<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 22, 1996
LEXINGTON CORPORATE PROPERTIES, INC.
(Exact Name of Registrant as specified in its charter)
MARYLAND 1-12386 13-3717318
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
355 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
(212) 692-7260
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE> 2
Item 2. Acquisition or Disposition of Assets
Pursuant to a Contribution Agreement dated as of May 22, 1996 (the
"Contribution Agreement"), Lexington Northwest Trust, a New York grantor trust
wholly owned by Lepercq Corporate Income Fund L.P. ("LCIF"), a real estate
partnership organized under the laws of the state of Delaware and a subsidiary
of Lexington Corporate Properties, Inc. (the "Registrant"), acquired a 295,000
square foot, four story office building and 600 car parking garage located in
Salt Lake City, Utah (the "Building") from Red Butte Creek Associates, a limited
partnership organized under the laws of the state of Utah ("Red Butte"), through
an exchange (the "Exchange") for LCIF partnership units (the "Units" and each a
"Unit").
The Building is leased to Northwest Pipeline Corporation (the
"Tenant") under a triple net lease which expires on September 30, 2009 and is
subject to two renewal options for a total of 19 additional years. The Exchange
will not affect the terms of the Building lease. The land on which the Building
is located (the "Property") is owned by the University of Utah, which leases the
Property to the Tenant. The Tenant subleases the Property to the Registrant for
a term which is coextensive with the building lease.
In connection with the Exchange, the Registrant effected the
following:
(i) The Registrant transferred to Red Butte an aggregate of
1,715,295 limited partnership Units in LCIF. Each Unit is exchangeable for
one share of the Registrant's Common Stock (the "Common Stock") beginning
May 22, 1998, and annually on each January 15 thereafter beginning on
January 15, 1999. The holders of the Units will be entitled to quarterly
cash distributions of $0.66 per Unit per annum, increasing to $1.08 per
Unit per annum by January 1, 1998, subject to downward adjustments based on
the annual dividend rate for shares of the Registrant's Common Stock. The
number of LCIF Units exchanged for the Building was determined based on a
valuation of the Building of $56,395,499 (determined based upon a
discounting of the after-tax cash flow at approximately 6.5%, net of the
Notes (as defined) assumed by Lexington Northwest Trust and taking into
account amounts paid to The LCP Group, L.P. ("LCP") in connection with its
management arrangements and its disposition fee).
(ii) The Registrant agreed to assume two mortgage notes to which
the Building is subject (the "Notes" and each a "Note"). The first Note had
an outstanding principal balance of $13,951,288 on March 31, 1996, matures
on October 1, 2005 and bears interest at a rate of 7.8676% per annum. The
second Note had an outstanding principal balance of $23,446,355 on March
31, 1996, matures on October 1, 2005 and bears interest at a rate of 12.9%
per annum. The second Note may be refinanced on October 1, 1997.
(iii) In addition to the Units transferred to Red Butte, the
Registrant transferred to LCP and Richard J. Rouse, a principal of LCP,
114,006 LCIF Units in exchange for LCP's contribution of its right to
receive certain management fees that
2
<PAGE> 3
would have been payable had current management arrangements remained in
effect and LCP's right to a 2% disposition fee upon the ultimate
disposition of the Building. The Registrant also transferred to LCP 9,000
shares of the Registrant's Common Stock, par value $.0001 per share, in
exchange for accrued but unpaid management fees.
Barnes Properties, Inc. and Barnshore Associates, the general partners
of Red Butte, are affiliates of the Registrant. Barnes Properties, Inc. is a
wholly-owned subsidiary of LCP, which is wholly-owned by E. Robert Roskind,
Co-Chief Executive Officer of the Registrant and Chairman of the Registrant's
Board of Directors. Barnshore Associates is partly owned by Mr. Roskind and
Richard J. Rouse, Co-Chief Executive Officer of the Registrant and Vice-Chairman
of its Board of Directors.
Item 7. Financial Statements, Pro Forma Information and Exhibits.
(a) Financial statements of properties acquired.
As of the date of filing of this Current Report on Form 8-K, it
is impracticable for the Registrant to provide the financial
statements required pursuant to this Item 7(a). The Registrant
intends to file such financial statements as soon as practicable
hereafter but in any event not later than August 5, 1996.
(b) Pro forma financial information.
As of the date of filing of this Current Report on Form 8-K, it
is impracticable for the Registrant to provide the financial
information required pursuant to this Item 7(b). The Registrant
intends to file such financial statements as soon as practicable
hereafter but in any event not later than August 5, 1996.
(c) Exhibits.
2.1 Contribution Agreement, dated as of May 22, 1996, among Red Butte
Creek Associates, Lepercq Corporate Income Fund L.P., Lex GP-1,
Inc., The LCP Group, L.P., Richard J. Rouse and Lexington
Northwest Trust.
4.1 Fourth Amended and Restated Agreement of Limited Partnership of
Lepercq Corporate Income Fund, L.P.
20.1 Press Release by Lexington Corporate Properties, Inc., dated
March 23, 1996.
3
<PAGE> 4
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEXINGTON CORPORATE PROPERTIES, INC.
By: /s/ T. WILSON EGLIN
-------------------------------------
T. Wilson Eglin
President and Chief Operating Officer
Date: June 5, 1996
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Page
----------- ----------- -------------
<S> <C> <C>
2.1 Contribution Agreement, dated as of May 22, 1996, among Red Butte
Creek Associates, Lepercq Corporate Income Fund L.P., Lex GP-1,
Inc., The LCP Group, L.P., Richard J. Rouse and Lexington
Northwest Trust.
4.1 Fourth Amended and Restated Agreement of Limited Partnership of
Lepercq Corporate Income Fund, L.P.
20.1 Press Release by Lexington Corporate Properties, Inc., dated
March 23, 1996.
</TABLE>
<PAGE> 1
Exhibit 2.1
CONTRIBUTION AGREEMENT
among
RED BUTTE CREEK ASSOCIATES
LEPERCQ CORPORATE INCOME FUND L.P.
LEX GP-1, INC.
THE LCP GROUP, L.P.
RICHARD J. ROUSE
and
LEXINGTON NORTHWEST TRUST
Dated May 22, 1996
<PAGE> 2
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT, dated May 22, 1996
(this "Agreement"), is entered into among Red Butte Creek Associates, a Utah
limited partnership ("Red Butte"), and Lepercq Corporate Income Fund L.P., a
Delaware limited partnership ("LCIF"), Lex GP-1, Inc. ("Lex GP"), a Delaware
corporation, The LCP Group, L.P. ("LCP"), a Delaware limited partnership,
Richard J. Rouse, and Lexington Northwest Trust, a New York grantor trust.
W I T N E S S E T H:
WHEREAS, Red Butte is the holder of a certain
leasehold interest encumbering, and the owner of certain improvements to, real
property located at 295 Chipeta Way, University of Utah Research Park, Salt Lake
City, Utah (the "Property");
WHEREAS, pursuant to Section 4.02(b) of the Third Amended
and Restated Limited Partnership Agreement of Red Butte, as amended, Barnes
Properties, Inc., the general partner of Red Butte, notified the Red Butte
limited partners in a letter dated March 22, 1995 of Red Butte's intention to
transfer the Property to LCIF and provided such limited partners with thirty
(30) days to object to such transfer;
WHEREAS, Red Butte limited partners with less than
one-half of the outstanding Units in Red Butte have objected to such transfer
through the date hereof;
WHEREAS, Northwest Pipeline Corporation ("Northwest"), the
lessee of the Property, consented to the transfer in a letter dated March 29,
1996;
WHEREAS, Fleet Bank, as successor to Shawmut Bank of
Boston N.A., as trustee under the Indenture and Deed of Trust by Red Butte to
First Interstate Bank of Utah, N.A., Max Goldsmith, Shawmut Bank of Boston,
N.A., in a letter dated May 10, 1996 indicated that lenders with 86.9% of the
outstanding notes consented to the transfer;
WHEREAS, pursuant to the terms and subject to the
conditions of this Agreement, Red Butte is exchanging the Property for interests
in LCIF ("LCIF Units") with the terms and conditions set forth in the Fourth
Amended and Restated Agreement of Limited Partnership of LCIF (as amended from
time to time, the "Partnership Agreement") in a transaction which is intended to
<PAGE> 3
qualify as a tax-free transfer of the Property by Red Butte to LCIF under
Section 721 of the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, immediately following such transfer, LCIF will
transfer the Property to Lexington Northwest Trust, a New York grantor trust
(the "Trust") for one hundred percent (100%) of the beneficial interests
therein;
WHEREAS, The LCP Group, L.P. ("LCP") and Richard J. Rouse
are contributing their contractual right to receive a two percent fee payable
upon the ultimate sale of the Property in exchange for an aggregate of 35,006
LCIF Units to LCIF (which LCIF Units have the same terms and conditions as the
LCIF Units distributed to Red Butte except that such LCIF Units will be eligible
for distributions of $1.08 per Unit prior to January 1, 1998) in a transaction
that qualifies under Code Section 721;
WHEREAS, LCP will contribute to LCIF its contractual right
to receive management fees from the date hereof through the remainder of the
term of the lease of the Property from Red Butte to Northwest in exchange for
79,000 LCIF Units (which LCIF Units have the same terms and conditions as the
LCIF Units distributed to Red Butte except that such LCIF Units will be eligible
for distributions of $1.08 per unit prior to January 1, 1998) in a transaction
that qualifies under Code Section 721;
NOW, THEREFORE, in consideration of the foregoing and of
the mutual covenants and agreements hereinafter set forth, the parties hereto
hereby agree as follows:
1. Contribution of the Property to LCIF. Effective as of
the date hereof, Red Butte hereby contributes, transfers and assigns to LCIF all
of its right, title and interest in and to the Property subject to any and all
liabilities encumbering such Property (including the lien created by the
Indenture). LCIF hereby issues to Red Butte, in exchange for such contribution,
1,715,295.5 units in LCIF (the "Units"). The Units will provide for all of the
rights and obligations more fully set forth in the Partnership Agreement.
2. Contribution of the Property to the Trust. Immediately
following the transfer described in paragraph 1, LCIF hereby contributes,
transfers and assigns to the Trust all of its right, title and interest in and
to the Property subject to any and all liabilities encumbering such Property
(including the lien created by the Indenture) in exchange for hundred percent
(100%) of the beneficial interests therein.
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3. Contribution of Disposition Fee. LCP and Richard J.
Rouse hereby contribute to LCIF their contractual rights to the fee payable upon
the ultimate sale of the Property and in exchange LCIF will issue 25,704 LCIF
Units to LCP and 9,302 LCIF Units to Mr. Rouse.
4. Contribution of Management Agreement. LCP, as successor
to Lepercq Management Corporation ("LMC"), hereby contributes its contractual
right pursuant to that certain Property Management Agreement dated December __,
1980 with Red Butte to receive management fees for the period from the date
hereof through the end of the term of the lease of the Property to Northwest to
LCIF in exchange for 79,000 LCIF Units.
5. Dissolution of Red Butte and Admission to LCIF.
Pursuant to Section 7.01(a)(iv) of the Red Butte Associates Limited Partnership
Agreement, Red Butte Associates Limited Partnership is dissolved and its
interests in LCIF are distributed in accordance with Exhibit A. Pursuant to
11.2D and 11.3 of the Third Amended and Restated Agreement of Limited
Partnership of LCIF, Lex GP hereby consents to the admission of each of the Red
Butte limited partners as limited partners in LCIF.
6. Expenses. Red Butte and LCIF agree to each pay fifty
percent (50%) of all costs and expenses attributable to the transfer.
7. Parties in Interest. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons or entities other than the parties to it
and their respective successors and assigns, nor is anything in this Agreement
intended to relieve or discharge the obligations or liabilities of any third
persons or entities which are not a party to this Agreement, nor shall any
provision of this Agreement give any third persons or entities any rights of
subrogation or action over against any party to this Agreement.
8. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof,
supersedes all prior and contemporaneous agreements, representations and
understandings of the parties with respect thereto, and may not be modified,
amended or otherwise changes in any manner except by a writing executed by a
duly authorized representative of the party to be charged.
9. Counterparts; Further Assurances. This Agreement may be
executed in multiple counterparts. The parties
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agree to execute such documents, stock powers and instruments of assignment and
assumption as may be necessary or expedient to carry out the transactions
contemplated by this Agreement.
10. Miscellaneous. This Agreement shall be governed by the
laws of the State of New York without regard to the principles of conflicts of
laws.
RED BUTTE CREEK ASSOCIATES
By: Barnes Properties, Inc.
By: /s/ Richard J. Rouse
----------------------------
Name: Richard J. Rouse
Title: Vice President
LEPERCQ CORPORATE INCOME FUND L.P.
BY: Lex GP-1, Inc.
By: /s/ Richard J. Rouse
----------------------------
Name: Richard J. Rouse
Title: Vice President
LEX GP-1, INC.
By: /s/ Richard J. Rouse
----------------------------
Name: Richard J. Rouse
Title: Vice President
THE LCP GROUP, L.P.
By: Lepercq Capital Partners
By: Third Lero Corporation
By: /s/
----------------------------
Name:
Title:
RICHARD J. ROUSE
By: /s/ Richard J. Rouse
----------------------------
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<PAGE> 6
LEXINGTON NORTHWEST TRUST
By: The LCP Group, L.P., as trustee
By: Lepercq Capital Partners
By: Third Lero Corporation
By: /s/
____________________________
Name:
Title:
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<TABLE>
<CAPTION>
===================================================================================
EXHIBIT A
- -----------------------------------------------------------------------------------
PARTNER LCIF UNITS
- -----------------------------------------------------------------------------------
<S> <C>
Barnes Properties, Inc./Barnshore 17,153
Associates
- -----------------------------------------------------------------------------------
Abbott, Mary I. 16,921
- -----------------------------------------------------------------------------------
Babush, R.K. 1,811
- -----------------------------------------------------------------------------------
Baer, Verdilla 33,842
- -----------------------------------------------------------------------------------
Becker, Warren J. 16,921
- -----------------------------------------------------------------------------------
Sharon Bracken, Trustee, Sharon 33,842
Bracken Marital Trust
- -----------------------------------------------------------------------------------
Burns, John F. 16,921
- -----------------------------------------------------------------------------------
Calkins, Windsor & Judy 16,921
- -----------------------------------------------------------------------------------
Center Trust 67,684
- -----------------------------------------------------------------------------------
Cherrington, James S. 16,921
- -----------------------------------------------------------------------------------
Cole, Maxine 16,921
- -----------------------------------------------------------------------------------
Cutrer, Jerry W. 5,431
- -----------------------------------------------------------------------------------
Dallas, Robert H. (Sr.) 16,921
- -----------------------------------------------------------------------------------
Danzig, Murray 33,842
- -----------------------------------------------------------------------------------
Denny, Catherine 33,842
- -----------------------------------------------------------------------------------
Diversi, Henry L. (Jr.) 10,861
- -----------------------------------------------------------------------------------
Dodds, W. Douglas 16,921
- -----------------------------------------------------------------------------------
Dye Investment Properties #1 33,842
- -----------------------------------------------------------------------------------
Ebrahimian, Moosa 33,842
- -----------------------------------------------------------------------------------
Falconer, Maynard C. 33,842
- -----------------------------------------------------------------------------------
Flake, Rodney J. 16,921
- -----------------------------------------------------------------------------------
Armando J. and Mary Lou Flocchini, 16,921
Trustees, under revocable trust
agreement dated June 30, 1971, as
amended (for Flocchini Jr.)
- -----------------------------------------------------------------------------------
Armando J. and Lena Flocchini, 16,921
Trustees, under revocable trust
agreement dated 2/26/80 (Sr.)
