
specifying in such notice the redemption date, the redemption price, and the
number of Preferred Partnership Units to be redeemed. The Partnership Redemption
Right may be exercised with respect to any number of Preferred Partnership Units
held by the General Partner. If the General Partner exercises its optional
redemption right with respect to the Series A Preferred Shares, then the
exercise of the Partnership Redemption Right will become mandatory. Similarly,
if the Partnership exercises the Partnership Redemption Right, the General
Partner agrees to redeem a corresponding portion of the Series A Preferred
Shares.
(c) On and after the redemption date, the Preferred Return will no
longer accrue or accumulate with respect to the Preferred Partnership Units
redeemed by the Partnership. In addition, the General Partner shall have no
right, with respect to the Preferred Partnership Units so redeemed, to receive
any distribution payable after the redemption date unless the General Partner
was the holder of record of such Units on the record date of the distribution.
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6.09 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed or retained
by the Partnership and may otherwise deal with the Partnership (whether as a
buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent,
lender or otherwise) and may receive from the Partnership any compensation,
price, or other payment therefor which the General Partner determines to be fair
and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries or
other Persons in which it has an equity investment, and such Persons may borrow
funds from the Partnership, on terms and conditions established in the sole and
absolute discretion of the General Partner. The foregoing authority shall not
create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions as the
General Partner deems are consistent with this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement, neither the
General Partner nor any of its Affiliates shall sell, transfer or convey any
property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.
6.10 LOANS TO THE PARTNERSHIP. If additional funds are required by the
Partnership for any purpose relating to the business of the Partnership or for
any of its obligations, expenses, costs, or expenditures, including operating
deficits, the Partnership may borrow such funds as are needed from the General
Partner or any Affiliate of the General Partner for such period of time and on
such terms as the General Partner or its Affiliate may agree, provided that the
terms shall be substantially equivalent to the terms that could be obtained from
a third party on an arm's-length basis.
6.11 LOANS TO THE GENERAL PARTNER. If additional funds are required by the
General Partner for any purpose relating to the business of the General Partner
or for any of its obligations, expenses, costs, or expenditures, including
operating deficits, the General Partner may borrow such funds as are needed from
the Partnership or any Affiliate of the Partnership for such period of time and
on such terms as the Partnership or its Affiliate may agree, provided that the
terms shall be substantially equivalent to the terms that could be obtained from
a third party on an arm's-length basis.
6.12 GENERAL PARTNER PARTICIPATION. The General Partner agrees that all
business activities of the General Partner, including activities pertaining to
the acquisition, development and/or ownership of hotels or other property, shall
be conducted through the Partnership; provided, however, that the General
Partner is allowed to make a direct
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acquisition, but if and only if, such acquisition is made in connection with the
issuance of New Securities, which direct acquisition and issuance have been
approved and determined to be in the best interests of the General Partner and
the Partnership by a majority of the Independent Directors. The General Partner
also agrees that all borrowings shall constitute Funding Loans, subject to the
exception set forth in Section 4.03 hereof.
ARTICLE VII
CHANGES IN GENERAL PARTNER
7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) The General Partner may not transfer any of its General
Partnership Interest or Limited Partnership Interest or withdraw as General
Partner except as provided in Section 7.01(c) or in connection with a
transaction described in Section 7.01(d).
(b) The General Partner agrees that it will at all times own at least
a 20% Partnership Interest.
(c) Except as otherwise provided in Section 6.06(b) or Section 7.01(d)
hereof, the General Partner shall not engage in any merger, consolidation or
other combination with or into another Person or sale of all or substantially
all of its assets, or any reclassification, or any recapitalization or change of
outstanding REIT Shares (other than a change in par value, or from par value to
no par value, or as a result of a subdivision or combination of REIT Shares (a
"Transaction"), unless (i) the Transaction also includes a merger of the
Partnership or sale of substantially all of the assets of the Partnership as a
result of which all Limited Partners will receive for each Partnership Unit an
amount of cash, securities, or other property equal to the product of the
Conversion Factor and the greatest amount of cash, securities or other property
paid in the Transaction to a holder of one REIT Share in consideration of one
REIT Share, provided that if, in connection with the Transaction, a purchase,
tender or exchange offer ("Offer") shall have been made to and accepted by the
holders of more than 50 percent of the outstanding REIT Shares, each holder of
Partnership Units shall be given the option to exchange its Partnership Units
for the greatest amount of cash, securities, or other property which a Limited
Partner would have received had it (A) exercised its Limited Partner Redemption
Right and received REIT shares and (B) sold, tendered or exchanged such REIT
shares pursuant to the Offer the REIT Shares received upon exercise of the
Limited Partner Redemption Right immediately prior to the expiration of the
Offer; and (ii) no more than 75 percent of the equity securities of the
acquiring Person in such Transaction shall be owned, after consummation of such
Transaction, by the General Partner or Persons who were Affiliates of the
Partnership or the General Partner immediately prior to the date on which the
Transaction is consummated.
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(d) Notwithstanding Section 7.01(c), the General Partner may merge
into or consolidate with another entity if immediately after such merger or
consolidation (i) substantially all of the assets of the successor or surviving
entity (the "Surviving General Partner"), other than Partnership Units held by
the General Partner, are contributed to the Partnership as a Capital
Contribution in exchange for Partnership Units with a fair market value equal to
the value of the assets so contributed by the Surviving General Partner in good
faith and (ii) the Surviving General Partner expressly agrees to assume all
obligations of the General Partner hereunder. Upon such contribution and
assumption, the Surviving General Partner shall have the right and duty to amend
this Agreement as set forth in this Section 7.01(d). The Surviving General
Partner shall in good faith arrive at a new method for the calculation of the
Cash Amount and Conversion Factor for a Partnership Unit after any such merger
or consolidation so as to approximate the existing method for such calculation
as closely as reasonably possible. Such calculation shall take into account,
among other things, the kind and amount of securities, cash and other property
that was receivable upon such merger or consolidation by a holder of REIT Shares
and/or options, warrants or other rights relating thereto, and to which a holder
of Partnership Units could have acquired had such Partnership Units been
redeemed immediately prior to such merger or consolidation. Such amendment to
this Agreement shall provide for adjustment to such method of calculation which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The above provisions of this Section
7.01(d) shall similarly apply to successive mergers or consolidations permitted
hereunder.
