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U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported):
November 12, 1997
American Real Estate Investment Corporation
(Name of small business issuer in its charter)
Maryland 1-12514 84-1246585
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(State or other (Commission File Number) (IRS Employer
jurisdiction Identification Number)
of incorporation
1670 Broadway, Suite 3350, Denver, Colorado 80202
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(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number (including Area Code): (303) 869-4700
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Item 7. Financial Statements and Exhibits.
(c) Exhibits. This Current Report is filed for the purpose of filing
the following exhibits by EDGAR:
3.1 Articles of Incorporation of the Registrant filed with the State
of Maryland on August 17, 1994
3.2 Articles of Merger between American Real Estate Investment
Corporation, a Delaware corporation, and the Registrant filed with
the State of Maryland on August 26, 1994
3.3 Articles of Amendment of the Registrant filed with the State of
Maryland on June 23, 1995
3.4 Bylaws of the Registrant
10.1.1 Agreement of Limited Partnership of American Real Estate
Investment, L.P. dated November 10, 1993
10.1.2 Amendment No. 1 dated June 30, 1997 to Agreement of Limited
Partnership of American Real Estate Investment, L.P.
10.1.3 Amendment No. 2 dated August 11, 1997 to Agreement of Limited
Partnership of American Real Estate Investment, L.P.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned, thereunto duly authorized.
American Real Estate Investment Corporation
By: /s/ Rick A. Burger
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Rick A. Burger, Treasurer
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Exhibit 3.1
ARTICLES OF INCORPORATION
OF
AMERICAN REAL ESTATE INVESTMENT CORPORATION
(a Maryland corporation)
ARTICLE I
INCORPORATOR
The undersigned, Evan Zucker, whose address is 1777 South Harrison
Street, Suite 312, Denver, Colorado 80210, being at least 18 years of age, does
hereby form a corporation under the general laws of the State of Maryland.
ARTICLE II
NAME
The name of the corporation is AMERICAN REAL ESTATE INVESTMENT
CORPORATION (the "Corporation").
ARTICLE III
PURPOSE
The purpose of the Corporation is to engage in any lawful act or
activity (including, without limitation or obligation, engaging in business as a
real estate investment trust under the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute (the "Code")) for which corporations
may be organized under the general laws of the State of Maryland as now or
hereafter in force. For purposes of these Articles, "REIT" means a real estate
investment trust as defined in Sections 856 through 860 of the Code.
ARTICLE IV
PRINCIPAL OFFICE IN THE STATE AND RESIDENT AGENT
The post office address and principal office of the Corporation in
the State of Maryland is The Prentice-Hall Corportion System, Maryland, 11 East
Chase Street, Baltimore, Maryland 21202. The name and address of the resident
agent of the Corporation in the State of Maryland is The Prentice-Hall
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Corporation System, Maryland, 11 East Chase Street, Baltimore,
Maryland 21202. The resident agent is a Maryland corporation.
ARTICLE V
STOCK
A. Classes and Number of Shares.
The total number of shares of all classes of capital stock that the
Corporation shall have authority to issue is Sixty Five Million (65,000,000)
shares, consisting of (i) Five Million (5,000,000) shares of preferred stock,
par value $0.01 per share (the "Preferred Stock"), (ii) Thirty Million
(30,000,000) shares of common stock, par value $0.001 per share (the "Common
Stock") and (iii) Thirty Million (30,000,000) shares of excess stock, par value
$0.001 per share (the "Excess Stock"). The aggregate par value of all shares of
stock having par value is $110,000. Unless otherwise required by law or these
Articles, approval of stockholders is not required for the issuance of shares.
B. Preferred Stock.
The Preferred Stock may be divided into such number of series as the
Board of Directors may determine. The Board of Directors is authorized to
classify or reclassify any unissued shares of Preferred Stock by setting or
changing the preference, conversion or other rights and conditions, voting
rights, preferences before dividends are set apart for or paid to the holders of
another class of stock, rates, amount, times of payment, restrictions and
limitations as to dividends or other distributions, whether cumulative,
cumulative to a limited extent or non-cumulative, preferences, if any, over
another class as to its distributive share of the assets on voluntary or
involuntary liquidation and the amount of the preferences, qualifications or
terms or conditions of redemption of such Preferred Stock or any series thereof,
and any other preferences, rights, restrictions, including restrictions on
transferability, and qualifications not inconsistent with law, and to fix the
number of shares of any series of Preferred Stock, and the designation of any
such series of Preferred Stock, provided that all such Preferred Stock shall
have a par value of $0.01 per share. The Board of Directors, within the limits
and restrictions stated in any resolution or resolutions of the Board of
Directors originally fixing the number of shares constituting any series, may
increase or decrease (but not below the number of shares of such series then
outstanding) the number of shares of any series subsequent to the issue of
shares of that series. Before issuing any stock pursuant to the foregoing, the
board shall file Articles Supplementary for record with the Maryland State
Department of Assessment and Taxation pursuant to Section 2-208 of the Maryland
General Corporation Law.
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C. Common Stock.
(1) Common Stock Subject to Terms of Preferred Stock. The Common
Stock shall be subject to the express terms of the Preferred Stock and any
series thereof.
(2) Dividend Rights. The holders of shares of the Common Stock shall
be entitled to receive such dividends as may be declared by the Board of
Directors of the Corporation out of funds legally available therefor.
(3) Rights Upon Liquidation. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of, or any distribution of
the assets of, the Corporation, each holder of shares of the Common Stock shall
be entitled to receive, ratably with each other holder of shares of Common Stock
and Excess Stock, that portion of the assets of the Corporation available for
distribution to the holders of its Common Stock and Excess Stock, as the number
of shares of the Common Stock held by such holder bears to the total number of
shares of Common Stock and Excess Stock then outstanding.
(4) Voting Rights. Except as may be provided in these Articles or in
Articles Supplementary, the holders of shares of the Common Stock shall have the
exclusive right to vote on all matters (for which a common stockholder shall be
entitled to vote thereon) at all meetings of the stockholders of the
Corporation, and shall be entitled to one vote for each share of the Common
Stock entitled to vote at such meeting.
D. Restrictions on Transfer.
(1) Definitions. The following terms, used in this Article V and
elsewhere in these Articles, shall have the following meanings:
"American Real Estate Investment, L.P. Agreement" shall
mean the agreement of limited partnership establishing American Real Estate
Investment, L.P., a Delaware Limited Partnership.
"Articles Supplementary" shall mean any Articles Supplementary
filed pursuant to Article V, Section B of these Articles.
"Beneficial Ownership" shall mean ownership of Equity Stock by
a Person who would be treated as an owner of such shares of Equity Stock either
directly or indirectly through the
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application of Section 544 of the Code, as modified by Section 856(h)(1)(B) of
the Code; except that such Person shall be treated as having exercised any
option or any other right to acquire Equity Stock if such exercise would result
in any increase in such person's ownership percentage in the Corporation,
whether or not such option or other right is to be deemed exercised under
Section 544 of the Code. The terms "Beneficial Owner," "Beneficially Owns" and
"Beneficially Owned" shall have correlative meanings.
"Board of Directors" shall mean the Board of Directors of the
Corporation.
"Bylaws" shall mean the Bylaws of the Corporation.
"Capital Stock" shall mean stock that is Common Stock, Excess
Stock or Preferred Stock.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Constructive Ownership" shall mean ownership of Equity Stock
by a Person who would be treated as an owner of such shares of Equity Stock
either directly or indirectly through the application of Section 318 of the
Code, as modified by Section 856(d)(5) of the Code. The terms "Constructive
Owner," "Constructively Owns" and "Constructively Owned" shall have correlative
meanings.
"Equity Stock" shall mean stock that is either Common Stock or
Preferred Stock.
"Existing Holder" shall mean Evan Zucker, Barbara Zucker,
Brian Zucker, Marshall Zucker, James Mulvihill, Gail Mulvihill, Heather
Mulvihill, Andrew Mulvihill, Gene Mulvihill, Jr., Chris Mulvihill, and Rosalind
Davidowitz.
"Existing Holder Limit" shall mean, initially, the greater of
the Ownership Limit and the percentage of the value of the outstanding Common
Stock Beneficially Owned by each Existing Holder immediately after the Initial
Public Offering, and after any adjustment pursuant to subparagraph D(9) of this
Article IV, shall mean such percentage of the outstanding Equity Stock as so
adjusted.
"Initial Public Offering" means the sale of shares of Common
Stock pursuant to the Corporation's (or its predecessor's) registration
statement for such Common Stock filed under the Securities Act of 1933, as
amended, and declared effective on November 3, 1993.
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"Market Price" on any date shall mean the average of the
Closing Price for the five consecutive Trading Days ending on such date. The
"Closing Price" on any date shall mean the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the American Stock Exchange or, if the Equity Stock is
not listed or admitted to trading on the American Stock Exchange, as reported in
the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Equity Stock is listed or admitted to trading or, if the Equity Stock is not
listed or admitted to trading on any national securities exchange, the last
quoted price, or if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by the National Association
of Securities Dealers, Inc. Automated Quotation System or, if such system is no
longer in use, the principal other automated quotation system that may then be
in use or, if the Equity Stock is not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Equity Stock selected by the Board of
Directors of the Company. "Trading Day" shall mean a day on which the principal
national securities exchange on which the Equity Stock is listed or admitted to
trading is open for the transaction of business or, if the Equity Stock is not
listed or admitted to trading on any national securities exchange, shall mean
any day other than a Saturday, a Sunday or a day on which banking institutions
in the State of New York are authorized or obligated by law or executive order
to close.
"MGCL" shall mean the Maryland General Corporation Law as
amended from time to time.
"Ownership Limit" shall initially mean 4.75% of the value of
the outstanding Equity Stock of the Corporation, and after any adjustment as set
forth in subparagraph D(10) of this Article IV, shall mean such greater
percentage (but not more than 4.75%) of the value of the outstanding Equity
Stock as so adjusted.
"Person" shall mean an individual, corporation, partnership,
estate, trust (including a trust qualified under Section 401(a) or 501(c)(17) of
the Code) other than a Qualified Trust whose Equity Stock is treated, for
purposes of Section 542(a)(2) as not being held by such Qualified Trust but as
being held by such Qualified Trust's beneficiaries in proportion to their
actuarial interests therein, a portion of a trust permanently set aside for or
to be used exclusively for the purposes described in Section 642(c) of the Code,
association,
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private foundation within the meaning of Section 509(a) of the Code, joint stock
company or other entity and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Purported Beneficial Transferee" shall mean, with respect to
any purported Transfer which results in Excess Stock, the purported beneficial
transferee for whom the Purported Record Transferee would have acquired shares
of Equity Stock if such Transfer had been valid under subparagraph D(2) of this
Article V.
"Purported Record Transferee" shall mean, with respect to any
purported Transfer which results in Excess Stock, the record holder of the
Equity Stock if such Transfer had been valid under subparagraph D(2) of this
Article V.
"Qualified Trust" shall mean any trust described under Section
401(a) of the Code and exempt from tax under Section 501(a) of the Code.
"REIT" shall mean a Real Estate Investment Trust under Section
856 of the Code.
"Restriction Termination Date" shall mean the first day after
the date of the Initial Public Offering on which the Board of Directors of the
Corporation determine that it is no longer in the best interests of the
Corporation to attempt to, or continue to, qualify as a REIT.
"Rights" shall mean the rights granted under the American Real
Estate Investment, L.P. Agreement to the limited partners, to acquire Common
Stock.
"Transfer" shall mean any sale, transfer, gift, hypothecation,
pledge, assignment, devise or other disposition of Equity Stock, (including (i)
the granting of any option or entering into any agreement for the sale, transfer
or other disposition of Equity Stock or (ii) the sale, transfer, assignment or
other disposition of any securities or rights convertible into or exchangeable
for Equity Stock), whether voluntary or involuntary, whether of record,
constructively or beneficially and whether by operation of law or otherwise.
"Trust" shall mean the trust created pursuant to subparagraph
E(1) of this Article V.
"Trustee" shall mean the Corporation, acting as trustee for
the Trust or any successor trustee appointed by the Corporation.
"Voting Stock" shall mean the outstanding shares
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of Capital Stock of the Corporation entitled to vote generally in the election
of directors.
"Whole Board" shall mean the total number of Directors which
the Corporation would have if there were no vacancies.
(2) Restriction on Transfers.
(a) Except as provided in subparagraph D(9) of this Article V,
from the date of the Initial Public Offering and prior to the Restriction
Termination Date, no Person (other than an Existing Holder) shall Beneficially
Own or Constructively Own shares of the outstanding Equity Stock in excess of
the Ownership Limit, and no Existing Holder shall Beneficially Own or
Constructively Own shares of Equity Stock in excess of the Existing Holder Limit
for such Existing Holder.
(b) Except as provided in subparagraph D(9) of this Article V,
from the date of the Initial Public Offering and prior to the Restriction
Termination Date, any transfer that, if effective, would result in any Person
(other than an Existing Holder) Beneficially Owning or Constructively Owning
Equity Stock in excess of the Ownership Limit shall be void ab initio as to the
Transfer of that number of shares of Equity Stock which would be otherwise
Beneficially or Constructively Owned by such person in excess of the Ownership
Limit; and the intended transferee shall acquire no rights in such excess shares
of Equity Stock.
(c) Except as provided in subparagraph D(9) of this Article V,
from the date of the Initial Public Offering and prior to the Restriction
Termination Date, any Transfer that, if effective, would result in any Existing
Holder Beneficially Owning or Constructively Owning Common Stock in excess of
the applicable Existing Holder Limit shall be void ab initio as to the Transfer
of that number of shares of Equity Stock which would be otherwise Beneficially
Owned or Constructively Owned by such Person in excess of the applicable
Existing Holder Limit; and such Existing Holder shall acquire no rights in such
excess shares of Equity Stock.
(d) Except as provided in subparagraph D(9) of this Article V,
from the date of the Initial Public Offering and prior to the Restriction
Termination Date, any Transfer that, if effective, would result in the Equity
Stock being Beneficially Owned by fewer than 100 Persons (determined without
reference to any rules of attribution) shall be void ab initio as to the
Transfer of that number of shares which would be otherwise Beneficially or
Constructively Owned by the transferee; and the intended transferee shall
acquire no rights in such excess shares
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of Equity Stock.
(e) From the date of the Initial Public Offering and prior to
the Restriction Termination Date, any Transfer of shares of Equity Stock that,
if effective, would result in the Corporation being "closely held" within the
meaning of Section 856(h) of the Code shall be void ab initio as to the Transfer
of that number of shares of Equity Stock which would cause the Corporation to be
"closely held" within the meaning of Section 856(h) of the Code; and the
intended transferee shall acquire no rights in such excess shares of Equity
Stock.
(3) Exchange For Excess Stock.
(a) If, notwithstanding the other provisions contained in this
Article V, at any time after the date of the Initial Public Offering and prior
to the Restriction Termination Date, there is a purported Transfer or other
change in the capital structure of the Corporation such that any Person would
either Beneficially Own or Constructively Own Equity Stock in excess of the
Ownership Limit or Existing Holder Limit, then, except as otherwise provided in
subparagraph D(9), such shares of Equity Stock in excess of the Ownership Limit
or Existing Holder Limit (rounded up to the nearest whole share) shall be
automatically exchanged for an equal number of shares of Excess Stock. Such
exchange shall be effective as of the close of business on the business day
prior to the date of the Transfer or change in capital structure.
(b) If, notwithstanding the other provisions contained in this
Article V, at any time after the date of the Initial Public Offering and prior
to the Restriction Termination Date, there is a purported Transfer or other
change in the capital structure of the Corporation which, if effective, would
cause the Corporation to become "closely held" within the meaning of Section
856(h) of the Code, then the shares of Equity Stock being Transferred or which
are otherwise affected by the change in capital structure and which, in either
case, would cause the Corporation to be "closely held" within the meaning of
Section 856(h) of the Code (rounded up to the nearest whole share) shall be
automatically exchanged for an equal number of shares of Excess Stock. Such
exchange shall be effective as of the close of business on the business day
prior to the date of the Transfer or change in capital structure.
(4) Remedies For Breach. If the Board of Directors or its designees
shall at any time determine in good faith that a Transfer has taken place in
violation of subparagraph D(2) of this Article V or that a Person intends to
acquire or has attempted to acquire Beneficial Ownership or Constructive
Ownership of any shares of Equity Stock in violation of subparagraph D(2) of
this Article V, the Board of Directors or
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its designees shall take such action as it or they deem advisable to refuse to
give effect to or to prevent such Transfer, including, but not limited to,
refusing to give effect to such Transfer on the books of the Corporation or
instituting proceedings to enjoin such Transfer; provided, however, that any
Transfers or attempted Transfers in violation of subparagraphs D(2)(a)-(c) and
(e) of this Article V shall be void ab initio and automatically result in the
exchange described in subparagraph D(3), irrespective of any action (or
non-action) by the Board of Directors or its designees.
(5) Notice of Restricted Transfer. Any person who acquires or
attempts to acquire shares of Equity Stock in violation of subparagraph D(2) of
this Article V, or any Person who is a transferee such that Excess Stock results
under subparagraph D(3) of this Article V, shall immediately give written notice
to the Corporation of such event and shall provide to the Corporation such other
information as the Corporation may request in order to determine the effect, if
any, of such Transfer or attempted Transfer on the Corporation's status as a
REIT.
(6) Owners Required To Provide Information. From the date of the
Initial Public Offering and prior to the Restriction Termination Date:
(a) every Beneficial Owner or Constructive Owner of more than
5%, or such lower percentages as required pursuant to regulations under the
Code, of the outstanding Equity Stock of the Corporation shall, within 30 days
after January 1 of each year, give written notice to the Corporation stating the
name and address of such Beneficial Owner or Constructive Owner, the number of
shares of Equity Stock Beneficially Owned, or Constructively Owned, and a
description of how such shares are held. Each such Beneficial Owner or
Constructive Owner shall provide to the Corporation such additional information
as the Corporation may request in order to determine the effect, if any, of such
Beneficial Ownership on the Corporation's status as a REIT and to ensure
compliance with the Ownership Limit and Existing Holder Limit.
(b) each Person who is a Beneficial Owner or Constructive
Owner of Equity Stock and each Person (including the stockholder of record) who
is holding Equity Stock for a Beneficial Owner or Constructive Owner shall
provide to the Corporation such information as the Corporation may request in
order to determine the Corporation's status as a REIT and to ensure compliance
with the Ownership Limit and Existing Holder Limit.
(7) Remedies Not Limited. Nothing contained in this Article V shall
limit the authority of the Board of Directors to take such other action as it
deems necessary or advisable to
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protect the Corporation and the interests of its stockholders by preservation of
the Corporation's status as a REIT and to ensure compliance with the Ownership
Limit and Existing Holder Limit.
(8) Ambiguity. In the case of an ambiguity in the application of any
of the provisions of subparagraph D of this Article V, including any definition
contained in subparagraph D(1), the Board of Directors shall have the power to
determine the application of the provisions of this subparagraph D with respect
to any situation based on the facts known to it.
(9) Exception. The Board of Directors, upon receipt of a ruling from
the Internal Revenue Service or an opinion of counsel in each case to the effect
that the restrictions contained in subparagraphs D(2)(d) and subparagraph
D(2)(e) will not be violated, may exempt a Person from the Ownership Limit or
Existing Holder Limit if such Person is not an individual for purposes of
Section 542(a)(2) of the Code or is an underwriter which participates in a
public offering of the Equity Stock for a period of 90 days following the
purchase by such underwriter of the Equity Stock and the Board of Directors
obtains such representations and undertakings from such Person as are reasonably
necessary to ascertain that no individual's Beneficial Ownership of Equity Stock
will violate the Ownership Limit or Existing Holder Limit and agrees that any
violation or attempted violation will result in such Equity Stock being
exchanged for Excess Stock in accordance with subparagraph D(3) of this Article
V.
(10) Modifications of Existing Holding Limits. The Existing Holder
Limit shall be modified as follows:
(a) Subject to the limitations contained in subparagraph
D(12), the Board of Directors may grant stock options which result in Beneficial
Ownership or Constructive Ownership of Equity Stock by an Existing Holder
pursuant to a stock option plan approved by the stockholders of the Corporation.
Any such grant of stock options shall increase the Existing Holder Limit for the
affected Existing Holder to the maximum extent possible under subparagraph D(12)
to permit the Beneficial Ownership or Constructive Ownership of the Shares of
Equity Stock issuable upon exercise of such stock options.
(b) The Board of Directors may reduce the Existing Holder
Limit for any Existing Holder, with the written consent of such Existing Holder,
after any Transfer permitted in this subparagraph D by such Existing Holder to a
Person other than an Existing Holder or after the lapse (without exercise) of a
stock option described in subparagraph D(10)(a).
(11) Modification of Ownership Limit.
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Subject to the limitations contained in subparagraph D(12),
the Board of Directors may from time to time increase the Ownership Limit.
(12) Limitations on Modifications.
(a) Neither the Ownership Limit nor any Existing Holder Limit
may be increased (nor may any additional Existing Holder Limit be created) if,
after giving effect to such increase (or creation), five Beneficial Owners of
Equity Stock (including all of the then Existing Holders) could (assuming
ownership of shares by all Persons other than Existing Holders equal to the
Ownership Limit) Beneficially Own, in the aggregate, more than 50% of the
outstanding Equity Stock.
(b) Prior to any modifications of any Existing Holder Limit or
Ownership Limit, the Board of Directors of the Corporation may require such
opinions of counsel, affidavits, undertakings or agreements as it may deem
necessary or advisable in order to determine or ensure the Corporation's status
as a REIT.
(c) No Existing Holder Limit shall be reduced to a percentage
that is less than the Ownership Limit.
(d) The Ownership Limit may not be increased to a percentage
that is greater than 9.8%.
(13) Legend. Each certificate for Equity Stock shall bear the
following legend:
"The shares of Common Stock represented by this certificate are
subject to restrictions on transfer for the purpose of the Corporation's
maintenance of its status as a real estate investment trust under the Internal
Revenue Code of 1986, as amended (the "Code"). No Person may (1) Beneficially
Own or Constructively Own shares of Equity Stock in excess of 4.75% (or such
greater percentage as may be determined by the Board of Directors of the
Corporation) of the value of the outstanding Equity Stock of the Corporation
unless such Person is an Existing Holder (in which case the Existing Holder
Limit shall be applicable); or (2) Beneficially Own Equity Stock which would
result in the Corporation being "closely held" under Section 856(h) of the Code.
Any Person who attempts to Beneficially Own or Constructively Own shares of
Equity Stock in excess of the above Limitations must immediately notify the
Corporation. All capitalized terms in this legend have the meanings defined in
the Corporation's Articles of Incorporation, as the same may be further amended
from time to time, a copy of which, including the restrictions on transfer, will
be sent without charge to each stockholder who so requests. If the restrictions
on transfer are violated, the shares of Equity Stock represented hereby will be
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automatically exchanged for shares of Excess Stock which will be held in
trust by the Corporation."
(14) Severability. If any provision of this Article V or any
application of any such provision is determined to be invalid by any Federal or
state court having jurisdiction over the issues, the validity of the remaining
provisions shall not be affected and other applications of such provision shall
be affected only to the extent necessary to comply with the determination of
such court.
E. Excess Stock.
(1) Ownership In Trust. Upon any purported Transfer that
results in Excess Stock pursuant to subparagraph D(3) of this Article V, such
Excess Stock shall be deemed to have been transferred to the Corporation, as
Trustee of a Trust for the exclusive benefit of such Beneficiary or
Beneficiaries to whom an interest in such Excess Stock may later be transferred
pursuant to subparagraph E(5). Shares of Excess Stock so held in trust shall be
issued and outstanding stock of the Corporation. The Purported Record Transferee
shall have no rights in such Excess Stock except the right to designate a
transferee of such Excess Stock upon the terms specified in subparagraph E(5) of
this Article V. The purported Beneficial Transferee shall have no rights in such
Excess Stock except as provided in subparagraph E(5).