</TABLE>
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<PAGE> 8
<TABLE>
- ----------------------------------------------------------------------------------
<S> <C>
Gilbert, Peter G. 5,431
- ----------------------------------------------------------------------------------
Glick, (Gerald)/Revocable Trust 20,315
- ----------------------------------------------------------------------------------
Golia, Dominick T. 37,236
- ----------------------------------------------------------------------------------
Gross, Stephen R. 5,431
- ----------------------------------------------------------------------------------
Harbin, Robert L. 5,431
- ----------------------------------------------------------------------------------
Harrington, Thomas J. 20,315
- ----------------------------------------------------------------------------------
Healey, Thomas J. 3,734
- ----------------------------------------------------------------------------------
Irvin, Tinesley H. 10,862
- ----------------------------------------------------------------------------------
Jacobs, Randolph 33,842
- ----------------------------------------------------------------------------------
Jenkins, Edward M. 16,921
- ----------------------------------------------------------------------------------
Johnson, Richard J. 2,716
- ----------------------------------------------------------------------------------
Jones, Billy Ray 5,431
- ----------------------------------------------------------------------------------
Jones, J. Curtis 2,716
- ----------------------------------------------------------------------------------
Jones, William G. 16,921
- ----------------------------------------------------------------------------------
Kadish, Mark J. 2,716
- ----------------------------------------------------------------------------------
Kadish, Rosalyn S. 2,716
- ----------------------------------------------------------------------------------
Kemper, William T. 115,104
- ----------------------------------------------------------------------------------
Kenyon Trust 38,594
- ----------------------------------------------------------------------------------
Kirschner Brothers 33,842
- ----------------------------------------------------------------------------------
Kornman, J.S. 1,810
- ----------------------------------------------------------------------------------
Kotkins, Henry L. (Jr.) 33,842
- ----------------------------------------------------------------------------------
Kotkins, Henry L. (Sr.) 33,842
- ----------------------------------------------------------------------------------
Kremers, Joseph A. 33,842
- ----------------------------------------------------------------------------------
Krone, Howard B. 8,147
- ----------------------------------------------------------------------------------
Legum, Steven F. 5,431
- ----------------------------------------------------------------------------------
Manlowe, Donald & Virginia 33,842
- ----------------------------------------------------------------------------------
Maronick, E. Phil 33,842
- ----------------------------------------------------------------------------------
Martin, Eff W. 3,734
- ----------------------------------------------------------------------------------
Mathews, David P. 16,921
</TABLE>
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<TABLE>
- ----------------------------------------------------------------------------------
<S> <C>
Mazo, (Gerald)/Trust 5,431
- ----------------------------------------------------------------------------------
McBride, Cornell 10,862
- ----------------------------------------------------------------------------------
McGonacle, Linda 16,921
- ----------------------------------------------------------------------------------
McKenzie, Therman (Sr.) 10,862
- ----------------------------------------------------------------------------------
Murphy, Chester M. 16,921
- ----------------------------------------------------------------------------------
Neiman, H.F. 1,810
- ----------------------------------------------------------------------------------
Obernauer, Marne (Jr.) 20,315
- ----------------------------------------------------------------------------------
Obie, Gordon T. 16,921
- ----------------------------------------------------------------------------------
Peter Trust L.P. 67,684
- ----------------------------------------------------------------------------------
Post, Allen W. (Jr.) 10,862
- ----------------------------------------------------------------------------------
Price, Gerald E. 16,921
- ----------------------------------------------------------------------------------
Rabe, Arthur W. 16,921
- ----------------------------------------------------------------------------------
Rhoad, Estate of Guy C. 37,236
- ----------------------------------------------------------------------------------
Romney, (Clark)/Revocable Trust 20,315
- ----------------------------------------------------------------------------------
Schaefer, Robert A. 5,431
- ----------------------------------------------------------------------------------
Schubach, Robert M. 33,842
- ----------------------------------------------------------------------------------
Schwartz, Richard J. 33,842
- ----------------------------------------------------------------------------------
Segal, John M. 5,431
- ----------------------------------------------------------------------------------
Segal, Steven A. 5,431
- ----------------------------------------------------------------------------------
Shapiro, Norman I. 16,921
- ----------------------------------------------------------------------------------
Sherry, Henry I. 5,431
- ----------------------------------------------------------------------------------
Stephenson, Leroy 33,842
- ----------------------------------------------------------------------------------
Stewart, Faye H. 16,921
- ----------------------------------------------------------------------------------
Strimatter, Paul L. & Joann H. 16,921
- ----------------------------------------------------------------------------------
Toberoff, Max 67,684
- ----------------------------------------------------------------------------------
Todd, Geils 33,842
- ----------------------------------------------------------------------------------
Weaver, Terry M. 33,842
- ----------------------------------------------------------------------------------
Whitmore, George M. (Jr.) 5,431
- ----------------------------------------------------------------------------------
Williams, John C. 2,716
</TABLE>
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<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
<S> <C>
WWH Investment Partners, Northwest 10,861
Cardiology Consultants
- -----------------------------------------------------------------------------------
Young, Raymond 5,431
===================================================================================
</TABLE>
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<PAGE> 1
Exhibit 4.1
FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEPERCQ CORPORATE INCOME FUND L.P.
Dated as of May 22, 1996
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE 1 DEFINED TERMS.................................................................... 1
ARTICLE 2 ORGANIZATIONAL MATTERS........................................................... 15
Section 2.1 Organization............................................................. 15
Section 2.2 LCIF I Merger............................................................ 15
Section 2.3 Name..................................................................... 16
Section 2.4 Registered Office and Agent Principal
Office................................................................... 16
Section 2.5 Term..................................................................... 17
ARTICLE 3 PURPOSE.......................................................................... 17
Section 3.1 Purpose and Business..................................................... 17
Section 3.2 Powers................................................................... 17
ARTICLE 4 CAPITAL CONTRIBUTIONS............................................................ 18
Section 4.1 Capital Contributions of the Partners.................................... 18
Section 4.2 Issuances of Additional Partnership
Interests................................................................ 18
ARTICLE 5 DISTRIBUTIONS.................................................................... 20
Section 5.1 Requirement and Characterization of
Distributions............................................................ 20
Section 5.2 Amounts Withheld......................................................... 21
Section 5.3 Distributions Upon Liquidation........................................... 21
ARTICLE 6 ALLOCATIONS...................................................................... 21
Section 6.1 Allocations For Capital Account
Purposes................................................................. 21
ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS............................................ 23
Section 7.1 Management............................................................... 23
Section 7.2 Certificate of Limited Partnership....................................... 25
Section 7.3 Restrictions on Authority................................................ 26
Section 7.4 Reimbursement of LXP..................................................... 26
Section 7.5 Outside Activities of and Participation
in Other Transactions by LXP and the
General Partner.......................................................... 27
Section 7.6 Indemnification.......................................................... 28
ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS................................... 29
Section 8.1 Management of Business................................................... 29
Section 8.2 Outside Activities of Additional Limited
Partners................................................................. 30
Section 8.3 Return of Capital........................................................ 30
Section 8.4 Redemption Rights........................................................ 30
ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS.......................................... 36
Section 9.1 Records and Accounting................................................... 36
</TABLE>
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<TABLE>
<CAPTION>
Page
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<S> <C>
Section 9.2 Fiscal Year............................................................... 36
ARTICLE 10 TAX MATTERS...................................................................... 36
Section 10.1 Preparation of Tax Returns............................................... 36
Section 10.2 Tax Elections............................................................ 36
Section 10.3 Tax Matters Partner...................................................... 37
Section 10.4 Withholding.............................................................. 37
ARTICLE 11 TRANSFERS AND WITHDRAWALS........................................................ 38
Section 11.1 Transfer................................................................. 38
Section 11.2 Transfer of Partnership Interests by the
General Partner and the Initial Limited
Partner.................................................................. 38
Section 11.3 Additional Limited Partners' Rights to
Transfer................................................................. 39
Section 11.4 Substituted Additional Limited Partners.................................. 41
Section 11.5 Assignees................................................................ 41
Section 11.6 General Provisions....................................................... 42
ARTICLE 12 ADMISSION OF PARTNERS............................................................ 43
Section 12.1 Admission of Subsequent Partner.......................................... 43
Section 12.2 Amendment of Agreement and Certificate
of Limited Partnership................................................... 44
ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION......................................... 44
Section 13.1 Dissolution.............................................................. 44
Section 13.2 Winding Up............................................................... 45
Section 13.3 Negative Capital Accounts................................................ 46
Section 13.4 Deemed Distribution and Recontribution................................... 47
Section 13.5 Rights of the Limited Partners........................................... 47
Section 13.6 Waiver of Partition...................................................... 48
ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT............................................... 48
ARTICLE 15 GENERAL PROVISIONS............................................................... 49
Section 15.1 Addresses and Notice..................................................... 49
Section 15.2 Titles and Captions...................................................... 49
Section 15.3 Pronouns and Plurals..................................................... 49
Section 15.4 Further Action........................................................... 50
Section 15.5 Binding Effect........................................................... 50
Section 15.6 Waiver................................................................... 50
Section 15.7 Counterparts............................................................. 50
Section 15.8 Applicable Law........................................................... 50
Section 15.9 Invalidity of Provisions................................................. 50
Section 15.10 Entire Agreement......................................................... 51
</TABLE>
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<PAGE> 4
EXHIBIT A PARTNERS' CONTRIBUTIONS AND PARTNERSHIP
INTERESTS
EXHIBIT B CAPITAL ACCOUNT MAINTENANCE
EXHIBIT C SPECIAL ALLOCATION RULES
EXHIBIT D-1 NOTICE OF REDEMPTION
EXHIBIT D-2 NOTICE OF REDEMPTION
EXHIBIT D-3 NOTICE OF REDEMPTION
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<PAGE> 5
FOURTH AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEPERCQ CORPORATE INCOME FUND L.P.
THIS FOURTH AMENDED AND RESTATED AGREEMENT OF LIMITED
PARTNERSHIP, dated as of May 22, 1996, is entered into by and among Lex GP-1,
Inc., a Delaware corporation ("GP-1"), as the General Partner, Lex LP-1, Inc. a
Delaware corporation ("LP-1"), as the Initial Limited Partner, Lexington
Corporate Properties, Inc., a Delaware corporation ("LXP"), which is the sole
stockholder of the General Partner and the Initial Limited Partner, the Persons
whose names will be hereinafter set forth on Exhibit A as Special Limited
Partners as attached hereto, the Persons whose names will be hereinafter set
forth on Exhibit A as Property Limited Partners attached hereto, and the Persons
whose names will be hereinafter set forth on Exhibit A as Red Butte Limited
Partners, with any other Persons who become Partners in the Partnership as
provided herein.
ARTICLE 1
DEFINED TERMS
The following definitions shall for all purposes be applied to
the following terms used in this Agreement.
"Act" means the Delaware Revised Uniform Limited Partnership
Act, as it may be amended from time to time.
"Additional Limited Partners" means the Special Limited
Partners, the Property Limited Partners, the Red Butte Limited Partners, and any
other limited partner admitted to the Partnership pursuant to Section 4.2.A.
"Adjusted Capital Account" means the Capital Account
maintained for each Partner as of the end of each Partnership Year (i) increased
by any amounts which such Partner is obligated to restore pursuant to any
provision of this Agreement or is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5) and (ii) decreased by the items described in Regulations Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).
The foregoing definition of Adjusted Capital Account is intended to comply with
the
<PAGE> 6
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.
"Adjusted Capital Account Deficit" means, with respect to any
Partner, the deficit balance, if any, in such Partner's Adjusted Capital Account
as of the end of the relevant Partnership Year.
"Adjusted Property" means any property the Carrying Value of
which has been adjusted pursuant to Exhibit B hereof. Once an Adjusted Property
is deemed distributed by, and recontributed to, the Partnership for federal
income tax purposes upon a termination thereof pursuant to Section 708 of the
Code, such property shall thereafter constitute a Contributed Property until the
Carrying Value of such property is further adjusted pursuant to Exhibit B
hereof.
"Affiliate" means, with respect to any Person, any Person
directly or indirectly controlling, controlled by or under common control with
such Person.
"Agreed Value" means (i) the 704(c) Value of such property or
other consideration in the case of any Contributed Property as of the time of
its contribution to the Partnership, reduced by any liabilities either assumed
by the Partnership upon such contribution or to which such property is subject
when contributed, and (ii) in the case of any property distributed to a Partner
by the Partnership, the Partnership's Carrying Value of such property at the
time such Property is distributed, reduced by any indebtedness either assumed by
such Partner upon such distribution or to which such property is subject at the
time of distribution under Section 752 of the Code and the Regulations
thereunder.
"Agreement" means this Fourth Amended and Restated Agreement
of Limited Partnership, as it may be amended, supplemented or restated from time
to time.
"Assignee" means a Person to whom one or more Partnership
Units held by an Additional Limited Partner have been transferred in a manner
permitted under this Agreement, but who has not become a Substituted Additional
Limited Partner and who has the rights set forth in Section 11.5.
"Book-Tax Disparities" means, with respect to any item of
Contributed Property or Adjusted Property, as of the date of any determination,
the difference between the
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Carrying Value of such Contributed Property or Adjusted Property and the
adjusted basis thereof for federal income tax purposes as of such date. A
Partner's share of the Partnership's Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner's Capital Account balance as maintained pursuant to Exhibit
B and the hypothetical balance of such Partner's Capital Account computed as if
it had been maintained strictly in accordance with federal income tax accounting
principles.
"Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in New York, New York are authorized or
required by law to close.
"Capital Account" means the Capital Account maintained for a
Partner pursuant to Exhibit B hereof.
"Capital Contributions" means, with respect to any Partner,
any cash, cash equivalents or the Agreed Value of Contributed Property which
such Partner contributes or is deemed to contribute to the Partnership pursuant
to Section 4.1 or 4.2 hereof.
"Capital Event" means the sale, refinancing or other
disposition of a Partnership asset outside the ordinary course of the
Partnership's business.
"Carrying Value" means (i) with respect to a Contributed
Property or Adjusted Property, the 704(c) Value of such property reduced (but
not below zero) by all Depreciation with respect to such property charged to the
Partners' Capital Accounts and (ii) with respect to any other Partnership
property, the adjusted basis of such property for federal income tax purposes,
all as of the time of determination. The Carrying Value of any property shall be
adjusted from time to time in accordance with Exhibit B hereof, and to reflect
changes, additions or other adjustments to the Carrying Value for dispositions
and acquisitions of Partnership properties, as deemed appropriate by the General
Partner.
"Certificate" means the Certificate of Limited Partnership
relating to the Partnership filed in the office of the Delaware Secretary of
State, as amended from time to time in accordance with the terms hereof and the
Act.
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"Certificate of Incorporation" means the Amended and Restated
Certificate of Incorporation of LXP, as amended or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended and
in effect from time to time, as interpreted by the applicable regulations
thereunder. Any reference herein to a specific section or sections of the Code
shall be deemed to include a reference to any corresponding provision of future
law.
"Contributed Property" means each property or other asset, in
such form as may be permitted by the Act, but excluding cash, contributed or
deemed contributed to the Partnership (or deemed contributed to the Partnership
on termination and reconstitution thereof pursuant to Section 708 of the Code).
Once the Carrying Value of a Contributed Property is adjusted pursuant to
Exhibit B hereof, such property shall no longer constitute a Contributed
Property for purposes of Exhibit B hereof, but shall be deemed an Adjusted
Property for such purposes.
"Depreciation" means, for each fiscal year, an amount equal to
the federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year, except that if the
Carrying 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 Carrying Value as the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year bears to such beginning adjusted tax basis; provided, however,
that if the federal income tax depreciation, amortization, or other cost
recovery deduction for such year is zero, Depreciation shall be determined with
reference to such beginning Carrying Value using any reasonable method selected
by the General Partner.
"Effective Date" means the date of the filing of the LCIF I
Merger Certificate with the Secretary of State of the State of Delaware.
"Effective Time" means the time of the filing of the LCIF I
Merger Certificate with the Secretary of State of Delaware.
"General Partner" means Lex GP-1, Inc. or its successors as
general partner of the Partnership.
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"General Partner Interest" means a Partnership Interest held
by the General Partner that is a general partner interest. A General Partner
Interest shall be expressed as a number of Partnership Units.
"Immediate Family" means, with respect to any natural Person,
such natural Person's spouse and such natural Person's natural or adoptive
parents, descendants, nephews, nieces, brothers, and sisters.