7.02 ADMISSION OF A SUBSTITUTE OR SUCCESSOR GENERAL PARTNER. A Person shall
be admitted as a substitute or successor General Partner of the Partnership only
if the following terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or additional General
Partner shall have accepted and agreed to be bound by all the terms and
provisions of this Agreement by executing a counterpart thereof and such other
documents or instruments as may be required or appropriate in order to effect
the admission of such Person as a General Partner, and a certificate evidencing
the admission of such Person as a General Partner shall have been filed for
recordation and all other actions required by Section 2.05 hereof in connection
with such admission shall have been performed;
(b) if the Person to be admitted as a substitute or additional General
Partner is a corporation or a partnership it shall have provided the Partnership
with evidence satisfactory to counsel for the Partnership of such Person's
authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the person to be
admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such
Person as a substitute or additional General Partner will cause (i) the
Partnership to
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be classified other than as a partnership for federal income tax purposes or
(ii) the loss of any Limited Partner's limited liability.
7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A GENERAL
PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the withdrawal,
removal or dissolution of a General Partner (except that, if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof.
(b) Following the occurrence of an Event of Bankruptcy as to a General
Partner (and its removal pursuant to Section 7.04(a) hereof) or the withdrawal,
removal or dissolution of a General Partner (except that, if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within 90 days after such occurrence, may elect
to reconstitute the Partnership and continue the business of the Partnership for
the balance of the term specified in Section 2.04 hereof by selecting, subject
to Section 7.02 hereof and any other provisions of this Agreement, a substitute
General Partner by unanimous consent of the Limited Partners. If the Limited
Partners elect to reconstitute the Partnership and admit a substitute General
Partner, the relationship with the Partners and of any Person who has acquired
an interest of a Partner in the Partnership shall be governed by this Agreement.
7.04 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; provided, however, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners.
(b) If a General Partner has been removed pursuant to this Section
7.04 and the Partnership is continued pursuant to Section 7.03 hereof, such
General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership (i) to the substitute General Partner approved by a
majority-in-interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section 7.02
hereof. At the time of assignment, the removed General
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Partner shall be entitled to receive from the substitute General Partner the
fair market value of the General Partnership Interest of such removed General
Partner as reduced by any damages caused to the Partnership by such General
Partner. Such fair market value shall be determined by an appraiser mutually
agreed upon by the General Partner and a majority-in-interest of the Limited
Partners within 10 days following the removal of the General Partner. In the
event that the parties are unable to agree upon an appraiser, the General
Partner and a majority-in-interest of the Limited Partners each shall select an
appraiser. Each such appraiser shall complete an appraisal of the fair market
value of the General Partner's General Partnership Interest within 30 days of
the General Partner's removal, and the fair market value of the General
Partner's General Partnership Interest shall be the average of the two
appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the General Partner's General Partnership Interest no later than
60 days after the removal of the General Partner. In such case, the fair market
value of the General Partner's General Partnership Interest shall be the average
of the two appraisals closest in value.
(c) The General Partnership Interest of a removed General Partner,
during the time after default until transfer under Section 7.04(b), shall be
converted to that of a special Limited Partner; provided, however, such removed
General Partner shall not have any rights to participate in the management and
affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions
allocable or payable, as the case may be, to the Limited Partners. Instead, such
removed General Partner shall receive and be entitled to retain only
distributions or allocations of such items which it would have been entitled to
receive in its capacity as General Partner, until the transfer is effective
pursuant to Section 7.04(b) hereof.
(d) All Partners shall have given and hereby do give such consents,
shall take such actions and shall execute such documents as shall be legally
necessary and sufficient to effect all the foregoing provisions of this Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to sign
for or bind the Partnership, such powers being vested solely and exclusively in
the General Partner.
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8.02 POWER OF ATTORNEY. Each Limited Partner hereby irrevocably appoints
the General Partner his true and lawful attorney-in-fact, who may act for each
Limited Partner and in his name, place and stead, and for his use and benefit,
to sign, acknowledge, swear to, deliver, file and record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of his Interest in the Partnership.
8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner shall
be liable for any debts, liabilities, contracts or obligations of the
Partnership. A Limited Partner shall be liable to the Partnership only to make
payments of his Capital Contribution, if any, as and when due hereunder. After
his Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital
Contributions or other payments or lend any funds to the Partnership.
8.04 OWNERSHIP BY LIMITED PARTNER OF CORPORATE GENERAL PARTNER OR
AFFILIATE. No Limited Partner shall at any time, either directly or indirectly,
own any stock or other interest in the General Partner or in any Affiliate
thereof, if such ownership by itself or in conjunction with other stock or other
interests owned by other Limited Partners would, in the opinion of counsel for
the Partnership, jeopardize the classification of the Partnership as a
partnership for federal income tax purposes. The General Partner shall be
entitled to make such reasonable inquiry of the Limited Partners as is required
to establish compliance by the Limited Partners with the provisions of this
Section.