(2) Dividend Rights. Excess Stock shall not be entitled to any
dividends. Any dividend or distribution paid prior to the discovery by the
Corporation that the shares of Equity Stock have been exchanged for Excess Stock
shall be repaid to the Corporation upon demand, and any dividend or distribution
declared but unpaid shall be rescinded as void ab initio with respect to such
shares of Equity Stock.
(3) Rights Upon Liquidation. Subject to the preferential
rights of any Preferred Stock, if any, as may be determined by the Board of
Directors of the Corporation pursuant to paragraph B of this Article V, in the
event of any voluntary or involuntary liquidation, dissolution or winding up of,
or any distribution of the assets of, the Corporation, each holder of shares of
Excess Stock shall be entitled to receive, ratably with each other holder of
Common Stock and Excess Stock that portion of the assets of the Corporation
available for distribution to its stockholders as the number of shares of the
Excess Stock held by such holder bears to the total number of shares of Common
Stock and Excess Stock then outstanding. The Corporation, as holder of the
Excess Stock in trust, or if the Corporation shall
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have been dissolved, any trustee appointed by the Corporation prior to its
dissolution, shall distribute ratably to the Beneficiaries of the Trust, when
determined, any such assets received in respect of the Excess Stock in any
liquidation, dissolution or winding up of, or any distribution of the assets of
the Corporation.
(4) Voting Rights. The holders of shares of Excess Stock
shall not be entitled to vote on any matters (except as required by the MGCL).
(5) Restrictions On Transfer; Designation of Beneficiary.
(a) Excess Stock shall not be transferrable. The
Purported Record Transferee may freely designate a Beneficiary of its interest
in the Trust (representing the number of shares of Excess Stock held by the
Trust attributable to a purported Transfer that resulted in the Excess Stock),
if (i) the shares of Excess Stock held in the Trust would not be Excess Stock in
the hands of such Beneficiary and (ii) the Purported Beneficial Transferee does
not receive a price for designating such Beneficiary that reflects a price per
share for such Excess Stock that exceeds (x) the price per share such Purported
Beneficial Transferee paid for the Equity Stock in the purported Transfer that
resulted in the Excess Stock, or (y) if the Purported Beneficial Transferee did
not give value for such shares of Excess Stock (through a gift, devise or other
transaction), a price per share equal to the Market Price on the date of the
purported Transfer that resulted in the Excess Stock. Upon such transfer of an
interest in the Trust, the corresponding shares of Excess Stock in the Trust
shall be automatically exchanged for an equal number of shares of Equity Stock
and such shares of Equity Stock shall be transferred of record to the
Beneficiary of the interest in the Trust designated by the Purported Record
Transferee as described above if such Equity Stock would not be Excess Stock in
the hands of such Beneficiary. Prior to any transfer of any interest in the
Trust, the Purported Record Transferee must give advance notice to the
Corporation of the intended transfer and the Corporation must have waived in
writing its purchase rights under subparagraph E(6) of this Article V.
(b) Notwithstanding the foregoing, if a Purported
Beneficial Transferee receives a price for designating a Beneficiary of an
interest in the Trust that exceeds the amounts allowable under subparagraph E(5)
(a) of this Article V, such Purported Beneficial Transferee shall pay, or cause
the Beneficiary of the interest in the Trust to pay, such excess to the
Corporation.
(6) Purchase Right in Excess Stock. Shares of
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Excess Stock shall be deemed to have been offered for sale to the Corporation,
or its designee, at a price per share equal to the lesser of (i) the price per
share in the transaction that created such Excess Stock (or, in the case of
devise or gift, the Market Price at the time of such devise or gift) and (ii)
the Market Price on the date the Corporation, or its designee, accepts such
offer. The Corporation shall have the right to accept such offer for a period of
ninety days after the later of (i) the date of the Transfer which resulted in
such Excess Stock and (ii) the date the Board of Directors determines in good
faith that a Transfer resulting in Excess Stock has occurred, if the Corporation
does not receive a notice of such Transfer pursuant to subparagraph D(5) of this
Article V.
F. Issuance of Rights to Purchase Securities and other Property.
Subject to the rights of the holders of any series of Preferred
Stock, the Board of Directors is hereby authorized to create and to authorize
and direct the issuance (on either a pro rata or a non-pro rata basis) by the
Corporation of rights, options, and warrants for the purchase of shares of
capital stock of the Corporation, other securities of the Corporation, or shares
or other securities of any successor in interest of the Corporation (a
"Successor"), at such time, in such amounts, to such persons, for such
consideration (if any), with such form and content (including without limitation
the consideration for which any shares of capital stock of the Corporation,
other securities of the Corporation, or shares or other securities of any
Successor are to be issued) and upon such terms and conditions as it may, from
time to time, determine upon, subject only to the restrictions, limitations,
conditions and requirements imposed by the MGCL, other applicable laws and these
Articles.
ARTICLE VI
INDEMNIFICATION AND ADVANCE FOR EXPENSES
To the maximum extent permitted by Maryland law in effect from time
to time, the Corporation shall have the power to obligate itself to indemnify,
and pay or reimburse reasonable expenses in advance of final disposition of a
proceeding to, (i) any individual who is a present or former director, officer,
employee, or agent of the Corporation, or (ii) any individual who, while a
director, officer, employee or agent of the Corporation and at the request of
the Corporation, serves or has served another corporation, partnership, joint
venture, trust,
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<PAGE>
employee benefit plan, or any other enterprise as a director, officer, partner
or trustee of such corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise. The Corporation shall have the power, with the
approval of its Board of Directors, to provide such indemnification and
advancement of expenses to a person who served as a predecessor of the
Corporation in any of the capacities described in (i) or (ii) above and to any
employee or agent of the Corporation or a predecessor of the Corporation.
ARTICLE VII
LIMITATION OF LIABILITY
To the maximum extent permitted by Maryland law in effect from time
to time, no director or officer of the Corporation shall be liable to the
Corporation or its stockholders for money damages. Neither the amendment nor
repeal of this Article VII, nor the adoption or amendment of any other provision
of the Articles of Incorporation or Bylaws of the Corporation inconsistent with
this Article VII, shall apply to or affect in any respect the applicability of
the preceding sentence with respect to any act or failure to act which occurred
prior to such amendment, repeal or adoption. This Article shall not include any
provision that restricts or limits the liability of its directors or officers to
the Corporation or its stockholders:
(1) To the extent that it is proved that the person actually
received an improper benefit or profit in money, property, or services for the
amount of the benefit or profit in money, property, or services actually
received;
(2) To the extent that a judgment or other final adjudication
adverse to the person is entered in a proceeding based on a finding in the
proceeding that the person's action, or failure to act, was the result of active
and deliberate dishonesty and was material to the cause of action adjudicated in
the proceeding; or
(3) With respect to any action described in subsection (b) of
Section 5-349 of Title 5 of the Courts and Judicial Proceedings Article of the
laws of the State of Maryland.
ARTICLE VIII
BOARD OF DIRECTORS
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<PAGE>
Section 1. Number. The number of Directors of the Corporation
initially shall be five (5), which number may be altered pursuant to a
resolution adopted by a majority of the Whole Board within such limits as are
specified in the Bylaws of the Corporation. The names of the Directors who shall
serve effective immediately and until their successors are duly elected and
qualified, as hereinafter provided, are:
Michael Rotchford (First Class)
Hord Hardin, III (First Class)
James Mulvihill (Second Class)
Evan Zucker (Second Class)
J. Christopher O'Keeffe (Third Class)
Section 2. Staggered Board. The board of directors shall be divided
into three classes, as nearly equal in number as possible. The First Class of
Directors (as identified above) shall serve until the annual meeting of the
stockholders held in 1995 for a term of three years. The Second Class of
Directors (as identified above) shall serve until the annual meeting of the
stockholders held in 1996 for a term of three years. The Third Class of
Directors shall serve until the annual meeting of the stockholders held in 1997
for a term of three years. Directors elected to succeed those Directors whose
terms have thereupon expired shall be elected for a term of office of three
years and until the election and qualification of their successors. If the
number of Directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain or attain, if possible, the equality of the
number of Directors in each class, but in no case will a decrease in the number
of Directors shorten the term of any incumbent Director. If such equality is not
possible, the increase or decrease shall be apportioned among the classes in
such a way that the difference in the number of Directors in any two classes
shall not exceed one.
Section 3. Vacancies. Any vacancies in the Board of Directors
resulting from any cause (except for an increase in the number of Directors) may
be filled by a majority of the remaining Directors then in office, although less
than a quorum. Any vacancy resulting from an increase in the number of directors
may be filled by majority vote of the Whole Board. A Director elected by the
Board of Directors to fill a vacancy resulting from any cause shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
office of the class to which he shall have been elected expires and until such
director's successor shall have been duly elected and qualified.
Section 4. Removal. Any Director, or the entire Board of Directors,
may be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at
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least 75% of the then outstanding voting stock voting together as a single
class. No decrease in the number of authorized Directors constituting the Whole
Board shall shorten the terms of any incumbent director.
ARTICLE XI
STOCKHOLDERS MEETINGS
Special meetings of stockholders of the Corporation may be called
only by the president of the Corporation, pursuant to a resolution adopted by a
majority of the Whole Board, or, subject to the Maryland General Corporation
Law, upon the written request of the holders of shares entitled to cast not less
than 25% of all the votes entitled to be cast at the meeting.
ARTICLE XII
AMENDMENT TO BYLAWS
The Directors of the Corporation shall have the power to adopt,
amend, alter, change, repeal or add to the Bylaws of the Corporation by the
affirmative vote of a majority of the Whole Board. The affirmative vote of the
holders of at least 75% of the voting power of all of the shares of stock of the
Corporation then entitled to vote generally in the election of Directors, voting
together as a single class, shall be required for the stockholders of the
Corporation to adopt, amend, alter, change, repeal, or add to any of the Bylaws
of the Corporation.
ARTICLE XIII
AMENDMENT TO ARTICLES
The Corporation reserves the right from time to time to make any
amendment to its Charter, now or hereafter authorized by law, including any
amendment altering the terms or contract rights, as expressly set forth in the
Charter, of any shares of outstanding stock. Any amendment to the Charter of the
Corporation shall be valid only if such amendment shall have been approved by
the affirmative vote of a majority of all the votes entitled to be cast on that
matter. All rights and powers conferred by the Charter on stockholders,
directors and officers are granted subject to this reservation.
The holders of the outstanding shares of a class shall be entitled
to vote as a class upon a proposed amendment to the
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<PAGE>
Charter of the Corporation if the amendment would increase or decrease the
aggregate number of authorized shares of such class, increase or decrease the
par value of the shares of such class, alter or change the powers, preferences,
or special rights of the shares of such class so as to affect them adversely. If
any proposed amendment would alter or change the powers, preferences, or special
rights of one or more series of any class so as to affect them adversely, but
shall not so affect the entire class, then only the shares of the series so
affected by the amendment shall be considered a separate class for the purposes
of this Article XIII.
ARTICLE XIV
STOCKHOLDER VOTE ON EXTRAORDINARY ACTIONS
Except as otherwise herein specifically provided and except for the
election of Directors, notwithstanding any provision of law permitting or
requiring any action to be taken or authorized by the affirmative vote of the
holders of a greater number of votes, any such action shall be effective and
valid if taken or authorized by the affirmative vote of holders of shares
entitled to cast a majority of all the votes entitled to be cast on that matter.
ARTICLE XV
PREEMPTIVE RIGHTS
No holder of shares of stock of any class shall have any preemptive
right to subscribe to or purchase any additional shares of any class, or any
bonds or convertible securities of any nature; provided, however, that the Board
of Directors may, in authorizing the issuance of shares of stock of any class,
confer any preemptive right that the Board of Directors may deem advisable in
connection with such issuance.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation
and acknowledge the same to be my act on this 8th day of August, 1994.
/s/ Evan Zucker
Evan Zucker,
President
1777 South Harrison Street
Suite 312
Denver, Colorado 80210
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<PAGE>
Exhibit 3.2
ARTICLES OF MERGER
BETWEEN
AMERICAN REAL ESTATE INVESTMENT CORPORATION
(a Delaware corporation)
AND
AMERICAN REAL ESTATE INVESTMENT CORPORATION
(a Maryland corporation)
This is to certify that:
FIRST: American Real Estate investment Corporation (a Delaware
corporation) and American Real Estate Investment Corporation (a Maryland
corporation) agree to merge in the manner hereinafter set forth.
SECOND: American Real Estate Investment Corporation (a Maryland
corporation) is the corporation to survive the merger (the "Surviving
Corporation").
THIRD: American Real Estate Investment Corporation (a Delaware
corporation) (the "Merging Corporation") is incorporated under the laws of
the State of Delaware. The Surviving Corporation is incorporated under the
laws of the State of Maryland.
FOURTH: The Merging Corporation was incorporated under the General
Corporation Law of Delaware on August 24, 1993. The principal office of the
Surviving Corporation in the State of Maryland is located in Baltimore City. The
Merging Corporation does not have an office in the State of Maryland.
FIFTH: The Merging Corporation and the Surviving Corporation own
no interest in land in the State of Maryland.
SIXTH: The charter of the Surviving Corporation will not be
amended as a result of the merger.
SEVENTH: The total number of shares of all classes of stock which each
corporation party to these Articles has authority to issue and the number of
shares of stock of each class are as follows:
(a) Surviving Corporation
The total number of shares of all classes of capital stock that the
Surviving Corporation shall have authority to issue is Sixty Five Million
(65,000,000) shares, consisting of
(i) Five Million (5,000,000) shares of preferred stock, par value $0.01 per
share (the "Preferred Stock"), (ii) Thirty Million (30,000,000) shares of common
stock, par value $0.001 per share (the "Common Stock") and (iii) Thirty Million
(30,000,000) shares of excess stock, par value $0.001 per share (the "Excess
Stock"). The aggregate par value of all shares of stock having par value is
$110,000.
(b) Merging Corporation
The total number of shares of all classes of capital stock that the
Merging Corporation shall have authority to issue is Six Million Five Hundred
Thousand (6,500,000) shares, consisting of (i) Five Hundred Thousand (500,000)
shares of preferred stock, par value $0.01 per share (the "Preferred Stock"),
(ii) Three Million (3,000,000) shares of common stock, par value $0.001 per
share (the "Common Stock") and (iii) Three Million (3,000,000) shares of excess
stock, par value $0.001 per shares (the "Excess Stock").
EIGHTH: At the Effective Time, the Merging Corporation shall be merged
into the Surviving Corporation; and, thereupon, the Surviving Corporation shall
possess any and all purposes and powers of the Merging Corporation; and all
leases, licenses, property, rights, privileges and powers of whatever nature and
description of the Merging Corporation shall be transferred to, vested in and
devolved upon the Surviving Corporation, without further act or deed, subject to
all of the debts and obligations of the Merging Corporation.
At the Effective Time, by virtue of the Merger and without any action on
the part of the Merging Corporation, the Surviving Corporation or any holder of
any stock of either of them:
(a) Each share of Common Stock, $0.001 par value per share, of the
Merging Corporation ("Parent Common Shares") issued and outstanding immediately
prior to the Effective Time shall be converted into the right to receive one (1)
validly issued, fully paid and nonassessable share of Common Stock, $0.001 par
value per share, of the Surviving Corporation ("Surviving Common Shares"). Each
certificate representing Parent Common Shares shall thereafter represent the
right to receive Surviving Common Shares. All Parent Common Shares shall cease
to be outstanding, shall be canceled and retired and shall cease to exist.
(b) Each Parent Common Share issued and held in the Merging
Corporation's treasury at the Effective Time shall cease to be outstanding,
shall be canceled and retired without payment of any consideration therefor and
shall cease to exist.
(c) Each Surviving Common Share issued and outstanding immediately
prior to the Effective Time shall cease to be outstanding, shall be canceled and
retired without payment of any consideration therefor and shall cease to exist.
(d) Each option, conversion right, or other right to purchase or
otherwise acquire Parent Common Shares pursuant to stock option or other
stock-based plans, or conversion right of the Merging Corporation granted issued
or outstanding immediately prior to the Effective Time shall be converted into
and become a right to purchase or otherwise acquire the same number of Surviving
Common Shares at the same price per share and upon the same terms and subject to
the same conditions as applicable to such options, conversion rights, or other
rights immediately prior to the Effective Time.
On or after the Effective Time, all of the outstanding certificates which
prior to that time represented Parent Common Shares shall be deemed for all
purposes to evidence ownership of and to represent Surviving Common Shares into
which such shares have been converted as hereinabove provided and shall be so
registered on the books and records of the Surviving Corporation or its transfer
agents. Until any such certificate shall have been surrendered for transfer or
otherwise accounted for to the Surviving Corporation or its transfer agent, the
registered owner of any such outstanding certificate shall have and be entitled
to exercise any voting and other rights with respect to, and to receive any
dividend or other distribution on, the Surviving Common Shares into which the
Parent Common Shares represented by such certificate have been converted. After
the Effective Time, whenever certificates which formerly represented Parent
Common Shares are presented for exchange or registration of transfer, the
Surviving Corporation will cause to be issued in respect thereof certificates
representing an equal number of Surviving Common Shares.
NINTH: The terms and conditions of the transaction described in these
Articles were duly advised, authorized and approved by the Merging Corporation
in the manner and by the vote required by the laws of the State of Delaware and
the charter of the Merging Corporation, as follows:
(a) The Board of Directors of the Merging Corporation, by written
consent signed by all the members thereof and filed with the minutes of the
proceedings of the Board, adopted a resolution declaring that the terms and
conditions of the transaction described herein were advisable and directing that
the proposed transaction be submitted for consideration by the stockholders of
the Merging Corporation.
(b) At the annual meeting of stockholders of the Merging Corporation
held on July 6, 1994, and as adjourned to August 5, 1994, the stockholders
adopted a resolution approving the terms and conditions of the transaction
described herein as so proposed and such resolution is filed with the minutes of
the proceedings of the stockholders.
TENTH: The terms and conditions of the transaction described in these
Articles were duly advised, authorized and approved by the Surviving Corporation
in the manner and by the vote required by the laws of the State of Maryland and
the charter of the Surviving Corporation, as follows:
(a) The Board of Directors of the Surviving Corporation, by written
consent signed by all the members thereof and filed with the minutes of the
proceedings of the Board, adopted a resolution declaring that the terms and
conditions of the transaction described herein were advisable and directing that
the proposed transaction be submitted for consideration by the sole stockholder
of the Surviving Corporation and such resolution is filed with the minutes of
the proceedings of the Board of Directors.
(b) A consent in writing, setting forth approval of the terms and
conditions of the transaction described herein as so proposed was signed by the
sole stockholder of the Surviving Corporation entitled to vote thereon, and such
consent is filed with the minutes of the proceedings of the sole stockholder of
the Surviving Corporation.
ELEVENTH: These Articles of Merger shall become effective upon
acceptance for filing by the State Department of Assessments and Taxation of
Maryland (the "Effective Time").
TWELFTH: The undersigned President of the Surviving Corporation
acknowledges these Articles of Merger to be the corporate act of the Surviving
Corporation on whose behalf he has signed, and further, as to all matters of
fact required to be verified under oath, the President acknowledges that, to the
best of his knowledge, information and belief, these matters and facts relating
to the Surviving Corporation on whose behalf he has signed are true in all
material respects and that this statement is made under the penalties for
perjury.
<PAGE>
IN WITNESS WHEREOF, these Articles of Merger have been duly executed by
the parties hereto this 22nd day of August 1994.
ATTEST: AMERICAN REAL ESTATE
INVESTMENT CORPORATION
(a Delaware corporation)
/s/ Rick A. Burger By /s/ Evan Zucker
Rick A. Burger, Secretary Evan Zucker, President
AMERICAN REAL ESTATE
INVESTMENT CORPORATION
(a Maryland corporation)
/s/ Rick A. Burger By /s/ Evan Zucker
Rick A. Burger, Secretary Evan Zucker, President
The undersigned Secretary of the Merging Corporation acknowledges these
Articles of Merger to be the corporate act of the Merging Corporation on whose
behalf he has signed, and further, as to all matters of facts required to be
verified under oath, the Secretary acknowledges that, to the best of his
knowledge, information and belief, these matters and facts relating to the
Merging Corporation on whose behalf he has signed are true in all material
respects and that this statement is made under the penalties for perjury.
AMERICAN REAL ESTATE
INVESTMENT CORPORATION
(a Delaware corporation)
/s/ Rick A. Burger
Rick A. Burger, Secretary
<PAGE>
Exhibit 3.3
AMERICAN REAL ESTATE INVESTMENT CORPORATION
ARTICLES OF AMENDMENT
American Real Estate Investment Corporation, a Maryland corporation,
having its principal office in Baltimore, Maryland (which is hereinafter called
the "Corporation"), hereby certifies to the State Department of Assessments and
Taxation of Maryland that:
First: The Charter of the Corporation is hereby amended as follows:
1. Article V, Subparagraph D(1), is amended so that the definition of
"Existing Holder" shall read in its entirety as follows:
"Existing Holder" shall mean Evan Zucker, Barbara Zucker, Brian
Zucker, Marshall Zucker, James Mulvihill, Gail Mulvihill, Heather
Mulvihill, Andrew Mulvihill, Gene Mulvihill, Jr., Chris Mulvihill,
and Rosalind Davidowitz (and Persons who would Beneficially Own or
Constructively Own Equity Stock owned by an Existing Holder
determined without regard to this parenthetical).
2. Article V, Subparagraph D(1), is amended so that the definition of
"Existing Holder Limit" shall read in its entirety as follows:
"Existing Holder Limit" shall mean, (i) initially, the greater of
the Ownership Limit and the percentage of the value of the
outstanding Common Stock Beneficially Owned by each Existing Holder
immediately after the Initial Public Offering, and (ii) after any
modification of the Existing Holder Limit pursuant to subparagraph
D(10) of this Article V, the greater of (A) the Existing Holder
Limit as adjusted pursuant to subparagraph D(10)(a) and as reduced
pursuant to subparagraph D(10)(b) of this Article V, and (B) such
other percentage as may be determined by the Board of Directors
pursuant to subparagraph D(10)(c) of this Article V.
3. Article V, Subparagraph D(10), is amended so that Subparagraph D(10)
shall include the following provision:
(c) Subject to the limitations contained in Subparagraph D(12)
(without regard to subparagraph D(12)(d), if applicable), the
Board of Directors may modify the Existing Holder Limit.
Second: The amendment does not increase the authorized stock of the
Corporation.
Third: The foregoing amendment to the Charter of the Corporation has been
advised
<PAGE>
by the Board of Directors and approved by the stockholders of the Corporation.
<PAGE>
IN WITNESS WHEREOF, American Real Estate Investment Corporation has caused
these presents to be signed in its name and on its behalf by its President and
witnessed by its Secretary on June , 1995.
WITNESS: AMERICAN REAL ESTATE
INVESTMENT CORPORATION
By:
- ------------------------------ --------------------------------
Secretary Evan Zucker, President
THE UNDERSIGNED, President of American Real Estate Investment Corporation,
who executed on behalf of the Corporation the foregoing Articles of Amendment of
which this certificate if made a part, thereby acknowledges in the name and on
behalf of said Corporation the foregoing Articles of Amendment to be the
corporate act of said Corporation and hereby certifies that to the best of his
knowledge, information, and belief the matters and facts set forth therein with
respect to the authorization and approval thereof are true in all material
respects under the penalties of perjury.
-----------------------------------
Evan Zucker, President
<PAGE>
Exhibit 3.4
BYLAWS
OF AMERICAN REAL ESTATE INVESTMENT CORPORATION
Incorporated under the laws of the State of Maryland
ARTICLE 1
OFFICES
Section 1. Principal Office. The principal office of the Corporation
shall be located at such place or places as the Board of Directors may
designate.
Section 2. Additional Offices. The Corporation may have additional
offices at such places as the Board of Directors may from time to time determine
or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place. All meetings of the stockholders shall be held at
the principal office of the Corporation or at such other place within the United
States as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.