"Incapacity" or "Incapacitated" means (i) as to any individual
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating him incompetent to manage his Person or his estate;
(ii) as to any corporation which is a Partner, the filing of a certificate of
dissolution, or its equivalent, for the corporation or the revocation of its
charter; (iii) as to any partnership which is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate's entire interest in
the Partnership; (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee); or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any Bankruptcy, insolvency or similar law
now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner's
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the
Partner's properties, (f) any proceeding seeking liquidation, reorganization or
other relief of or against such Partner under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one
hundred twenty (120) days after the commencement thereof, (g) the appointment
without the Partner's consent or acquiescence of a trustee, receiver or
liquidator for the assets of the Partner which such
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appointment has not been vacated or stayed within ninety (90) days of such
appointment, or (h) an appointment referred to in clause (g) is not vacated
within ninety (90) days after the expiration of any such stay.
"Indemnitee" means (i) any Person made a party to a proceeding
by reason of his status as (A) the General Partner, or (B) a director or officer
of the Partnership, the General Partner, the Initial Limited Partner or LXP, and
(ii) such other Persons (including Affiliates of the Partnership, the General
Partner, the Initial Limited Partner or LXP) as the General Partner may
designate from time to time (whether before or after the event giving rise to
potential liability), in its sole and absolute discretion.
"Initial Limited Partner" means Lex LP-1, Inc.
"IRS" means the Internal Revenue Service, which administers
the internal revenue laws of the United States.
"LCIF I" means Lepercq Corporate Income Fund L.P., a Delaware
limited partnership.
"LCIF I Merger" means the Merger of Lex M-1 with and into LCIF
I pursuant to the LCIF I Merger Agreement.
"LCIF I Merger Agreement" means the Agreement and Plan of
Merger of Lex M-1 into LCIF I dated as of October 12, 1993.
"LCIF I Merger Certificate" means the Certificate of Merger of
the Partnership into LCIF I, dated October 12, 1993 filed in the office of the
Delaware Secretary of State on October 12, 1993.
"LCIF II" means Lepercq Corporate Income Fund II L.P., a
Delaware limited partnership.
"Lex M-1" means Lex M-1, L.P., a Delaware limited partnership.
"Limited Partner Interest" means a Partnership Interest held
by a Limited Partner in the Partnership that is a limited partner interest. A
Limited Partner Interest shall be expressed as a number of Partnership Units.
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"Limited Partners" means the Initial Limited Partners, the
Special Limited Partners and the Property Limited Partners, and the Red Butte
Limited Partners.
"Liquidator" has the meaning set forth in Section 13.2.
"LXP" means Lexington Corporate Properties, Inc., a Delaware
corporation which is the sole stockholder of the General Partner and the Initial
Limited Partner.
"Mergers" means the merger of Lex M-1 with and into LCIF I and
the merger of Lex M-2 with and into LCIF II, which mergers became effective on
October 12, 1993.
"Net Income" means, for any taxable period, the excess, if
any, of the Partnership's items of income and gain for such taxable period over
the Partnership's items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Income is subjected to the special
allocation rules in Exhibit C, Net Income or the resulting Net Loss, whichever
the case may be, shall be recomputed without regard to such item.
"Net Loss" means, for any taxable period, the excess, if any,
of the Partnership's items of loss and deduction for such taxable period over
the Partnership's items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. Once an item of income, gain, loss or deduction that has been
included in the initial computation of Net Loss is subjected to the special
allocation rules in Exhibit C, Net Loss or the resulting Net Income, whichever
the case may be, shall be recomputed without regard to such item.
"Nonrecourse Built-in Gain" means, with respect to any
Contributed Properties or Adjusted Properties that are subject to a mortgage or
negative pledge securing a Nonrecourse Liability, the amount of any taxable gain
that would be allocated to the Partners pursuant to Section 2.B of Exhibit C if
such properties were disposed of in a taxable transaction in full satisfaction
of such liabilities and for no other consideration.
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"Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for
a Partnership Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in
Regulations Section 1.752-1(a)(2).
"Notice of Redemption" means the Notice of Redemption
substantially in the form of Exhibit D-1, Exhibit D-2, or Exhibit D-3 to this
Agreement.
"Operating Cash Flow" means, for any period, operating revenue
from leases on real property investments, partnership distributions with respect
to partnerships in which the Partnership has interests, and interest on
uninvested funds and other cash investment returns, less operating expenses,
capital expenditures and regularly scheduled principal and interest payments
(exclusive of balloon payments due at maturity) on outstanding mortgage and
other indebtedness. The General Partner may, in its discretion, reduce Operating
Cash Flow for any period by an amount determined by the General Partner to be
necessary to fund reserves required by the Partnership.
"Partner" means a General Partner, the Initial Limited
Partner, any Special Limited Partner, any Property Limited Partner, or any Red
Butte Limited Partner and "Partners" means the General Partner, the Limited
Partner, the Special Limited Partners, the Property Limited Partners, and the
Red Butte Limited Partners.
"Partner Minimum Gain" means an amount, with respect to each
Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would
result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations Section 1.704-2(i)(3).
"Partner Nonrecourse Debt" has the meaning set forth in
Regulations Section 1.704-2(b)(4).
"Partner Nonrecourse Deductions" has the meaning set forth in
Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse
Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year
shall be determined in accordance with the rules of Regulations Section
1.704-2(i)(2).
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"Partnership" shall have the meaning set forth in Section 2.3
of this Agreement.
"Partnership Interest" means an ownership interest in the
Partnership representing a Capital Contribution by a Partner and includes any
and all benefits to which the holder of such a Partnership Interest may be
entitled as provided in this Agreement, together with all obligations of such
Person to comply with the terms and provisions of this Agreement. A Partnership
Interest shall be expressed as a number of Partnership Units.
"Partnership Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,
as well as any net increase or decrease in Partnership Minimum Gain, for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).
"Partnership Record Date" means the record date established by
the General Partner for the distribution of Operating Cash Flow pursuant to
Section 5.1 hereof, which record date shall be the same as the record date
established by LXP for a distribution to its stockholders of some or all of such
distribution.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2.
"Partnership Year" means the fiscal year of the Partnership,
which shall be the calendar year.
"Percentage Interest" means, as to a Partner, its interest in
the Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding and as
specified in Exhibit A attached hereto, as such Exhibit may be amended from time
to time.
"Person" means an individual or a corporation, partnership,
trust, unincorporated organization, association, limited liability company or
other entity.
"Prior Agreements" means the Agreement of Limited Partnership
of Lex M-1, L.P., dated as of October 5, 1993, between the General Partner, the
Initial Limited Partner, the First Amended and Restated Agreement of Limited
Partnership of Lex M-1, L.P., dated as of October 8, 1993,
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between the General Partner, the Initial Limited Partner and the Special Limited
Partners, the First Amended and Restated Agreement of Limited Partnership of
Lepercq Corporate Income Fund L.P. dated as of October 12, 1993, between the
General Partner, the Initial Limited Partner and the Special Limited Partners,
the Second Amended and Restated Agreement of Limited Partnership of Lepercq
Corporate Income Fund L.P., dated as of October 12, 1993 between the General
Partner, the Initial Limited Partner and the Special Limited Partners, and the
Third Amended and Restated Agreement of Limited Partnership of Lepercq Corporate
Income Fund L.P. dated August 1, 1995 between the General Partner, the Initial
Limited Partners, the Special Limited Partners and the Property Limited
Partners.
"Property Limited Partner" means a Person admitted to the
Partnership as a Property Limited Partner pursuant to Section 4.2 hereof as a
result of the contribution of an interest in an Underlying Partnership and who
is shown as such on the books and records of the Partnership.
"Property Limited Partner Interest" means a Partnership
Interest of a Property Limited Partner in the Partnership representing a
fractional part of the Partnership Interests of all Property Limited Partners
and includes any and all benefits to which the holder of such a Partnership
Interest may be entitled as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this
Agreement. A Property Limited Partner Interest may be expressed as a number of
Partnership Units.
"Property Limited Partner Redemption Right" shall have the
meaning set forth in Section 8.4.
"Property Partners Closing Date" shall mean the date hereof.
"Property Redeeming Partners" shall have the meaning set forth
in Section 8.4.
"Recapture Income" means any gain recognized by the
Partnership upon the disposition of any property or asset of the Partnership,
which gain is characterized as ordinary income because it represents the
recapture of deductions previously taken with respect to such property or asset.
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"Red Butte" means Red Butte Creek Associates Limited
Partnership, a limited partnership organized under the laws of the State of
Utah.
"Red Butte Limited Partner" means a Person admitted to the
Partnership as a Red Butte Limited Partner pursuant to Section 4.2 hereof as a
result of the contribution by Red Butte of all of its interest in the Red Butte
Property and the subsequent dissolution of Red Butte and who is shown as such on
the books and records of the Partnership.
"Red Butte Limited Partner Interest" means a Partnership
Interest of a Red Butte Limited Partner in the Partnership representing a
fractional part of the Partnership Interests of all Red Butte Limited Partners
and includes any and all benefits to which the holder of such a Partnership
Interest may be entitled as provided in this Agreement, together with all
obligations of such Person to comply with the terms and provisions of this
Agreement. A Red Butte Limited Partner Interest may be expressed as a number of
Partnership Units.
"Red Butte Limited Partner Redemption Right" shall have the
meaning set forth in Section 8.4.
"Red Butte Partners Closing Date" shall mean the date hereof.
"Red Butte Property" means all of Red Butte's interest in that
certain property located at 295 Chipeta Way, University of Utah Research Park,
Salt Lake City, Utah.
"Red Butte Redeeming Partners" shall have the meaning set
forth in Section 8.4.
"Redeeming Partner" shall mean either a Special Redeeming
Partner, a Property Redeeming Partner, or a Red Butte Redeeming Partner, as the
case may be.
"Redemption Amount" means the number of REIT Shares equal to
the product of the number of Partnership Units offered for redemption by a
Redeeming Partner, multiplied by the Redemption Factor; provided that in the
event the General Partner issues to all holders of REIT Shares rights, options,
warrants or convertible or exchangeable securities entitling the stockholders to
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, the "rights") then the
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Redemption Amount shall also include such rights that a holder of that number of
REIT Shares would be entitled to receive.
"Redemption Exercise Date" shall mean that applicable date as
set forth next to each Property Limited Partners' name, and each Red Butte
Limited Partners' name, on Exhibit A.
"Redemption Factor" means 1.0, provided that in the event that
LXP (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Redemption
Factor shall be adjusted by multiplying the Redemption Factor in effect
immediately before such event by a fraction, the numerator of which shall be the
number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend distribution, subdivision or combination. Any
adjustment to the Redemption Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such
event.
"Redemption Right" shall mean either the Special Limited
Partner Redemption Right, the Property Limited Partner Redemption Right, or the
Red Butte Limited Partner Redemption Right, as the case may be.
"Regulations" means the Income Tax Regulations promulgated
under the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"REIT" means a real estate investment trust under Section 856
of the Code.
"REIT Share" shall mean a share of Common Stock, $.0001 par
value, of LXP. A REIT Share shall also mean a share of Excess Stock, $.0001 par
value, of LXP issued in exchange or upon conversion of a share of such Common
Stock
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under the circumstances contemplated by the Certificate of Incorporation.
"Relative Interest" means the percentage determined by a
fraction, the numerator of which is the Capital Contributions deemed to be made
by the General Partner, the Initial Limited Partner and the Special Limited
Partners on the Effective Date to the Partnership and the denominator of which
is such Capital Contributions plus the capital contributions deemed to be made
by the partners of LCIF II to LCIF II on the Effective Date. LXP may require the
Partnership to adjust the Relative Interest from time to time, in its discretion
(provided that the sum of the Relative Interest of the Partnership and the
relative interest of LCIF II continue to total one (1.0)), so that each
Partnership Unit held by the Special Limited Partners remains substantially
equivalent to each partnership unit held by the special limited partners in LCIF
II with regard to (i) allocations of income, gain, loss, deduction and credit,
(ii) distributions from Operating Cash Flow and (iii) distributions upon
dissolution and liquidation of the Partnership and LCIF II.
"Residual Gain" or "Residual Loss" means any item of gain or
loss, as the case may be, of the Partnership recognized for federal income tax
purposes resulting from a sale, exchange or other disposition of Contributed
Property or Adjusted Property, to the extent such item of gain or loss is not
allocated pursuant to Section 2.B.l(a) or 2.B.2(a) of Exhibit C to eliminate
Book-Tax Disparities.
"704(c) Value" of any Contributed Property means the fair
market value of such property or other consideration at the time of contribution
as determined by the General Partner using such reasonable method of valuation
as it may adopt; provided that the 704(c) Value of any property deemed
contributed to the Partnership for federal income tax purposes upon termination
and reconstitution thereof pursuant to Section 708 of the Code shall be
determined in accordance with Exhibit B hereof. Subject to Exhibit B hereof, the
General Partner shall, in its sole and absolute discretion, use such method as
it deems reasonable and appropriate to allocate the aggregate of the 704(c)
Values of Contributed Properties in a single or integrated transaction among the
separate properties on a basis proportional to their respective fair market
values.
"Special Limited Partner" means a Person admitted to the
Partnership as a Special Limited Partner pursuant to
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Section 4.2 hereof and who is shown as such on the books and records of the
Partnership.
"Special Limited Partner Interest" means a Partnership
Interest of the Special Limited Partners in the Partnership representing a
fractional part of the Partnership Interests of all Special Limited Partners and
includes any and all benefits to which the holder of such a Partnership Interest
may be entitled as provided in this Agreement, together with all obligations of
such Person to comply with the terms and provisions of this Agreement. A Special
Limited Partner Interest may be expressed as a number of Partnership Units.
"Special Limited Partner Redemption Right" shall have the
meaning set forth in Section 8.4 hereof.
"Special Redeeming Partner" has the meaning set forth in
Section 8.4 hereof.
"Specified Redemption Date" means the tenth (10th) Business
Day after receipt by the General Partner and LXP of a Notice of Redemption.
"Subsequent Partner" means a Person admitted to the
Partnership as a Partner following the Property Partners Closing Date through
the sale or issuance by the Partnership of additional Partnership Interests and
not through the transfer of existing Partnership Interests.
"Subsidiary" means, with respect to any Person, any
corporation, partnership or other entity of which a majority of (i) the voting
power of the voting equity securities or (ii) the outstanding equity interests
is owned, directly or indirectly, by such Person.
"Substituted Additional Limited Partner" means a Person who is
admitted as an Additional Limited Partner to the Partnership pursuant to Section
11.4
"Terminating Capital Transaction" means any sale or other
disposition of all or substantially all of the assets of the Partnership or a
related series of transactions that, taken together, result in the sale or other
disposition of all or substantially all of the assets of the Partnership.
"Unrealized Gain" attributable to any item of Partnership
property means, as of any date of determination,
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the excess, if any, of (i) the fair market value of such property (as determined
under Exhibit B hereof) as of such date, over (ii) the Carrying Value of such
property (prior to any adjustment to be made pursuant to Exhibit B hereof) as of
such date.
"Unrealized Loss" attributable to any item of Partnership
property means, as of any date of determination, the excess, if any, of (i) the
Carrying Value of such property (prior to any adjustment to be made pursuant to
Exhibit B hereof) as of such date, over (ii) the fair market value of such
property (as determined under Exhibit B hereof) as of such date.
"Underlying Partnership" means Barngiant Livingston Associates
Limited Partnership, Barnhale Modesto Properties, Barnes Rockshire Associates
Limited Partnership, Barnvyn Bakersfield Associates L.P., Barnhech Montgomery
Associates Limited Partnership, and Barnward Brownsville Properties, the
partnerships in which the Partnership will acquire interests by contribution
from the Property Limited Partners.
ARTICLE 2
ORGANIZATIONAL MATTERS
Section 2.1 Organization
A. The Partnership is a limited partnership formed pursuant to
the provisions of the Act and upon the terms and conditions set forth in the
Prior Agreements. The Partners hereby amend and restate the Prior Agreements in
their entirety as of the date hereof. Except as expressly provided herein to the
contrary, the rights and obligations of the Partners and the administration and
termination of the Partnership shall be governed by the Act. The Partnership
Interest of each Partner shall be personal property for all purposes.