8.05 LIMITED PARTNER REDEMPTION RIGHT.
(a) Subject to Section 8.05(c), on or after January 1, 1995, each
Class A Limited Partner shall have the right to require the Partnership to
redeem on a Specified Redemption Date all or a portion of the Partnership Units
held by such Class A Limited Partner at a redemption price equal to and in the
form of the Redemption Amount. Subject to Section 8.05(c), the Class B Limited
Partners shall have the right to require the Partnership to redeem on a
Specified Redemption Date the Partnership Units held by such Class B Limited
Partners, at a redemption price equal to and in the form of the Redemption
Amount subject to any restriction agreed to in writing between the Redeeming
Limited Partner and the General Partner. The redemption right described in this
Section 8.05 shall be referred to as the "Limited Partner Redemption Right." The
Limited Partner Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner by the Limited Partner who is
exercising the Limited Partner Redemption Right (the "Redeeming Limited
Partner"). A Limited Partner may not exercise the Limited Partner Redemption
Right for less than three hundred (300) Partnership Units or, if such Limited
Partner holds less than three hundred (300) Partnership Units, all of the
Partnership Units held by such Partner. The Redeeming Limited Partner shall have
no right, with respect to
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any Partnership Units so redeemed, to receive any distribution paid with respect
to Partnership Units if the record date for such distribution is on or after the
Specified Redemption Date.
(b) Notwithstanding the provisions of Section 8.05(a), the General
Partner may, in its sole and absolute discretion, assume directly and satisfy a
Limited Partner Redemption Right by paying to the Redeeming Limited Partner the
Redemption Amount on the Specified Redemption Date, whereupon the General
Partner shall acquire the Partnership Units offered for redemption by the
Redeeming Limited Partner and shall be treated for all purposes of this
Agreement as the owner of such Partnership Units. In the event the General
Partner shall exercise its right to satisfy the Limited Partner Redemption Right
in the manner described in the preceding sentence, the Partnership shall have no
obligation to pay any amount to the Redeeming Limited Partner with respect to
such Redeeming Limited Partner's exercise of the Limited Partner Redemption
Right, and each of the Redeeming Limited Partner, the Partnership, and the
General Partner shall treat the transaction between the General Partner and the
Redeeming Limited Partner as a sale of the Redeeming Limited Partner's
Partnership Units to the General Partner for federal income tax purposes. Each
Redeeming Limited Partner agrees to execute such documents as the General
Partner may reasonably require in connection with the issuance of REIT Shares
upon exercise of the Limited Partner Redemption Right.
(c) The Partnership or the General Partner, as the case may be, shall
pay the Cash Amount to a Redeeming Limited Partner as the Redemption Amount for
such Partner if (i) the acquisition of REIT Shares by such Partner on the
Specified Redemption Date would (A) result in such Partner or any other person
owning, directly or indirectly, REIT Shares in excess of the "Ownership Limit,"
as defined in the Charter and calculated in accordance therewith, except as
provided in the Charter, (B) result in REIT Shares being owned by fewer than 100
persons (determined without reference to any rules of attribution), except as
provided in the Charter, (C) result in the General Partner being "closely held"
within the meaning of Section 856(h) of the Code, (D) cause the General Partner
to own, directly or constructively, 10% or more of the ownership interests in a
tenant of the General Partner's or the Partnership's real property, within the
meaning of Section 856(d)(2)(B) of the Code, or (E) cause the acquisition of
REIT Shares by such Partner to be "integrated" with any other distribution of
REIT Shares for purposes of complying with the registration provisions of the
Securities Act of 1933, as amended, or (ii) the Partnership or the General
Partner, as the case may be, so elects in its sole discretion. Any Cash Amount
or REIT shares to be paid to a redeeming Limited Partner pursuant to this
Section 8.05 shall be paid within five (5) business days after the initial date
of receipt by the General Partner of the Notice of Redemption relating to the
Partnership Units to be redeemed; provided, however, that such five (5) day
period may be extended for up to an additional one hundred eighty (180) day
period to the extent required for the General Partner to cause additional REIT
Shares to be issued to provide financing to be used to make such payment of the
Cash Amount and provided further, that the Partnership shall pay interest at the
Prime Rate as published in The Wall Street Journal, Eastern Edition, from time
to time on the Cash Amount from the
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expiration of the five day period to the date of payment. Notwithstanding the
foregoing, the General Partner and the Partnership agree to use their best
efforts to cause the closing of the acquisition of redeemed Partnership Units
hereunder to occur as quickly as reasonably possible. If a Class B Limited
Partner exercises its Limited Partner Redemption Right and the Partnership or
the General Partner, as the case may be, elects to pay the REIT Shares Amount
rather than the Cash Amount, the REIT Shares received by such Class B Limited
Partner shall be properly registered under the Securities Act of 1933, as
amended.
(d) Each certificate, if any, evidencing REIT Shares that may be
issued in redemption of Partnership Units under this Section 8.05 (the
"Redemption Shares") shall bear a restrictive legend in substantially the
following form:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933, as amended, or any state securities law. No
transfer of the Shares represented by this certificate shall be valid or
effective unless (A) such transfer is made pursuant to an effective
registration statement under the Securities Act of 1933, as amended (the
"Act"), or (B) the holder of the securities proposed to be transferred
shall have delivered to the company either a no-action letter from the
Securities and Exchange Commission or an opinion of counsel (who may be an
employee of such holder) experienced in securities matters to the effect
that such proposed transfer is exempt from the registration requirements of
the act which opinion shall be reasonably satisfactory to the company."