Section 2. Annual Meeting. The annual meeting of the stockholders of
the Corporation shall be held on such date and at such time as may be determined
by the Board of Directors during the month of May in each year. At each annual
meeting, the stockholders shall elect Directors in the manner provided by the
Corporation's Charter and these Bylaws, as in effect from time to time, and
shall transact such other business as may properly come before the meeting.
Section 3. Special Meetings. Subject to the rights of the holders of
any series of preferred stock, par value $0.01 per share, of the Corporation
(the "Preferred Stock"), the president of the Corporation or the Board of
Directors, pursuant to a resolution adopted by a majority of the total number of
directors which the Corporation would have if there were no vacancies, (the
"Whole Board") may call special meetings of the stockholders. Special meetings
of stockholders shall also be called by the secretary upon the written request
of the holders of shares
<PAGE>
entitled to cast not less than twenty-five percent (25%) of all the votes
entitled to be cast at such meeting. Such request shall state the purpose of
such meeting and the matters proposed to be acted on at such meeting. The
secretary shall inform said stockholders of the reasonably estimated cost of
preparing and mailing notice of the meeting and, upon payment to the Corporation
of such costs, the secretary shall give notice to each stockholder entitled to
notice of the meeting. Unless requested by the stockholders entitled to cast a
majority of all the votes entitled to be cast at such meeting, the special
meeting need not be called to consider any matter which is substantially the
same as a matter voted on at any meeting of the stockholders held during the
preceding twelve (12) months.
Section 4. Notice of Meetings. Written notice of every meeting of
stockholders, stating the purpose or purposes for which the meeting is called,
the date, hour and place of the meeting, and, unless it is an annual meeting,
indicating that it is being issued by or at the direction of the person or
persons calling the meeting, shall be given, not less than ten (10) nor more
than ninety (90) days before the date of the meeting, to each stockholder of
record entitled to vote at such meeting. Such notice shall be directed to a
stockholder at his address as it shall appear on the records of the Corporation
or its transfer agent.
Section 5. Scope of Notice; Procedure. Any business of the
Corporation may be transacted at an annual meeting of the stockholders without
being specifically designated in the notice, except such business as is required
by statute to be stated in such notice. Business transacted at all special
meetings shall be confined to that which is related to the purpose or purposes
stated in the notice of the meeting.
Section 6. Quorum. Except as otherwise provided by the Charter or by
these Bylaws, the holders entitled to cast a majority of the votes entitled to
be cast at the meeting, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business, provided that when a specified item of business is required to be
voted on by a class or series, voting as a class, the holders entitled to cast a
majority of the votes entitled to be cast at the meeting by such class or series
on the matter shall constitute a quorum for the transaction of such specified
item of business. When there is a quorum to organize a meeting, it shall not be
deemed broken by the subsequent withdrawal of any stockholders. It there shall
not be a quorum, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting from time to time
to a date not more than 120 days after the original record date, without notice
other than announcement at the meeting of the time
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<PAGE>
and place to which the meeting shall be adjourned. At such adjourned meeting at
which there shall be a quorum, any business may be transacted which might have
been transacted on the original date of the meeting.
Section 7. Action Taken at Meetings. A plurality of all the votes
cast at a meeting at which a quorum is present shall be sufficient to elect a
Director. A majority of the votes cast at a meeting at which a quorum is present
shall be sufficient to approve any other matter which may properly come before
the meeting, unless the matter is one upon which, by express provision of
Maryland law, the Charter or of these Bylaws, a different vote is required, in
which case such express provisions shall govern and control the decision of such
matter.
Section 8. Voting. Unless the Charter or Articles Supplementary
thereto provides for a greater or lesser number of votes per share or limits or
denies voting rights, each outstanding share of stock shall be entitled to one
vote on each matter submitted to a vote at a meeting of stockholders.
Section 9. Proxies. Every proxy must be in writing, dated and
executed by the stockholder or by his duly authorized attorney in fact. No proxy
shall be valid after the expiration of eleven months from the date of its
execution, unless a longer or shorter duration is specified in the proxy. Every
proxy shall be revocable at the pleasure of the person executing it or of his
personal representative or assigns, except in those cases where an irrevocable
proxy is permitted by statute.
Section 10. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders.
(1) Nominations of persons for election to the Board of Directors of
the Corporation and the proposal of business to be considered by the
stockholders may be made at an annual meeting of stockholders (a) pursuant to
the Corporation's notice of meeting delivered pursuant to Article II, Section 4
of these Bylaws, (b) by or at the direction of the President or (c) by any
stockholder of the Corporation who is entitled to vote at the meeting, who
complies with the notice procedures set forth in clauses (2) and (3) of this
paragraph (A) of this Bylaw and who was a stockholder of record at the time such
notice is delivered to the Secretary of the Corporation.
(2) For nominations or other business to be properly brought before
the annual meeting by a stockholder pursuant to clause (c) of paragraph (A)(1)
of this Bylaw the stockholder must have given timely notice thereof in writing
to the Secretary of
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<PAGE>
the Corporation. To be timely, a stockholder's notice shall be delivered to the
Secretary at the principal executive offices of the Corporation not less than
sixty days nor more than ninety days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than thirty days or delayed by
more than sixty days from such anniversary date, notice by the stockholder to be
timely must be so delivered not earlier than the ninetieth day prior to such
annual meeting and not later than the close of business on the later of the
sixtieth day prior to such annual meeting or the tenth day following the day on
which public announcement of the date of meeting is first made. Such
stockholder's notice shall set forth (a) as to each person whom the stockholder
proposes to nominate for election or reelection as a director all information
relating to such person that is required to be disclosed in solicitations of
proxies for election of directors, or is otherwise required, in each case
pursuant to Regulation 14A under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), including such person's written consent to being named in
the proxy statement as a nominee and to serving as a director if elected; (b) as
to any other business that the stockholder proposes to bring before the meeting,
a brief description of the business desired to be brought before the meeting,
the reasons for conducting such business at the meeting and any material
interest in such business of such stockholder and the beneficial owner, if any,
on whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nominations or
proposal is made (i) the name and address of such stockholder, as they appear on
the Corporation's books, and of such beneficial owner and (ii) the class and
number of shares of the Corporation which are owned beneficially and of record
by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of directors
to be elected to the Board of Directors of the Corporation is increased and
there is no public announcement naming all of the nominees for director or
specifying the size of the increased Board of Directors made by the Corporation
at least seventy days prior to the first anniversary of the preceding year's
annual meeting, a stockholder's notice required by this Bylaw shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the tenth day following the day on which such public announcement is
first made by the Corporation.
(B) Special Meetings of Stockholders. Only such
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business shall be conducted at a special meeting of stockholders as shall have
been brought before the meeting pursuant to the Corporation's notice of meeting
pursuant to Article II, Section 4 of these Bylaws. Nominations of persons for
election to the Board of Directors may be made at a special meeting of
stockholders at which directors are to be elected pursuant to the Corporation's
notice of meeting (a) by or at the direction of the Board of Directors or (b) by
any stockholder of the Corporation who is entitled to vote at the meeting, who
complies with the notice procedures set forth in this Bylaw and who is a
stockholder of record at the time such notice is delivered to the Secretary of
the Corporation. Nominations by stockholders of persons for election to the
Board of Directors may be made at such a special meeting of stockholders if the
stockholder's notice as required by paragraph (A)(2) of this Bylaw shall be
delivered to the Secretary at the principal executive offices of the Corporation
not earlier than the ninetieth day prior to such special meeting and not later
than the close of business on the later of the seventieth day prior to such
special meeting or the tenth day following the day on which public announcement
is first made of the date of the special meeting and of the nominees proposed by
the Board of Directors to be elected at such meeting.
(C) General.
(1) Only persons who are nominated in accordance with the procedures
set forth in this Bylaw shall be eligible to serve as directors and only such
business shall be conducted at a meeting of stockholders as shall have been
brought before the meeting in accordance with the procedures set forth in this
Bylaw. Except as otherwise provided by Maryland law, the Charter or these
Bylaws, the chairman of the meeting shall have the power and duty to determine
whether a nomination or any business proposed to be brought before the meeting
was made in accordance with the procedures set forth in this Bylaw and, if any
proposed nomination or business is not in compliance with this Bylaw, to declare
that such defective proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service, Associated
Press or comparable national news service or in a document publicly filed by the
Corporation with the Securities and Exchange Commission pursuant to Section 13,
14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any rights
of
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stockholders to request inclusion of proposals in the Corporation's proxy
statement pursuant to Rule 14a-5 under the Exchange Act.
Section 11. Procedure for Election of Directors. Election of
directors at all meetings of the stockholders at which directors are to be
elected shall be by written ballot, and, except as otherwise set forth in any
Articles Supplementary (as referred in Article V of the Charter) with respect to
the right of the holders of any series of Preferred Stock to elect additional
directors under specified circumstances, a plurality of the votes cast thereat
shall elect.
Section 12. No Stockholder Action by Written Consent. Subject to the
rights of the holders of any series of Preferred Stock, any action required or
permitted to be taken by the stockholders of the Corporation must be effected at
an annual or special meeting of stockholders of the Corporation and may not be
effected by any consent in writing by such stockholders.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the
Corporation shall be managed under the direction of its Board of Directors,
which may exercise all such powers of the Corporation and do all such lawful
acts and things as are not by statute, by the Charter or by these Bylaws
conferred on or reserved to the stockholders.
Section 2. Number, Tenure and Qualifications. Subject to the rights
of the holders of any series of Preferred Stock, the number of directors shall
be fixed from time to time exclusively pursuant to a resolution adopted by a
majority of the Whole Board, but shall consist of not more than fifteen nor less
than three directors. The initial Board of Directors shall be set forth in the
Articles of Incorporation. The directors, other than any who may be elected by
the holders of any series of Preferred Stock, shall be divided, with respect to
the time for which they severally hold office, into three classes, as nearly
equal in number as possible, with the term of office of the first class to
expire at the 1995 annual meeting of stockholders, the term of office of the
second class to expire at the 1996 annual meeting of stockholders and the term
of office of the third class to expire at the 1997 annual meeting of
stockholders. Each director shall hold office until his or her successor shall
have been duly elected and qualified. At each annual meeting of
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stockholders, commencing with the 1995 annual meeting, directors elected to
succeed those directors whose terms then expire shall be elected for a term of
office to expire at the third succeeding annual meeting of stockholders after
their election, with each director to hold office until his or her successor
shall have been duly elected and qualified.
Section 3. Resignation. Any Director of the Corporation may resign
at any time by giving written notice to the president or secretary of the
Corporation. Such resignation shall take effect on the date of the receipt of
such notice or at any later date specified herein, and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Section 4. Vacancies. Subject to the rights of the holders of any
series of Preferred Stock, and unless the Board of Directors otherwise
determines, vacancies resulting from death, resignation, retirement,
disqualification, removal from office or other case (except for an increase in
the number of Directors), may be filled only by the affirmative vote of a
majority of the remaining directors then in office, although less than a quorum
of the Board of Directors. Any vacancy resulting from an increase in the number
of Directors may be filled by a majority vote of the Whole Board. Directors
elected by the Board of Directors to fill a vacancy resulting from any cause
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires
and until such director's successor shall have been duly elected and qualified.
No decrease in the number of authorized directors constituting the Whole Board
shall shorten the terms of any incumbent director.
Section 5. Removal. Subject to the rights of the holders of any
series of Preferred Stock, any director, or the entire Board of Directors, may
be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least 75 percent of the then outstanding
voting stock, voting together as a single class.
ARTICLE IV
MEETINGS OF DIRECTORS
Section 1. Place. The Directors may hold meetings, both regular and
special, at the principal office of the Corporation, or at such other place or
places, within the United States as they may from time to time determine.
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Section 2. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this Bylaw immediately after,
and at the same place as, each annual meeting of stockholders. The Board of
Directors may, by resolution, provide the time and place for the holding of
additional regular meetings without other notice than such resolution.
Section 3. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the president or a majority of the
Board of Directors. The person or persons authorized to call special meetings of
the Board of Directors may fix the place and time of the meetings.
Section 4. Quorum. A whole number of directors equal to at least a
majority of the Whole Board shall constitute a quorum for the transaction of
business, but if at any meeting of the Board of Directors there shall be less
than a quorum present, a majority of the directors present may adjourn the
meeting from time to time without further notice. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors. The directors present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough directors to leave less than a quorum.
Section 5. Notice. Notice of any special meeting shall be given to
each director at his business or residence in writing or by telegram or by
telephone communication. If mailed, such notice shall be deemed adequately
delivered when deposited in the United States mails so addressed, with postage
thereon prepaid, at least five days before such meeting. If by telegram, such
notice shall be deemed adequately delivered when the telegram is delivered to
the telegraph company at least twenty-four hours before such meeting. If by
telephone, the notice shall be given at least twelve hours prior to the time set
for the meeting. Neither the business to be transacted at, nor the purpose of,
any regular or special meeting of the Board of Directors need be specified in
the notice of such meeting, except for amendments to these Bylaws as provided
under Article IX hereof. A meeting may be held at any time without notice if all
the directors are present or if those not present waive notice of the meeting in
writing, either before or after such meeting.
Section 6. Committees. The Board of Directors may, by resolution or
resolutions passed by a majority of the Whole Board, designate one or more
committees, each committee to consist of two or more directors of the
Corporation, including the following committees:
(a) An Executive Committee, which shall have such
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authority as shall be delegated by the Board of Directors (except
those powers which may not be delegated to a committee under the
MGCL) and shall advise the Board of Directors from time to time with
respect to such matters as the Board of Directors shall direct.
(b) An Audit Committee which shall consist of Independent
Directors (as defined below). The Audit Committee shall make
recommendations concerning the engagement of independent public
accountants, review with the independent public accountants the
plans and results of the audit engagement, approve professional
services provided by the independent public accountants, review the
independence of the independent public accountants, consider the
range of audit and non-audit fees and review the adequacy of the
Corporation's internal accounting controls.
(c) A Compensation Committee, which shall determine
compensation for the Corporation's executive officers and shall
administer a stock incentive plan adopted by the Corporation.
For purposes of this Article IV, Section 6, "Independent Directors" shall mean
directors who are not (i) officers of the Corporation, (ii) employees of the
Corporation, (iii) holders of more than 10 percent of the outstanding Voting
Stock of the Corporation or (iv) with reference to any particular transaction,
interested directors within the meaning of Section 2-419 of the MGCL. The Board
of Directors may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
such committee. Any such committee, to the extent provided in the resolution
establishing such committee and not inconsistent with the MGCL, may exercise the
powers of the Board of Directors in the management of the business and affairs
of the Corporation. Unless the Board of Directors shall provide otherwise, the
presence of one-half of the total membership of any committee of the Board of
Directors shall constitute a quorum for the transaction of business at any
meeting of such committee and the act of a majority of those present shall be
necessary and sufficient for the taking of any action thereat.
Section 7. Conference Call Meetings. Any one or more members of the
Board of Directors or any committee thereof may participate in a meeting of the
Board of Directors or such committee by means of a conference telephone or other
similar communications equipment which allows all members participating in the
meeting to hear one another at the same time.
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Participation by such means shall constitute presence in person at a board or
committee meeting.
Section 8. Consents. Any action required or permitted to be taken by
the Board by the MGCL, the provisions of the Charter or these Bylaws may be
taken without a meeting if the Whole Board or all the members of the committee
consent in writing to the adoption of a resolution authorizing the action. The
resolution and the written consents thereto shall be filed with the minutes of
the proceedings of the Board.
ARTICLE V
OFFICERS
Section 1. Executive Officers. The officers of the Corporation shall
include a president and chief executive officer, secretary and treasurer. The
Board of Directors may also appoint one or more vice presidents, assistant
secretaries and assistant treasurers. Any two or more offices except president
and vice president may be held by the same person. The Board may elect or
appoint such other officers, agents and employees as it shall deem necessary who
shall have such authority and shall perform such duties as from time to time
shall be prescribed by the Board.
Section 2. Election; Term of Office. All officers shall be elected
annually by the Board of Directors and shall hold office at the pleasure of the
Board. Each officer shall hold office until his or her successor is elected and
qualifies or until his or her death, resignation or removal.
Section 3. Compensation. The salaries of all officers of the
Corporation shall be fixed by the Board of Directors or, if appointed, the
Compensation Committee.
Section 4. Removal. Any officer elected by the Board of Directors
may be removed by a majority of the members of the Whole Board whenever, in
their judgement, the best interests of the Corporation would be served thereby.
No elected officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of the election of his
successor, his death, his resignation or his removal, whichever event shall
first occur, except as otherwise provided in an employment contract or under an
employee deferred compensation plan.
Section 5. Vacancies. A newly created office and a
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vacancy in any office because of death, resignation, or removal may be filled by
the Board of Directors for the unexpired portion of the term at any meeting of
the Board of Directors.
Section 6. President. The president shall be the chief executive
officer of the Corporation. He shall have general powers of supervision and
management of the business and affairs of the Corporation subject to the control
of the Board of Directors, and shall see that all orders and resolutions of the
Board of Directors are carried into effect.
Section 7. Secretary and Assistant Secretary. The secretary or at
the request of the Board of Directors, the assistant secretary, shall attend all
meetings of the Board of Directors or the stockholders, keep the minutes thereof
in appropriate books, give or cause to be given notice of all meetings of the
Board of Directors and of the stockholders, keep in safe custody the records and
seal of the Corporation, affix such seal to any instrument when authorized by
the Board of Directors and perform such other duties incidental to the office or
as may be prescribed by the Board.
Section 8. Treasurer and Assistant Treasurers. The treasurer shall
have the custody of the corporate funds and securities and shall be responsible
for the keeping of full and accurate accounts of receipts and disbursements in
books belonging to the Corporation, the deposit of all moneys and other valuable
effects in the name and to the credit of the Corporation and the disbursement of
the funds of the Corporation subject to the order of the Board of Directors. The
treasurer shall render to the president and Directors whenever they may so
require an account of all his transactions as treasurer and of the financial
condition of the Corporation. The treasurer shall, if required by the Board,
give the Corporation a bond in such sum or sums and with such surety or sureties
as shall be satisfactory to the board, conditioned upon the faithful performance
of his duties. The assistant treasurer shall perform such duties and have such
powers as the Board may from time to time prescribe. At the request of the
treasurer or in his absence or disability, the assistant treasurer shall in
their order of designated rank or seniority perform all the duties and exercise
the powers of treasurer.
Section 9. Vice Presidents. The Vice President(s) shall have such
powers as the Board of Directors may determine.
ARTICLE VI
SHARE CERTIFICATES
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Section 1. Signature; Form. Every holder of shares in the
Corporation shall be entitled to have a certificate bearing the name of the
Corporation, signed by, or in the name of the Corporation by, the president and
by the secretary or the assistant secretary, or the treasurer or an assistant
treasurer, bearing the seal of the Corporation or a facsimile thereof, the class
of stock it represents, exhibiting the holder's name and certifying the number
of shares owned by him in the Corporation and such other statement or summary as
may be required by the MGCL. The certificates shall be in such form as shall be
determined by the Board of Directors and shall be numbered consecutively and
entered in the books of the Corporation or its agents as they are issued. In
case any officer, transfer agent or registrar who has signed or whose facsimile
signature has been placed upon a certificate has ceased to be such officer,
transfer agent or registrar before such certificate is issued, it may be issued
by the Corporation with the same effect as if he were such officer, transfer
agent or registrar at the date of issue.
Section 2. Lost Certificates. The Board of Directors (or any officer
designated by it) may direct a new certificate to be issued in place of any
certificate theretofore issued by the Corporation, alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, stolen or destroyed. When authorizing such
issue of a new certificate, the Board may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate, or his legal representative, to give the Corporation a
bond in such sum and with such surety or sureties as it may direct as indemnity
agent any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
Section 3. Transfers of Shares. Upon surrender to the Corporation or
the transfer agent of the Corporation of a certificate for shares duly endorsed
or accompanied by proper evidence of succession, assignment or authority to
transfer, subject to compliance with all applicable laws and the requirements of
the Corporation's transfer agent, it shall be the duty of the Corporation or its
agents to issue a new certificate to the person entitled thereto, to cancel the
old certificate and to record the transaction upon its transfer books.
Section 4. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares as the holder in
fact thereof and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such share or shares on the part of any person
whether or not it shall have express or other notice thereof, except as
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expressly provided by the laws of the State of Maryland.
ARTICLE VII
GENERAL PROVISIONS
Section 1. Fiscal Year. The fiscal year of the Corporation shall be
as determined by resolution of the Board of Directors.
Section 2. Stock in Other Corporations. Shares of stock or
certificates representing the voting power in other corporations held by the
Corporation shall be voted by such officer or officers of the Corporation as the
Board of Directors by a majority vote shall from time to time designate for that
purpose or by a proxy thereunto duly authorized by like vote of the Board.
Section 3. Annual Statement of Affairs. Not later than one hundred
twenty (120) days after the close of each full fiscal year of the Corporation,
the Board shall cause to be mailed a report of the business and operations of
the Corporation during such fiscal year to the stockholders, which report shall
constitute the accounting of the Board for such fiscal year. The report shall be
in such form and have such content as the Board shall deem proper. The annual
report shall include the financial statements required by the Securities and
Exchange Commission to be included in such Report. Such financial statements
shall be accompanied by the report of an independent certified public accountant
thereon.
ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS;
TRANSACTIONS WITH AFFILIATES
Section 1. Indemnification and Insurance.
(A) To the maximum extent permitted by Maryland law in effect from
time to time, the Corporation shall indemnify and shall pay and reimburse
reasonable expenses in advance of final disposition of a proceeding to (i) any
individual who is a present or former Director, officer, employee, or agent of
the Corporation or (ii) any individual who, while a Director, officer, employee,
or agent of the Corporation and at the request of the Corporation, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any
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other enterprise as a director, officer, partner or trustee of such corporation,
partnership, joint venture, trust, employee benefit plan, or other enterprise.
The Corporation, with the approval of its Board of Directors, shall provide such
indemnification and advancement of expenses to a person who served as a
predecessor of the Corporation in any of the capacities described in (i) or (ii)
above and to any employee or agent of the Corporation or a predecessor of the
Corporation.
(B) Following any "change in control" of the Corporation of the type
required to be reported under Item 1 of Form 8-K promulgated under the Exchange
Act, any determination as to entitlement to indemnification shall be made by
independent legal counsel selected by the claimant, which such independent legal
counsel shall be retained by the Board of Directors on behalf of the Corporation
and whose fees and disbursements shall be paid by the Corporation.
(C) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this Bylaw shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of the Charter, Bylaws,
agreement, vote of stockholders or disinterested directors or otherwise.
(D) The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the MGCL.
(E) The Corporation may, to the extent authorized from time to time
by the Board of Directors, grant rights to indemnification, and rights to be
paid by the Corporation the expenses incurred in defending any proceeding in
advance of its final disposition, to any agent of the Corporation to the fullest
extent of the provisions of the MGCL or this Bylaw with respect to the
indemnification and advancement of expenses of directors, officers and employees
of the Corporation.
(F) The right to indemnification conferred in this Bylaw shall be a
contract right and shall include the right to be paid by the Corporation the
expenses incurred in defending any such proceeding in advance of its final
disposition; provided, however, that if the MGCL requires, the payment of such
expenses incurred by a director or officer in his or her capacity as a director
or officer (and not in any other capacity in which service was or is rendered by
such person while a director or officer, including, without limitation, service
to an employee benefit plan) in advance of the final disposition of a
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proceeding, shall be made only upon delivery to the Corporation of an
undertaking by or on behalf of such director or officer to repay all amounts so
advanced if it shall ultimately be determined that such director or officer is
not entitled to be indemnified under this Bylaw or otherwise.
Section 2. Amendments; Effect of. Neither the amendment nor repeal
of this Article VIII, nor the adoption or amendment of any other provisions of
the Bylaws or the Articles of Incorporation of the Corporation inconsistent with
this Article VIII, shall apply to or affect in any respect the applicability of
the preceding paragraphs with respect to any act or failure to act which
occurred prior to such amendment repeal or adoption.