Section 2.2 LCIF I Merger
A. GP-1 in its capacity as the general partner of the
Partnership, and LP-1 in its capacity as the limited partner of the Partnership,
authorized and approved the LCIF I Merger and the execution of the LCIF I Merger
Agreement by the Partnership. At the Effective Time, (i) Lex M-1 merged with and
into LCIF I, whereupon the separate existence of Lex M-1 ceased and (ii) LCIF I,
also referred to as the
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Partnership in this Agreement, was the surviving limited partnership of the LCIF
I Merger.
B. At the Effective Time:
(1) Each limited partner interest in LCIF I outstanding
immediately prior to the Effective Time was exchanged for either shares of
common stock in LXP, or subordinated notes issued by LXP;
(2) Secured Property Associates L.P.'s interest in LCIF I
outstanding immediately prior to the Effective Time was exchanged for Special
Partner Interests in LCIF I, and Secured Property Associates L.P. was admitted
to the Partnership as a Special Limited Partner;
(3) GP-1's interest in Lex M-1 was cancelled, and GP-1 was
admitted to the Partnership as a general partner of the Partnership; and
(4) LP-1's limited partner interest in Lex M-1 was cancelled,
and LP-1 was admitted to the Partnership as a limited partner of the
Partnership.
Section 2.3 Name
The name of the Partnership is Lepercq Corporate Income Fund
L.P. The Partnership's business may be conducted under any other name or names
deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words "Limited Partnership," "L.P.,"
"Ltd." or similar words or letters shall be included in the Partnership's name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time.
Section 2.4 Registered Office and Agent Principal Office
The address of the registered office of the Partnership in the
State of Delaware is located at 1209 Orange Street, City of Wilmington, County
of New Castle, Delaware 19801, and the registered agent for service of process
on the Partnership in the State of Delaware at such registered office is The
Corporation Trust Company. The principal office of the Partnership is located at
355 Lexington Avenue, New York, New York 10017, and may be
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changed to such other place as the General Partner may from time to time
designate. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.
Section 2.5 Term
The term of the Partnership commenced on October 5, 1993, the
date the Certificate was filed in the office of the Secretary of State of
Delaware in accordance with the Act and shall continue until December 31, 2093,
unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 or as otherwise provided by law.
ARTICLE 3
PURPOSE
Section 3.1 Purpose and Business
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act; provided that such business
shall be limited to and conducted in such a manner as to permit LXP at all times
to be classified as a REIT, unless LXP ceases to qualify as a REIT for reasons
other than the conduct of the business of the Partnership, (ii) to enter into
any partnership, joint venture or other similar arrangement to engage in any of
the foregoing or to own interests in any entity engaged in any of the foregoing
and (iii) to do anything necessary or incidental to the foregoing. In connection
with the foregoing, and without limiting LXP's right in its sole discretion to
cease qualifying as a REIT, the Partners acknowledge that LXP's status as a REIT
inures to the benefit of all the Partners and not solely to LXP.
Section 3.2 Powers
The Partnership shall be empowered to do any and all acts and
things necessary, appropriate, proper, advisable, incidental to or convenient
for the furtherance and accomplishment of the purposes and business described
herein and for the protection and benefit of the Partnership; provided that the
Partnership shall not take, or refrain from taking, any action which, in the
judgment of LXP, in its sole and absolute discretion, (i) could adversely affect
the ability of LXP to continue to qualify
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as a REIT under Section 857 of the Code, (ii) could subject LXP to any
additional taxes under any Section of the Code or (iii) could violate any law or
regulation of any governmental body or agency having jurisdiction over LXP or
its securities, unless such action (or inaction) shall have been specifically
consented to by LXP in writing.
Notwithstanding anything to the contrary that may be contained
herein, the Partnership had and continues to have the power and authority to
execute, acknowledge, verify, deliver, file and record any and all documents and
instruments, including the LCIF I Merger Agreement and the LCIF I Merger
Certificate, and to perform any and all acts required by applicable law or which
were or may be necessary or advisable in order to give effect to the
consummation of the LCIF I Merger.
ARTICLE 4
CAPITAL CONTRIBUTIONS
Section 4.1 Capital Contributions of the Partners
As of the date of this Agreement, (i) the Partners shall be
deemed to have made the Capital Contributions set forth in Exhibit A to this
Agreement and (ii) each Partner shall own Partnership Units in the amount set
forth for such Partner in Exhibit A and shall have a Percentage Interest in the
Partnership as set forth for such Partner in Exhibit A, which Percentage
Interest shall be adjusted in Exhibit A from time to time by the General Partner
to the extent necessary to reflect accurately redemptions, Capital
Contributions, Capital Events, the issuance of additional Partnership Units or
similar events having an effect on a Partner's Percentage Interest. Except as
provided in Sections 4.2 and 10.4, the Partners shall have no obligation to make
any additional Capital Contributions or loans to the Partnership.
Section 4.2 Issuances of Additional Partnership Interests
A. The General Partner is hereby authorized to cause the
Partnership from time to time to issue to the Partners or other Persons
additional Partnership Units or other Partnership Interests in one or more
classes, or one or more series of any of such classes, with such designations,
preferences and relative, participating,
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optional or other special rights, powers and duties, including rights, powers
and duties senior to existing Partnership Interests, all as shall be determined
by the General Partner in its sole and absolute discretion, including, without
limitation, (i) the allocations of items of Partnership income, gain, loss,
deduction and credit to each such class or series of Partnership Interests, (ii)
the right of each such class or series of Partnership Interests to share in
Partnership distributions, and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership.
B. Notwithstanding any provision of Section 4.2.A to the
contrary, no such additional Partnership Units or other Partnership Interests
shall be issued to the General Partner, the Initial Limited Partner, LXP or any
of their Subsidiaries unless
(1) (a) the additional Partnership Interests are issued in
connection with an issuance of shares of LXP, which shares have designations,
preferences and other rights, all such that the economic interests are
substantially similar to the designations, preferences and other rights of the
additional Partnership Interests issued to the General Partner, the Initial
Limited Partner, LXP or any of their Subsidiaries in accordance with Section
4.2.A, and (b) LXP through the General Partner or the Limited Partner shall make
a Capital Contribution to the Partnership in an amount equal to the product of
(i) the proceeds raised in connection with the issuance of such shares of LXP
and (ii) the Relative Interest, or
(2) the additional Partnership Interests are issued to all
Partners in proportion to their respective Percentage Interests.
Further, notwithstanding any provision of Section 4.2.A to the
contrary, in issuing additional Partnership Units or other Partnership Interests
to any Person, the General Partner shall use all reasonable efforts and shall
follow the directions of LXP so that each Partnership Unit held by the Special
Limited Partners in the Partnership remains substantially equivalent to each
partnership unit held by the special limited partners in LCIF II with regard to
(i) allocations of income, gain, loss, deduction and credit, (ii) distributions
from Operating Cash Flow and (iii) distributions upon dissolution and
liquidation of the Partnership and LCIF II.
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ARTICLE 5
DISTRIBUTIONS
Section 5.1 Requirement and Characterization of Distributions
A. General. The General Partner shall distribute quarterly an
amount equal to 100% of the Operating Cash Flow generated by the Partnership
during such quarter to the Partners, who are Partners on the Partnership Record
Date with respect to such quarter in accordance with their respective Percentage
Interests on such Partnership Record Date; provided, that in no event may a
Partner receive a distribution of Operating Cash Flow with respect to a
Partnership Unit if such Partner is entitled to receive a distribution out of
such Operating Cash Flow with respect to a REIT Share for which such Partnership
Unit has been redeemed or exchanged.
B. Property Limited Partners. For purposes of this Section
5.1, a Property Limited Partner shall be treated as having no Partnership Units
and, therefore, shall not be entitled to receive cash distributions until such
Property Limited Partner's applicable Redemption Exercise Date (or such earlier
date as a Property Limited Partner is entitled to exercise its Property Limited
Partner Redemption Right under the second paragraph of Section 8.4.B); provided,
that the General Partner shall distribute to the Property Limited Partners that
contributed interests in Barngiant Livingston Associates Limited Partnership and
Barnhech Montgomery Associates Limited Partnership cash in the amount reflected
on Exhibit A to the extent the Partnership receives cash distributions from the
respective Underlying Partnership pro rata in accordance with their relative
Percentage Interests.
C. Red Butte Limited Partners. Notwithstanding Section 5.1.A,
each Red Butte Limited Partner's share of Operating Cash Flow (other than The
LCP Group, L.P. and Richard J. Rouse) shall be limited to a cash distribution of
$0.165 per Partnership Unit per quarter ($0.66 per Partnership Unit per annum)
through January 1, 1998, increasing to $0.27 per Partnership Unit per quarter
($1.08 per Partnership Unit per annum) on and after January 1, 1998, provided,
that if LXP reduces its dividend below $1.08 then the distribution to which each
Red Butte Limited Partner is entitled shall be reduced by the percentage
reduction in the LXP dividend. The LCP Group, L.P. and Richard J. Rouse shall be
entitled to cash distributions of $0.27 per Partnership Unit per quarter ($1.08
per Partnership Unit per annum) commencing on the date hereof or
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such lower dividend rate as is payable with respect to the common stock of LXP.
Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of
any state or local tax law and Section 10.5 hereof with respect to any
allocations, payment or distribution to the Partners or the Assignees shall be
treated as amounts distributed to the Partners or the Assignees pursuant to
Section 5.1 for all purposes under this Agreement.
Section 5.3 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction, and any other
cash received or reductions in reserves made after commencement of the
liquidation of the Partnership, shall be distributed to the Partners in
accordance with Section 13.2.
ARTICLE 6
ALLOCATIONS
Section 6.1 Allocations For Capital Account Purposes
For purposes of maintaining the Capital Accounts and in
determining the rights of the Partners among themselves, the Partnership's items
of income, gain, loss and deduction (computed in accordance with Exhibit B
hereof) shall be allocated among the Partners in each taxable year (or portion
thereof) as provided herein below.
A. Net Income. After giving effect to the special allocations
set forth in Section 1 of Exhibit C, Net Income shall be allocated to the
General Partner and the Limited Partners in accordance with their respective
Percentage Interests; provided, that following (i) the Effective Date and (ii)
the sale or other disposition (in which gain or loss is recognized) of real
properties representing at least fifty (50%) percent of the Carrying Value of
such properties as of the Effective Date, gains from the sale or other
disposition of partnership assets shall be allocated to the Partners other than
the Property Limited Partners, having negative Capital Accounts, to the extent
and in accordance with such negative Capital Accounts and thereafter to all
Partners in accordance with their
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Percentage Interests; provided further, that, a Property Limited Partner shall
be specially allocated items of Partnership income and gain prior to such
Property Limited Partner's applicable Redemption Exercise Date to the extent
such Property Limited Partner receives a cash distribution pursuant to Section
5.1; provided, further, that a Red Butte Limited Partner will be allocated
taxable income only in an amount equal to the cash distributions received.
B. Net Losses. After giving effect to the special allocations
set forth in Exhibit C, Net Losses shall be allocated first, to any Partner
having a positive Capital Account in accordance with and to the extent of such
positive Capital Account, and thereafter to the Limited Partners in accordance
with their respective Percentage Interests; provided, that, in no event shall
Property Limited Partners be allocated losses prior to such Property Limited
Partner's applicable Redemption Exercise Date; provided further, that, a portion
of the Partnership's allocable share of an Underlying Partnership's Depreciation
shall be allocated by the Partnership to the Property Limited Partners that
contributed the interests in such Underlying Partnership in an amount equal to
the product of the ratio of such Property Limited Partner's Partnership Units to
the total outstanding Partnership Units held by all Partners and the total
Depreciation attributable to the Underlying Partnership.
C. For purposes of Regulations Section 1.752-3(a)(3), the
Partners agree that Nonrecourse Liabilities of the Partnership in excess of the
sum of the amount of Partnership Minimum Gain and the total amount of
Nonrecourse Built-in Gain shall be allocated first to account for any income or
gain to be allocated to the Property Limited Partners and the Red Butte Limited
Partners pursuant to Sections 2.B and 2.D of Exhibit C and then among the
Partners in accordance with their respective Percentage Interests.
D. Any gains upon the sale or other taxable disposition of any
Partnership asset shall, to the extent possible, after taking into account other
required allocations of gain pursuant to Exhibit C that are characterized as
Recapture Income, be allocated to Partners in the same proportions and to the
same extent as such Partners have been allocated any deductions directly or
indirectly giving rise to the treatment of such gains as Recapture Income.
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ARTICLE 7
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1 Management
A. Except as otherwise expressly provided in this Agreement,
all management powers over the business and affairs of the Partnership are and
shall be exclusively vested in the General Partner. The Limited Partners shall
not have any right to participate in or exercise control or management power
over the business and affairs of the Partnership. The General Partner may not be
removed by the Limited Partners. In addition to the powers now or hereafter
granted to a general partner of a limited partnership under applicable law or
which are granted to the General Partner under any other provision of this
Agreement, the General Partner, subject to Section 7.3 hereof, shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:
(1) the execution, acknowledgement, verification,
delivery, filing and recording, for and in the name of the Partnership, and, to
the extent necessary, GP-1 and LP-l, of any and all documents and instruments,
including the LCIF I Merger Agreement and the performance of any and all acts
required by applicable law or which GP-1 deems necessary or advisable in order
to give effect to the consummation of the LCIF I Merger;
(2) the making of any expenditures, the lending or
borrowing of money (including, without limitation, making prepayments on loans
and borrowing money to permit the Partnership to make distributions to its
Partners in such amounts as will permit LXP (so long as LXP qualifies as a REIT)
to avoid the payment of any federal income tax (including, for this purpose, any
excise tax pursuant to Section 4981 of the Code) and to make distributions to
its stockholders sufficient to permit LXP to maintain REIT status) and the
assumption or guarantee of, or other contracting for, indebtedness and other
liabilities;
(3) the acquisition, disposition, mortgage, pledge,
encumbrance, hypothecation or exchange of any assets of the Partnership or the
merger or other combination of the Partnership with or into another entity (all
of the
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foregoing subject to any prior approval only to the extent required by Section
7.3 hereof);
(4) the use of the assets of the Partnership for any
purpose consistent with the terms of this Agreement and on any terms the General
Partner sees fit, and the making of capital contributions or loans to its
Subsidiaries;
(5) the management, operation, leasing, landscaping,
repair, alteration, demolition or improvement of any real property or
improvements owned by the Partnership or any Subsidiary of the Partnership;
(6) the negotiation, execution and performance of any
contracts, conveyances or other instruments that the General Partner considers
useful or necessary to the conduct of the Partnership's operations or the
implementation of the General Partner's powers under this Agreement;
(7) the distribution of Partnership cash or other
Partnership assets in accordance with this Agreement;
(8) the formation of, or acquisition of an interest
in, and the contribution of property to, any further limited or general
partnerships or joint ventures that the General Partner deems desirable;
(9) the undertaking of any action in connection with
the Partnership's direct or indirect investment in its Subsidiaries or any other
Person (including, without limitation, the contribution or loan of funds by the
Partnership to such Persons);
(10) the determination of the fair market value of
any Partnership property distributed in kind using such reasonable method of
valuation as the General Partner may adopt;
(11) the exercise, directly or indirectly, through
any attorney-in-fact acting under a general or limited power of attorney, of any
right, including the right to vote, appurtenant to any asset or investment held
by the Partnership; and
(12) the making, execution and delivery of any and
all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust,
security agreements, conveyances,
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contracts, guarantees, warranties, indemnities, waivers, releases or legal
instruments or agreements in writing necessary or appropriate in the judgment of
the General Partner for the accomplishment of any of the powers of the General
Partner enumerated in this Agreement.
B. At all times from and after the date hereof, the General
Partner may cause the Partnership to obtain and maintain (i) casualty, liability
and other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder.