8.06 REGISTRATION.
(a) Shelf Registration. At the request of a Class B Limited Partner,
the General Partner agrees to file with the Commission, no later than November
1, 1995, a shelf registration statement under Rule 415 of the Securities Act, or
any similar rule that may be adopted by the Commission (the "Shelf
Registration"), with respect to all of the REIT Shares that may be issued in
redemption of Partnership Units under Section 8.05 above (the "Redemption
Shares"). The General Partner will use its best efforts to have the Shelf
Registration declared effective under the Securities Act no later than January
1, 1996 (the "Target Effective Date") to permit the disposition of the
Redemption Shares by the holders thereof in accordance with the method or
methods of disposition specified by the holders, and to keep the Shelf
Registration continuously effective until the earlier of (i) January 1, 1998
(the "Shelf Registration Period"), (ii) the date when all of the Redemption
Shares are sold thereunder, or (iii) the date on which all of the holders of
Redemption Shares, pursuant to Rule 144(k) under the Securities Act, may sell
the Redemption Shares without registration under the Securities Act of 1933, as
amended (the "Securities Act"). The General Partner further agrees to supplement
or make amendments to the Shelf Registration, if required by the rules,
regulations or instructions applicable to the registration form utilized by the
Company or by the Securities Act or rules and regulations thereunder for the
Shelf Registration. Notwithstanding the foregoing, if for any reason the
effectiveness of the Shelf
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Registration is delayed or suspended or it ceases to be available for sales of
Redemption Shares thereunder, the Shelf Registration Period shall be extended by
the aggregate number of days of such delay, suspension or unavailability.
(b) Registration and Qualification Procedures. The General Partner is
required by the provisions of Section 8.06(a) hereof to use its best efforts to
have the Shelf Registration declared effective under the Securities Act by
January 1, 1996. Accordingly, the General Partner will:
(i) prepare and file with the Commission a registration statement,
including amendments thereof and supplements relating thereto, with respect to
the Redemption Shares, in connection with which the General Partner will give
each holder of Redemption Shares, their underwriters, if any, and their counsel
and accountants a reasonable opportunity to participate in the preparation
thereof and will give such persons reasonable access to its books, records,
officers and independent public accountants;
(ii) use its best efforts to cause the registration statement to
be declared effective by the Commission;
(iii) keep the registration statement effective and the related
prospectus current throughout the Shelf Registration Period; provided, however,
that the General Partner shall have no obligation to file any amendment or
supplement at its own expense more than ninety (90) days after the effective
date of the registration statement;
(iv) furnish to each holder of Redemption Shares such numbers of
copies of prospectuses, and supplements or amendments thereto, and such other
documents as such holder reasonably requests;
(v) register or qualify the securities covered by the registration
statement under the securities or blue sky laws of such jurisdictions within the
United States as any holder of Redemption Shares shall reasonably request, and
do such other reasonable acts and things as may be required of it to enable such
holders to consummate the sale or other disposition in such jurisdictions of the
Redemption Shares; provided, however, that the General Partner shall not be
required to (i) qualify as a foreign corporation or consent to a general and
unlimited service or process in any jurisdictions in which it would not
otherwise be required to be qualified or so consent or (ii) qualify as a dealer
in securities;
(vi) furnish, at the request of the holders of Redemption Shares,
on the date Redemption Shares are delivered to the underwriters for sale
pursuant to such registration, or, if such Shares are not being sold through
underwriters, on the date the Shelf Registration with respect to such Redemption
Shares becomes effective, (A) a securities opinion of counsel representing the
General Partner for the purposes of such registration covering such legal
matters as are customarily included in such opinions and (B) letters of the firm
of independent public accountants that certified the financial statements
included in
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the registration statement, addressed to the underwriters, covering
substantially the same matters as are customarily covered in accountant's
letters delivered to underwriters in underwritten public offerings of securities
and such other financial matters as such holders (or the underwriters, if any)
may reasonably request;
(vii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its shareholders
as soon as reasonably practicable, but not later than sixteen (16) months after
the effective date of the Shelf Registration, an earnings statement covering a
period of at least twelve (12) months beginning after the effective date of the
Shelf Registration, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act;
(viii) enter into and perform an underwriting agreement with the
managing underwriter, if any, selected as provided herein, containing customary
(A) terms of offer and sale of the securities, payment provisions, underwriting
discounts and commissions and (B) representations, warranties, covenants,
indemnities, terms and conditions; and
(ix) keep the holders of Redemption Shares advised as to the
initiation and progress of the registration.
(c) Allocation of Expenses. The Partnership shall pay all expenses in
connection with the Shelf Registration, including without limitation (i) all
expenses incident to filing with the National Association of Securities Dealers,
Inc., (ii) registration fees, (iii) printing expenses, (iv) accounting and legal
fees and expenses, except to the extent holders of Redemption Shares elect to
engage accountants or attorneys in addition to the accountants and attorneys
engaged by the General Partner, (v) accounting expenses incident to or required
by any such registration or qualification and (vi) expenses of complying with
the securities or blue sky laws of any jurisdictions in connection with such
registration or qualification; provided, however, the Partnership shall not be
liable for (A) any discounts or commissions to any underwriter or broker
attributable to the sale of Redemption Shares, or (B) any fees or expenses
incurred by holders of Redemption Shares in connection with such registration
which, according to the written instructions of any regulatory authority, the
Partnership is not permitted to pay.
(d) Indemnification.
(i) In connection with the Shelf Registration, the General Partner
and the Partnership agree to indemnify holders of Redemption Shares within the
meaning of Section 15 of the Securities Act, against all losses, claims,
damages, liabilities and expenses (including reasonable costs of investigation)
caused by any untrue, or alleged untrue, statement of a material fact contained
in the Shelf Registration, preliminary prospectus or prospectus (as amended or
supplemented if the General Partner shall have furnished any amendments or
supplements thereto) or caused by any omission, or alleged omission, to state
therein a material fact required to be stated therein or necessary to make the
statements
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therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any untrue statement, alleged untrue
statement, omission, or alleged omission based upon information furnished to the
General Partner expressly for use therein. The General Partner and each officer,
director and controlling person of the General Partner shall be indemnified by
each holder of Redemption Shares covered by the Shelf Registration for all such
losses, claims, damages, liabilities and expenses (including reasonable costs of
investigation) caused by any such untrue, or alleged untrue, statement or any
such omission, or alleged omission, based upon information furnished to the
General Partner expressly for use therein in a writing signed by the holder.