ARTICLE IX
AMENDMENTS
These Bylaws may be adopted, amended, altered, changed, repealed or
added to at any regular or special meeting of the Board of Directors by the
affirmative vote of a majority of the Whole Board. However, the affirmative vote
of the holders of at least seventy-five percent (75%) of the voting power of all
the shares of stock of the Corporation then entitled to vote generally in the
election of Directors, voting together as a single class, shall be required for
the stockholders of the Corporation to adopt, amend, alter, change, repeal, or
add to any of the Bylaws of the Corporation.
<PAGE>
Exhibit 10.1.1
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN REAL ESTATE INVESTMENT, L. P.
AGREEMENT OF LIMITED PARTNERSHIP
OF
AMERICAN REAL ESTATE INVESTMENT, L. P.
<PAGE>
THIS AGREEMENT OF LIMITED PARTNERSHIP is made and entered into as of
the 10th day of November by and among the undersigned parties.
W I T N E S S E T H:
WHEREAS, the parties hereto desire to organize a limited partnership
under the Revised Uniform Limited Partnership Act of the State of Delaware;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged, the parties
hereto, intending legally to be bound, hereby agree as follows:
ARTICLE I
Definitions; Etc.
1.1 Definitions. Except as otherwise herein expressly provided, the
following terms and phrases shall have the meanings set forth below:
"Accountants" shall mean the firm or firms of independent certified
public accountants selected by the General Partner on behalf of the Partnership
to audit the books and records of the Partnership and to prepare statements and
reports in connection therewith.
"Acquisition Cost" shall have the meaning set forth in Section
4.7(b) hereof.
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"Act" shall mean the Revised Uniform Limited Partnership Act as
enacted in the State of Delaware, and as the same may hereafter be amended from
time to time.
"Additional Interests" shall have the meaning set forth in Section
9.3 hereof.
"Additional Partner" shall have the meaning set forth in Section
9.3 hereof.
"Adjustment Date" shall have the meaning set forth in Section 4.3(b)
hereof.
"Administrative Expenses" shall mean (i) all administrative and
operating costs and expenses incurred by the Partnership, including, without
limitation, organizational expenses, (ii) those administrative costs and
expenses of the General Partner, including salaries paid to officers of the
General Partner, and accounting and legal expenses undertaken by the General
Partner on behalf or for the benefit of the Partnership, and (iii) to the extent
not included in clause (ii) above, REIT Expenses.
"Affiliate" shall mean, with respect to any Partner (or as to any
other person the affiliates of whom are relevant for purposes of any of the
provisions of this Agreement), (i) any member of the Immediate Family of such
Partner; (ii) any trustee or beneficiary of a Partner; (iii) any legal
representative, successor, or assignee of any Person referred to in the
preceding clauses (i) and (ii); (iv) any trustee or trust for the benefit of any
Person referred to in the preceding clauses (i) through (iii);
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or (v) any Entity which directly or indirectly through one or more
intermediaries, Controls, is Controlled by, or is under common Control with, any
Person referred to in the preceding clauses (i) through (iv).
"Affiliate Financing" means financing or refinancing obtained from a
Partner or an Affiliate of a Partner by the Partnership.
"Agreement" shall mean this Agreement of Limited Partnership, as
originally executed and as amended, modified, supplemented or restated from time
to time, as the context requires.
"Bankruptcy" shall mean, with respect to any Partner, (i) the
commencement by such Partner of any proceeding seeking relief under any
provision or chapter of the federal Bankruptcy Code or any other federal or
state law relating to insolvency, bankruptcy or reorganization, (ii) an
adjudication that such Partner is insolvent or bankrupt; (iii) the entry of an
order for relief under the federal Bankruptcy Code with respect to such Partner,
(iv) the filing of any such petition or the commencement of any such case or
proceeding against such Partner, unless such petition and the case or proceeding
initiated thereby are dismissed within ninety (90) days from the date of such
filing, (v) the filing of an answer by such Partner admitting the allegations of
any such petition, (vi) the appointment of a trustee, receiver or custodian for
all or substantially all of the assets of such Partner unless such appointment
is vacated or dismissed
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within ninety (90) days from the date of such appointment but not less than five
(5) days before the proposed sale of any assets of such Partner, (vii) the
insolvency of such Partner or the execution by such Partner of a general
assignment for the benefit of creditors, (viii) the failure of such Partner to
pay its debts as they mature, (ix) the levy, attachment, execution or other
seizure of substantially all of the assets of such Partner where such seizure is
not discharged within thirty (30) days thereafter, or (x) the admission by such
Partner in writing of its inability to pay its debts as they mature or that it
is generally not paying its debts as they become due.
"Beneficially Own" shall mean the ownership of Shares by a Person
who would be treated as an owner of such Shares either directly or
constructively through the application of Section 544 of the Code, as modified
by Section 856(h)(1)(B) of the Code.
"Capital Contribution" shall mean, with respect to
any Partner, the amount of money and the initial Gross Asset Value of any
property other than money contributed to the Partnership with respect to the
Partnership Interest held by such Partner (net of liabilities to which such
property is subject).
"Certificate" shall mean the Certificate of Limited Partnership
establishing the Partnership, as filed with the office of the Delaware Secretary
of State, as it may be amended from time to time in accordance with the terms of
this Agreement and the Act.
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"Closing Price" on any date shall mean the last sale price, regular
way, or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on the American Stock Exchange or, if the Shares
are not listed or admitted to trading on the American Stock Exchange, as
reported in the principal consolidated transaction reporting system with respect
to securities listed on the principal national securities exchange on which the
Shares are listed or admitted to trading or, if the Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price,
or if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers,Inc. Automated Quotations System or, if such system is no longer in use,
the principal other automated quotations system that may then be in use or, if
the Shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market
in the Shares as such person is selected from time to time by the Board of
Directors of the General Partner.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Completion of the Offering" shall mean the closing of the sale of
Shares in the Offering.
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"Computation Date" shall have the meaning set forth in Section 11.5
hereof.
"Consent of the Limited Partners" means the written consent of a
Majority-In-Interest of the Limited Partners, which consent shall be obtained
prior to the taking of any action for which it is required by this Agreement and
may be given or withheld by a Majority-In-Interest of the Limited Partners,
unless otherwise expressly provided herein, in their sole and absolute
discretion.
"Contributed Funds" shall have the meaning set forth in Section
4.3(b) hereof.
"Contributed Property" shall have the meaning set forth in Section
4.7(b) hereof.
"Contributed Limited Partner Assets" shall mean all right, title and
interest of the Limited Partners in and to the partnership interests, together
with assignments of such rights and other agreements as may relate to such
interests, as more particularly described in the Contribution Agreement.
"Contribution Agreement" shall mean and refer to the agreement
described in Section 4.2 hereof.
"Contribution Date" shall have the meaning set forth in Section
9.3(a) hereof.
"Control" shall mean the ability, whether by the direct or indirect
ownership of shares or other equity interests, by contract or otherwise, to
elect a majority of the directors of a corporation, to select the managing
partner of a partnership, or
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otherwise to select, or have the power to remove and then select, a majority of
those persons exercising governing authority over an Entity. In the case of a
limited partnership, the sole general partner, all of the general partners to
the extent each has equal management control and authority, or the managing
general partner or managing general partners thereof shall be deemed to have
control of such partnership and, in the case of a trust, any trustee thereof or
any Person having the right to select any such trustee shall be deemed to have
control of such trust.
"Conversion Exercise Notice" shall have the meaning set forth in
Section 11.2 hereof.
"Conversion Right" shall have the meaning set forth in Section 11.1
hereof.
"Current Per Share Market Price" on any date shall mean the average
of the Closing Price for the thirty (30) consecutive Trading Days ending on such
date.
"Deemed Partnership Interest Value" as of any date, shall mean with
respect to a Partner, the Deemed Value of the Partnership (as of the day
preceding such date) multiplied by such Partner's Percentage Interest.
"Deemed Value of the Partnership" as of any date, shall mean and be
equal to the quotient of (i) the Share Value as of the Trading Day immediately
preceding such date divided by (ii) the Percentage Interest of the General
Partner on the Trading Day immediately preceding such date.
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"Depreciation" shall mean for each Partnership Fiscal Year or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable under the Code with respect to an asset for such
year or other period, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such
year or other period, Depreciation shall be an amount which bears the same ratio
to such beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
"Entity" shall mean any general partnership, limited partnership,
corporation, joint venture, trust, business trust, cooperative or association.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time (or any corresponding provisions of
succeeding laws).
"Exercise Notice" shall have the meaning set forth in Section 11.2
hereof.
"Exercising Partners" shall have the meaning set forth in Section
11.2 hereof.
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"GAAP" shall mean generally accepted accounting principles
consistently applied.
"General Partner" shall mean American Real Estate Investment
Corporation, a Delaware corporation, its duly admitted successors and assigns
and any other Person who is a general partner of the Partnership at the time of
reference thereto.
"General Partner Capital Contribution" shall have the meaning set
forth in Section 4.1 hereof.
"General Partner's Preference Amount" for a Partnership Fiscal Year
shall mean an amount equal to the product of (a) .8 and (b) the number of Shares
outstanding as of the end of such Partnership Fiscal Year.
"Gross Asset Value" shall have the meaning set forth in Section
4.7(b) hereof.
"Gross Income" means the income of the Partnership determined
pursuant to Section 61 of the Code before deduction of items of expense or
deduction.
"Hart Scott Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended.
"Immediate Family" shall mean, with respect to any Person, such
Person's spouse, parents, parents-in-law, descendants by blood or adoption,
nephews, nieces, brothers, sisters, brothers-in-law, sisters-in-law and
children-in-law.
"Incentive Option" means an option to purchase Shares granted under
the Stock Incentive Plan.
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"Incentive Option Agreement" means the form or forms of Incentive
Option Agreement to be used under the Stock Incentive Plan.
"Initial Offering Price Per Share" means the price at which the
Shares were sold to the public in the Offering.
"Lien" shall mean any liens, security interests, mortgages, deeds of
trust, charges, claims, encumbrances, restrictions, pledges, options, rights of
first offer or first refusal and any other rights or interests of others of any
kind or nature, actual or contingent, or other similar encumbrances of any
nature whatsoever.
"Limited Partner Allocation Catch-Up Amount" shall mean the amount
determined for X pursuant to the following formula:
X = A (B + X) - C
Where A = the aggregate Percentage Interests of the Limited
Partners as of the end of the Fiscal Year;
B = the sum of (a) the aggregate amount of Profits allocated to
all of the Partners pursuant to clauses (1), (4) and (5) of Section 6.1(b) for
all prior Partnership Fiscal Years and (b) the amount of Profits allocated to
the General Partner for the current Partnership Fiscal Year pursuant to clause
(1) of Section 6.1(b); and
C = the aggregate amount of Profits allocated to the Limited
Partners pursuant to clauses (4) and (5) of Section 6.1(b) for all prior
Partnership Fiscal Years.
"Limited Partner Distribution Catch-Up Amount" shall mean the amount
determined for X pursuant to the following formula:
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X = A (B + X) - C
Where A = the aggregate Percentage Interests of the Limited
Partners as of the end of the Fiscal Year;
B = the sum of (a) the aggregate amount distributed to all of
the Partners pursuant to Section 6.2(b) for all prior Partnership Fiscal Years
and (b) the amount distributed to the General Partner for the current
Partnership Fiscal Year pursuant to clause (1) of Section 6.2(b); and
C = the aggregate amount distributed to the Limited Partners
pursuant to clauses (2) and (3) of Section 6.2(b) for all prior Partnership
Fiscal Years.
"Limited Partners" shall mean those Persons listed under the heading
"Limited Partners" on the signature page hereto who have executed (in person or
pursuant to power of attorney) this Agreement in their respective capacities as
limited partners of the Partnership, their permitted successors or assigns as a
limited partner hereof, or any Person who, at the time of reference thereto, is
a limited partner of the Partnership.
"Liquidating Trustee" shall mean such individual or Entity as is
selected as the Liquidating Trustee hereunder by the General Partner, which
individual or Entity may include the General Partner or an Affiliate of the
General Partner, provided such Liquidating Trustee agrees in writing to be bound
by the terms of this Agreement. The Liquidating Trustee shall be empowered to
give and receive notices, reports and payments in connection with the
dissolution, liquidation and/or winding-up of the Partnership and shall hold and
exercise such other rights and powers as are necessary or required to permit all
parties to deal with the Liquidating Trustee in connection with the dissolution,
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liquidation and/or winding-up of the Partnership.
"Losses" shall have the meaning set forth in Section 6.1 hereof.
"Major Decisions" shall have the meaning set forth in Section 7.3
hereof.
"Majority-In-Interest of the Limited Partners" shall mean Limited
Partner(s) who hold in the aggregate more than fifty percent (50%) of the
Percentage Interests then allocable to and held by the Limited Partners, as a
class.
"Minimum Gain" shall have the meaning set forth in Section 6.l(d)(l)
hereof.
"Minimum Gain Chargeback" shall have the meaning
set forth in Section 6.1(d)(1) hereof.
"Net Financing Proceeds" shall mean the cash proceeds received by
the Partnership in connection with any borrowing by or on behalf of the
Partnership (whether or not secured), after deduction of all costs and expenses
incurred by the Partnership in connection with such borrowing, and after
deduction of that portion of such proceeds used to repay any other indebtedness
of the Partnership, or any interest or premium thereon.
"Net Operating Cash Flow" shall mean, with respect to any fiscal
period of the Partnership, the excess, if any, of "Receipts" over
"Expenditures". For purposes hereof, the term "Receipts" means the sum of all
cash receipts of the Partnership from all sources for such period, including Net
Sale Proceeds and Net Financing Proceeds but excluding Capital Contributions,
and
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any amounts held as reserves as of the last day of such period which the
General Partner reasonably deems to be in excess of necessary reserves as
determined below. The term "Expenditures" means the sum of (a) all cash expenses
of the Partnership for such period, (b) the amount of all payments of principal
and interest on account of any indebtedness of the Partnership, or amounts due
on such indebtedness during such period, and (c) such additional cash reserves
as of the last day of such period as the General Partner deems necessary for any
capital or operating expenditure permitted hereunder.
"Net Sale Proceeds" means the cash proceeds received by the
Partnership in connection with a sale of any asset by or on behalf of the
Partnership after deduction of any costs or expenses incurred by the
Partnership, or payable specifically out of the proceeds of such sale
(including, without limitation, any repayment of any indebtedness required to be
repaid as a result of such sale or which the General Partner elects to repay out
of the proceeds of such sale, together with accrued interest and premium, if
any, thereon and any sales commissions or other costs and expenses due and
payable to any Person in connection with a sale).
"Nonrecourse Liabilities" shall have the meaning set forth in
Section 6.l(d)(l) hereof.
"Offered Interests" shall mean the Partnership Interests of the
Exercising Partners identified in an Exercise Notice which, pursuant to the
exercise of Conversion Rights, can be acquired by the General Partner under the
terms hereof.
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"Offering" shall have the meaning set forth in the Registration
Statement.
"Ownership Limit" shall have the meaning set forth in Section 11.4
hereof.
"Partner Nonrecourse Debt" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partner Nonrecourse Debt Minimum Gain" shall have the meaning set
forth in Section 6.1(d)(2) hereof.
"Partner Nonrecourse Deduction" shall have the meaning set forth in
Section 6.1(d)(2) hereof.
"Partners" shall mean the General Partner and the Limited Partners,
their duly admitted successors or assigns or any Person who is a partner of the
Partnership at the time of reference thereto.
"Partnership" shall mean the limited partnership hereby constituted,
as such limited partnership may from time to time be constituted.
"Partnership Fiscal Year" shall mean the calendar year.
"Partnership Interest" shall mean with respect to a Partner, such
Partner's right to the allocations (and each item thereof), specified in Section
6.1 hereof and all distributions from the Partnership, and its rights of
management, consent, approval, or participation, if any, as provided in this
Agreement.
"Partnership Minimum Gain" shall have the meaning set forth in
Section 1.704-2(b)(2) of the Regulations.
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"Percentage Interest" shall mean, with respect to any Partner, the
percentage ownership interest of such Partner in the Partnership. The initial
Percentage Interest of each Partner is as set forth opposite its respective name
on attached Exhibit A.
"Person" shall mean any individual or Entity.
"Pledge" means a pledge or grant of a mortgage,
security interest, lien or other encumbrance in respect of a Partnership
Interest.
"Profits" shall have the meaning set forth in Section 6.1 hereof.
"Property" shall mean any real estate in which the Partnership,
directly or indirectly, acquires ownership of a fee or leasehold interest.
"Purchase Price" shall have the meaning set forth in Section 11.5.
"Registration Statement" shall mean the Registration Statement No.
33-63120 (including the prospectus contained therein) heretofore filed by the
General Partner with the SEC, and any amendments at any time hereafter made
thereto (other than post-effective amendments) pursuant to which the General
Partner proposes to offer and sell certain of its Shares.
"Regulations" shall mean the final, temporary or proposed Income Tax
Regulations promulgated under the Code, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations)
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"REIT" shall mean a real estate investment trust as defined in
Section 856 of the Code.
"REIT Expenses" shall mean (i) costs and expenses relating to the
formation and continuity of existence of the General Partner and its
subsidiaries (which subsidiaries shall, for purposes of this definition be
included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable to
any director of the General Partner or such subsidiaries, (ii) costs and
expenses relating to any offer or 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
offer 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 SEC and any stock
exchanges on which the Shares are listed, (iv) costs and expenses associated
with compliance by the General Partner with laws, rules and regulations
promulgated by any regulatory body, including the SEC, 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 Requirements" shall have the meaning set forth in Section
7.11 hereof.
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"Required Funds" shall have the meaning set forth in Section 4.3
hereof.
"Rights" shall have the meaning set forth in Section 11.1 hereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Shares" shall mean the shares of Common Stock, par value $.001 per
share, of the General Partner.
"Share Value" as of any date shall mean the total number of Shares
issued and outstanding at the close of business on such date (and excluding any
treasury shares) multiplied by the Current Per Share Market Price on such date.
"Stock Incentive Plan" means the General Partner's 1993 Omnibus
Incentive Plan.
"Substituted Limited Partner" shall have the meaning set forth in
Section 9.2 hereof.
"Third Party": or "Third Parties" means a Person or Persons who is
or are neither a Partner or Partners nor an Affiliate or Affiliates of a Partner
or Partners.
"Third Party Financing" means financing or refinancing obtained from
a Third Party by the Partnership.
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Shares are listed or admitted to trading is
open for the transaction of business or, if the Shares are not listed or
admitted to trading on any national securities exchange, shall mean any day
other than a Saturday, a
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Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"Transfer" means any assignment, sale, transfer, conveyance, Pledge,
grant of an option or proxy, or other disposition or act of alienation, whether
voluntary or involuntary, or by operation of law.
"Underwriting Agreement" shall mean that certain Underwriting
Agreement among the General Partner and the underwriters named therein, in
substantially the form attached hereto as Exhibit D.
1.2 Exhibit, Etc. References to "Exhibit" are, unless otherwise specified,
to one of the Exhibits attached to this Agreement, and references to an
"Article" or a "Section" are, unless otherwise specified, to one of the Articles
or Sections of this Agreement. Each Exhibit attached hereto and referred to
herein is hereby incorporated herein by reference.
ARTICLE II
Organization
2.1 Formation. The parties hereto do hereby form a limited
partnership pursuant to the provisions of the Act, and all other pertinent laws
of the State of Delaware, for the purposes and upon the terms and conditions
hereinafter set forth. The Partners agree that the rights and liabilities of the
Partners
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shall be as provided in the Act except as otherwise herein expressly provided.
Promptly upon the execution and delivery hereof, the General Partner shall cause
a Certificate of Limited Partnership and such other notice, instrument,
document, or certificate as may be required by applicable law, and which may be
necessary to enable the Partnership to conduct its business, and to own its
properties, under the Partnership name, to be filed or recorded in all
appropriate public offices.
2.2 Name. The business of the Partnership shall be conducted
under the name of American Real Estate Investment, L. P. or such other name
as the General Partner may select, and all transactions of the Partnership,
to the extent permitted by applicable law, shall be carried on and completed
in such name.
2.3 Character of the Business. The purpose of the Partnership shall
be to acquire, hold, own, develop, redevelop, construct, improve, maintain,
operate, sell, lease, transfer, encumber, convey, exchange, and otherwise
dispose of or deal with Properties; to acquire, hold, own, develop, redevelop,
construct, improve, maintain, operate, sell, lease, transfer, encumber, convey,
exchange, and otherwise dispose of or deal with real and personal property of
all kinds; to undertake such other activities as may be necessary, advisable,
desirable or convenient to the business of the Partnership, and to engage in
such other ancillary activities as shall be necessary or desirable to effectuate
the foregoing purposes. The Partnership shall have all powers necessary or
desirable to accomplish the purposes enumerated. In
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connection with the foregoing, but subject to all of the terms, covenants,
conditions and limitations contained in this Agreement and any other agreement
entered into by the Partnership, the Partnership shall have full power and
authority to enter into, perform, and carry out contracts of any kind, to borrow
or lend money and to issue evidences of indebtedness, whether or not secured by
mortgage, trust deed, pledge or other lien, and, directly or indirectly, to
acquire, hold, own, develop, redevelop, construct, improve, maintain, operate,
sell, lease, transfer, encumber, convey, exchange and otherwise dispose of or
deal with additional Properties necessary or useful in connection with its
business.
2.4 Location of the Principal Place of Business. The location of the
principal place of business of the Partnership shall be at 1777 South Harrison
Street, Suite 309, Denver, Colorado 80210, or such other location as shall be
selected from time to time by the General Partner in its sole discretion.
2.5 Registered Agent and Registered Office. The Registered Agent of
the Partnership shall be Prentice-Hall Corporation System, Inc. or such other
Person as the General Partner may select in its sole discretion. The Registered
Office of the Partnership shall be 32 Loockerman Square, Suite L-100, Dover,
Delaware 19901 or such other location as the General Partner may select in its
sole and absolute discretion.
2.6 Power of Attorney. Each Limited Partner constitutes and appoints
the General Partner and authorized
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officers and attorneys-in-fact of the General Partner, and each of those acting
singly, in each case with full power of substitution, its true and lawful agent
and attorney-in-fact, with full power and authority in its name, place and stead
to:
(1) execute, swear to, acknowledge, deliver, file and record in
the appropriate public offices (a) all certificates, documents
and other instruments (including, without limitation, this
Agreement and Certificate and all amendments or restatements
thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited
partnership (or a partnership in which the limited partners
have limited liability) in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct
business or own property; (b) all instruments that the General
Partner deems appropriate or necessary to reflect any
amendment, change, modification or restatement of this
Agreement in accordance with its terms; (c) all conveyances
and other instruments or documents that the General Partner
deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this
Agreement, including, without
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limitation, a certificate of cancellation; (d) all instruments
relating to the admission, withdrawal, removal or substitution
of any Partner and (e) all certificates, documents and other
instruments relating to the termination of the rights,
preferences and privileges of Partnership Interests; and
(2) execute, swear to, acknowledge and file all ballots, consents,
approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion
of the General Partner, to make, evidence, give, confirm or
ratify any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is
consistent with the terms of this Agreement or appropriate or
necessary, in the sole discretion of the General Partner, to
effectuate the terms or intent of this Agreement.
ARTICLE III
Term
3.1 Commencement. The Partnership shall commence business as a
limited partnership upon the filing of the
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Certificate of Limited Partnership with the Secretary of State of the State of
Delaware.
3.2 Dissolution. The Partnership shall continue until dissolved upon
the occurrence of the earliest of the following events:
(a) The dissolution, termination, retirement or Bankruptcy of the
General Partner unless the Partnership is continued as provided in Section 9.1
hereof;
(b) The election to dissolve the Partnership made in writing by the
General Partner with the Consent of the Limited Partners;
(c) The sale or other disposition of all or substantially all the
assets of the Partnership; or
(d) Dissolution required by operation of law.