C. At all times from and after the date hereof, the General
Partner may cause the Partnership to establish and maintain any and all
reserves, working capital accounts and other cash or similar balances in such
amounts as the General Partner, in its sole discretion, deems appropriate and
reasonable from time to time.
D. In exercising its authority under this Agreement, the
General Partner may, but shall not be obligated to, take into account the tax
consequences to any Partner of any action taken by it. The General Partner and
the Partnership shall not, however, have liability to an Additional Limited
Partner under any circumstances as a result of an income tax liability incurred
by such Additional Limited Partner as a result of an action (or inaction) by the
General Partner pursuant to its authority under this Agreement.
Section 7.2 Certificate of Limited Partnership
To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner shall
file amendments to the Certificate and do all the things to maintain the
Partnership as a limited partnership (or a partnership in which the limited
partners have limited liability) under the laws of the State of Delaware and
each other state, or the District of Columbia, in which the partnership may
elect to do business or own property. The General Partner shall use all
reasonable efforts to cause to be filed such other certificates or documents as
may be reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability to the extent provided by applicable
law) in the State of Delaware and any other state, or the District of
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Columbia, in which the Partnership may elect to do business or own property.
Section 7.3 Restrictions on Authority
After the Effective Date, without the consent of holders of a
majority of the outstanding Partnership Units held by the Special Limited
Partners, the General Partner may not consent to the Partnership participating
in any merger, consolidation or other combination with or into another Person or
sale of all or substantially all of its assets.
Without the unanimous consent of the Red Butte Limited
Partners, the General Partner shall not dispose of its interest in the Red Butte
Property prior to January 1, 2001 except in the event of a foreclosure or in the
event that the General Partner determines that the failure to dispose of the Red
Butte Property would result in the disqualification of LXP as a real estate
investment trust under the Code. In addition, through January 1, 2001, the
General Partner shall not take any action that will result in a reduction in any
Limited Partner's share of nonrecourse liabilities attributable to the Limited
Partner's LCIF Units by an amount which would cause a taxable event to the
Limited Partners.
Section 7.4 Reimbursement of LXP
A. Except as provided in this Section 7.4 and elsewhere in
this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
B. LXP and the General Partner shall be reimbursed on a
monthly basis, or such other basis as LXP may determine in its sole and absolute
discretion, for all expenses LXP incurs relating to the ownership and operation
of, or for the benefit of, the Partnership; provided that the amount of such
reimbursement shall be reduced by the product of (i) the Relative Interest and
(ii) any interest earned by LXP or the General Partner with respect to bank
accounts or other instruments or accounts held by either of them on behalf of
the Partnership as permitted in Section 7.5.A. Such reimbursements shall be in
addition to any reimbursement to LXP or the General Partner as a result of
indemnification pursuant to Section 7.6 hereof.
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C. LXP shall also be reimbursed by the Partnership for the
product of (i) the Relative Interest and (ii) all expenses LXP incurs relating
to the reorganization of LXP, the Partnership, the General Partner and the
Limited Partner, and any other issuance of REIT Shares pursuant to Section 4.2
hereof.
D. In the event that LXP shall elect to purchase from
stockholders REIT Shares pursuant to any stock repurchase program or for the
purpose of delivering such REIT Shares to satisfy an obligation under Section
8.4 of this Agreement, any dividend reinvestment program adopted by LXP, any
employee stock purchase plan adopted by LXP, or any other similar obligation or
arrangement undertaken by LXP in the future, the purchase price paid by LXP for
such REIT Shares and any other expenses incurred by LXP in connection with such
purchase shall be considered expenses of the Partnership to the extent of the
Partnership's Relative Interest and shall be reimbursed to LXP to such extent,
subject to the condition that, if such REIT Shares are sold, the General Partner
shall contribute to the Partnership, through the General or Limited Partner, any
proceeds received by the General Partner for such REIT Shares (provided that
REIT shares delivered to an Additional Limited Partner in exchange for
Partnership Units pursuant to Section 8.4 shall not be considered a sale of REIT
Shares for such purpose).
Section 7.5 Outside Activities of and Participation in Other
Transactions by LXP and the General Partner
Without the consent of holders of a majority of the
outstanding Partnership Units held by the Special Limited Partners, LXP agrees
that, following the Effective Date, it will not (i) permit the General Partner
or the Initial Limited Partner to issue additional shares of capital stock, (ii)
assign, sell, pledge, hypothecate or otherwise transfer any outstanding shares
of capital stock in the General Partner or in the Initial Limited Partner, (iii)
permit the General Partner or the Initial Limited Partner to incur any
indebtedness or to engage in any business other than to hold and own the
Partnership Interests in the Partnership or (iv) allow or consent to any merger,
consolidation or other combination of the General Partner or the Initial Limited
Partner with or into another Person or the sale of all or substantially all of
its assets.
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Section 7.6 Indemnification
A. The Partnership shall indemnify and hold harmless each
Indemnitee from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including, without limitation, attorney's fees and
other legal fees and expenses), judgments, fines, settlements, and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, that relate to the Mergers or to the
operations of the Partnership as set forth in this Agreement in which such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise; provided that the Partnership shall not indemnify an Indemnitee for
such Indemnitee's breach of duty of loyalty to the Partnership or for acts or
omissions not taken by the Indemnitee in good faith or which involve intentional
misconduct or a knowing violation of law or in which such Indemnitee received an
improper personal benefit. The General Partner is hereby authorized and
empowered, on behalf of the Partnership, to enter into one or more indemnity
agreements consistent with the provisions of this Section 7.6 in favor of any
Indemnitee having or potentially having liability for any such indebtedness. It
is the intention of this Section 7.6.A that the Partnership indemnify each
Indemnitee to the fullest extent permitted under the Act. The termination of any
proceeding by judgment, order or settlement does not create a presumption that
the Indemnitee did not meet the requisite standard of conduct set forth in this
Section 7.6.A. The termination of any proceeding by conviction of an Indemnitee
or upon a plea of nolo contendere or its equivalent by an Indemnitee, or an
entry of an order of probation against an Indemnitee prior to judgment, creates
a rebuttable presumption that such Indemnitee acted in a manner contrary to that
specified in this Section 7.6.A with respect to the subject matter of such
proceeding.
B. Reasonable expenses incurred by an Indemnitee who is a
party to a proceeding may be paid or reimbursed by the Partnership in advance of
the final disposition of the proceeding upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership as
authorized in Section 7.6.A has been met and (ii) a written undertaking by or on
behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
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C. The indemnification provided by this Section 7.6 shall be
in addition to any other rights to which an Indemnitee or any other Person may
be entitled under any agreement, pursuant to any vote of the Partners, as a
matter of law or otherwise.
D. The Partnership may, but shall not be obligated to,
purchase and maintain insurance on behalf of any of the Indemnitees and such
other Persons as the General Partner shall determine against any liability that
may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
E. In no event may an Indemnitee subject any of the Partners
to personal liability by reason of the indemnification provisions set forth in
this Agreement.
F. The provisions of this Section 7.6 are for the benefit of
the Indemnitees, their heirs, successors, assigns and administrators and shall
not be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.6 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the
Partnership's liability to any Indemnitee under this Section 7.6 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.
ARTICLE 8
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
Section 8.1 Management of Business
The Limited Partners and Assignees shall not take part in the
operation, management or control of the Partnership's business, transact any
business in the Partnership's name or have the power to sign documents for or
otherwise bind the Partnership. The transaction of any such business by the
General Partner, any of its Affiliates or any officer, director, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such, shall not
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affect, impair or eliminate the limitations on the liability of the Limited
Partners or Assignees under this Agreement.
Section 8.2 Outside Activities of Additional Limited Partners
Neither the Partnership nor any Partners shall have any rights
by virtue of this Agreement in any business ventures of any Additional Limited
Partner or Assignee. None of the Additional Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any business ventures of any other Person
(other than the General Partner and the Initial Limited Partner to the extent
expressly provided herein) and such Person shall have no obligation pursuant to
this Agreement or otherwise to offer any interest in any such business ventures
to the Partnership, any Additional Limited Partner or any such other Person,
even if such opportunity is of a character which, if presented to the
Partnership, any Additional Limited Partner, or such other Person, could be
taken by such Person.
Section 8.3 Return of Capital
Except pursuant to the right of redemption set forth in
Section 8.4, no Partner shall be entitled to the withdrawal or return of his
Capital Contribution, except to the extent of distributions made pursuant to
this Agreement or upon termination of the Partnership as provided herein.
Section 8.4 Redemption Rights
A. Subject to Section 8.4.C, on or at any time after the
Effective Date, each Special Limited Partner shall have the right (the "Special
Limited Partner Redemption Right") to require the Partnership to redeem on a
Specified Redemption Date all or a portion of the Partnership Units held by such
Special Limited Partner for the Redemption Amount to be delivered by the
Partnership. The Special Limited Partner Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the General Partner and LXP by
the Special Limited Partner who is exercising the Special Limited Partner
Redemption Right (the "Special Redeeming Partner"). A Special Limited Partner
may not exercise the Redemption Right for fewer than one thousand (1,000)
Partnership Units or, if such Special Limited Partner holds fewer than one
thousand (1,000) Partnership Units, all of the Partnership Units held by such
Special
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Limited Partner. The Special Redeeming Partner shall have no right, with respect
to any Partnership Units so redeemed, to receive any distributions paid after
the Specified Redemption Date. The Assignee of any Special Limited Partner may
exercise the rights of such Special Limited Partner pursuant to this Section
8.4, and such Special Limited Partner shall be deemed to have assigned such
rights to such Assignee and shall be bound by the exercise of such rights by
such Special Limited Partner's Assignee. In connection with any exercise of such
rights by such Assignee on behalf of such Special Limited Partner, the
Redemption Amount shall be delivered by the Partnership directly to such
Assignee and not to such Special Limited Partner.
B. Subject to Section 8.4.D, on the applicable Redemption
Exercise Date, or on each one year anniversary thereafter, each Property Limited
Partner shall have the right (the "Property Limited Partner Redemption Right")
to require the Partnership to redeem on a Specified Redemption Date all, but not
less than all, of the Partnership Units held by such Property Limited Partner
for the Redemption Amount to be delivered by the Partnership. The Property
Limited Partner Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner and LXP by the Property Limited
Partner who is exercising the redemption right (the "Property Redeeming
Partner"). The Property Redeeming Partner shall have no right, with respect to
any Partnership Units so redeemed, to receive any distributions paid after the
Specified Redemption Date. The Assignee of any Property Limited Partner may
exercise the rights of such Property Limited Partner pursuant to this Section
8.4.B., and such Property Limited Partner shall be deemed to have assigned such
rights to such Assignee and shall be bound by the exercise of such rights by
such Property Limited Partner's Assignee. In connection with any exercise of
such rights by such Assignee on behalf of such Property Limited Partner, the
Redemption Amount shall be delivered by the Partnership directly to such
Assignee and not to such Property Limited Partner.
Notwithstanding any other provision of this Section 8.4.B, if
the Partnership disposes of its interest in an Underlying Partnership, or if an
Underlying Partnership disposes of substantially all of its assets, then the
General Partner shall provide prompt written notification to the Property
Limited Partners that contributed interests in such Underlying Partnership, and
each such Property Limited Partner may exercise its Property Limited Partner
Redemption Right on the last Business Day of
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the calendar year in which such disposition occurs or, if later, ten (10)
Business Days following the consummation of such transaction.
C. LXP hereby agrees to enter into a Guaranty Agreement with
the Partnership on the Effective Date, on terms reasonably satisfactory to LXP
and the Partnership, pursuant to which LXP shall guaranty the obligations of the
Partnership under Sections 8.4.A and arrange for the delivery, if the
Partnership is unable, of the Redemption Amount on the Specified Redemption
Date, whereupon LXP or, if specified by LXP, the General Partner shall acquire
the Partnership Units offered for redemption by the Special Redeeming Partner
and shall be treated for all purposes of this Agreement as the owner of such
Partnership Units. Each of the Special Redeeming Partner, LXP, the Partnership,
and the General Partner shall treat the transaction between LXP and the Special
Redeeming Partner as a sale of the Special Redeeming Partner's Partnership Units
to LXP or the General Partner, as the case may be, for federal income tax
purposes. Each Special Redeeming Partner agrees to execute such documents as LXP
or the General Partner may reasonably require in connection with the issuance of
REIT Shares upon exercise of the Special Limited Partner Redemption Right.
D. LXP hereby further agrees to enter into a Guaranty
Agreement with the Partnership on the Property Partners Closing Date, on terms
reasonably satisfactory to LXP and the Partnership, pursuant to which LXP shall
guaranty the obligations of the Partnership under Section 8.4.B to pay the
Redemption Amount on the Specified Redemption Date, whereupon the Partnership
shall acquire the Partnership Units offered for redemption by the Property
Redeeming Partner. Each Property Redeeming Partner agrees to execute such
documents as the Partnership may reasonably require in connection with the
issuance of REIT Shares upon exercise of the Property Limited Partner Redemption
Right.
E. Following the date that at least 50% of the Partnership
Units held by the Special Limited Partners immediately following the Effective
Date have been redeemed in accordance with the provisions of Section 8.4, LXP or
the General Partner may require the remaining Special Limited Partners to redeem
their Partnership Units for the Redemption Amount to be delivered by the
Partnership. The right of LXP or the General Partner under this Section 8.4.E
shall be exercised pursuant to a notice delivered to all remaining Special
Limited Partners. Such redemption shall be effective on the date specified in
the notice, which date
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shall be at least 30 days after the notice is sent to the Special Limited
Partners.
At any time that (i) LXP shall be considering a sale of all or
substantially all of its assets, or a merger, consolidation, stock issuance,
stock redemption or other similar transaction that would result in a change in
the beneficial ownership of LXP by 50% or more, or (ii) the Partnership shall be
considering a sale of all or substantially all of its assets or a merger,
consolidation, or issuance or redemption of partnership interests which would
result in a change in the beneficial ownership in LCIF capital or profits of 50%
or more, then the General Partner shall have the right to redeem the Partnership
Units held by all, but not less than all, of the Additional Limited Partners
(other than the Special Limited Partners) for the Redemption Amount provided
that such redemption is contingent upon the completion of such transaction. In
such event, the General Partner shall provide notice to the Limited Partners and
such Limited Partners shall be required to surrender their Partnership Units for
cancellation. The rights of such Additional Limited Partners shall be limited to
the receipt of the Redemption Amount.
F. In connection with any REIT Shares delivered to any
Additional Limited Partner upon the redemption of Partnership Units held by such
Additional Limited Partner, it is intended that such Additional Limited Partner
be able to resell publicly such REIT Shares pursuant to the provisions Rule 144
under the Securities Act of 1933, but without the need to comply with the
holding period requirements of Rule 144(d). To the extent that counsel to LXP
reasonably determines that resales of any such REIT Shares cannot be made
pursuant to the provisions of Rule 144, and without the need to comply with the
holding period requirements of Rule 144(d), LXP agrees, at its sole cost and
expense, if requested by Special Limited Partners representing a majority of the
Partnership Units (including REIT Shares delivered upon exchange of such
Partnership Units) held by such Special Limited Partners, or by Additional
Limited Partners representing a majority of the Partnership Units (including
REIT Shares delivered upon the exchange of such Partnership Units) held by such
class of Additional Limited Partners, to include REIT Shares that may be (or
already have been) acquired by any Special Limited Partner or any Additional
Limited Partner, as the case may be, in an effective registration statement
under the Securities Act of 1933; provided that LXP's obligations to include
such REIT Shares in such an effective registration
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statement shall be conditioned upon Special Limited Partners representing a
majority of the Partnership Units (including REIT Shares delivered upon exchange
of such Partnership Units) held by such Special Limited Partners or, where
applicable, by Additional Limited Partners representing a majority of the
Partnership Units (including REIT Shares delivered upon the exchange of such
Partnership Units) held by such class of Additional Limited Partners, agreeing
to be bound by a customary registration rights agreements to be prepared by LXP.