(ii) Promptly upon receipt by a party indemnified under this
Section 8.06(d) of notice of the commencement of any action against such
indemnified party in respect of which indemnity or reimbursement may be sought
against any indemnifying party under this Section 8.06(d), such indemnified
party shall notify the General Partner in writing of the commencement of such
action, but the failure to so notify the General Partner shall not relieve it of
any liability which it may have to any indemnified party otherwise than under
this Section 8.06(d) unless such failure shall materially adversely affect the
defense of such action. In case notice of commencement of any such action shall
be given to the General Partner as above provided, the General Partner shall be
entitled to participate in and, to the extent it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense of such
action at its own expense, with counsel chosen by it and reasonably satisfactory
to such indemnified party. The indemnified party shall have the right to employ
separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel (other than reasonable costs of
investigation) shall be paid by the indemnified party unless (i) the General
Partner or the Partnership agrees to pay the same, (ii) the General Partner
fails to assume the defense of such action with counsel reasonably satisfactory
to the indemnified party or (iii) the named parties to any such action
(including any impleaded parties) have been advised by such counsel that
representation of such indemnified party and the General Partner by the same
counsel would be inappropriate under applicable standards of professional
conduct (in which case the General Partner shall not have the right to assume
the defense of such action on behalf of such indemnified party). No indemnifying
party shall be liable for any settlement entered into without its consent.
(e) Contribution.
(i) If for any reason the indemnification provisions contemplated
by Section 8.06(d) are either unavailable or insufficient to hold harmless an
indemnified party in respect of any losses, claims, damages or liabilities
referred to therein, then the party that would otherwise be required to provide
indemnification or the indemnifying party (in either case, for purposes of this
Section 8.06(e), the "Indemnifying Party") in respect of such losses, claims,
damages or liabilities, shall contribute to the amount paid or payable by the
party that would otherwise be entitled to indemnification or the indemnified
party (in either case, for purposes of this Section 8.06(e), the "Indemnified
Party") as a result of such losses, claims, damages, liabilities or expense, in
such proportion as is appropriate to reflect the
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relative fault of the Indemnifying Party and the Indemnified Party, as well as
any other relevant equitable considerations. The relative fault of the
Indemnifying Party and Indemnified Party shall be determined by reference to,
among other things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact related to
information supplied by the Indemnifying Party or Indemnified Party, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a
party as a result of the losses, claims, damages, liabilities and expenses
referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party. In no event shall any holder of Redemption
Shares covered by the Shelf Registration be required to contribute an amount
greater than the dollar amount of the proceeds received by such holder from the
sale of Redemption Shares pursuant to the registration giving rise to the
liability.
(ii) The parties hereto agree that it would not be just and
equitable if contribution pursuant to this Section 8.06(e) were determined by
pro rata allocation (even if the holders or any underwriters or all of them were
treated as one entity for such purpose) or by any other method of allocation
which does not take account of the equitable considerations referred to in the
immediately preceding paragraph. No person or entity determined to have
committed a fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person or entity
who was not guilty of such fraudulent misrepresentation.
(iii) The contribution provided for in this Section 8.06(e) shall
survive the termination of this Agreement and shall remain in full force and
effect regardless of any investigation mae by or on behalf of any Indemnified
Party.
(f) Listing on Securities Exchange. If the General Partner shall list
or maintain the listing of any shares of Common Stock on any securities exchange
or national market system, it will at its expense and as necessary to permit the
registration and sale of the Redemption Shares hereunder, list thereon, maintain
and, when necessary, increase such listing to include such Redemption Shares.
8.07 OTHER AGREEMENTS.
The provisions of Sections 8.05 and 8.06 are applicable only to certain
Limited Partners admitted to the Partnership prior to _____________ 1996. The
rights of certain Limited Partners with respect to the redemption of Units
issued on and after ____________ 1996, the registration of REIT Shares issued
upon redemption of such Units and certain other matters specific to some but not
all Partners, may be included in agreements other than this Agreement. The
existence and operation of such agreements shall not modify or terminate the
rights, benefits or obligations of any Partner who is not a party to such
agreements under this Agreement or applicable law.
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8.08 OUTSIDE ACTIVITIES OF CLASS A LIMITED PARTNERS.
(a) No Class A Limited Partner or director, shareholder or Affiliate
of a Class A Limited Partner may (i) invest in any motel or hotel property or
(ii) manage or agree to manage a motel or hotel property, except for a Property
or any other hotel or motel property in which the General Partner or the
Partnership has an ownership interest, that, at the time such management is
undertaken or agreement to manage is entered into, is located within a 20-mile
radius of a Property or any other motel or hotel property in which the General
Partner has an ownership interest.
(b) The General Partner, in its sole discretion, may waive the
restrictions on Class A Limited Partners set forth in Section 8.08(a) above as
to (i) any particular business venture in which a Limited Partner proposes to
engage or (ii) any particular Class A Limited Partner.
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner hereby represents and warrants to the General
Partner and to the Partnership that the acquisition of his Partnership Interest
is made as a principal for his account for investment purposes only and not with
a view to the resale or distribution of such Partnership Interest.
(b) Each Limited Partner agrees that he will not sell, assign or
otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person
who does not similarly represent, warrant and agree.
9.02 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a) Except as otherwise provided in Section 9.02(d) hereof, no Limited
Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer his
Limited Partnership Interest, in whole or in part, whether voluntarily or by
operation of law or at judicial sale or otherwise (collectively, a "Transfer")
without the written consent of the General Partner, which consent may be
withheld in the sole discretion of the General Partner. The General Partner may
require, as a condition of any Transfer, that the transferor assume all costs
incurred by the Partnership in connection therewith.