ARTICLE IV
Contributions to Capital
4.1 General Partner Capital Contribution. Concurrently herewith, the
General Partner shall contribute to the Partnership (the "General Partner
Capital Contribution") as its initial contribution to the capital the amount of
Nine-Million-Eight Hundred-Ninety-Thousand dollars ($9,890,000) by deposit of
its check in a Partnership bank account.
4.2 Limited Partner Capital Contributions. Concurrently herewith,
each Limited Partner shall contribute, or cause to be
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contributed as its initial Capital Contribution to the capital of the
Partnership, the Contributed Limited Partner Assets as set forth on attached
Exhibit B, in accordance with and subject to the terms and conditions of a
certain Contribution Agreement. The agreed-to gross fair market value of each of
the Contributed Limited Partner Assets, which shall be their initial Gross Asset
Value, is as set forth opposite the contributing Limited Partner's name on
attached Exhibit B.
4.3 Additional Funds.
(a) The Partnership may obtain funds ("Required Funds") (i) which it
considers necessary to meet the needs and obligations and requirements of the
Partnership, or to maintain adequate working capital or to repay Partnership
indebtedness, or to carry out the Partnership's purposes, from the proceeds of
Third Party Financing or Affiliate Financing, in each case pursuant to such
terms, provisions, and conditions and in such manner (including the engagement
of brokers and/or investment bankers to assist in providing such financing) and
amounts as the General Partner shall determine in its sole discretion or (ii)
from the exercise of the option granted in Section 4 of the Underwriting
Agreement or (iii) from the exercise of Incentive Options pursuant to Section
4.4 hereof. Any and all funds required or expended, directly or indirectly, by
the Partnership for capital expenditures may be obtained or replenished through
Partnership borrowings. Any Third Party Financing or Affiliate Financing
obtained by the General Partner, on behalf of the Partnership may be convertible
in whole
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or in part into Additional Interests (to be issued in accordance with
Section 9.3 hereof), may be unsecured, may be secured by a mortgage or
mortgages, or deed(s) of trust and/or assignments on or in respect of all or any
portion of the assets of the Partnership or any other security made available by
the Partnership, may include or be obtained through the public or private
placement of debt and/or other instruments, domestic and foreign, and may
include the provision for the option to acquire Additional Interests (to be
issued in accordance with Section 9.3 hereof), and may include the acquisition
of or provision for interest rate swaps, credit enhancers, and/or other
transactions or items in respect of such Third Party Financing or Affiliate
Financing; provided, however, that in no event may the Partnership obtain any
Third Party Financing that is recourse to any Partner or any Affiliate, partner,
shareholder, beneficiary, principal, officer, or director of any Partner without
the consent of the affected Partner and any other Person or Persons to whom such
recourse may be had.
(b) To the extent the Partnership does not borrow all of the
Required Funds, the General Partner may (but is not required to) contribute to
the Partnership as an additional Capital Contribution the amount of the Required
Funds ("Contributed Funds") (hereinafter, each date on which the General Partner
so contributes Contributed Funds pursuant to this paragraph (b) is referred to
as an "Adjustment Date"). In the event the General Partner advances Required
Funds to the Part-
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nership as Contributed Funds pursuant to this paragraph (b), then (x) the
Partnership shall assume and pay (or reflect on its books as additional
Contributed Funds) the costs, fees and expenses (including any applicable
underwriting discounts and selling commissions) incurred by the General Partner
in connection with raising such Contributed Funds through a public offering of
its securities or otherwise and (y) the Percentage Interests of the Partners
shall be adjusted as follows:
(i) Effective on each Adjustment Date, the Percentage Interest
of each Limited Partner shall be adjusted such that the Percentage
Interest of the Limited Partner shall be equal to a fraction, the
numerator of which is equal to the Deemed Partnership Interest Value
of such Limited Partner (computed as of the Trading Day immediately
preceding the Adjustment Date) and the denominator of which is equal
to the sum of (i) the Deemed Value of the Partnership (computed as
of the Trading Day immediately preceding the Adjustment Date) and
(ii) the amount of Contributed Funds contributed by the General
Partner on such Adjustment Date. The General Partner shall promptly
give each Limited Partner written notice of its Percentage Interest,
as adjusted.
(ii) Effective on each Adjustment Date, the Percentage
Interest of the General Partner shall be adjusted such that the
Percentage Interest of the
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General Partner shall be equal to a fraction, the numerator of which
is equal to the sum of (i) the Deemed Partnership Interest Value of
the General Partner (computed as of the Trading Day immediately
preceding the Adjustment Date) and (ii) the amount of the
Contributed Funds contributed by the General Partner on such
Adjustment Date and the denominator of which is equal to the sum of
(iii) the Deemed Value of the Partnership (computed as of the
Trading Day immediately preceding the Adjustment Date) and (iv) the
amount of the Contributed Funds contributed by the General Partner.
4.4 Stock Incentive Plan. If at any time or from time to time
Incentive Options granted in connection with the General Partner's Stock
Incentive Plan are exercised in accordance with the terms of the Incentive
Option Agreement, the General Partner shall, as soon as practicable after such
exercise, contribute to the capital of the Partnership an amount equal to the
exercise price paid to the General Partner by such exercising party in
connection with the exercise of the Incentive Option.
4.5 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 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
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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 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.
Notwithstanding the foregoing, the stockholders of the General Partner shall not
be considered creditors or third parties for the purposes of this Agreement but
shall be considered third party beneficiaries with the right to enforce this
Agreement.
4.6 No Interest; No Return. No Partner shall be entitled to interest
on its Capital Contribution or on such Partner's Capital Account. Except as
provided herein or by law, no Partner shall have any right to withdraw any part
of its Capital Account or to demand or receive the return of its Capital
Contribution from the Partnership.
4.7 Capital Accounts.
(a) The Partnership shall establish and maintain a separate capital
account ("Capital Account") for each Partner, including a substitute partner who
shall pursuant to the provisions hereof acquire a Partnership Interest, which
Capital Account shall be:
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(1) credited with the amount of cash; the initial Gross Asset Value
(net of liabilities secured by such contributed property that the
Partnership assumes or takes subject to) of any other property
contributed by such Partner to the capital of the Partnership; in
the case of the General Partner, (i) the amount, if any, of Required
Funds contributed to the Partnership from the exercise of the option
contained in Section 4 of the Underwriting Agreement, and (ii) upon
exercise of an Incentive Option, the amount described in Section
4.4; such Partner's distributive share of Profits; and any other
items in the nature of income or gain that are allocated to such
Partner pursuant to Section 6.1 hereof, but excluding tax items
described in Regulations Section 1.704- l(b)(4)(i); and
(2) debited with the amount of cash; the Gross Asset Value (net of
liabilities secured by such distributed property that such Partner
assumes or takes subject to) of any Partnership property distributed
to such Partner pursuant to any provision of this Agreement; such
Partner's distributive share of Losses; and any other items in the
nature of expenses or losses that are allocated to such Partner
pursuant to Section 6.1 hereof, but excluding tax items described in
Regulations Section 1.704-l(b)(4)(i).
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In the event that a Partner's Partnership Interest or portion
thereof is transferred within the meaning of Regulations Section
1.704-l(b)(2)(iv)(f), the transferee shall succeed to the Capital Account of the
transferor to the extent that it relates to the Partnership Interest or portion
thereof so transferred.
In the event that the Gross Asset Values of Partnership assets are
adjusted as described below in Section 4.7(b) hereof, the Capital Accounts of
the Partners shall be adjusted to reflect the aggregate net adjustments as if
the Partnership sold all of its property for their fair market values and
recognized gain or loss for federal income tax purposes equal to the amount of
such aggregate net adjustment.
The foregoing provisions and the other provisions of this Agreement
relating to the maintenance of Capital Accounts are intended to comply with
Section 1.704-l(b) of the Regulations, and shall be interpreted and applied as
provided in the Regulations. In the event that the General Partner reasonably
determines that the manner in which the Capital Accounts, or any debits or
credits thereto, are maintained or computed under the Regulations should be
further amended, the General Partner shall be authorized, without the approval,
consent or act of any of the Partners, to amend this Agreement, provided that
such amendment shall not directly and adversely affect the Partnership Interest
of a Partner, including without limitation, the right to receive distributions
allocable thereto, without the written concurrence of such Partner. In
determining whether this Agreement should be
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amended to reflect the foregoing, the General Partner shall be entitled to rely
on the advice of the Partnership Accountants and/or counsel to the Partnership.
(b) The term "Gross Asset Value" or "Gross Asset Values" means, with
respect to any asset of the Partnership, such asset's adjusted basis for federal
income tax purposes, except as follows:
(a) the initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be (i) in the case of any asset described
on attached Exhibit B, the gross fair market value ascribed thereto on
such Exhibit B and (ii) in the case of any other asset hereafter
contributed by a Partner, the gross fair market value of such asset as
reasonably determined by the General Partner;
(b) the Gross Asset Values of all Partnership assets shall be
adjusted to equal their respective gross fair market values, as reasonably
determined by the General Partner, immediately prior to the following
events:
(i) a Capital Contribution (other than a de minimis Capital
Contribution) to the Partnership by a new or existing Partner as
consideration for a Partnership Interest, including in connection
with the exercise of an Incentive Option;
(ii) the distribution by the Partnership to a Partner of more
than a de minimis amount of Partnership property as consideration
for the redemption of a Partnership Interest;
(iii) the liquidation of the Partnership within the meaning
of Section 1.704-l(b)(2)(ii)(g) of the Regulations; and
(iv) the exercise by a Limited Partner of its Conversion
Rights.
(c) the Gross Asset Values of Partnership assets distributed to any
Partner shall be the gross fair market values of such assets as reasonably
determined by the General Partner as of the date of distribution.
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The agreed-to gross fair market value of each of the Contributed Limited Partner
Assets shall be its initial Gross Asset Value as set forth on attached Exhibit
B. The gross fair market value of any property contributed by the General
Partner to the Partnership ("Contributed Property"), other than money and other
than property contributed to the Partnership by the General Partner as its
initial contribution described in Section 4.1 above, shall be the Acquisition
Cost of such Contributed Property. For purposes hereof, the Acquisition Cost of
Contributed Property shall be (i) in the case of Contributed Property acquired
by the General Partner in exchange for Shares, the Current Per Share Market
Price as of the closing date on which the General Partner acquired such
Contributed Property multiplied by the number of Shares issued in the
acquisition or (ii) in the case of Contributed Property acquired by the General
Partner for consideration other than Shares, the amount of such consideration
plus, in either case, any costs and expenses incurred by the General Partner in
connection with such acquisition or contribution; provided, however, that in the
event the Acquisition Cost of Contributed Property is financed by any borrowings
by the General Partner, the Partnership shall assume any such obligations of the
General Partner so that the General Partner shall be released therefrom
concurrently with the contributions of such property to the Partnership or, if
impossible, shall obligate itself to the General Partner in an amount and on
terms equal to such indebtedness, and the Acquisition Cost shall be reduced
appropriately.
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At all times, Gross Asset Values shall be adjusted by any Depreciation taken
into account with respect to the Partnership's assets for purposes of computing
Profits and Losses. Any adjustment to the Gross Asset Values of Partnership
property shall require an adjustment to the Partners' Capital Accounts as
described in Section 4.7(a) above.
4.8 No Preemptive Rights. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership; or (ii) issuance or sale of any
Partnership Interests.
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ARTICLE V
Conditions/Representations and Warranties
5.1 General Partner Conditions. The obligation of the General
Partner to consummate the transactions contemplated herein is subject to
fulfillment of all of the following conditions on or prior to the date hereof:
(a) Each Limited Partner shall transfer and assign all of its right,
title and interest in and to the Contributed Limited Partner Assets to the
Partnership free and clear of all Liens other than those Liens described on
Exhibit B and, in connection therewith, shall execute and deliver to the
Partnership such instruments as may be necessary or desirable to effectuate the
transfer of the Contributed Limited Partner Assets to the Partnership;
(b) All consents, waivers, approvals and authorizations required for
the consummation of the transactions contemplated hereby shall have been
obtained, including, if required, approvals required under the Hart-Scott Act;
(c) All necessary filings for any transfer taxes payable in respect
of the transfer to the Partnership of the Contributed Limited Partner Assets, or
resulting therefrom, shall have been prepared and payment of or provisions for
any amounts due shall have been made by the General Partner;
(d) All of the representations and warranties or the Limited
Partners shall be true and correct in all material
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respects as of the date hereof;
(e) The Registration Statement shall become effective under the
provisions of the Securities Act of 1933, as amended, and no stop order or other
administrative proceeding shall have been entered or instituted with respect
thereto as of the date hereof; and
(f) The Offering shall have been consummated in accordance with the
Underwriting Agreement.
5.2 Limited Partner Conditions. The obligation of the Limited
Partners to consummate the transactions contemplated herein is subject to
fulfillment of all of the following conditions on or prior to the date hereof:
(a) The General Partner shall have made the General Partner Capital
Contribution as provided in Section 4.1(a) hereof and, in connection therewith,
shall execute and deliver to the Partnership such instruments as may be
necessary or desirable.
(b) All consents, waivers, approvals and authorizations required for
the consummation of the transactions contemplated hereby shall have been
obtained, including, if required, approvals required under the Hart-Scott Act;
(c) All necessary filings for any transfer taxes payable in respect
of the transfer to the Partnership of the Contributed Limited Partner Assets
shall have been prepared and payment of or provisions for any amounts due shall
have been made by the General Partner;
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(d) All of the representations and warranties of the General Partner
shall be true and correct in all material respects as of the date hereof;
(e) The Registration Statement shall become effective under the
provisions of the Securities Act of 1933, as amended, and no stop order or other
administrative proceeding shall have been entered or instituted with respect
thereto as of the date hereof; and
(f) The Offering shall have been consummated in accordance with the
Underwriting Agreement.
5.3 Representations and Warranties by the General Partner.
The General Partner represents and warrants to the Limited Partners
and to the Partnership that (i) it is a corporation duly formed, validly
existing and in good standing under the laws of the State of Delaware; (ii) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including without limitation, that of its
directors and/or shareholder(s), as the case may be, as required, (iii) the
consummation of such transactions shall not result in a breach or violation of,
or a default under the General Partner's certificate of incorporation or
by-laws, any agreement by which the General Partner or any of its properties or
any of its directors and/or shareholders, as the case may be, is or are bound,
or any statute, regulation, order, or other law to which it or any of its
directors are bound and/or
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(iv) this Agreement is binding upon, and enforceable against the General Partner
in accordance with its terms; and (v) no consent, waiver approval or
authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by the General Partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers, approvals or
authorizations which have been obtained prior to the date hereof.
5.4 Representations and Warranties by the Limited Partners. Each
Limited Partner severally represents and warrants to the General Partner and the
Partnership as follows:
(a) the consummation of the transactions contemplated by this
Agreement and the Contribution Agreement to be performed by the Limited Partner
will not result in a breach or violation of, or a default under, any agreement
by which such Limited Partner is bound, or any statute, regulation, order, or
other law to which the Limited Partner is subject, (ii) such Limited Partner is
neither a "foreign person" within the meaning of Section 1445(f) of the Code nor
a "foreign partner" within the meaning of Section 1446(e) of the Code, (iii) the
Limited Partner has received all authorization necessary to enter into and to
perform this Agreement and (iv) this Agreement and the Contribution Agreement
have been duly executed and delivered by and are binding upon, and enforceable
against, the Limited Partner in accordance with their respective terms; and no
consent, waiver approval or
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authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by any of the Limited Partner in connection with the execution, delivery
and performance of this Agreement and the Contribution Agreement.
(b) there is no litigation or governmental, administrative or
arbitration proceeding or investigation pending, or, to the knowledge of the
Limited Partners, threatened, or any unsatisfied arbitration awards or judicial
orders against the Limited Partner and which affects any of the Contributed
Limited Partner Assets, or which might affect the ability of the Limited Partner
to perform its obligations under this Agreement, except as set forth in Exhibit
;
(c) no attachments, execution proceedings, assignments for the
benefit of creditors, insolvency, bankruptcy, reorganization or other
proceedings are pending or, to the best of such Limited Partner's knowledge,
threatened against the Limited Partner nor are any of such proceedings
anticipated or contemplated by the Limited Partner;
(d) the Limited Partners will cooperate with the General Partner
after the date hereof in obtaining any initial licenses, approvals, permits and
certificates which become necessary after the date hereof for the Partnership to
commence the operation of the Contributed Limited Partner Properties and the
assets relating thereto.
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(e) Each Alpine Affiliate, of which such Limited Partner is a
partner, has good and marketable title in fee simple to the Property owned by
such Alpine Affiliate, free and clear of any liens, charges or encumbrances,
except liens referred to in the Registration Statement; the statements in the
Registration Statement relating to such Property are complete and accurate in
all material respects; to the knowledge of such Limited Partner, there exists no
defaults in respect to any leases or agreements of such Alpine Affiliate
relating to such property which default could be material to such Alpine
Affiliate and the consummation of the transactions described in the Prospectus
will not conflict with any such lease or agreement; such Property and the
business indicated thereof by such Alpine Affiliate comply in all material
respects with all applicable federal, state and local laws and regulations; and
there is no proceeding or action pending or, to the knowledge of such Limited
Partner, threatened in respect of such property or such Alpine Affiliate, except
such that would not have a material adverse effect on such Alpine Affiliate. Any
term used in this subsection not otherwise defined in this Agreement, shall be
as defined in the Registration Statement.
5.5 Survival of Representations and Warranties. The representations
and warranties made by the General Partner in paragraph 5.3 hereof shall survive
for twelve (12) months after the date hereof. The representations and warranties
made by the Limited Partners in Section 5.4 hereof shall survive for twelve
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(12) months after the date hereof.
5.6 Indemnification by the Limited Partners.
Subject to the provisions of paragraph 5.7 hereof, each Limited Partner,
severally, indemnifies and holds harmless the Partnership and the General
Partner against and from all liability, demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses) sustained or incurred by the Partnership or the General Partner as a
result of or arising out of (i) any inaccuracy in a representation or warranty
made by such Limited Partner under this Agreement or the Contribution Agreement
or (ii) any liability of the General Partner or the Partnership arising under
the Underwriting Agreement arising from any inaccuracy in a representation or
warranty made by the Partnership therein.
5.7 Limitations on Representations and Warranties by the Limited
Partners. Notwithstanding anything to the contrary in this Agreement, the sole
recourse of the General Partner or the Partnership under this Article V shall be
against the Limited Partners' Partnership Interests, all right, title and
interest of the Limited Partners under this Agreement in and to the assets or
properties of the Partnership and in all Shares owned by the Limited Partners,
including Shares acquired upon exercise of Rights.
5.8 Acknowledgement by Each Partner. Except as otherwise provided
herein, each Partner hereby acknowledges that
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no representations as to potential profit, cash flows, or yield, if any, in
respect of the Partnership or any one or more or all of the Properties have been
made by any Partner or any employee or
representative or Affiliate of any Partner, and that projections and any other
information, including, without limitation, financial and descriptive
information and documentation, which may have been in any manner submitted to
such Partner shall not constitute any representation or warranty, express or
implied.
ARTICLE VI
Allocations, Distributions and Other Tax and Accounting Matters
6.1 Allocations.
(a) For the purpose of this Agreement, the terms "Profits" and
"Losses" mean, respectively, for each Partnership Fiscal Year or other period,
the Partnership's taxable income or loss for such Partnership Fiscal Year or
other period, determined in accordance with Section 703(a) of the Code (for this
purpose, all items of income, gain, loss, or deduction required to be stated
separately pursuant to Section 703(a)(1) of the Code shall be included in
taxable income or loss), adjusted as follows:
(1) any income of the Partnership that is exempt from federal income
tax and not otherwise taken into account in computing Profits or Losses pursuant
to this Section 6.l(a) shall be added to such taxable income or loss;
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(2) in lieu of the depreciation, amortization, and other cost
recovery deductions taken into account in computing such taxable income or loss,
there shall be taken into account Depreciation for such Partnership Fiscal Year
or other period;
(3) any items that are specially allocated pursuant to Section
6.1(d) or 6.1(f) hereof shall not be taken into account in computing Profits or
Losses; and
(4) any expenditures of the Partnership described Section
705(a)(2)(B) of the Code (or treated as such under Regulation Section
704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profits or
Losses pursuant to this Section 6.1(a) shall be deducted from such taxable
income or loss.
(b) Except as otherwise provided in Section 6.1(d) hereof, the
Profits of the Partnership (and each item thereof) for each Partnership Fiscal
Year shall be allocated among the Partners as follows:
(1) First, to the General Partner, an amount of Profits up to
the General Partner's Preference Amount for such Partnership Fiscal year.
(2) Then, to the Partners in an amount equal to the excess of
(i) the aggregate amount of Losses allocated to the Partners pursuant to clause
(7) of this Section 6.1(b) for all prior Partnership Fiscal Years over (ii) the
aggregate amount of Profits allocated to the Partners pursuant to this clause
(2) of Section 6.1(b) for all prior Partnership Fiscal years (with respect to
each Partner, such amount being referred to herein as
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its "Section 6.1(b)(2) Amount"), in proportion to their respective Section
6.1(b)(2) Amounts;
(3) Then, to the Partners in an amount equal to the excess of
(i) the aggregate amount of Losses allocated to the Partners pursuant to clause
(6) of this Section 6.1(b) for all prior Partnership Fiscal Years over (ii) the
aggregate amount of Profits allocated to the Partners pursuant to this clause
(3) of Section 6.1(b) for all prior Partnership Fiscal Years (with respect to
each Partner, such amount being referred to herein as its "Section 6.1(b)(3)
Amount"), in proportion to their respect Section 6.1(b)(3) Amounts;
(4) Then, to the Limited Partners in proportion to their
respective Percentage Interests, an amount of Profits up to the Limited Partner
Allocation Catch-Up Amount;
(5) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
Except as otherwise provided in Section 6.1(d) hereof, the
Losses of the Partnership (and each item thereof) for each Partnership Fiscal
year shall be allocated among the Partners as follows:
(6) First, to the Partners in an amount up to the aggregate
positive balances in their Capital Accounts, in proportion to their respective
positive Capital Account balances;
(7) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
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(c) For the purpose of Section 6.1(b) hereof, gain or loss resulting
from any disposition of Partnership property shall be computed by reference to
the Gross Asset Value of the property disposed of, notwithstanding that the
adjusted tax basis of such property for federal income tax purposes differs from
its Gross Asset Value.
(d) Notwithstanding the foregoing provisions of this Section 6.1,
the following provisions shall apply:
(1) A Partner shall not receive an allocation of any Partnership
deduction that would result in total loss allocations attributable to
"Nonrecourse Liabilities" (as defined in Regulations Section 1.704-2(b)(3)) in
excess of such Partner's share of Minimum Gain (as determined under Regulations
Section 1.704-2(g)). The term "Minimum Gain" means an amount determined in
accordance with Regulations Section 1.704-2(d) by computing, with respect to
each Nonrecourse Liability of the Partnership, the amount of gain, if any, that
the Partnership would realize if it disposed of the property subject to such
liability for no consideration other than full satisfaction thereof, and by then
aggregating the amounts so computed. If there is a net decrease in Partnership
Minimum Gain for a Partnership Fiscal Year, in accordance with Regulations
Section 1.704-2(f) and the exceptions contained therein, the Partners shall be
allocated items of Partnership income and gain for such Partnership Fiscal Year
(and, if necessary, for subsequent Partnership Fiscal Years) equal to the
Partners' respective shares of the net decrease in Minimum
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Gain within the meaning of Regulations Section 1.704-2(g)(2) (the "Minimum Gain
Chargeback"). The items to be allocated pursuant to this Section 6.l(d)(l) shall
be determined in accordance with Regulations Section 1.704-2(f) and (j).