In addition, any Additional Limited Partner whose REIT Shares are included in
such registration statement must also agree to be bound by the terms and
provisions of a registration rights agreement.
G. Notwithstanding the provisions of Section 8.4.A, Section
8.4.B, Section 8.4.C, Section 8.4.D, and Section 8.4.I, a Subsequent Partner
shall not be entitled to exercise the Redemption Right pursuant to Section
8.4.A, Section 8.4.B, or Section 8.4.I if the delivery of REIT Shares to such
Subsequent Partner on the Specified Redemption Date would be prohibited under
the Certificate of Incorporation and shall be subject in any event to the
issuance of REIT Shares being in compliance with all applicable Federal and
State securities laws.
H. Notwithstanding any other provision of this Agreement, upon
the occurrence of a Capital Event prior to the Redemption Exercise Date, the
proceeds of which are distributed to the Partners, and ultimately
proportionately to the shareholders of LXP, the Percentage Interest of each
Partner shall, from the date of such Capital Event, be equal to (i) the product
of (a) such Partner's Percentage Interest prior to such Capital Event and (b)
the difference between (x) the fair market value of the assets of the
Partnership and (y) any amounts distributed to such Partner as a result of the
Capital Event, divided by (ii) the fair market value of the assets of the
Partnership after such distribution. The General Partner shall adjust the number
of Partnership Units owned by each Partner to appropriately reflect the
adjustments made by this Section 8.4.H.
I. On May 22, 1998, and on each January 15 thereafter
beginning January 15, 1999, each Red Butte Limited Partner shall have the right
(the "Red Butte Limited Partner Redemption Right") to require the Partnership to
redeem on a Specified Redemption Date all, but not less than all, of the
Partnership Units held by a Red Butte Limited Partner for the Redemption Amount
to be delivered by the Partnership. The Red Butte Limited Partner Redemption
Right
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shall be exercised pursuant to a Notice of Redemption delivered to the General
Partner and LXP by the Red Butte Limited Partner who is exercising the
redemption right (the "Red Butte Redeeming Partner"). The Red Butte Redeeming
Partner shall have no right, with respect to any Partnership Units so redeemed,
to receive any distributions paid after the Specified Redemption Date. The
Assignee of any Red Butte Limited Partner may exercise the rights of such Red
Butte Limited Partner pursuant to the exercise of this Section 8.4.I, and such
Red Butte Limited Partner shall be deemed to have assigned such rights to such
Assignee and shall be bound by the exercise of such rights by such Red Butte
Limited Partner's Assignee. In connection with any exercise of such rights by
such Assignee on behalf of such Red Butte Limited Partner, the Redemption Amount
shall be delivered by the Partnership directly to such Assignee and not to such
Red Butte Limited Partner.
The Partnership hereby covenants not to dispose of its
interest in the Red Butte Property prior to January 1, 2001. Notwithstanding the
foregoing, if the Partnership does dispose of its interest prior to May 22,
1998, then the General Partner shall provide prompt written notification to the
Red Butte Limited Partners of such disposition and each such Red Butte Limited
Partner may exercise its Red Butte Limited Partner Redemption Right on the last
Business Day of the calendar year in which such disposition occurs or, if later,
ten (10) Business Days following the consummation of such transaction.
LXP agrees to enter into a Guaranty Agreement with the
Partnership on the Red Butte Partners Closing Date, on terms reasonably
satisfactory to LXP and the Partnership, pursuant to which LXP shall guaranty
the obligations of the Partnership under this Section 8.4.I to pay the
Redemption Amount on the Specified Redemption Date, whereupon the Partnership
shall acquire the Partnership Units offered for redemption by the Red Butte
Redeeming Partner. Each Red Butte Redeeming Partner agrees to execute such
documents as the Partnership may reasonably require in connection with the
issuance of REIT shares upon exercise of the Red Butte Limited Partner
Redemption Right.
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ARTICLE 9
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1 Records and Accounting
The General Partner shall keep or cause to be kept at the
principal office of the Partnership those records and documents required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership's business. The books of the
Partnership shall be maintained, for financial and tax reporting purposes, on an
accrual basis in accordance with generally accepted accounting principles, or on
such other basis as the General Partner determines to be necessary or
appropriate.
Section 9.2 Fiscal Year
The fiscal year of the Partnership shall be the calendar year.
ARTICLE 10
TAX MATTERS
Section 10.1 Preparation of Tax Returns
The General Partner shall arrange for the preparation and
timely filing of all returns of Partnership income, gains, deductions, losses
and other items required of the Partnership for federal and state income tax
purposes and shall use all reasonable efforts to furnish, within ninety (90)
days of the close of each taxable year, the tax information reasonably required
by the Additional Limited Partners for federal and state income tax reporting
purposes.
Section 10.2 Tax Elections
Except as otherwise provided herein, the General Partner
shall, in its sole and absolute discretion, determine whether to make any
available election pursuant to the Code; provided that the General Partner shall
make the election under Section 754 of the Code in accordance with applicable
Regulations thereunder. The General Partner shall have the right to seek to
revoke any such elections (including, without limitation, the election under
Section 754 of the Code) upon the General Partner's determination in
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its sole and absolute discretion that such revocation is in the best interests
of the Partners.
Section 10.3 Tax Matters Partner
A. The General Partner shall be the "tax matters partner" of
the Partnership for federal income tax purposes. The tax matters partner is
authorized but not required, to take any action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review proceeding to
the extent permitted by law.
B. The taking of any action and the incurring of any expense
by the tax matters partner in connection with any such audit or proceeding,
except to the extent required by law, is a matter in the sole and absolute
discretion of the tax matters partner and the provisions relating to
indemnification of the General Partner set forth in Section 7.7 of this
Agreement shall be fully applicable to the tax matters partner in its capacity
as such.
C. The tax matters partner shall receive no compensation for
its services. All third party costs and expenses incurred by the tax matters
partner in performing its duties as such (including legal and accounting fees
and expenses) shall be borne by the Partnership. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to assist
the tax matters partner in discharging its duties hereunder, so long as the
compensation paid by the Partnership for such services is reasonable.
Section 10.4 Withholding
Each Additional Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such
Additional Limited Partner any amount of federal, state, local, or foreign taxes
that the General Partner determines that the Partnership is required to withhold
or pay with respect to any amount distributable or allocable to such Additional
Limited Partner pursuant to this Agreement. Any amount paid on behalf of or with
respect to an Additional Limited Partner shall constitute a loan by the
Partnership to such Additional Limited Partner which loan shall be repaid by
such Additional Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to such
Additional Limited
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Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to Additional
Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or
(ii) shall be treated as having been distributed to such Additional Limited
Partner. Any amounts payable by a Limited Partner hereunder shall bear interest
at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in The Wall Street Journal,
such interest to accrue from the date such amount is due (i.e., fifteen (15)
days after demand) until such amount is paid in full.
ARTICLE 11
TRANSFERS AND WITHDRAWALS
Section 11.1 Transfer
A. The term "transfer," when used in this Article 11 with
respect to a Partnership Unit, shall be deemed to refer to a transaction by
which a Partner purports to assign all or any part of its Partnership Interest
to another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term "transfer" when used in this Article 11 does not include any redemption
of Partnership Units by an Additional Limited Partner or acquisition of
Partnership Units from an Additional Limited Partner by the General Partner
pursuant to Section 8.4.
B. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article 11. Any transfer or purported transfer of a Partnership Interest not
made in accordance with this Article 11 shall be null and void.
Section 11.2 Transfer of Partnership Interests by the General
Partner and the Initial Limited Partner
A. The General Partner may not transfer any of its General
Partner Interest except to the Initial Limited Partner or to LXP. The General
Partner may not withdraw as General Partner except in connection with the
complete transfer of its Partnership Interest as permitted hereunder.
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B. The Initial Limited Partner may not transfer any of its
Partnership Interests, except to the General Partner or to LXP. The Initial
Limited Partner may not withdraw as Initial Limited Partner except in connection
with the complete transfer of its Partnership Interest as permitted hereunder.
C. If LXP acquires any or all of the Partnership Interests of
the General Partner or the Initial Limited Partner as permitted hereunder, LXP
agrees that it will not transfer any of its Partnership Interests, except to the
Initial Limited Partner or to the General Partner. LXP may not withdraw as
Partner except in connection with the complete transfer of any Partnership
Interest as permitted hereunder.
D. Any transferee who acquires a Partnership Interest under
this Section 11.2 may become a Substituted Additional Limited Partner, or a
successor General Partner upon such terms specified by the General Partner,
including the delivery to the General Partner of such documents or instruments,
including powers of attorney, as may be required in the discretion of the
General Partner in order to effect such Person's admission as a Partner.
Section 11.3 Additional Limited Partners' Rights to Transfer
A. Subject to the provisions of Section 11.3.E, no Additional
Limited Partner shall have the right to transfer all or any portion of its
Partnership Interest, or any of such Additional Limited Partner's rights as a
Special Limited Partner, a Property Limited Partner, or a Red Butte Limited
Partner, as the case may be, without the prior written consent of the General
Partner, which consent may be given or withheld by the General Partner in its
sole and absolute discretion. Any purported transfer of a Partnership Interest
by an Additional Limited Partner in violation of this Section 11.3.A shall be
void ab initio and shall not be given effect for any purpose by the Partnership.
B. If an Additional Limited Partner is subject to Incapacity,
the executor, administrator, trustee, committee, guardian, conservator or
receiver of such Additional Limited Partner's estate shall have all the rights
of a Special Limited Partner, a Property Limited Partner, or a Red Butte Limited
Partner, as the case may be, but no more rights than those enjoyed by other
Special
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Limited Partners, Property Limited Partners, or Red Butte Limited Partners, as
the case may be, for the purpose of settling or managing the estate and such
power as the Incapacitated Additional Limited Partner possessed to transfer all
or any part of its interest in the Partnership. The Incapacity of an Additional
Limited Partner, in and of itself, shall not dissolve or terminate the
Partnership.
C. The General Partner may prohibit any transfer otherwise
permitted under Section 11.3.E by an Additional Limited Partner of his
Partnership Units (i) if, in the opinion of legal counsel to the Partnership,
such transfer would require filing of a registration statement under the
Securities Act of 1933 or would otherwise violate any federal, state, or foreign
securities laws or regulations applicable to the Partnership or the Partnership
Units or, (ii) if the transferring Additional Limited Partner, fails or is
unable to obtain and deliver to the Partnership, after request therefor is made
by the General Partner, a legal opinion from counsel acceptable to the General
Partner, addressed to the Partnership and the General Partner, that such
registration is not required in connection with such transfer and that such
transfer does not violate any federal, state or foreign securities laws or
regulations applicable to the Partnership or the Partnership Units.
D. No transfer by an Additional Limited Partner of its
Partnership Units may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, it would result in the Partnership being treated as
an association taxable as a corporation or (ii) such transfer is effectuated
through an "established securities market" or a "secondary market (or the
substantial equivalent thereof)" within the meaning of Section 7704(b) of the
Code.
E. Notwithstanding the provisions of Section 11.3.A (but
subject to the provisions of Section 11.3.C and 11.3.D), an Additional Limited
Partner may, with or without the consent of the General Partner, transfer all or
a portion of his Partnership Units to (i)(a) a member of his Immediate Family,
or a trust for the benefit of a member of his Immediate Family, (b) an
organization that qualifies under Section 501(c)(3) of the Code and that is not
a private foundation within the meaning of Section 509(a) of the Code or (c) a
partner in the Additional Limited Partner in a distribution by that Additional
Limited Partner to its partners under the partnership agreement of such
Additional Limited Partner or (ii) a lender as security for a loan made to or
guaranteed by the Additional Limited Partner, provided
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that in connection with any such transfer the lender does not acquire greater
rights with respect to the Partnership Units than those held by the transferring
Additional Limited Partner.
Section 11.4 Substituted Additional Limited Partners
A. No Additional Limited Partner shall have the right to
substitute a transferee in his place. The General Partner shall, however, have
the right to consent to the admission of a transferee of the interest of an
Additional Limited Partner pursuant to this Section 11.4 as a Substituted
Additional Limited Partner which consent may be given or withheld by the General
Partner in its sole and absolute discretion. The General Partner's failure or
refusal to permit a transferee of any such interests to become a Substituted
Additional Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner.
B. A transferee who has been admitted as a Substituted
Additional Limited Partner in accordance with this Article 11 shall have all the
rights and powers and be subject to all the restrictions and liabilities of the
transferor Additional Limited Partner under this Agreement.
C. Upon the admission of a Substituted Additional Limited
Partner, the General Partner shall amend Exhibit A, where applicable, to reflect
the name, address, number of Partnership Units, and Percentage Interest of such
Substituted Additional Limited Partner, and to eliminate or adjust, if
necessary, the name, address and interest of the predecessor of such Substituted
Additional Limited Partner.
Section 11.5 Assignees
If the General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section 11.3
as an Additional Limited Partner, as described in Section 11.4, such transferee
shall be considered an Assignee for purposes of this Agreement. An Assignee
shall be deemed to have had assigned to it, and shall be entitled to receive,
distributions from the Partnership and the share of Net Income, Net Losses,
Recapture Income, and any other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Units assigned to such
transferee, but shall not be deemed to be a holder of
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Partnership Units for any other purpose under this Agreement, and shall not be
entitled to vote such Partnership Units in any matter presented to the
Additional Limited Partners for a vote (such Partnership Units being deemed to
have been voted on such matter in the same proportion as all other Partnership
Units held by Special Limited Partners, Property Limited Partners, Red Butte
Limited Partners, or other Additional Limited Partners, where applicable, are
voted). In the event any such transferee desires to make a further assignment of
any such Partnership Units, such transferee shall be subject to all the
provisions of this Article 11 to the same extent and in the same manner as any
Additional Limited Partner desiring to make an assignment of Partnership Units.
Section 11.6 General Provisions
A. No Additional Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Additional Limited Partner's Partnership Units in accordance with this Article
11 or pursuant to redemption of all of its Partnership Units under Section 8.4.
B. Any Additional Limited Partner who shall transfer all of
his Partnership Units in a transfer permitted pursuant to this Article 11 shall
cease to be an Additional Limited Partner upon the admission of an Assignee of
such Partnership Units as a Substituted Additional Limited Partners. Similarly,
any Additional Limited Partner who shall transfer all of his Partnership Units
pursuant to a redemption of all of his Partnership Units under Section 8.4 shall
cease to be an Additional Limited Partner.
C. Transfers pursuant to this Article 11 may only be made on
the first day of a fiscal quarter of the Partnership, unless the General Partner
otherwise agrees.
D. If any Partnership Unit is transferred or assigned in
compliance with the provisions of this Article 11, or redeemed or transferred
pursuant to Section 8.4 on any day other than the first day of a Partnership
Year, then Net Income, Net Losses, each item thereof and all other items
attributable to such Partnership Unit for such Partnership Year shall be
allocated to the transferor Partner or the Redeeming Partner, as the case may
be, and, in the case of a transfer or assignment other than a redemption, to the
transferee Partner, by taking into account their varying interests during the
Partnership Year
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in accordance with Section 706(d) of the Code, using the interim closing of the
books method. Solely for purposes of making such allocations, each of such items
for the calendar month in which a transfer or assignment occurs shall be
allocated to the transferee Partner, and none of such items for the calendar
month in which a transfer or a redemption occurs shall be allocated to the
transferor Partner or the Redeeming Partner, as the case may be. All
distributions of Operating Cash Flow attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
transfer, assignment or redemption shall be made to the transferor Partner or
the Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Operating Cash Flow
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.
ARTICLE 12
ADMISSION OF PARTNERS
Section 12.1 Admission of Subsequent Partner
After the Property Partners Closing Date, no person shall be
admitted as a Partner except in accordance with the terms of this Agreement and
upon obtaining the consent of the General Partner. Any prospective Partner must
submit to the General Partner (i) evidence of acceptance in form satisfactory to
the General Partner of all of the terms and conditions of this Agreement, and
(ii) such other documents or instruments, including powers of attorney, as may
be required in the discretion of the General Partner in order to effect such
Person's admission as a Partner.