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(b) No Limited Partner may effect a Transfer of his Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Limited Partnership Interest under the Securities Act of 1933, as amended,
or would otherwise violate any applicable federal or state securities or "Blue
Sky" law (including investment suitability standards).
(c) No transfer by a Limited Partner of his Partnership Units, in
whole or in part, may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, the transfer would result in the Partnership's
being treated as an association taxable as a corporation (other than a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code), or (ii) such
transfer is effectuated through an "established securities market" or a
"secondary market (or the substantial equivalent thereof)" within the meaning of
Section 7704 of the Code.
(d) Section 9.02(a) shall not apply to the following transactions,
except that the General Partner may require that the transferor assume all costs
incurred by the Partnership in connection therewith:
(i) any Transfer by a Limited Partner pursuant to the exercise of
its Limited Partner Redemption Right under Section 8.05 hereof;
(ii) any Transfer by a Limited Partner that is a corporation or
other business entity to any of its Affiliates or subsidiaries or to
any successor in interest of such Limited Partner; or
(iii) any donative Transfer by an individual Limited Partner to
his immediate family members or any trust in which the individual or
his immediate family members own, collectively, 100% of the beneficial
interests. For purposes of this Section 9.02(c)(iii), the term
"immediate family member" shall be deemed to include only an
individual Limited Partner's spouse, children (including step-children
and adopted children) and grandchildren.
(e) Any Transfer in contravention of any of the provisions of this
Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.
9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article IX, an assignee of
the Limited Partnership Interest of a Limited Partner (which shall be understood
to include any purchaser, transferee, donee, or other recipient of any
disposition of such Limited Partnership Interest) shall be deemed admitted as a
Limited Partner of the Partnership only upon the satisfactory completion of the
following:
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(i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart
or an amendment thereof, including a revised Exhibit A, and such other
documents or instruments as the General Partner may require in order
to effect the admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have been
signed, acknowledged and filed for record in accordance with the Act.
(iii) The assignee shall have delivered a letter containing the
representation set forth in Section 9.01(a) hereof and the agreement
set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership or trust, the
assignee shall have provided the General Partner with evidence
satisfactory to counsel for the Partnership of the assignee's
authority to become a Limited Partner under the terms and provisions
of this Agreement.
(v) The assignee shall have executed a power of attorney
containing the terms and provisions set forth in Section 8.02 hereof.
(vi) The assignee shall have paid all reasonable legal fees of
the Partnership and the General Partner and filing and publication
costs in connection with his substitution as a Limited Partner.
(vii) The assignee has obtained the prior written consent of
General Partner to its admission as a Substitute Limited Partner,
which consent may be given or denied in the exercise of General
Partner's sole and absolute discretion.
(viii) The assignee shall surrender to the General Partner any
certificate evidencing the Limited Partnership Interest properly
endorsed for transfer.
(b) For the purpose of allocating profits and losses and distributing
cash received by the Partnership, a Substitute Limited Partner shall be treated
as having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.03(a)(ii) hereof or,
if no such filing is required, the later of the date specified in the transfer
documents, or the date on which the General Partner has received all necessary
instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person seeking to
become a Substitute Limited Partner by preparing the documentation required by
this Section and
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making all official filings and publications. The Partnership shall take all
such action as promptly as practicable after the satisfaction of the conditions
in this Article IX to the admission of such Person as a Limited Partner of the
Partnership.
9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.01 and 9.02 hereof, except
as required by operation of law, the Partnership shall not be obligated for any
purposes whatsoever to recognize the assignment by any Limited Partner of his
Partnership Interest until the Partnership has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a Limited
Partner's Limited Partnership Interest, but does not become a Substitute Limited
Partner and desires to make a further assignment of such Limited Partnership
Interest, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an
assignment of his Limited Partnership Interest.
9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A LIMITED
PARTNER. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.
9.06 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be acquired
by two individuals as joint tenants with right of survivorship, provided that
such individuals either are married or are related and share the same home as
tenants in common. The written consent or vote of both owners of any such
jointly held Partnership Interest shall be required to constitute the action of
the owners of such Partnership Interest; provided, however, that the written
consent of only one joint owner will be required if the Partnership has been
provided with evidence satisfactory to the counsel for the Partnership that the
actions of a single joint owner can bind both owners under the applicable laws
of the state of residence of such joint owners. Upon the death of one owner of a
Partnership Interest held in a joint tenancy with a right of survivorship, the
Partnership Interest shall become owned solely by the survivor as a Limited
Partner and not as an assignee. The Partnership need not recognize the death of
one of the owners of a jointly-held Partnership Interest until it shall have
received notice of such death. Upon notice to the General Partner from either
owner, the General Partner shall cause the Partnership Interest to be divided
into two equal
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Partnership Interests, which shall thereafter be owned separately by each of the
former owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
of Limited Partnership and all certificates of amendment thereto, (c) copies of
the Partnership's federal, state and local income tax returns and reports, (d)
copies of the Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or his duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours. The corporate Secretary of the General
Partner shall serve as the transfer agent for the certificates representing the
Partnership Units.
10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested shall be
deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation of the
business of the Partnership may be invested by the General Partner in investment
grade instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers' acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.02(b).
10.03 FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar year.
10.04 ANNUAL TAX INFORMATION AND REPORT. Within 75 days after the end of
each fiscal year of the Partnership, the General Partner shall furnish to each
person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
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51
10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a) The General Partner shall be the Tax Matters Partner of the
Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all
actions authorized and required, respectively, by the Code for the Tax Matters
Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the Partnership
under the Code shall be made by the General Partner in its sole discretion.