(2) Any item of "Partner Nonrecourse Deduction" (as defined in
Regulations Section 1.704- 2(i)) with respect to a "Partner Nonrecourse Debt"
(as defined in Regulations Section 1.704-2(b)(4)) shall be allocated to the
Partner or Partners who bear the economic risk of loss for such Partner
Nonrecourse Debt in accordance with Regulations Section 1.704-2(i)(1). Subject
to Section 6.1(d)(1) hereof, but notwithstanding any other provision of this
Agreement, in the event that there is a net decrease in Minimum Gain
attributable to a Partner Nonrecourse Debt (such Minimum Gain being hereinafter
referred to as "Partner Nonrecourse Debt Minimum Gain") for a Partnership Fiscal
Year, then after taking into account allocations pursuant to Section 6.1(d)(1)
hereof, but before any other allocations are made for such taxable year, and
subject to the exceptions set forth in Regulations Section 1.704- 2(i)(4), each
Partner with a share of Partner Nonrecourse Debt Minimum Gain at the beginning
of such Partnership Fiscal Year shall be allocated items of income and gain for
such Partnership Fiscal Year (and, if necessary, for subsequent Partnership
Fiscal Years) equal to such Partner's share of the net decrease in Partner
Nonrecourse Debt Minimum Gain as determined in a manner consistent with the
provisions of Regulations Section 1.704-2(g)(2). The items to be allocated
pursuant to this Section
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6.1(d)(2) shall be determined in accordance with Regulations Section 1.704-2(i)
(4) and (j).
(3) Pursuant to Regulations Section 1.752-3(a)(3), for the purpose
of determining each Partner's share of excess nonrecourse liabilities of the
Partnership, and solely for such purpose, each Partner's interest in Partnership
profits is hereby specified to be such Partner's Percentage Interest.
(4) No Limited Partner shall be allocated any item of deduction or
loss of the Partnership if such allocation would cause such Limited Partner's
Capital Account to become negative by more than the sum of (i) any amount such
Limited Partner is obligated to restore upon liquidation of the Partnership,
plus (ii) such Limited Partner's share of the Partnership's Minimum Gain and
Partner Nonrecourse Debt Minimum Gain. An item of deduction or loss that cannot
be allocated to a Limited Partner pursuant to this Section 6.1(d)(4) shall be
allocated to the General Partner. For this purpose, in determining the Capital
Account balance of such Limited Partner, the items described in Regulations
Section 1.704-l(b)(2)(ii)(d)(4), (5), and (6) shall be taken into account. In
the event that (A) any Limited Partner unexpectedly receives any adjustment,
allocation, or distribution described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), (5), or (6), and (B) such adjustment, allocation, or
distribution causes or increases a deficit balance (net of amounts which such
Limited Partner is obligated to restore or deemed obligated to restore under
Regulations Section 1.704- 2(g)(1) and 1.704-2(i)(5) and
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determined after taking into account any adjustments, allocations, or
distributions described in Regulations Sections 1.704- 1(b)(2)(ii)(d)(4), (5),
or (6) that, as of the end of the Partnership Fiscal Year, reasonably are
expected to be made to such Limited Partner) in such Limited Partner's Capital
Account as of the end of the Partnership Fiscal Year to which such adjustment,
allocation, or distribution relates, then items of Gross Income (consisting of a
pro rata portion of each item of Gross Income) for such Partnership Fiscal Year
and each subsequent Partnership Fiscal Year shall be allocated to such Limited
Partner until such deficit balance or increase in such deficit balance, as the
case may be, has been eliminated. In the event that this Section 6.1(d)(4) and
Section 6.l(d)(l) and/or (2) hereof apply, Section 6.l(d)(l) and/or (2) hereof
shall be applied prior to this Section 6.1(d)(4).
(5) In accordance with Sections 704(b) and 704(c) of the Code and
the Regulations thereunder, income, gain, loss, and deduction with respect to
any property contributed to the capital of the Partnership shall, solely for
federal income tax purposes, be allocated among the Partners so as to take
account of any variation between the adjusted basis of such property to the
Partnership for federal income tax purposes and the initial Gross Asset Value of
such property, all as set forth on Exhibit E hereto. If the Gross Asset Value of
any Partnership property is adjusted as described in the definition of Gross
Asset Value, subsequent allocations of income, gain, loss, and deduction with
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respect to such asset shall take account of any variation between the adjusted
basis of such asset for federal income tax purposes and the Gross Asset Value of
such asset in the manner prescribed under Sections 704(b) and 704(c) of the Code
and the Regulations thereunder.
(e) Notwithstanding anything to the contrary contained in this
Section 6.1, the allocation of Profits and Losses for any Partnership Fiscal
Year during which a Person acquires a Partnership Interest (other than upon
formation of the Partnership) shall take into account the Partners' varying
interests for such Partnership Fiscal Year pursuant to any method permissible
under Section 706 of the Code that is selected by the General Partner
(notwithstanding any agreement between the assignor and assignee of such
Partnership Interest although the General Partner may recognize any such
agreement), which method may take into account the date on which the Transfer or
an agreement to Transfer becomes irrevocable pursuant to its terms, as
determined by the General Partner.
(f) In the event of a sale or exchange of a Partner's Partnership
Interest or portion thereof or upon the death of a Partner, if the Partnership
has not theretofore elected, pursuant to Section 754 of the Code, to adjust the
basis of Partnership property, the General Partner shall cause the Partnership
to elect, if the Person acquiring such Partnership Interest or portion thereof
so requests, pursuant to Section 754 of the Code, to adjust the basis of
Partnership property. In addition, in the
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event of a distribution referred to in Section 734(b) of the Code, if the
Partnership has not theretofore elected, the General Partner may, in the
exercise of its reasonable discretion, cause the Partnership to elect, pursuant
to Section 754 of the Code, to adjust the basis of Partnership property. Except
as provided in Regulations Section 1.704-l(b)(2)(iv)(m), such adjustment shall
not be reflected in the Partners' Capital Accounts and shall be effective solely
for federal and (if applicable) state and local income tax purposes. Each
Partner hereby agrees to provide the Partnership with all information necessary
to give effect to such election. With respect to such election:
(1) Any change in the amount of the depreciation deducted by the
partnership and any change in the gain or loss of the Partnership, for federal
income tax purposes, resulting from an adjustment pursuant to Section 743(b) or
the Code shall be allocated entirely to the transferee of the Partnership
Interest or portion thereof so transferred. Neither the capital contribution
obligations of, nor the Partnership Interest of, nor the amount of any cash
distributions to, the Partners shall be affected as a result of such election,
and except as provided in Regulations Section 1.704-l(b)(2)(iv)(m), the making
of such election shall have no effect except for federal and (if applicable)
state and local income tax purposes.
(2) Solely for federal and (if applicable) state and local income
tax purposes and not for the purpose of maintaining the Partners' Capital
Accounts (except as provided in Regulations
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Section 1.704-l(b)(2)(iv)(m)), the Partnership shall keep a written record for
those assets, the bases of which is adjusted as a result of such election, and
the amount at which such assets are carried on such record shall be debited (in
the case of an increase in basis) or credited (in the case of a decrease in
basis) by the amount of such basis adjustment. Any change in the amount of the
depreciation deducted by the Partnership and any change in the gain or loss of
the Partnership, for federal and (if applicable) state and local income tax
purposes, attributable to the basis adjustment made as a result of such election
shall be debited or credited, as the case may be, on such record.
(g) The Profits, Losses, gains, deductions, and credits of the
Partnership (and all items thereof) for each Partnership Fiscal Year shall be
determined in accordance with the accounting method followed by the Partnership
for federal income tax purposes.
(h) Except as provided in Sections 6.1(d)(5) and 6.l(f) hereof, for
federal income tax purposes, each item of income, gain, loss, or deduction shall
be allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss, or deduction has been allocated pursuant to this
Section 6.1.
(i) Such portion of the gain allocated pursuant to this Section 6.1
that is treated as ordinary income attributable to the recapture of depreciation
shall, to the extent possible, be allocated among the Partners in the proportion
that (i) the amount
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of depreciation previously allocated to each Partner relating to the property
that is the subject of the disposition bears to (ii) the total of such
depreciation allocated to all of the Partners. This Section 6.l(i) shall not
alter the amount of allocations among the Partners pursuant to this Section 6.1,
but merely the character of gain so allocated.
(j) To the extent permitted by Regulations Sections 1.704-2(h)(3)
and 1.704-2(i)(6), the General Partner shall endeavor to treat distributions as
having been made from the proceeds of Nonrecourse Liabilities or Partner
Nonrecourse Debt only to the extent that such distributions would cause or
increase a deficit balance in any Partner's Capital Account that exceeds the
amount such Partner is otherwise obligated to restore (within the meaning of
Regulations Section 1.704-l(b)(2)(ii)(c)) as of the end of the Partnership's
taxable year in which the distribution occurs.
6.2 Except with respect to a liquidation of the Partnership pursuant
to Section 3.2 hereof:
(a) the General Partner shall cause the Partnership to
distribute all or a portion of Net Operating Cash Flow to the Partners from time
to time as determined by the General Partner, but in any event not less
frequently than quarterly in such amounts as the General Partner shall
determine.
(b) For each Partnership Fiscal Year, all distributions made
pursuant to this Section 6.2 shall be made in the following order of priority:
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(1) First, to the General Partner in an amount up to the
General Partner's Preference Amount for such Fiscal year.
(2) Then, to the Limited Partners in proportion to their
respective Percentage Interests, an amount up to the Limited Partner
Distribution Catch-up Amount;
(3) Thereafter, to the Partners in proportion to their
respective Percentage Interests.
(c) Notwithstanding the provisions of Section 6.2(a) and (b),
the General Partner shall use its best efforts to cause the Partnership to
distribute sufficient amounts to enable the General Partner to pay shareholder
dividends that will (1) satisfy the REIT Requirements and (2) avoid any federal
income or excise tax liability of the General Partner.
6.3 Books of Account. At all times during the continuance of the
Partnership, the General Partner shall maintain or cause to be maintained full,
true, complete and correct books of account in accordance with generally
accepted accounting principles wherein shall be entered particulars of all
monies, goods or effects belonging to or owing to or by the Partnership, or
paid, received, sold or purchased in the course of the Partnership's business,
and all of such other transactions, matters and things relating to the business
of the Partnership as are usually entered in books of account kept by persons
engaged in a business of a like kind and character. In addition, the Partnership
shall keep all records as required to be kept pursuant
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to the Act. The books and records of account shall be kept at the principal
office of the Partnership, and each Partner shall at all reasonable times have
access to such books and records and the right to inspect the same.
6.4 Reports. Within ninety (90) Days after the end of each
Partnership Fiscal Year, the Partnership shall cause to be prepared and
transmitted to each Partner, an annual report of the Partnership relating to the
previous Partnership Fiscal Year containing a statement of financial condition
as of the year then ended, and statements of operations, cash flow and
Partnership equity for the year then ended, which annual statements shall be
prepared in accordance with GAAP and shall be audited by the Accountants. The
Partnership shall also cause to be prepared and transmitted to each Partner
within forty-five (45) Days after the end of each of the first three (3)
quarters of each Partnership Fiscal Year, a quarterly unaudited report of the
Partnership's financial condition and statements of operations, cash flow and
Partnership equity relating to the fiscal quarter then just ended, prepared in
accordance with GAAP. The Partnership shall further cause to be prepared and
transmitted to the General Partner (i) such reports and/or information as are
necessary for the General Partner to fulfill its obligations under the
Securities Act of 1933, the Securities Exchange Act of 1934, as amended, and the
applicable stock exchange rules, and under any other regulations to which the
General Partner or the Partnership may be subject, and (ii) such other reports
and/or information as are necessary
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for the General Partner to determine its qualification as a REIT under the REIT
Requirements or its liability for a tax as a consequence of its Partnership
Interest, including its distributive share of taxable income, in each case, in a
manner that will permit the General Partner to comply with such obligations or
make such determinations in a timely fashion.
6.5 Audits. Not less frequently than annually, the books and
records of the Partnership shall be audited by the Accountants.
6.6 Tax Returns.
(a) The General Partner shall determine the methods to be used in
the preparation of federal, state, and local income and other tax returns for
the Partnership in connection with all items of income and expense, including
but not limited to, valuation of assets, the methods of depreciation and cost
recovery, elections, credits, and tax accounting methods and procedures.
(b) To the extent all necessary information is available, within
ninety (90) Days after the end of each Partnership Fiscal Year, and in any event
within one hundred twenty (120) Days after the end of each Partnership Fiscal
Year, the Partnership shall cause to be prepared and transmitted to the Partners
federal and appropriate state and local Partnership Income Tax Schedules "K-1,"
or any substitute therefor, with respect to such Partnership Fiscal Year on
appropriate forms prescribed.
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6.7 Tax Matters Partner. The General Partner is hereby designated as
the Tax Matters Partner within the meaning of Section 6231(a)(7) of the Code for
the Partnership; provided, however, (i) in exercising its authority as Tax
Matters Partner it shall be limited by the provisions of this Agreement
affecting tax aspects of the Partnership; (ii) the General Partner shall consult
in good faith with the Limited Partners regarding the filing of a Code Section
6227(b) administrative adjustment request with respect to the Partnership before
filing such request, it being understood, however, that the provisions hereof
shall not be construed to limit the ability of any Partner, including the
General Partner, to file an administrative adjustment request on its own behalf
pursuant to Section 6227(a) of the Code; (iii) the General Partner shall consult
in good faith with the Limited Partners regarding the filing of a petition for
judicial review of an administrative adjustment request under Section 6228 of
the Code, or a petition for judicial review of a final partnership
administrative judgment under Section 6226 of the Code relating to the
Partnership before filing such petition; (iv) the General Partner shall give
prompt notice to the Limited Partners of the receipt of any written notice that
the Internal Revenue Service or any state or local taxing authority intends to
examine Partnership income tax returns for any year, receipt of written notice
of the beginning of an administrative proceeding at the Partnership level
relating to the Partnership under Section 6223 of the Code, receipt of written
notice of the final Partnership administrative
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adjustment relating to the Partnership pursuant to Section 6223 of the Code, and
receipt of any request from the Internal Revenue Service for waiver of any
applicable statute of limitations with respect to the filing of any tax return
by the Partnership; and (v) the General Partner shall promptly notify the
Limited Partners if the General Partner does not intend to file for judicial
review with respect to the Partnership.
ARTICLE VII
Rights, Duties and Restrictions of the General Partner
7.1 Expenditures by 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 shall be made on behalf of the Partnership and the General Partner
shall be entitled to reimbursement by the Partnership for any expenditures
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.
7.2 Powers and Duties of General Partner. The General Partner shall
be responsible for the management of the Partnership's business and affairs.
Except as otherwise herein expressly provided, and subject to the limitations
contained in Section 7.3 hereof with respect to Major Decisions, the General
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Partner shall have, and is hereby granted, full and complete power to the
fullest extent permissible under the Act, authority and discretion to take such
action for and on behalf of the Partnership and in its name as the General
Partner shall, in its sole and absolute discretion, deem necessary or
appropriate to carry out the purposes for which the Partnership was organized.
Except as otherwise expressly provided herein, and subject to Section 7.3
hereof, the General Partner shall have the right, power and authority:
(a) To manage, control, invest, lend, reinvest, acquire by purchase,
lease or otherwise, sell, contract to purchase or sell, grant, obtain, or
exercise options to purchase, options to sell or conversion rights, assign,
transfer, convey, deliver, endorse, exchange, pledge, mortgage, abandon,
improve, repair, maintain, insure, lease for any term and otherwise deal with
any and all property of whatsoever kind and nature, and wheresoever situated, in
furtherance of the purposes of the Partnership;
(b) To acquire, directly or indirectly, interests in real or
personal property of any kind and of any type, and any and all kinds of
interests therein, and to determine the manner in which title thereto is to be
held; to manage, insure against loss, protect and subdivide any of the real or
personal property, interests therein or parts thereof; to improve, develop or
redevelop any such real or personal property; to participate in the ownership
and development of any property; to dedicate for public use, to vacate any
subdivisions or parts thereof, to
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resubdivide, to contract to sell, to grant options to purchase or lease, to sell
on any terms; to convey, to mortgage, pledge or otherwise encumber said
property, or any part thereof; to lease said property or any part thereof from
time to time, upon any terms and for any period of time, and to renew or extend
leases, to amend, change or modify the terms and provisions of any leases and to
grant options to lease and options to renew leases and options to purchase; to
partition or to exchange said real property, or any part thereof, for other real
or personal property; to grant easements or charges of any kind; to release,
convey or assign any right, title or interest in or about or easement
appurtenant to said property or any part thereof; to construct and reconstruct,
remodel, alter, repair, add to or take from buildings on said property; to
insure any Person having an interest in or responsibility for the care,
management or repair of such property; to direct the trustee of any land trust
to mortgage, lease, convey or contract to convey the real estate held in such
land trust or to execute and deliver deeds, mortgages, notes, and any and all
documents pertaining to the property subject to such land trust or in any matter
regarding such trust; to execute assignments of all or any part of the
beneficial interest in such land trust;
(c) To employ, engage or contract with or dismiss from employment or
engagement Persons to the extent deemed necessary by the General Partner for the
operation and management of the Partnership business, including but not limited
to, contractors,
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subcontractors, engineers, architects, surveyors, mechanics, consultants,
accountants, attorneys, insurance brokers, real estate brokers and others;
(d) To enter into contracts on behalf of the Partnership;
(e) To borrow or lend money, procure loans and advances from any
Person for Partnership purposes, and to apply for and secure, from any Person,
credit or accommodations; to contract liabilities and obligations, direct or
contingent and of every kind and nature with or without security; and to repay,
discharge, settle, adjust, compromise, or liquidate any such loan, advance,
credit, obligation or liability;
(f) To Pledge, hypothecate, mortgage, assign, deposit, deliver,
enter into sale and leaseback arrangements or otherwise give as security or as
additional or substitute security, or for sale or other disposition any and all
Partnership property, tangible or intangible, including, but not limited to,
real estate and beneficial interests in land trusts, and to make substitutions
thereof, and to receive any proceeds thereof upon the release or surrender
thereof; to sign, execute and deliver any and all assignments, deeds and other
contracts and instruments in writing; to authorize, give, make, procure, accept
and receive moneys, payments, property, notices, demands, vouchers, receipts,
releases, compromises and adjustments; to waive notices, demands, protests and
authorize and execute waivers of every kind and nature; to enter into, make,
execute, deliver and receive written
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agreements, undertakings and instruments of every kind and nature; to give oral
instructions and make oral agreements; and generally to do any and all other
acts and things incidental to any of the foregoing or with reference to any
dealings or transactions which any attorney may deem necessary, proper or
advisable;
(g) To acquire and enter into any contract of insurance which the
General Partner deems necessary or appropriate for the protection of the
Partnership, for the conservation of the Partnership's assets or for any purpose
convenient or beneficial to the Partnership;
(h) To conduct any and all banking transactions on behalf of the
Partnership; to adjust and settle checking, savings, and other accounts with
such institutions as the General Partner shall deem appropriate; to draw, sign,
execute, accept, endorse, guarantee, deliver, receive and pay any checks,
drafts, bills of exchange, acceptances, notes, obligations, undertakings and
other instruments for or relating to the payment of money in, into, or from any
account in the Partnership's name; to execute, procure, consent to and authorize
extensions and renewals of the same; to make deposits and withdraw the same and
to negotiate or discount commercial paper, acceptances, negotiable instruments,
bills of exchange and dollar drafts;
(i) To demand, sue for, receive, and otherwise take steps to collect
or recover all debts, rents, proceeds, interests, dividends, goods, chattels,
income from property, damages and all other property, to which the Partnership
may be entitled or which
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are or may become due the Partnership from any Person; to commence, prosecute or
enforce, or to defend, answer or oppose, contest and abandon all legal
proceedings in which the Partnership is or may hereafter be interested; and to
settle, compromise or submit to arbitration any accounts, debts, claims,
disputes and matters which may arise between the Partnership and any other
Person and to grant an extension of time for the payment or satisfaction thereof
on any terms, with or without security;
(j) To make arrangements for financing, including the taking of all
action deemed necessary or appropriate by the General Partner to cause any
approved loans to be closed;
(k) To take all reasonable measures necessary to insure compliance
by the Partnership with applicable arrangements, and other contractual
obligations and arrangements entered into by the Partnership from time to time
in accordance with the provisions of this Agreement, including periodic reports
as required to lenders and using all due diligence to insure that the
Partnership is in compliance with its contractual obligations;
(l) To maintain the Partnership's books and records; and
(m) To prepare and deliver, or cause to be prepared and delivered by
the Accountants, all financial and other reports with respect to the operations
of the Partnership, and preparation and filing of all federal and state tax
returns and reports.
Except as otherwise provided herein, to the extent the duties of the
General Partner require expenditures of funds to be
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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.
7.3 Major Decisions. The General Partner shall not, without the
prior Consent of the Limited Partners, on behalf of the Partnership, undertake
any of the following actions (the "Major Decisions"):
(a) Amend, modify or terminate this Agreement other than to reflect
the admission of additional limited partners pursuant to Section 9.3 hereof.
(b) Make a general assignment for the benefit of creditors or
appoint or acquiesce in the appointment of a custodian, receiver or trustee for
all or any part of the assets of the Partnership.
(c) Take title to any personal or real property, other than in the
name of the Partnership or pursuant to Section 7.7 hereof.
(d) Institute any proceeding for Bankruptcy on behalf of the
Partnership.
(e) Act or cause the taking or refraining of any action with
respect to the following matters:
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(i) the dissolution and winding up of the Partnership or an
election to continue the Partnership or to continue the business
of the Partnership;
(ii) a change in the nature of the business of the
Partnership.
7.4 Other Interests of General Partner. Nothing herein shall limit
or proscribe the General Partner and its Affiliates from having any interest in
other present or future ventures, of whatever nature, including real estate, and
further including ventures that are competitive with the Partnership and,
notwithstanding its status as General Partner, the General Partner and its
Affiliates shall be entitled to obtain and/or continue their respective
individual participation in all such ventures without (i) accounting to the
Partnership or the other Partners for any profits with respect thereto, (ii) any
obligation to advise the other Partners of business opportunities for the
Partnership which may come to its or its Affiliates attention as a result of its
or its Affiliates participation in such other ventures or in the Partnership,
and (iii) being subject to any claims whatsoever on account of such
participation.
7.5 Proscriptions. The General Partner shall not have the authority
to:
(a) Do any act in contravention of this Agreement or which would
make it impossible to carry on the ordinary business of the Partnership;
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(b) Possess any Partnership property or assign rights in specific
Partnership property for other than Partnership purposes; or
(c) Do any act in contravention of applicable law.
Nothing herein contained shall impose any obligation on any Person or firm doing
business with the Partnership to inquire as to whether or not the General
Partner has properly exercised its authority in executing any contract, lease,
mortgage, deed or any other instrument or document on behalf of the Partnership,
and any such Third Person shall be fully protected in relying upon such
authority.
7.6 Additional Partners. Additional Partners may be admitted to the
Partnership only as provided in Section 9.3 hereof.
7.7 Title Holder. To the extent allowable under applicable law,
title to all or any part of the properties of the Partnership may be held in the
name of the Partnership or any other individual, corporation, partnership, trust
or otherwise, the beneficial interest in which shall at all times be vested in
the Partnership. Any such title holder shall perform any and all of its
respective functions to the extent upon such terms and conditions as may be
determined from time to time by the General Partner.
7.8 Compensation of the General Partner. The General Partner shall
not be entitled to any compensation for services rendered to the Partnership
solely in its capacity as General
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Partner except with respect to reimbursement for those costs and expenses
constituting Administrative Expenses.