A. The admission of any Person as a Subsequent Partner shall
become effective on the date upon which the name of such Person is recorded in
the books and records of the Partnership, following the consent of the General
Partner to such admission.
B. If any Subsequent Partner is admitted to the Partnership on
any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items allocable among Partners and
Assignees for such Partnership Year shall be allocated among such Subsequent
Partner and all other Partners and Assignees by taking into account their
varying interests during the Partnership Year in accordance with Section 706(d)
of the
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Code, using the interim closing of the books method. Solely for purposes of
making such allocations, each of such items for the calendar month in which an
admission of any Subsequent Partner occurs shall be allocated among all the
Partners and Assignees including such Additional Limited Partner. All
distributions of Operating Cash Flow with respect to which the Partnership
Record Date is before the date of such admission shall be made solely to
Partners and Assignees other than the Subsequent Partner, and all distributions
of Operating Cash Flow thereafter shall be made to all the Partners and
Assignees including such Subsequent Partner.
Section 12.2 Amendment of Agreement and Certi- ficate of
Limited Partnership
For the admission to the Partnership of any Partner, the
General Partner shall take all steps necessary and appropriate under the Act to
amend the records of the Partnership and, if necessary, to prepare as soon as
practicable an amendment of this Agreement (including an amendment of Exhibit A)
and, if required by law, shall prepare and file an amendment to the Certificate.
ARTICLE 13
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 13.1 Dissolution
The Partnership shall not be dissolved by the admission of
Substituted Additional Limited Partners or Subsequent Partners or by the
admission of a successor General Partner in accordance with the terms of this
Agreement. Upon the withdrawal of the General Partner, any successor General
Partner shall continue the business of the Partnership. The Partnership shall
dissolve, and its affairs shall be wound up, upon the first to occur of any of
the following ("Liquidating Events"):
A. the expiration of its term as provided in Section 2.5
hereof;
B. an event of withdrawal of the General Partner, as defined
in the Act, unless (i) at the time of such event there is at least one remaining
general partner of the Partnership who carries on the business of the
Partnership (and each remaining general partner of the Partnership is hereby
authorized to carry on the business of
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the Partnership in such an event) or (ii) within ninety (90) days after such
event, all Partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of such event, of LXP as the
general partner of the Partnership (and LXP agrees to become a general partner
of the Partnership);
C. entry of a decree of judicial dissolution of the
Partnership pursuant to the provision of the Act; or
D. the sale of all or substantially all of the assets and
properties of the Partnership.
Section 13.2 Winding Up
A. Upon the occurrence of a Liquidating Event, the Partnership
shall continue solely for the purposes of winding up its affairs in an orderly
manner, liquidating its assets, and satisfying the claims of its creditors and
Partners. No Partner shall take any action that is inconsistent with, or not
necessary to or appropriate for, the winding up of the Partnership's business
and affairs. The General Partner or, in the event there is no remaining General
Partner, any Person elected by a majority in interest of the Limited Partners
(the General Partner or such other Person being referred to herein as the
"Liquidator") shall be responsible for overseeing the winding up and dissolution
of the Partnership and shall take full account of the Partnership's liabilities
and property and the Partnership property shall be liquidated as promptly as is
consistent with obtaining the fair value thereof, and the proceeds therefrom
shall be applied and distributed in the following order:
(1) First, to the satisfaction of all of the
Partnership's debts and liabilities, including all contingent, conditional or
immature claims and obligations to creditors other than the Partners (whether by
payment or the making of reasonable provision for payment thereof);
(2) Second, to the payment and discharge of all of
the Partnership's debts and liabilities to the General Partner;
(3) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other Partners;
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(4) The balance if any, to the Partners in accordance
with the positive Capital Account balances of the Partners, after giving effect
to all contributions, distributions, and allocations for all periods.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.
B. Notwithstanding the provisions of Section 13.2.A hereof
which require liquidation of the assets of the Partnership, but subject to the
order of priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership's assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion (subject to
its obligation to gradually settle and close the Partnership's business under
Section 17-803 of the Act), defer for a reasonable time the liquidation of any
assets except those necessary to satisfy liabilities of the Partnership
(including to those Partners as creditors).
Section 13.3 Negative Capital Accounts
A. Except as provided in this Section 13.3, no Partner,
general or limited, shall be liable to the Partnership or to any other Partner
for any negative balance outstanding in each such Partner's Capital Account,
whether such negative Capital Account results from the allocation of Net Losses,
or other items of deduction and loss to such Partner or from distributions to
such Partner.
B. Subject to Section 13.3.C, if any Special Limited Partner
on the date of the "liquidation" of his respective interest in the Partnership
(within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), including a
redemption under Section 8.4, would, following a hypothetical sale of
Partnership assets and the liquidation of the Partnership, have a negative
balance in his Capital Account, then such Special Limited Partner shall
contribute in cash to the capital of the Partnership the amount required to
increase his Capital Account as of such date to zero. Any such contribution
required of such Special Limited Partner hereunder shall be made on or before
the later of (i) the end of the Partnership Year in which the interest of such
Special Limited Partner is liquidated or (ii) the ninetieth (90th) day following
the date of such liquidation.
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C. After the death of a Special Limited Partner, the executor
of the estate of such Special Limited Partner may elect to reduce (or eliminate)
the deficit Capital Account restoration obligation of such Special Limited
Partner. Pursuant to Section 13.3.B. such election may be made by such executor
by delivering to the General Partner within two hundred seventy (270) days of
the death of such Special Limited Partner a written notice setting forth the
maximum deficit balance in his Capital Account that such executor agrees to
restore under Section 13.3.B, if any. If such executor does not make a timely
election pursuant to this Section 13.3.C (whether or not the balance in his
Capital Account is negative at such time), then a Special Limited Partner's
estate (and the beneficiaries thereof who receive distribution of Partnership
Units therefrom) shall be deemed to have a deficit Capital Account restoration
obligation as set forth pursuant to the terms of Section 13.3.B.
Section 13.4 Deemed Distribution and Recontribution
Notwithstanding any other provision of this Article 13, in the
event the Partnership is liquidated within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership's
property shall not be liquidated, the Partnership's liabilities shall not be
paid or discharged, and the Partnership's affairs shall not be wound up.
Instead, for federal income tax purposes and for purposes of maintaining Capital
Accounts pursuant to Exhibit B hereto, the Partnership shall be deemed to have
distributed the property in kind to the Partners, who shall be deemed to have
assumed and taken such property subject to all Partnership liabilities, all in
accordance with their respective Capital Accounts. Immediately thereafter, the
General Partner and Limited Partners shall be deemed to have recontributed the
Partnership property in kind to the Partnership, which shall be deemed to have
assumed and taken such property subject to all such liabilities.
Section 13.5 Rights of the Limited Partners
Except as otherwise provided in this Agreement, the Limited
Partners shall look solely to the assets of the Partnership for the return of
its Capital Contribution and shall have no right or power to demand or receive
property other than cash from the Partnership.
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Section 13.6 Waiver of Partition
Each Partner hereby waives any right to partition of the
Partnership property.
ARTICLE 14
AMENDMENT OF PARTNERSHIP AGREEMENT
Section 14.1 Amendments
A. This Agreement may be amended with the consent of the
General Partner, the Initial Limited Partner, and the Special Limited Partners
representing a majority of Partnership Units held by such Special Limited
Partners, but such amendments shall not require the approval of any Additional
Limited Partners other than the Special Limited Partners.
B. Notwithstanding Section 14.1.A, the General Partner shall
have the power, without the consent of any other Partner to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(1) to add to the obligations of the General Partner
or surrender any right or power granted to the General Partner or any Affiliate
of the General Partner for the benefit of the Limited Partners;
(2) to reflect the admission, substitution,
termination, or withdrawal of Partners in accordance with this Agreement;
(3) to set forth the designation, rights, powers,
duties, and preferences of the holders of any additional Partnership Interests
issued pursuant to Section 4.2.A hereof;
(4) to reflect a change that is of an inconsequential
nature and does not adversely affect the Limited Partners in any material
respect, or to cure any ambiguity, correct or supplement any provision in this
Agreement not inconsistent with law or with other provisions, or make other
changes with respect to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement; and
(5) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion,
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ruling, or regulation of a federal or state agency or contained in federal or
state law.
The General Partner shall provide notice to the other Partners when any action
under this Section 14.1.B is taken.
C. Notwithstanding Sections 14.1.A and 14.1.B hereof,
this Agreement shall not be amended without the consent of each Partner
adversely affected if such amendment would (i) convert a Limited Partner's
interest in the Partnership into a general partner interest, (ii) modify the
limited liability of a Limited Partner in a manner adverse to such Partner,
(iii) alter or modify the Redemption Right and REIT Shares Amount as set forth
in Section 8.4 in a manner adverse to such Partner, or (iv) amend this Section
14.1.C. Further, no amendment may alter the restrictions on the General
Partner's authority set forth in Section 7.3 without the consent specified in
that section.
ARTICLE 15
GENERAL PROVISIONS
Section 15.1 Addresses and Notice
Any notice, demand, request or report required or permitted to
be given or made to a Partner or Assignee under this Agreement shall be in
writing and shall be deemed given or made when delivered in person or when sent
by first class United States mail or by other means of written communication to
the Partner or Assignee at the address set forth in Exhibit A or such other
address of which the Partner shall notify the General Partner in writing.
Section 15.2 Titles and Captions
All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in
no way define, limit, extend or describe the scope or intent of any provisions
hereof. Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.3 Pronouns and Plurals
Whenever the context may require, any pronoun used in this
Agreement shall include the corresponding masculine, feminine or neuter forms,
and the singular form of nouns,
-49-
<PAGE> 54
pronouns and verbs shall include the plural and vice versa. Each reference
herein to Partnership Units held by the General Partner, a Special Limited
Partner, a Property Limited Partner or a Red Butte Limited Partner shall be
deemed to be a reference to Partnership Units held by such Partner in its role
as such.
Section 15.4 Further Action
The parties shall execute and deliver all documents, provide
all information and take or refrain from taking action as may be necessary or
appropriate to achieve the purposes of this Agreement.
Section 15.5 Binding Effect
This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their heirs, executors, administrators, successors,
legal representatives and permitted assigns.
Section 15.6 Waiver
No failure by any party to insist upon the strict performance
of any covenant, duty, agreement or condition of this Agreement or to exercise
any right or remedy consequent upon a breach thereof shall constitute waiver or
any such breach or any other covenant, duty, agreement or condition.
Section 15.7 Counterparts
This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affirming its signature hereto.
Section 15.8 Applicable Law
This Agreement shall be construed and enforced in accordance
with and governed by the laws of the State of Delaware, without regard to the
principles of conflicts of law.
Section 15.9 Invalidity of Provisions
If any provision of this Agreement is or becomes invalid,
illegal or unenforceable in any respect, the
-50-
<PAGE> 55
validity, legality and enforceability of the remaining provisions contained
herein shall not be affected thereby.
Section 15.10 Entire Agreement
This Agreement contains the entire understanding and agreement
among the Partners with respect to the subject matter hereof and supersedes the
Prior Agreements and any other prior written or oral understandings or
agreements among them with respect thereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement under seal as of the date first written above.
GENERAL PARTNER:
Lex GP-1, Inc.
By /s/ Richard J. Rouse
____________________________
Name: Richard J. Rouse
Title: Vice President
LIMITED PARTNER:
Lex LP-1, Inc.
By /s/ Richard J. Rouse
____________________________
Name: Richard J. Rouse
Title: Vice President
LEXINGTON CORPORATE
PROPERTIES, INC.
By /s/ Richard J. Rouse
____________________________
Name: Richard J. Rouse
Title: Vice President
PROPERTY LIMITED PARTNERS
By /s/ Richard J. Rouse
____________________________
On behalf of the Property
Limited Partners set forth
on Exhibit A
-51-
<PAGE> 56
RED BUTTE LIMITED PARTNERS
By /s/ Richard J. Rouse
____________________________
On behalf of the Red Butte
Limited Partners set forth
on Exhibit A
-52-
<PAGE> 57
<TABLE>
EXHIBIT A
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
GENERAL PARTNER $100 60,652 .732% N/A
- ---------------
Lex GP-1, Inc.
355 Lexington Ave.
New York, NY 10017
LIMITED PARTNER $100 6,108,228 73.713% N/A
- ---------------
Lex LP-1, Inc.
355 Lexington Ave.
New York, NY 10017
SPECIAL LIMITED PARTNERS ___ 6,556 .079% N/A
- ------------------------
Douglas S. Altabef
265 Ingleside Drive
Stamford, CT 06903
The LCP Group, L.P. ___ 28,057 .339% N/A
355 Lexington Avenue
New York, NY 10017
Antony E. Monk ___ 4,065.5 .049% N/A
6 Heathcote Road
Scarsdale, NY 10583
Ellen C. Monk ___ 4,065.5 .049% N/A
1125 Park Avenue
New York, NY 10128
Terrell R. Peterson ___ 2,608 .031% N/A
38 Via la Brisa
Larkspur, CA 94939
E. Robert Roskind ___ 41,813 .505% N/A
355 Lexington Avenue
New York, NY 10017
Richard J. Rouse ___ 16,063 .194% N/A
355 Lexington Avenue
New York, NY 10017
Edward C. Whiting ___ 9,001 .109% N/A
Whitman Heffernan
Rhein & Co., Inc.
767 Third Avenue
New York, NY 10017
</TABLE>
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<PAGE> 58
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PROPERTY LIMITED PARTNERS
1) Barngiant March 1, 2004
Livingston*
Howard P. Doerr 1 7,804 .094%
18892 East Long Avenue
Aurora, CO 80016
Edward G. Gilbert .5 3,902 .047%
323 W. Eighth Street,
#800
Kansas City, MO 64150
John Heubel .25 1,951 .024%
8494 Ridgewood Avenue
#4505
Cape Canaveral, FL 32920
Leone Heubel .25 1,951 .024%
8494 Ridgewood Avenue
#4505
Cape Canaveral, FL 32920
Estate of Jacob M. 1 7,804 .094%
Kirschner
Attn: Marla Gamble
1735 Market Street
38th Floor
Philadelphia, PA 19103
Alvin E. Levine 1 7,804 .094%
P.O. Box 2439
Matthews, NC 28106
Antony E. Monk .001 8 .0001%
6 Heathcote Road
Scarsdale, NY 10583
Ellen C. Monk .001 8 .0001%
725 Park Avenue
New York, NY 10128
Harry Pomerantz 1.5 11,706 .141%
14050 Lakeview Drive
Des Moines, IA 50325-8763
</TABLE>
- --------
* For purposes of Section 5.1, Property Limited Partners that
contributed interests in Barngiant Livingston shall be entitled to
cash distributions of $2,100 annually in 1996 through 2003, and
$350 in 2004.