(c) In the event of a transfer of all or any part of the Partnership
Interest of any Partner, the Partnership, at the option of the General Partner,
may elect pursuant to Section 754 of the Code to adjust the basis of the
Properties. Notwithstanding anything contained in Article V of this Agreement,
any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account
in establishing, maintaining or computing Capital Accounts for the other
Partners for any purpose under this Agreement. Each Partner will furnish the
Partnership with all information necessary to give effect to such election.
10.06 REPORTS TO LIMITED PARTNERS.
(a) The books of the Partnership shall be audited annually as of the
end of each fiscal year of the Partnership by accountants selected by the
General Partner, who shall be the same accountants responsible for the
examination of the General Partner's books. The General Partner shall determine
and prepare an annual balance sheet, a statement of partners' capital as of the
end of such year, as well as statements of cash flow and income, all in
accordance with generally accepted accounting principles and accompanied by an
independent auditor's report (collectively, the "Financial Statements"),
together with all supplementary schedules and information prepared by the
accountants related thereto. As a note to such Financial Statements, the General
Partner shall prepare a schedule of all loans to the Partnership. Such schedule
shall demonstrate that loans have been made, used, carried on the books of the
Partnership (and repaid, if applicable) in accordance with the provisions of
this Agreement. Within 90 days after the end of each fiscal year, the General
Partner shall transmit the Financial Statements to the Limited Partners. The
General Partner also shall
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52
prepare quarterly unreviewed Financial Statements and shall transmit such
statements to the Limited Partners within 45 days of the end of each fiscal
quarter of the Partnership.
(b) Any Partner shall further have the right to a private audit of the
books and records of the Partnership, provided such audit is made for
Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT
The General Partner, without the consent of the Limited Partners, may amend
this Agreement in any respect; provided, however, that the following amendments
shall require the consent of each Limited Partner adversely affected thereby:
(a) any amendment affecting the operation of the Conversion Factor or
the Limited Partner Redemption Right;
(b) any amendment that would adversely affect the rights of the
Limited Partners to receive the distributions payable to them hereunder;
(c) any amendment that would adversely affect the rights of the
Limited Partners to receive allocations of Profit and Loss; or
(d) any amendment that would impose on the Limited Partners any
obligation to make additional Capital Contributions to the Partnership.
The foregoing shall not limit the Partnership's or the General Partner's
rights to issue Additional Partnership Interests and New Securities pursuant to
Section 4.02.
ARTICLE XII
GENERAL PROVISIONS
12.01 NOTICES. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A; provided, however, that any Partner may specify a different
address by notifying the General Partner in writing of such different address.
Notices to the Partnership shall be delivered at or mailed to its specified
office.
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53
12.02 SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
12.03 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all further acts
and execute, swear to, acknowledge and deliver all further documents which may
be reasonable, necessary, appropriate or desirable to carry out the provisions
of this Agreement or the Act.
12.04 SEVERABILITY. If any provision of this Agreement shall be declared
illegal, invalid, or unenforceable in any jurisdiction, then such provision
shall be deemed to be severable from this Agreement (to the extent permitted by
law) and in any event such illegality, invalidity or unenforceability shall not
affect the remainder hereof.
12.05 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 PRONOUNS AND PLURALS. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.
12.07 HEADINGS. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.
12.08 COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original copy and all of which together
shall constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.
12.09 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Tennessee.
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54
IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Fourth Amended and Restated Agreement of Limited Partnership,
all as of January 3, 1997.
GENERAL PARTNER:
RFS HOTEL INVESTORS, INC., a
Tennessee corporation
By: /s/ Michael J. Pascal
--------------------------------
Michael J. Pascal, Secretary,
Treasurer and Chief Financial
Officer
CLASS A LIMITED PARTNERS:
*
------------------------------------
ROBERT M. SOLMSON
*
------------------------------------
H. LANCE FORSDICK
*
------------------------------------
RFS, INC., a Tennessee corporation
THE ROBERT M. SOLMSON TRUST
*
By:
---------------------------------
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55
CLASS B LIMITED PARTNERS:
*
------------------------------------
Michael H. Dubroff
*
------------------------------------
Charles Dubroff
Michel Family Partnership
*
By:
--------------------------------
DubFam, Inc.
*
By: --------------------------------
Dubroff Family Partnership
By: RFS Hotel Investors, Inc.,
an attorney-in-fact for the
named Parties
By: /s/ Michael J. Pascal
--------------------------------
Michael J. Pascal, Secretary,
Treasurer and Chief
Financial Officer
/s/ Gordon Gund by David Prescott
------------------------------------
GORDON GUND
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56
/s/ Grant Gund by David Prescott
-------------------------------------
GRANT GUND
/s/ G. Zachary Gund by David Prescott
-------------------------------------
G. ZACHARY GUND
/s/ Hugh Scott by David Prescott
-------------------------------------
HUGH SCOTT
/s/ Robert Hecker by David Prescott
-------------------------------------
ROBERT HECKER
GIC PARTNERS:
By: /s/ David Prescott
GIC PARTNERS II:
By: /s/ David Prescott
GORDON GUND-GRANT GUND TRUST:
By: /s/ Llura Gund by David Prescott
--------------------------------
Llura Gund, Trustee
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57
GORDON GUND-G. ZACHARY GUND TRUST
By: /s/ Llura Gund by David Prescott
-------------------------------------
Llura Gund, Trustee
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58
EXHIBIT A, dated as of January 2, 1997
===========================================================================================================
Amount or
Agreed Value of Preferred
Partner Capital Partnership Partnership Percentage
and Address Contributions Units Units Interest
- - -----------------------------------------------------------------------------------------------------------
General Partner:
- - -----------------------------------------------------------------------------------------------------------
RFS Hotel Investors, Inc.
c/o 889 Ridge Lake Blvd.
Suite 100
Memphis, TN 38120 $414,528,000 973,684 24,384,000 90.46655%
- - -----------------------------------------------------------------------------------------------------------
Class A Limited Partners:
- - -----------------------------------------------------------------------------------------------------------
H. Lance Fordsick, Sr.
c/o 889 Ridge Lake Blvd.