7.9 Waiver and Indemnification.
(a) Neither the General Partner nor any of its directors, officers,
shareholders, nor any Person acting on its behalf, pursuant hereto, shall be
liable, responsible or accountable in damages or otherwise to the Partnership or
to any Partner for any acts or omissions performed or omitted to be performed by
them within the scope of the authority conferred upon the General Partner by
this Agreement and the Act, provided that the General Partner's or such other
Person's conduct or omission to act was taken in good faith and in the belief
that such conduct or omission was in the best interests of the Partnership and,
provided further, that the General Partner or such other Person shall not be
guilty of fraud, willful misconduct or gross negligence in connection with such
conduct or omission. The Partnership shall, and hereby does, indemnify and hold
harmless the General Partner and its Affiliates, their respective directors,
trust managers, officers, shareholders and any other individual acting on their
behalf from any loss, damage, claim or liability, including, but not limited to,
reasonable attorneys' fees and expenses, incurred by them by reason of any act
performed by them in accordance with the standards set forth above or in
enforcing the provisions of this indemnity; provided, however, no Partner shall
have any personal liability with respect to the foregoing indemnification, any
such indemnification is to be
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satisfied solely out of the assets or the Partnership.
(b) Any Person entitled to indemnification under this Agreement
shall be entitled to receive, upon application therefor, advances to cover the
costs of defending any proceeding against such Person; provided, however, that
such advances shall be repaid to the Partnership, without interest, if such
Person is found by a court of competent jurisdiction upon entry or a final
judgment not to be entitled to such indemnification. All rights of the
indemnitee hereunder shall survive the dissolution of the Partnership; provided,
however, that a claim for Indemnification under this Agreement must be made by
or on behalf of the Person seeking indemnification prior to the time the
Partnership is liquidated hereunder. The indemnification rights contained in
this Agreement shall be cumulative of, and in addition to, any and all rights,
remedies and recourse to which the Person seeking indemnification shall be
entitled, whether at law or at equity. Indemnification pursuant to this
Agreement shall be made solely and entirely from the assets of the Partnership
including, without limitation, proceeds received from insurance coverage and no
Partner shall be liable therefor.
7.10 Real Estate Investment Trust Requirements. Notwithstanding
anything to the contrary contained in this Agreement, for so long as American
Real Estate Investment Corporation is a Partner, the Partnership shall operate
in such a manner and the Partnership shall take or omit to take all actions as
may be necessary (including making appropriate distributions
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from time to time), so as to permit American Real Estate Investment Corporation
(i) to continue to qualify as a REIT so long as such requirements exist and as
such provisions may be amended from time to time, or corresponding provisions of
succeeding law (the "REIT Requirements"), and (ii) to minimize its exposure to
the imposition of an excise tax under Section 4981(a) of the Code or a tax under
Section 857(b)(5) of the Code, so long as such taxes may be imposed and as such
provisions may be amended from time to time, or corresponding provisions of
succeeding law, each of (i) and (ii) to at all times be determined (a) as if
American Real Estate Investment Corporation sole asset is its Partnership
Interest, and (b) without regard to the action or inaction of American Real
Estate Investment Corporation with respect to distributions (by way of dividends
or otherwise) and the timing thereof. The General Partner may cause the
Partnership to obtain an opinion of tax counsel selected by the General Partner
regarding the impact of any proposed action affecting American Real Estate
Investment Corporation's continuing ability to qualify as a REIT, or its
exposure to an excise tax under Section 4981(a) of the Code, or a tax under
Section 857(b)(5) of the Code, so long as such taxes exist and as such
provisions may be amended from time to time or corresponding provisions of
succeeding law.
ARTICLE VIII
Dissolution, Liquidation and Winding-Up
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8.1 Accounting. In the event of the dissolution, liquidation and
winding-up of the Partnership, a proper accounting (which shall be certified)
shall be made of the Capital Account of each Partner and of the Profits or
Losses of the Partnership from the date of the last previous accounting to the
date of dissolution. Financial statements presenting such accounting shall
include a report of a certified public accountant selected by the Liquidating
Trustee.
8.2 Distribution on Dissolution. In the event of the dissolution and
liquidation of the Partnership for any reason, the assets of the Partnership
shall be liquidated for distribution in the following rank and order:
(a) Payment of creditors of the Partnership (other than Partners) in
the order of priority as provided by law;
(b) Establishment of reserves as provided by the General Partner to
provide for contingent liabilities, if any;
(c) Payment of debts of the Partnership to Partners, if any, in the
order of priority provided by law;
(d) To the Partners in accordance with the positive balances in
their Capital Accounts after giving effect to all contributions, distributions
and allocations for all periods, including the period in which such distribution
occurs (other than distributions made pursuant to this Section 8.2(d) and
Section 8.3 hereof).
Whenever the Liquidating Trustee reasonably determines that any reserves
established pursuant to paragraph (b) above are in excess of the reasonable
requirements of the Partnership, the amount determined to be excess shall be
distributed to the Partners in
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accordance with the above provisions.
8.3 Timing Requirements. In the event that the Partnership is
"liquidated" within the meaning of Section 1.704-l(b)(2)(ii)(g) of the
Regulations, any and all distributions to the Partners pursuant to Section
8.2(d) hereof shall be made no later than the later to occur of (i) the last day
of the taxable year of the Partnership in which such liquidation occurs or (ii)
ninety (90) days after the date of such liquidation.
8.4 Sale of Partnership Assets. In the event of the liquidation of
the Partnership in accordance with the terms of this Agreement, the Liquidating
Trustee may sell Partnership property; provided, however, all sales, leases,
encumbrances or transfers of Partnership assets shall be made by the Liquidating
Trustee solely on an "arm's-length" basis, at the best price and on the best
terms and conditions as the Liquidating Trustee in good faith believes are
reasonably available at the time and under the circumstances and on a
non-recourse basis to the Limited Partners. The liquidation of the Partnership
shall not be deemed finally terminated until the Partnership shall have received
cash payments in full with respect to obligations such as notes, purchase money
mortgages, installment sale contracts or other similar receivables received by
the Partnership in connection with the sale of Partnership assets and all
obligations of the Partnership have been satisfied or assumed by the General
Partner. The Liquidating Trustee shall continue to act to enforce all of the
rights of the Partnership pursuant to any such obligations
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until paid in full.
8.5 Distributions in Kind. In the event that it becomes necessary to
make a distribution of Partnership property in kind, the General Partner may,
with the Consent of the Limited Partners, transfer and convey such property to
the distributees as tenants in common, subject to any liabilities attached
thereto, so as to vest in them undivided interests in the whole of such property
in proportion to their respective rights to share in the proceeds of the sale of
such property (other than as a creditor) in accordance with the provisions of
Section 8.2 hereof.
8.6 Documentation of Liquidation. Upon the completion of the
dissolution and liquidation of the Partnership, the Partnership shall terminate
and the Liquidating Trustee shall have the authority to execute and record any
and all documents or instruments required to effect the dissolution, liquidation
and termination of the Partnership.
8.7 Liability of the Liquidating Trustee. The Liquidating Trustee
shall be indemnified and held harmless by the Partnership from and against any
and all claims, demands, liabilities, costs, damages and causes of action of any
nature whatsoever arising out of or incidental to the Liquidating Trustee's
taking of any action authorized under or within the scope of this Agreement;
provided, however, that the Liquidating Trustee shall not be entitled to
indemnification, and shall not be held harmless, where the claim, demand,
liability, cost, damage or cause of action at issue arose out of:
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(a) A matter entirely unrelated to the Liquidating Trustee's action
or conduct pursuant to the provisions of this Agreement; or
(b) The proven misconduct or negligence of the Liquidating Trustee.
ARTICLE IX
Transfer of Partnership Interests
9.1 General Partner Transfer. The General Partner shall not withdraw
from the Partnership and shall not sell, assign, pledge, encumber or otherwise
dispose of all or any portion of its interest in the Partnership without the
Consent of the Limited Partners, which shall not be unreasonably withheld. Upon
any transfer of a Partnership Interest in accordance with the provisions of this
Section 9.1, the transferee General Partner shall become vested with the powers
and rights of the transferor General Partner, and shall be liable for all
obligations and responsible for all duties of the General Partner, once such
transferee has executed such instruments as may be necessary to effectuate such
admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest
so acquired. It is a condition to any transfer otherwise permitted hereunder
that the transferee assumes by operation of law or express agreement all of the
obligations of the transferor General Partner under this Agreement with respect
to such transferred Partnership
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Interest. In the event the General Partner withdraws from the Partnership, in
violation of this Agreement or otherwise, or dissolves, terminates or upon the
Bankruptcy of the General Partner, a Majority-In-Interest of the Limited
Partners may elect to continue the Partnership business by selecting a
substitute general partner.
9.2 Transfers by Limited Partners. No Limited Partner shall sell,
assign, pledge, encumber, or otherwise dispose of all or any portion of its
Partnership Interest to any transferee without the consent of the General
Partner, which consent shall not be unreasonably withheld; provided, however
that each Limited Partner may at any time, without the consent of the General
Partner, transfer all or a portion of its Partnership Interest to an Affiliate
of such Limited Partner, subject to the provisions of this Section 9.2 and
Section 9.4 hereof. Nothing herein shall preclude a Limited Partner from
transferring its Limited Partnership Interest upon exercise of its Conversion
Rights under Article XI hereof. It is a condition to any transfer otherwise
permitted hereunder that the transferee assumes by operation of law or express
agreement all of the obligations of the transferor Limited Partner under this
Agreement with respect to such transferred Partnership Interest and no such
transfer (other than pursuant to a statutory merger or consolidation wherein all
obligations and liabilities of the transferor Partner are assumed by a successor
corporation by operation of law) shall relieve the transferor Partner of its
obligations under this Agreement without
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the approval of the General Partner, in its reasonable discretion. Upon such
transfer, the transferee shall be admitted as a Substituted Limited Partner as
such term is defined in the Act and shall succeed to all of the rights,
including rights with respect to the Conversion Rights, of the transferor
Limited Partner under this Agreement in the place and stead of such transferor
Limited Partner; provided, however, that notwithstanding the foregoing, any
transferee of any transferred Partnership Interest shall be subject to any and
all ownership limitations contained in the corporate charter of the General
Partner as may be amended from time to time applicable to persons other than the
Limited Partners and/or their Affiliates which may limit or restrict such
transferee's ability to exercise the Conversion Rights. Any transferee, whether
or not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted
Limited Partner, no transferee of a Partnership Interest pursuant to this
Section 9.2, whether by a voluntary transfer, by operation of law or otherwise,
shall have rights hereunder, other than to receive such portion of the
distributions made by the Partnership as are allocable to the Percentage
Interest transferred.
9.3 Issuance of Additional Partnership Interests. At any time after
the date hereof, subject to the provisions of Section 9.4 hereof, the General
Partner may, upon its determination that the issuance of additional Partnership
Interests ("Additional Interests") is in the best interests of the
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Partnership, cause the Partnership to issue Additional Interests to and admit as
a limited partner in the Partnership, any Person (the "Additional Partner") in
exchange for the contribution by such Person of cash and/or property desirable
to further the purposes of the Partnership under Section 2.3 hereof. In the
event that an Additional Interest is issued by the Partnership pursuant to this
Section 9.3:
(a) the Percentage Interest of such Additional Partner issued the
Additional Interest shall be equal to a fraction, the numerator of which is
equal to the Gross Asset Value of the property contributed by the Additional
Partner as of the date of contribution to the Partnership (the "Contribution
Date") and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership (computed as of the Trading Day immediately preceding the
Contribution Date) and (ii) the Gross Asset Value of the property contributed by
the Additional Partner as of the Contribution Date as reasonably determined by
the General Partner; and
(b) the Percentage Interests of each Partner other than the
Additional Partner shall be reduced, as of the Contribution Date, such that the
Percentage Interest of each such Partner shall be equal to a fraction, the
numerator of which is equal to the Deemed Partnership Interest Value of such
Partner (computed as of the Trading Day immediately preceding the Contribution
Date) and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership (computed as of the Trading Day
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immediately preceding the Contribution Date) and (ii) the Gross Asset Value of
the property contributed by the Additional Partner as of the Contribution Date.
The General Partner shall be authorized on behalf of each of the
Partners to amend this Agreement to reflect the admission of any Additional
Partner or any increase in the Percentage Interests of any Partner and the
corresponding reduction of the Percentage Interests of the other Partners in
accordance with the provisions of this Section 9.3, and the General Partner
shall promptly deliver a copy of such amendment to each Limited Partner. The
Limited Partners hereby irrevocably appoint the General Partner as their
attorney-in-fact, coupled with an interest, for the purpose of executing and
delivering such documents, and taking such actions, as shall be necessary in
connection with the transfer of such Partner's interest in the Partnership as
required pursuant to this Section 9.3. Notwithstanding anything contained herein
to the contrary, an Additional Partner that acquires an Additional Interest
pursuant to this Section 9.3 shall not acquire any interest in, and may not
exercise or otherwise participate in, any Rights pursuant to Article XI without
the Agreement of the General Partner.
9.4 Restrictions on Transfer. In addition to any other restrictions
on transfer herein contained, in no event may any transfer or assignment of a
Partnership Interest by any Partner be made (i) to any person or entity who
lacks the legal right, power or capacity to own a Partnership Interest; (ii) in
violation of
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any provision of any mortgage or trust deed (or the note or bond secured
thereby) constituting a Lien against a Property or any part thereof, or other
instrument, document or agreement to which the Partnership or any Property is a
party or otherwise bound; (iii) in violation of applicable law; (iv) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (v) in the event such transfer would immediately or with
the passage of time cause the American Real Estate Investment Corporation to
fail to comply with the REIT Requirements, such determination to be made
assuming that the American Real Estate Investment Corporation does comply with
the REIT Requirements immediately prior to the proposed transfer; (vi) if such
transfer would cause a termination of the Partnership for federal income tax
purposes; (vii) if such transfer would, in the opinion of counsel to the
Partnership, cause the Partnership to cease to be classified as a partnership
for Federal income tax purposes; (viii) if such transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a "party-in-interest" (as defined in Section 3(14) of ERISA)
or a "disqualified person" (as defined in Section 4975(e) of the Code), (ix) if
such transfer would, in the opinion of counsel to the Partnership, cause any
portion of the underlying assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section
2510.3-101 or (x) if such transfer would, in the opinion of
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counsel to the Partnership, violate the Federal Securities Act or applicable
state blue sky laws.
ARTICLE X
Rights and Obligations of the Limited Partners
10.1 No Participation in Management. Except as expressly permitted
hereunder, the Limited Partners shall not take part in the management of the
Partnership's business, transact any business in the Partnership's name or have
the power to sign documents for or otherwise bind the Partnership.
10.2 Bankruptcy of a Limited Partner. The Bankruptcy of any Limited
Partner shall not cause a dissolution of the Partnership, but the rights of such
Limited Partner to share in the Profits or Losses of the Partnership and to
receive distributions of Partnership funds shall, on the happening of such
event, devolve on its successors or assigns, subject to the terms and conditions
of this Agreement, and the Partnership shall continue as a limited partnership.
However, in no event shall such assignee(s) become a Substituted Limited
Partner.
10.3 No Withdrawal. No Limited Partner may withdraw from the
Partnership without the prior written consent of the General Partner, other
than as expressly provided in this Agreement.
10.4 Duties and Conflicts. The General Partner recognizes that the
Limited Partners and their Affiliates have or
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may have other business interests, activities and investments, some of which may
be in conflict or competition with the business of the Partnership, and that,
such persons are entitled to carry on such other business interests, activities
and investments. The Limited Partners and their Affiliates may engage in or
possess an interest in any other business or venture of any kind, independently
or with others, on their own behalf or on behalf of other entities with which
they are affiliated or associated, and such persons may engage in any
activities, whether or not competitive with the Partnership, without any
obligation to offer any interest in such activities to the Partnership or to any
Partner. Neither the Partnership nor any Partner shall have any right, by virtue
of this Agreement, in or to such activities, or the income or profits derived
therefrom, and the pursuit of such activities, even if competitive with the
business of the Partnership, shall not be deemed wrongful or improper.
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ARTICLE XI
Grant of Rights to Limited Partners
11.1 Grant of Rights. The General Partner does hereby grant to each
of the Limited Partners and the Limited Partners do hereby accept the right, but
not the obligations (hereinafter such right sometimes referred to as the
"Rights" or "Conversion Rights"), to convert all or any portion of their
Partnership Interests into Shares at any time or from time to time after the
first (1st) and no later than the fifth (5th) anniversary of the date on which
the Completion of the Offering occurs, on the terms and subject to the
conditions and restrictions contained in this Article XI, and whereby, upon the
closing of the purchase and sale of the Offered Interests, the General Partner
shall become the owner of such Offered Interests and be a Substituted Partner
pursuant to Section 9.2 hereof. The Conversion Rights granted hereunder may be
exercised by any one or more of the Limited Partners, on the terms and subject
to the conditions and restrictions contained in this Article XI, upon delivery
to the General Partner of an Exercise Notice in the form of Exhibit C, which
notice shall specify the Partnership Interests to be sold by such Limited
Partner. Once delivered, the Exercise Notice shall be irrevocable, subject to
payment by the General Partner of the Purchase Price in respect of such
Partnership Interests in accordance with the terms hereof.
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<PAGE>
11.2 Delivery of Exercise Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth herein deliver
to the General Partner written notice (the "Exercise Notice") pursuant to which
such Exercising Partners elect to exercise their Conversion Rights subject to
the limitations contained in Sections 11.3 and 11.4 below; and
11.3 Limitation on Delivery of Exercise Notices. The ability of
Limited Partners to exercise Conversion Rights shall be restricted so that an
Exercise Notice can be delivered and be effective only at such time as the
Shares issuable on exercise thereof are the subject of an effective registration
statement filed by the Securities Act of 1933, as amended and only one (1)
Exercise Notice may be delivered to the General Partner during each calendar
quarter period; provided, however, such Exercise Notice may be delivered by or
on behalf of one or more Exercising Parties.
11.4 Limitation on Exercise of Conversion Rights. (a) Conversion
Rights may be exercised at any time and from time to time, subject to the
limitation contained in Section 11.3 above and as provided herein. If an
Exercise Notice is delivered to the General Partner but, as a result of a result
of restrictions contained in the Certificate of Incorporation, including any
amendment thereto adopted prior to the date hereof or hereafter, of the General
Partner, the Conversion Rights cannot be exercised in full (the "Ownership
Limit"), the Exercise Notice shall be
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deemed to be modified such that the Conversion Rights shall be exercised only to
the extent permitted under the Certificate of Incorporation, as amended, of the
General Partner; with the remainder of such Conversion Rights being deemed to be
withdrawn and of no effect.
(b) In the event the Underwriter exercises the option granted in
Section 4 of the Underwriting Agreement, the extent to which each of the Limited
Partners may exercise the Conversion Right shall be reduced, pro rata, by up to
20.35966% (herein referred to as "Restricted Conversion Right Shares.")
Restricted Conversion Right Shares will be released from such restriction to the
extent that the Operating Partnership's Funds From Operations during the twelve
months ended with the close of any fiscal quarter exceed herein such excess is
referred to as "Excess Funds From Operations") 105% of the amount of funds
necessary to pay a dividend of $.80 per share per annum on the sum of (i) the
shares issued in the Offering (including shares issued on exercise of the option
granted in Section 4 of the Underwriting Agreement), (ii) the shares issued and
issuable on exercise of the Conversion Right, excluding the Restricted
Conversion Right Shares, and (iii) shares, if any, previously, but no longer,
Restricted Conversion Right Shares. The number of shares no longer Restricted
Conversion Right Shares will be that number resulting from dividing the Excess
Funds From Operations for such twelve month period by $.80. Any term used in
this subsection not otherwise defined in this Agreement, shall be as defined in
the Registration
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<PAGE>
Statement.
11.5 Computation of Purchase Price/Form of Payment. The purchase
price ("Purchase Price") payable by the General Partner to each Exercising
Partner shall be equal to the excess of (a) Deemed Partnership Interest Value of
such Exercising Partner's Offered Interest computed as of the date on which the
Exercise Notice was delivered to the General Partner (the "Computation Date")
over (b) the excess, if any, of (1) the aggregate amount distributed to such
Exercising Partner pursuant to Section 6.2 for all periods ending on the closing
of the acquisition of the Offered Interests over (2) the excess of the aggregate
amount of Profits allocated to such Exercising Partner pursuant to Section 6.1
over the aggregate amount of Losses allocated to such Exercising Partner
pursuant to Section 6.1 for all periods ending on the closing of the acquisition
of the Offered Interests. The Purchase Price on exercise of a Conversion Right
for the Offered Interest shall be payable by the issuance by the General Partner
of the number of Shares equal to the quotient of (i) the Purchase Price divided
by (ii) the Current Per Share Market Price as of the Computation Date adjusted
as appropriate to account for stock splits, stock dividends or other similar
transactions between the Computation Date and the closing of the purchase and
sale of the Offered Interest in the manner specified in Section 11.10(d) below.
Upon payment of such Purchase Price, the General Partner shall be the owner of
the Offered Interests.
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<PAGE>
11.6 Closing; Delivery of Election Notice. The closing of the
acquisition of Offered Interests shall, unless otherwise mutually agreed, be
held at the principal offices of the General Partner, on the date agreed to by
the General Partner and the Exercising Partners, which date shall in no event be
on the date which is the later of (i) twenty (20) days after the date of the
Exercise Notice and (ii) the expiration or termination of the waiting period
applicable to each Exercising Partner, if any, under the Hart-Scott Act.
11.7 Closing Deliveries. At the closing of the purchase and sale of
Offered Interests, payment of the Purchase Price shall be accompanied by proper
instruments of transfer and assignment to transfer and vest ownership of the
Offered Interests in the General Partner and by the delivery of (i)
representations and warranties of (A) the Exercising Partner with respect to its
due authority to sell all of the right, title and interest in and to such
Offered Interests to the General Partner and with respect to the status of the
Limited Partner Interest being sold, free and clear of all Liens, and
(B) the General Partner with respect to due authority for the purchase of such
Offered Interests, and (ii) to the extent that any Shares are issued in payment
of the Purchase Price or any portion thereof, (A) an opinion of counsel for the
General Partner, reasonably satisfactory to the Exercising Partners, to the
effect that such Shares have been duly authorized, are validly issued,
fully-paid and non-assessable, and (B) a stock certificate
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or certificates evidencing the Shares to be issued and registered in the name of
the Exercising Partner or its designee.
11.8 Term of Rights. Unless sooner terminated, the rights of the
parties with respect to the Conversion Rights shall commence after the first
(1st) anniversary of the date of Completion of the Offering and shall lapse for
all purposes and in all respects on the fifth (5th) anniversary of the
Completion of the Offering, provided, however, that the parties hereto shall
continue to be bound by an Exercise Notice delivered to the General Partner
prior to such anniversary.
11.9 Covenants of the General Partner. To facilitate the General
Partner's ability to fully perform its obligations hereunder, the General
Partner covenants and agrees as follows:
(a) At all times during the pendency of the Conversion Rights, the
General Partner shall reserve for issuance such number of Shares as may be
necessary to enable the General Partner to issue such Shares in full payment of
the Purchase Price in regard to all Limited Partnership Interests which are from
time to time outstanding.
(b) As long as the General Partner shall be obligated to file
periodic reports under the Exchange Act, the General Partner will timely file
such reports in such manner as shall enable any recipient of Shares issued to
Limited Partners hereunder in reliance upon an exemption from registration under
the Securities Act to continue to be eligible to utilize Rule 144 promulgated by
the SEC pursuant to the Securities Act, or any
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<PAGE>
successor rule or regulation or statute thereunder, for the resale thereof.
(c) During the pendency of the Conversion Rights, the Limited
Partners shall receive in a timely manner all reports filed by the General
Partner with the SEC and all other communications transmitted from time to time
by the General Partner to the owners of its Shares.
(d) The General Partner shall, within five days after request by a
Limited Partner, provide or cause to be provided to such Limited Partner a
computation of the Deemed Value of the Partnership.
11.10 Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the General Partner that all Offered Interests tendered to the
General Partner in accordance with the exercise of Rights herein provided shall
be delivered to the General Partner free and clear of all Liens and should any
Liens exist or arise with respect to such Offered Interests, the General Partner
shall be under no obligation to acquire the same. Each Limited Partner further
agrees that, in the event any state or local property transfer tax is payable as
a result of the transfer of its Offered Interests to the General Partner (or its
designee), such Limited Partner shall assume and pay such transfer tax.
ARTICLE XII
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<PAGE>
General Provisions
12.1 Notices. All notices, offers or other communications required
or permitted to be given pursuant to this Agreement shall be in writing and may
be personally served or sent by United States mail and shall be deemed to have
been given when delivered in person, upon receipt of telecopy or three business
days after deposit in United States mail, registered or certified, postage
prepaid, and properly addressed, by or to the appropriate party. For purposes of
this Section 12.1, the addresses of the parties hereto shall be as set forth
below their name on a signature page hereof. The address of any party hereto may
be changed by a notice in writing given in accordance with the provisions
hereof.
12.2 Successors. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of all Partners, and
their legal representatives, heirs, successors and permitted assigns, except as
expressly herein otherwise provided.
12.3 Liability of Limited Partners. The liability of the Limited
Partners for their obligations, covenants, representations and warranties
under this Agreement shall be several and not joint.
12.4 Effect and Interpretation. This Agreement shall be governed
by and construed in conformity with the laws of the State
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of Delaware.
12.5 Counterparts. This Agreement may be executed in counterparts,
each of which shall be an original, but all of which shall constitute one and
the same instrument.
12.6 Partners Not Agents. Nothing contained herein shall be
construed to constitute any Partner the agent of another Partner, except as
specifically provided herein, or in any manner to limit the Partners in the
carrying on of their own respective businesses or activities.
12.7 Entire Understanding; Etc. This Agreement constitutes the
entire agreement and understanding among the Partners and supersedes any prior
understandings and/or written or oral agreements among them respecting the
subject matter within.
12.8 Amendments. This Agreement may not be amended, and no provision
benefiting the General Partner may be waived, except by a written instrument
signed by the General Partner (and approved on behalf of the General Partner by
at least a majority of its directors who are not Affiliates of any of the
Limited Partners) and, except as provided in Section 7.3 with respect to the
admission of additional limited partners, a Majority-In-Interest of the Limited
Partners.
12.9 Severability. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be held
invalid by a court of competent jurisdiction, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those to
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which it is held invalid by such court, shall not be affected thereby.
12.10 Pronouns and Headings. As used herein, all pronouns shall
include the masculine, feminine and neuter, thereof wherever the context and
facts require such construction. The headings, titles and subtitles herein are
inserted for convenience of reference only and are to be ignored in any
construction of the provisions hereof. Any references in this Agreement to
"including" shall be deemed to mean "including without limitation".
12.11 Assurances. Each of the Partners shall hereafter execute and
deliver such further instruments and do such further acts and things as may be
required or useful to carry out the intent and purpose of this Agreement and as
are not inconsistent with the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused this Agreement to be executed as of the date and year first above
written.
GENERAL PARTNER:
American Real Estate Investment Corporation
By:_________________________________
Evan Zucker, President
LIMITED PARTNERS:
Executed by Rick Burger, Treasurer
of American Real Estate Investment
Corporation, a Delaware corporation,
pursuant to Power of Attorney granted
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<PAGE>
by the below named persons
- ----------------------------------
Evan Zucker
- ----------------------------------
James Mulvihill
- ---------------------------------
Heather Mulvihill
- ---------------------------------
Michael Rotchford
- ---------------------------------
Hord Hardin, III
- ---------------------------------
Rosalind Davidowitz
- ---------------------------------
Gail Mulvihill
- --------------------------------
John Dell
- --------------------------------
JKP Family Associates
- --------------------------------
Jim Fleming
- --------------------------------
Floyd Hall
- --------------------------------
Huston McCullough
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<PAGE>
- --------------------------------
Larvo Investments, LLC
- --------------------------------
Matt Moran
- --------------------------------
Andrew Mulvihill
- --------------------------------
Gene Mulvihill, Jr.
- --------------------------------
Christopher Mulvihill
- --------------------------------
Barbara Zucker
- --------------------------------
Brian Zucker
- --------------------------------
Marshall Zucker
- --------------------------------
Mariano DeCola
- --------------------------------
David Jones
- --------------------------------
James Marshall
- --------------------------------
Anthony Meile
- --------------------------------
John Blumberg
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<PAGE>
- --------------------------------
Property Asset Equities
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<PAGE>
Exhibit A
---------
Name of Limited Partner Initial Percentage Interest
- ----------------------- ---------------------------
Interest
- --------
Evan Zucker 1.5883%
James Mulvihill 0.5646%
Heather Mulvihill 4.0915%
Michael Rotchford 0.3706%
Hord Hardin, III 0.2735%
Rosalind Davidowitz 11.3620%
Gail Mulvihill 9.5584%
John Dell 2.1210%
JKP Family Associates 2.8722%
Jim Fleming 0.0927%
Floyd Hall 0.7412%
Huston McCullough 0.3705%
Larvo Investments, LLC 0.1834%
Matt Moran 0.0367%
Andrew Mulvihill 0.1101%
Gene Mulvihill, Jr. 0.0074%
Christopher Mulvihill 0.1801%
Barbara Zucker 0.0165%
Brian Zucker 0.0165%
Marshall Zucker 0.0220%
Mariano DeCola 1.5333%
David Jones 1.5333%
James Marshall 1.5333%
New Jersey Real Estate Liquidation Corp. 1.0511%
Anthony Meile 0.4503%
John Blumberg 1.0832%
Property Asset Equities 0.6575%
--------
Totals 42.4212%
========
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<PAGE>
Exhibit B
---------
Contributed Limited
Name of Limited Partner Partner Assets
- ----------------------- -------------------
Evan Zucker $272,816.80
James Mulvihill 96,986.40
Heather Mulvihill 702,769.60
Michael Rotchford 63,654.80
Hord Hardin, III 46,975.20
Rosalind Davidowitz 1,951,596.00
Gail Mulvihill 1,641,795.20
John Dell 364,320.80
JKP Family Associates 493,340.80
Jim Fleming 15,925.20
Floyd Hall 127,309.60
Huston McCullough 63,645.60
Larvo Investments, LLC 31,510.00
Matt Moran 6,302.00
Andrew Mulvihill 18,906.00
Gene Mulvihill, Jr. 1,269.60
Christopher Mulvihill 30,939.60
Barbara Zucker 2,833.60
Brian Zucker 2,833.60
Marshall Zucker 3,781.20
Mariano DeCola 263,359.20
David Jones 263,359.20
James Marshall 263,359.20
New Jersey Real Estate Liquidation Corp. 180,540.80
Anthony Meile 77,344.40
John Blumberg 186,051.60
Property Asset Equities 112,939.20
------------
Totals $7,286,464.40
============
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<PAGE>
Exhibit C
---------
Form of Exercise Notice
-----------------------
Pursuant to Article XI, Section 11.1 of the Agreement of Limited
Partnership of American Real Estate Investment, L.P. a Delaware limited
partnership (the "Partnership"), the undersigned hereby irrevocably elects to
exercise the right to sell to American Real Estate Investment Corporation, a
Delaware corporation and the general partner of the Partnership, % Partnership
Interests in the Partnership (the "Offered Interests") and requests that
certificates for the Purchase Price be issued in the name of .
(social security number ).
All terms used herein not otherwise defined shall be defined as set
forth in the aforesaid Agreement of Limited Partnership.
Dated:_____________________
________________________________
(signature)
Signature Guaranteed:
- --------------------------
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<PAGE>
Exhibit D
Underwriting Agreement
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<PAGE>
Exhibit E
(see reference on page 46)
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<PAGE>
Exhibit 10.1.2
AMENDMENT NO. 1 (this "Amendment") TO
AGREEMENT OF LIMITED PARTNERSHIP OF
AMERICAN REAL ESTATE INVESTMENT, L.P.
The parties hereto intend to amend the Agreement of Limited Partnership of
American Real Estate, L.P. (the "Agreement") pursuant to Section 12.8 thereof as
follows:
1. Capitalized terms used but not defined herein shall have the
meanings given to them in the Agreement.
2. Article I of the Agreement shall be amended by adding "or the
Partnership" after the words "the General Partner" in the definition of
"Offered Interests."
3. Article XI of the Agreement shall be amended and restated as set
forth in Schedule A attached hereto.
4. Exhibit C to the Agreement shall be amended and restated as set
forth in Schedule B attached hereto.
5. This Amendment shall be effective as of June 30, 1997.
6. Except as amended by this Amendment, the Agreement shall remain
in full force and effect in all respects.
7. This Amendment shall be governed by and construed in conformity
with the laws of the State of Delaware.
8. This Amendment may be executed in any number of counterparts, all
of which taken together shall constitute one Amendment.
<PAGE>
IN WITNESS WHEREOF, the General Partner (with the approval of a majority
of its directors who are not Affiliates of any of the Limited Partners), and
Limited Partners constituting a Majority-In-Interest of the Limited Partners,
have executed this Amendment.
American Real Estate Investment Corporation,
General Partner
By: /s/ Evan Zucker
------------------------------------------
Evan Zucker, President
Limited Partners:
/s/ Evan Zucker
------------------------------------------
Evan Zucker
/s/ James Mulvihill
------------------------------------------
James Mulvihill
/s/ Heather Mulvihill
------------------------------------------
Heather Mulvihill
------------------------------------------
Michael Rotchford
<PAGE>
------------------------------------------
Hord Hardin, III
/s/ Rosalind Davidowitz
------------------------------------------
Rosalind Davidowitz
/s/ Gail Mulvihill
------------------------------------------
Gail Mulvihill
------------------------------------------
John Dell
------------------------------------------
JKP Family Associates
------------------------------------------
Jim Fleming
------------------------------------------
Floyd Hall
------------------------------------------
Huston McCullough
<PAGE>
------------------------------------------
Lervo Investments, LLC
------------------------------------------
Matt Moran
<PAGE>
Schedule "A"
ARTICLE XI
Grant of Rights to Limited Partners
11.1 Grant of Rights. The General Partner does hereby grant to each of the
Limited Partners and the Limited Partners do hereby accept the right, but not
the obligations (hereinafter such right sometimes referred to as the "Rights" or
"Conversion Rights"), to convert all or any portion of their Partnership
Interests into Shares or cash, as selected by the General Partner, at any time
or from time to time after the first (1st) and no later than the fifth (5th)
anniversary of the date on which the Completion of the Offering occurs, on the
terms and subject to the conditions and restrictions contained in this Article
XI. In the event the General Partner elects to cause the Offered Interests to be
converted into Shares, upon the closing, of the acquisition of the Offered
Interests, the General Partner shall become the owner of such Offered Interests
and be a Substituted Partner pursuant to Section 9.2 hereof. In the event the
General Partner elects to cause the Offered Interests to be converted into cash,
upon the closing, of the acquisition of the Offered Interests, the General
Partner shall effect such conversion by causing, the Partnership to redeem the
Offered Interests for cash. The Conversion Rights granted hereunder may be
exercised by any one or more of the Limited Partners, on the terms and subject
to the conditions and restrictions contained in this Article XI, upon delivery
to the General Partner of an Exercise Notice in the form of Exhibit C, which
notice shall specify the Partnership Interests to be sold by such Limited
Partner. Once delivered, the Exercise Notice shall be irrevocable, subject to
payment by the General Partner or the Partnership of the Purchase Price in
respect of such Partnership Interests in accordance with the terms hereof.
11.2 Delivery of Exercise Notices. Any one or more Limited Partners
("Exercising Partners") may, subject to the limitations set forth herein deliver
to the General Partner written notice (the "Exercise Notice") pursuant to which
such Exercising Partners elect to exercise their Conversion Rights subject to
the limitations contained in Sections 11.3 and 11.4 below.
11.3 Limitation on Delivery of Exercise Notices. The ability of Limited
Partners to exercise Conversion Rights shall be restricted so that an Exercise
Notice can be delivered and be effective only at such time as the Shares that,
upon election of the General Partner, may be issuable on exercise thereof are
the subject of an effective registration statement filed pursuant to the
Securities Act of 1933, as amended and only one (1) Exercise Notice may be
delivered to the General Partner during each calendar quarter period; provided,
however, such Exercise Notice may be delivered by or on behalf of one or more
Exercising, Parties.
11.4 Limitation on Exercise of Conversion Rights. (a) Conversion Rights
may be exercised at any time and from time to time, subject to the limitation
contained in Section 11.3
<PAGE>
above and as provided herein. If an Exercise Notice is delivered to the General
Partner but, as a result of Restrictions contained in the Certificate of
Incorporation, including any amendment, thereto,) adopted prior to the date
hereof or hereafter, of the General Partner, the Conversion Rights cannot be
exercised in full for Shares (the "Ownership Limit"), the Exercise Notice, if
the Purchase Price is to be payable in Shares, shall be deemed to be modified
such that the Conversion Rights shall be exercised only to the extent permitted
under the Ownership Limit or under other restrictions in the Certificate of
Incorporation, as amended, of the General Partner.
(b) In the event the Underwriter exercises the option granted in
Section 4 of the Underwriting Agreement, the extent to which each of the Limited
Partners may exercise the Conversion Right shall be reduced, pro rata, by up to
20.35966% (herein referred to as "Restricted Conversion Right Shares").
Restricted Conversion Right Shares will be released from such restriction to the
extent that the Operating Partnership's Funds From Operations during, the twelve
months ended with the close of any fiscal quarter exceed (herein such excess is
referred to as "Excess Funds From Operations") 105% of the amount of funds
necessary to pay a dividend of $.80 per share per annum on the sum of (i) the
shares issued in the Offering (including shares issued on exercise of the option
- -ranted in Section 4 of the Underwriting Agreement), (ii) the shares issued and
issuable on exercise of the Conversion Right, excluding the Restricted
Conversion Right Shares, and (iii) shares, if any, previously, but no longer,
Restricted Conversion Right Shares. The number of shares no longer Restricted
Conversion Right Shares will be that number resulting from dividing, the Excess
Funds From Operations for such twelve month period by $.80. Any term used in
this subsection not otherwise defined in this Agreement, shall be as defined in
the Registration Statement.
11.5 Computation of Purchase Price/Form of Payment. The purchase price
("Purchase Price") payable to each Exercising Partner shall be equal to the
excess of (a) Deemed Partnership Interest Value of such Exercising, Partner's
Offered Interest computed as of the date on which the Exercise Notice was
delivered to the General Partner (the 'Computation Date") over (b) the excess,
if any, of (1) the aggregate amount distributed to such Exercising Partner
pursuant to Section 6.2 for all periods ending on the closing, of the
acquisition (whether through purchase by the General Partner or redemption by
the Partnership) of the Offered Interests over (2) the excess of the aggregate
amount of Profits allocated to such Exercising Partner pursuant to Section 6.1
over the aggregate amount of Losses allocated to such Exercising, Partner
pursuant to Section 6.1 for all periods ending on the closing of the acquisition
of the Offered Interests. The Purchase Price on exercise of a Conversion Right
for the Offered Interest shall be payable, at the option of the General Partner,
by causing the Partnership to redeem the Offered Interests for cash in the
amount of the Purchase Price, or by the issuance by the General Partner of the
number of Shares equal to the quotient of (i) the Purchase Price divided by (E)
the Current Per Share Market Price as of the Computation Date adjusted as
appropriate to account for stock splits, stock dividends or other similar
transactions between the Computation Date and the closing of the acquisition of
the Offered Interest in the manner specified in Section 11.9 (d) below.
<PAGE>
11.6 Closing: Delivery of Election Notice. The closing of the acquisition
of Offered Interests shall, unless otherwise mutually agreed, be held at the
principal offices of the General Partner, on the date agreed to by the General
Partner and the Exercising Partners, which date shall in no event be on the date
which is the later of (i) twenty (20) days after the date of the Exercise Notice
and (ii) the expiration or termination of the waiting period applicable to each
Exercising Partner, if any, under the Hart-Scott Act.
11.7 Closing Deliveries. At the closing of the acquisition of Offered
Interests, payment of the Purchase Price shall be accompanied by proper
instruments of transfer and assignment to transfer and vest ownership of the
Offered Interests in the General Partner or the Partnership, as the case may be,
and by the delivery of (i) representations and warranties of (A) the Exercising
Partner with respect to its due authority to sell all of the right, title and
interest in and to such Offered Interests to the General Partner or the
Partnership, as the case may be, and with respect to the status of the Offered
Interest being sold, free and clear of all Liens, and (B) the General Partner
with respect to its due authority to acquire such Offered Interests for Shares
or to cause the Partnership to redeem such Offered Interests for cash, and (ii)
to the extent that any Shares are issued in payment of the Purchase Price or any
portion thereof, (A) an opinion of counsel for the General Partner, reasonably
satisfactory to the Exercising Partners, to the effect that such Shares have
been duly authorized, are validly issued, fully-paid and non-assessable, and (B)
a stock certificate or certificates evidencing the Shares to be issued and
registered in the name of the Exercising Partner or its designee.
11.8 Term of Rights. Unless sooner terminated, the rights of the parties
with respect to the Conversion Rights shall commence after the first (1st)
anniversary of the date of Completion of the Offering and shall lapse for all
purposes and in all respects on the fifth (5th) anniversary of the Completion of
the Offering, provided, however, that the parties hereto shall continue to be
bound by an Exercise Notice delivered to the General Partner prior to such
anniversary.
11.9 Covenants of the General Partner. To facilitate the General Partner's
ability to fully perform its obligations hereunder, the General Partner
covenants and agrees as follows:
(a) At all times during the pendency of the Conversion Rights, the
General Partner shall reserve for issuance such number of Shares as may be
necessary to enable the General Partner to issue such Shares in full payment of
the Purchase Price in regard to all Limited Partners' Partnership Interests
which are from time to time outstanding.
(b) As long as the General Partner shall be obligated to file
periodic reports under the Exchange Act, the General Partner will timely file
such reports in such manner as shall enable any recipient of Shares issued to
Limited Partners hereunder in reliance upon an exemption from registration under
the Securities Act to continue to be eligible to utilize Rule 144 promulgated by
the SEC pursuant to the Securities Act, or any successor rule or regulation or
statute thereunder, for the resale thereof.
<PAGE>
(c) During the pendency of the Conversion Rights, the Limited
Partners shall receive in a timely manner all reports filed by the General
Partner with the SEC and all other communications transmitted from time to time
by the General Partner to the owners of its Shares.
(d) The General Partner shall, within five days after request by a
Limited Partner, provide or cause to be provided to such Limited Partner a
computation of the Deemed Value of the Partnership.
11.10 Limited Partners' Covenant. Each Limited Partner covenants and
agrees with the General Partner that all Offered Interests tendered to the
General Partner or the Partnership, as the case may be, in accordance with the
exercise of Rights herein provided shall be delivered free and clear of all
Liens and should any Liens exist or arise with respect to such Offered
Interests, the General Partner or the Partnership, as the case may be, shall be
under no obligation to acquire or redeem the same. Each Limited Partner further
agrees that, in the event any state or local property transfer tax is payable as
a result of the transfer of its Offered Interests to the General Partner, the
Partnership or their respective designees, such Limited Partner shall assume and
pay such transfer tax.
<PAGE>
Schedule "B"
Exhibit C
Form of Exercise Notice
Pursuant to Article XI, Section I 1.1 of the Agreement of Limited
Partnership of American Real Estate Investment, L.P. a Delaware limited
partnership (the "Partnership"), the undersigned hereby irrevocably elects to
exercise the Conversion Right with respect to _____% Partnership Interests in
the Partnership (the "Offered Interests") and requests that (i) if the General
Partner elects to cause the Offered Interests to be converted into Shares,
certificates for the Purchase Price be issued in the name of _______________
(social security number _______________, and (ii) if the General Partner elects
to cause the Offered Interests to be converted into cash, such cash amount be
sent to the address set forth below.
All terms used herein not otherwise defined shall be defined as set forth
in the aforesaid Agreement of Limited Partnership.
Dated:
-------------------- --------------------------------------------
(signature)
Signature Guaranteed: Address:
- --------------------------------- --------------------------------------------
<PAGE>
Exhibit 10.1.3
AMENDMENT NO. 2 (this "Amendment") TO
AGREEMENT OF LIMITED PARTNERSHIP OF
AMERICAN REAL ESTATE INVESTMENT, L.P.
The parties hereto intend to amend the Agreement of Limited Partnership of
American Real Estate, L.P. (the "Agreement") pursuant to Section 12.8 thereof as
follows:
1. Capitalized terms used but not defined herein shall
have the meanings given to them in the Agreement.
2. Section 11.1 of Article XI of the Agreement shall be amended and
restated as set forth in Schedule "A" attached hereto.
3. This Amendment shall be effective as of August 11, 1997.
4. Except as amended by this Amendment, the Agreement
shall remain in full force and effect in all respects.
5. This Amendment shall be governed by and construed in
conformity with the laws of the State of Delaware.
6. This Amendment may be executed in any number of
counterparts, all of when taken together shall constitute one
Amendment.
<PAGE>
IN WITNESS WHEREOF, the General Partner (with the approval of a majority
of its directors who are not Affiliates of any of the Limited Partners), and
Limited Partners constituting a Majority-In-Interest of the Limited Partners,
have executed this Amendment.
American Real Estate Investment Corporation,
General Partner
By: __________________________________________
Evan Zucker, President
Limited Partners:
------------------------------------------
John Blumberg
------------------------------------------
Rosalind Davidowitz
------------------------------------------
Mariano DeCola
------------------------------------------
John Dell
-2-
<PAGE>
------------------------------------------
Jim Fleming
------------------------------------------
Floyd Hall
------------------------------------------
Hord Hardin, III
------------------------------------------
JKP Family Associates
------------------------------------------
David Jones
------------------------------------------
Lervo Investments, LLC
------------------------------------------
James Marshall
-3-
<PAGE>
------------------------------------------
Houston McCollough
------------------------------------------
Anthony Miele
------------------------------------------
Matt Moran
------------------------------------------
Andrew Mulvihill
------------------------------------------
Christopher Mulvihill
------------------------------------------
Gail Mulvihill
------------------------------------------
Gene Mulvihill, Jr.
-4-
<PAGE>
------------------------------------------
Heather Mulvihill
------------------------------------------
James Mulvihill
------------------------------------------
New Jersey Real Estate Liquidation Corp.
------------------------------------------
Property Asset Equities
------------------------------------------
Michael Rotchford
------------------------------------------
Barbara Zucker Zarett
------------------------------------------
Brian Zucker
-5-
<PAGE>
------------------------------------------
Evan Zucker
------------------------------------------
Marshall Zucker
------------------------------------------
Blue Mesa Capital, LLC
------------------------------------------
Webb Waring Institute for Biomedical
Research
-6-
<PAGE>
Exhibit "A"
ARTICLE XI
Grant of Rights to Limited Partners
-----------------------------------
11.1 Grant of Rights. The General Partner does hereby grant to each of the
Limited Partners and the Limited Partners do hereby accept the right, but not
the obligations (hereinafter such right sometimes referred to as the "Rights" or
"Conversion Rights"), to convert all or any portion of their Partnership
Interests into Shares or cash, as selected by the General Partner, at any time
or from time to time after the first (1st) and no later than the tenth (10th)
anniversary of the date on which the Completion of the Offering occurs, on the
terms and subject to the conditions and restrictions contained in this Article
XI. In the event the General Partner elects to cause the Offered Interests to be
converted into Shares, upon the closing of the acquisition of the Offered
Interests, the General Partner shall become the owner of such Offered Interests
and be a Substituted Partner pursuant to Section 9.2 hereof. In the event the
General Partner elects to cause the Offered Interests to be converted into cash,
upon the closing of the acquisition of the Offered Interests, the General
Partner shall effect such conversion by causing the Partnership to redeem the
Offered Interests for cash. The Conversion Rights granted hereunder may be
exercised by any one or more of the Limited Partners, on the terms and subject
to the conditions and restrictions contained in this Article XI, upon delivery
to the General Partner of an Exercise Notice in the form of Exhibit C, which
notice shall specify the Partnership Interests to be sold by such Limited
Partner. Once delivered, the Exercise Notice shall be irrevocable, subject to
payment by the General Partner or the Partnership of the Purchase Price in
respect of such Partnership Interests in accordance with the terms hereof.