Suite 100
Memphis, TN 38120 $ 349,741 -- 20,573 .07633%
- - -----------------------------------------------------------------------------------------------------------
Robert M. Solmson
c/o 889 Ridge Lake Blvd.
Suite 100
Memphis, TN 38120 $ 95,353 -- 5,609 .02081%
- - -----------------------------------------------------------------------------------------------------------
The Robert M. Solmson
Trust
c/o 889 Ridge Lake Blvd.
Suite 100
Memphis, TN 38120 $ 120,462 -- 7,086 .02629%
- - -----------------------------------------------------------------------------------------------------------
RFS, Inc.
c/o 889 Ridge Lake Blvd.
Suite 100
Memphis, TN 38120 $ 1,324,351 -- 77,903 .28903%
- - -----------------------------------------------------------------------------------------------------------
Class B Limited Partners:
- - -----------------------------------------------------------------------------------------------------------
Dubfam Inc.
c/o Residence Inn
Route 9, Interstate 84
Fishkill, NY 12524 $ 24,429 -- 1,437 .00533%
- - -----------------------------------------------------------------------------------------------------------
Michael H. Dubroff
c/o Residence Inn
Route 9, Interstate 84
Fishkill, NY 12524 $ 637,551 -- 37,503 .13914%
- - -----------------------------------------------------------------------------------------------------------
The Dubroff Family
Partnership
c/o Residence Inn
Route 9, Interstate 84
Fishkill, NY 12524 $ 806,089 -- 47,417 .17592%
- - -----------------------------------------------------------------------------------------------------------
59
- - -----------------------------------------------------------------------------------------------------------
The Michel Family
Partnership
c/o Residence Inn
Route 9, Interstate 84
Fishkill, NY 12524 $ 1,534,998 -- 90,294 .33500%
- - -----------------------------------------------------------------------------------------------------------
Charles M. Dubroff
c/o Residence Inn
Route 9, Interstate 84
Fishkill, NY 12524 $ 626,501 -- 36,853 .13673%
- - -----------------------------------------------------------------------------------------------------------
Gordon Gund
14 Nassau Street
Princeton, NJ 08542 $ 17,145,656 -- 1,008,568 3.74187%
- - -----------------------------------------------------------------------------------------------------------
Grant Gund
14 Nassau Street
Princeton, NJ 08542 $ 4,838,948 -- 284,644 1.05605%
- - -----------------------------------------------------------------------------------------------------------
G. Zachary Gund
14 Nassau Street
Princeton, NJ 08542 $ 4,838,948 -- 284,644 1.05605%
- - -----------------------------------------------------------------------------------------------------------
Gordon Gund-Grant Gund
Trust
c/o Llura Gund, Trustee
14 Nassau Street
Princeton, NJ 08542 $ 2,548,980 -- 149,940 .55629%
- - -----------------------------------------------------------------------------------------------------------
Gordon Gund-G. Zachary
Gund Trust
c/o Llura Gund, Trustee
14 Nassau Street --
Princeton, NJ 08542 $ 2,548,980 149,940 .55629%
- - -----------------------------------------------------------------------------------------------------------
G.I.C. Partners
114 Nassau Street
Princeton, NJ 08542 $ 1,362,125 -- 80,125 .29727%
- - -----------------------------------------------------------------------------------------------------------
G.I.C. Partners II
14 Nassau Street
Princeton, NJ 08542 $ 143,446 -- 8,438 .03131%
- - -----------------------------------------------------------------------------------------------------------
Hugh C. Scott
#5 West Shore Road
Belvedere, CA 94920 $ 3,422,032 -- 201,296 .74682%
- - -----------------------------------------------------------------------------------------------------------
Robert M. Hecker
611 Washington Street
Suite 2302
San Francisco, CA 94111 $ 1,314,763 -- 77,339 .28693%
- - -----------------------------------------------------------------------------------------------------------
Total $458,211,353 -- 26,953,609 100%
===========================================================================================================
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60
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
The undersigned hereby irrevocably (i) presents for redemption ______ units
of limited partnership interest ("Units") in RFS Partnership, L.P. (the
"Partnership") in accordance with the terms of the Agreement of Limited
Partnership ("Agreement") of the Partnership and the "Limited Partner Redemption
Right" defined therein, (ii) surrenders such Units and all right, title and
interest therein, (iii) surrenders herewith any certificate or other writing
evidencing the Units (and requests that any Units so evidenced that are not
redeemed be evidenced by the issuance of a new certificate or writing) and (iv)
directs that the "Cash Amount" or "REIT Shares Amount" (as determined by the
General Partner), as defined in the Agreement, deliverable upon exercise of the
Limited Partner Redemption Rights be delivered to the address specified below,
and if REIT Shares are to be delivered, such REIT Shares be registered or placed
in the name(s) and at the address(es) specified below.
Dated:
----------------
Name of Limited Partner:
------------------------------
(Signature of Limited Partner)
------------------------------
(Street Address)
------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
------------------------------
If REIT Shares are to be issued, issue to:
- - ----------------------------
- - ----------------------------
- - ----------------------------
Please provide social security or identifying number:
- - ---------------
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61
ACCEPTANCE OF GENERAL PARTNER:
RFS Hotel Investors, Inc., as General Partner of the Partnership, hereby
accepts the Units described above for redemption in accordance with the
Agreement, and by its execution hereof evidences conclusively that the Limited
Partner has satisfied all of the requirements under the Agreement for exercise
of the Limited Partner Redemption Right, or that some or all of such
requirements have been waived, such waiver being in the sole discretion of the
General Partner
RFS Hotel Investors, Inc.
By: _____________________
Robert M. Solmson
Its: President
Dated: ____________________
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