A-2
<PAGE> 59
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alex Silverman TTEE .5 3,902 .047%
u/a/d
Second Amended Trust
Agmt. dtd 10/24/89
330 Running Springs
Lakes Country Club
Palm Desert, CA 92260
Roy Swarzman .5 3,902 .047%
1530 Financial Center
Des Moines, IA 50307
Barnes Properties, Inc. .2 1,593 .019%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
2) Barnhale Modesto February 1, 2006
Jeffrey Caspe 115.5 4,967 .060%
c/o Lewis Caspe
National Sheet Metal
101 Fifth Street
Des Moines, IA 50309
Richard Caspe 77 3,311 .040%
c/o Lewis Caspe
National Sheet Metal
101 Fifth Street
Des Moines, IA 50309
Bernard H. Kaplan 77 3,311 .040%
4026 Canyon Road
Lafayette, CA 94549
Albert J. Mintzer, 38.5 1,656 .020%
Trustee
Albert J. Mintzer
Revocable Trust dtd
3/24/92
943 Cummins Parkway
Des Moines, IA 50312
Jack Pester 77 3,311 .040%
c/o Coastal Corporation
9 Greenway Plaza
Houston, TX 77046
Norman Rips 19.25 1,656 .020%
711 North 69th St.
Omaha, NE 68132
</TABLE>
A-3
<PAGE> 60
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sheldon Rips 19.25 1,656 .020%
Optical Services
9007 F. Street
Omaha, NE 68127
William Stauffer 19.25 1,656 .020%
4916 Hagwood Drive
Des Moines, IA 50312
E. Robert Roskind 20.2 872 .011%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
Barnes Properties, Inc. 20.2 871 .011%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
March 1, 2005
3) Barnes Rockshire
Daniel R. Baty 1 3,672 .044%
2105 N. 30th Street
Tacoma, WA 98403
Gordon Chalmers 1 3,672 .044%
1408 Kensington Drive
Knoxville, TN 37922
Charles W. Coker, Jr. 1 3,672 .044%
1100 West Carolina Ave.
Hartsville, SC 29550
Richard M. Durwood 1.5 5,508 .066%
VWF Building
406 W. 34th Street
Kansas City, MO 64111
William Fromm 1 3,672 .044%
4350 Johnson Drive
Shawnee Mission, KS
66205
Antony E. Monk .001 4 .0001%
6 Heathcote Road
Scarsdale, NY 10583
Ellen C. Monk .001 4 .0001%
725 Park Avenue
New York, NY 10128
</TABLE>
A-4
<PAGE> 61
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Albert Silverman 1 3,672 .044%
6416 Aberdeen
Shawnee Mission, KS
66208
Alex Silverman TTEE 1 3,672 .044%
u/a/d 4/4/8
Second Amended Trust
Agmt. dtd 10/24/89
330 Running Springs
Lakes Country Club
Palm Desert, CA 92250
R. James Thornton 1 3,672 .044%
276 Albert Place
Lawrence, NY 11559
Robert Wolf 1 3,672 .044%
6432 Aberdeen
Shawnee Mission, KS
66208
Barnes Properties, Inc. .5 1,933 .023%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
4) Barnvyn Bakersfield January 1, 2003
Robert Miller 1.47 5,485 .066%
41 Mountain Shadows East
5635 E. Lincoln Drive
Paradise Valley, AZ
85253
William D. Kimpton .26 978 .012%
Kimpton Investment
Company
222 Kearny Street
Suite 200
San Francisco, CA 94108
Barnes Properties, Inc. .26 978 .012%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
</TABLE>
A-5
<PAGE> 62
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
5) Barnhech May 1, 2006
Montgomery*
Ralph A. Hart 1 1,703 .021%
401 E. Linton Blvd. #570
Del Ray Beach, FL 33483
The Estate of James A. 1 1,703 .021%
Linen IV
c/o Crestar Bank
Attn: Trust Special
Assets, HDQ 5610
P.O. Box 26665
Richmond, VA 23261-6665
Charles R. Perko 1 1,703 .021%
P.O. Box 2911
Manassas, VA 22110
William A. Rogers III .5 852 .010%
3481 Ranger Road
Davidsonville, MD 21035
Herbert G. Roskind, Jr. .5 852 .010%
P.O. Box 899
Sherborn, MA 01770
Gary Smith 1 1,703 .021%
12910 Ruxton Road
Silver Spring, MD 20904
Ralph S. Thomas 1 1,703 .021%
Route 1, Box 39
Shenandoah Junction, WV
25442
Hugh B. Wallis .5 852 .010%
1000 Shore Drive,
Chalk Point
West River, MD 20778
Barnes Properties, Inc. .4 695 .008%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
</TABLE>
- --------
* For purposes of Section 5.1, Property Limited Partners that contributed
interests in Barnhech Montgomery shall be entitled to cash distributions
of $490 annually in 1996 through 2005, and $163 in 2006.
A-6
<PAGE> 63
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
6) Barnward Brownsville November 2, 2004
Aaron David Bear 1 5,424 .065%
21 51st Street
Des Moines, IA 50312
Robert Bole 1 5,424 .065%
8713 Sunflower Circle
Des Moines, IA 50322
Robert Leiserowitz 1 5,424 .065%
P.O. Box 32309
Phoenix, AZ 85064-2309
Barry Pidgeon 1 5,424 .065%
3317 Elmwood Drive
Des Moines, IA 50312
Harold Pidgeon 1 5,424 .065%
6970 Miramar Road
San Diego, CA 92121
Gerald J. Riddle 1 5,424 .065%
319 S. 95th Street
Omaha, NE 6814
E. Robert Roskind .26 1,428 .017%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
Barnes Properties, Inc. .26 1,428 .017%
355 Lexington Ave.
New York, NY 10017
(economic interest
only)
7) Red Butte Limited May 22, 1998
Partners
Barnes Properties, 17,153 .207%
Inc./Barnshore
Associates
Abbott, Mary I. 16,921 .204%
Babush, R.K. 1,811 .022%
Baer, Verdilla 33,842 .409%
Becker, Warren J. 16,921 .204%
Sharon Bracken, Trustee, 33,842 .409%
Sharon Bracken Marital
Trust
Burns, John F. 16,921 .204%
</TABLE>
A-7
<PAGE> 64
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Calkins, Windsor & Judy 16,921 .204%
Center Trust 67,684 .818%
Cherrington, James S. 16,921 .204%
Cole, Maxine 16,921 .204%
Cutrer, Jerry W. 5,431 .066%
Dallas, Robert H. (Sr.) 16,921 .204%
Danzig, Murray 33,842 .409%
Denny, Catherine 33,842 .409%
Diversi, Henry L. (Jr.) 10,861 .131%
Dodds, W. Douglas 16,921 .204%
Dye Investment 33,842 .409%
Properties #1
Ebrahimian, Moosa 33,842 .409%
Falconer, Maynard C. 33,842 .409%
Flake, Rodney J. 16,921 .204%
Armando J. and Mary Lou 16,921 .204%
Flocchini, Trustees,
under revocable trust
agreement dated June 30,
1971, as amended (for
Flocchini Jr.)
Armando J. and Lena 16,921 .204%
Flocchini, Trustees,
under revocable trust
agreement dated 2/26/80
(Sr.)
Gilbert, Peter G. 5,431 .066%
Glick, 20,315 .245%
(Gerald)/Revocable Trust
Golia, Dominick T. 37,236 .450%
Gross, Stephen R. 5,431 .066%
Harbin, Robert L. 5,431 .066%
Harrington, Thomas J. 20,315 .245%
Healey, Thomas J. 3,734 .045%
Irvin, Tinesley H. 10,862 .131%
Jacobs, Randolph 33,842 .409%
Jenkins, Edward M. 16,921 .204%
</TABLE>
A-8
<PAGE> 65
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Johnson, Richard J. 2,716 .033%
Jones, Billy Ray 5,431 .066%
Jones, J. Curtis 2,716 .033%
Jones, William G. 16,921 .204%
Kadish, Mark J. 2,716 .033%
Kadish, Rosalyn S. 2,716 .033%
Kemper, William T. 115,104 1.391%
Kenyon Trust 38,594 .466%
Kirschner Brothers 33,842 .409%
Kornman, J.S. 1,810 .022%
Kotkins, Henry L. (Jr.) 33,842 .409%
Kotkins, Henry L. (Sr.) 33,842 .409%
Kremers, Joseph A. 33,842 .409%
Krone, Howard B. 8,147 .098%
Legum, Steven F. 5,431 .066%
Manlowe, Donald & 33,842 .409%
Virginia
Maronick, E. Phil 33,842 .409%
Martin, Eff W. 3,734 .045%
Mathews, David P. 16,921 .204%
Mazo, (Gerald)/Trust 5,431 .066%
McBride, Cornell 10,862 .131%
McGonacle, Linda 16,921 .204%
McKenzie, Therman (Sr.) 10,862 .131%
Murphy, Chester M. 16,921 .204%
Neiman, H.F. 1,810 .022%
Obernauer, Marne (Jr.) 20,315 .245%
Obie, Gordon T. 16,921 .204%
Peter Trust L.P. 67,684 .818%
Post, Allen W. (Jr.) 10,862 .131%
Price, Gerald E. 16,921 .204%
Rabe, Arthur W. 16,921 .204%
Rhoad, Estate of Guy C. 37,236 .450%
</TABLE>
A-9
<PAGE> 66
<TABLE>
PARTNERS' CONTRIBUTIONS AND PARTNERSHIP INTERESTS
<CAPTION>
Name and Address of Capital Partnership Percentage Redemption
Partner Contribution Units Interest Exercise Date
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Romney, 20,315 .245%
(Clark)/Revocable Trust
Schaefer, Robert A. 5,431 .066%
Schubach, Robert M. 33,842 .409%
Schwartz, Richard J. 33,842 .409%
Segal, John M. 5,431 .066%
Segal, Steven A. 5,431 .066%
Shapiro, Norman I. 16,921 .204%
Sherry, Henry I. 5,431 .066%
Stephenson, Leroy 33,842 .409%
Stewart, Faye H. 16,921 .204%
Strimatter, Paul L. & 16,921 .204%
Joann H.
Toberoff, Max 67,684 .808%
Todd, Geils 33,842 .409%
Weaver, Terry M. 33,842 .409%
Whitmore, George M. 5,431 .066%
(Jr.)
Williams, John C. 2,716 .033%
WWH Investment Partners, 10,861 .131%
Northwest Cardiology
Consultants
Young, Raymond 5,431 .066%
The LCP Group, L.P. 104,704 1.265%
Richard J. Rouse 9,302 .112%
</TABLE>
A-10
<PAGE> 67
EXHIBIT B
CAPITAL ACCOUNT MAINTENANCE
1. Capital Accounts of the Partners
A. The Partnership shall maintain for each Partner a separate
Capital Account in accordance with the rules of Regulations Section
1.704-1(b)(2)(iv). Such Capital Account shall be increased by (i) the amount of
all Capital Contributions and any other deemed contributions made by such
Partner to the Partnership pursuant to this Agreement and (ii) all items of
Partnership income and gain (including income and gain exempt from tax) computed
in accordance with Section 1.B hereof and allocated to such Partner pursuant to
Section 6.1.A of the Agreement and Exhibit C hereof, and decreased by (x) the
amount of cash or Agreed Value of all actual and deemed distributions of cash or
property made to such Partner pursuant to this Agreement and (y) all items of
Partnership deduction and loss computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1.B of the Agreement and
Exhibit C hereof.
B. For purposes of computing the amount of any item of income,
gain, deduction or loss to be reflected in the Partners' Capital Accounts,
unless otherwise specified in this Agreement, the determination, recognition and
classification of any such item shall be the same as its determination,
recognition and classification for federal income tax purposes determined in
accordance with Section 703(a) of the Code (for this purpose all items of
income, gain, loss or deduction required to be stated separately pursuant to
Section 703(a)(1) of the Code shall be included in taxable income or loss), with
the following adjustments:
(1) Except as otherwise provided in Regulation
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any election under Section 754 of
the Code which may be made by the Partnership; provided that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made pursuant
to Section 734 of the Code as a result of the distribution of property by the
Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners' Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section 1.704-1(b)(2)(iv)(m)(4).
-B-1-
<PAGE> 68
(2) The computation of all items of income, gain,
loss and deduction shall be made without regard to the fact that items described
in Sections 705(a)(1)(B) or 705(a)(2)(B) of the Code are not includable in gross
income or are neither currently deductible nor capitalized for federal income
tax purposes.
(3) Any income, gain or loss attributable to the
taxable disposition of any Partnership property shall be determined as if the
adjusted basis of such property as of such date of disposition were equal in
amount to the Partnership's Carrying Value with respect to such property as of
such date.
(4) In lieu of the depreciation, amortization, and
other cash recovery deductions taken into account in computing such taxable
income or loss, there shall be taken into account Depreciation for such fiscal
year.
(5) In the event the Carrying Value of any
Partnership Asset is adjusted pursuant to Section 1.D hereof, the amount of any
such adjustment shall be taken into account as gain or loss from the disposition
of such asset.
(6) Any items specially allocated under Section 2 of
Exhibit C hereof shall not be taken into account.
C. Generally, a transferee (including any Assignee) of a
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor; provided that if the transfer causes a termination of the
Partnership under Section 708(b)(1)(B) of the Code, the Partnership's properties
shall be deemed, solely for federal income tax purposes, to have been
distributed in liquidation of the Partnership to the holders of Partnership
Units (including such transferee) and recontributed by such Persons in
reconstitution of the Partnership. In such event, the Carrying Values of the
Partnership properties shall be adjusted immediately prior to such deemed
distribution pursuant to Section 1.D.(2) hereof. The Capital Accounts of such
reconstituted Partnership shall be maintained in accordance with the principles
of this Exhibit B.
D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D.(2), the Carrying Values of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times of the adjustments provided in Section 1.D.(2) hereto, as if such
Unrealized
-B-2-
<PAGE> 69
Gain or Unrealized Loss had been recognized on an actual sale of each such
property and allocated pursuant to Section 6.1 of the Agreement.
(2) Such adjustments shall be made as of the
following times: (a) immediately prior to the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (b) immediately prior to the
distribution by the Partnership to a Partner of more than a de minimis amount of
property as consideration for an interest in the Partnership; and (c)
immediately prior to the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g); provided that adjustments pursuant to
clauses (a) and (b) above shall be made only if the General Partner determines
that such adjustments are necessary or appropriate to reflect the relative
economic interests of the Partners in the Partnership.
(3) In accordance with Regulations Section
1.704-1(b)(2)(iv)(e) the Carrying Value of Partnership assets distributed in
kind shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the time any
such asset is distributed.
(4) In determining Unrealized Gain or Unrealized Loss
for purposes of this Exhibit B, the aggregate cash amount and fair market value
of all Partnership assets (including cash or cash equivalents) shall be
determined by the General Partner using such reasonable method of valuation as
it may adopt, or in the case of a liquidating distribution pursuant to Article
13 of the Agreement, be determined and allocated by the Liquidator using such
reasonable methods of valuation as it may adopt. The General Partner, or the
Liquidator, as the case may be, shall allocate such aggregate value among the
assets of the Partnership (in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual properties).
E. The provisions of this Agreement (including this Exhibit B
and the other Exhibits to this Agreement) relating to the maintenance of Capital
Accounts are intended to comply with Regulations Section 1.704-1(b), and shall
be interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto
(including, without limitation, debits or credits relating to liabilities which
are secured by contributed or distributed property or which are assumed by the
-B-3-
<PAGE> 70
Partnership, the General Partner, or the Limited Partners), are computed in
order to comply with such Regulations, the General Partner may make such
modification, provided that it is not likely to have a material effect on the
amounts distributable to any Person pursuant to Article 13 of the Agreement upon
the dissolution of the Partnership. The General Partner also shall (i) make any
adjustments that are necessary or appropriate to maintain equality between the
Capital Accounts of the Partners and the amount of Partnership Capital reflected
on the Partnership's balance sheet, as computed for book purposes, in accordance
with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate
modifications in the event unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b).
2. No Interest
No interest shall be paid by the Partnership on Capital
Contributions or on balances in Partners' Capital Accounts.
3. No Withdrawal
No Partner shall be entitled to withdraw any part of his
Capital Contributions or his Capital Account or to receive any distribution from
the Partnership, except as provided in this Agreement.
-B-4-
<PAGE> 71
EXHIBIT C
SPECIAL ALLOCATION RULES
1. Special Allocation Rules
Notwithstanding any other provision of the Agreement or this
Exhibit C, the following special allocations shall be made in the following
order:
A. Minimum Gain Chargeback. Notwithstanding the provisions of
Section 6.1 of the Agreement or any other provisions of this Exhibit C, if there
is a net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(f)(6). This Section
1.A is intended to comply with the minimum gain chargeback requirements in
Regulations Section 1.704-2(f) and for purposes of this Section 1.A only, each
Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of this Agreement with respect to such
Partnership Year and without regard to any decrease in Partner Minimum Gain
during such Partnership Year.
B. Partner Minimum Gain Chargeback. Notwithstanding any other
provision of Section 6.1 of the Agreement or any other provisions of this
Exhibit C (except Section 1.A. hereof), if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
Year, each Partner who has a share of the Partner Minimum Gain attributable to
such Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
for such year (and, if necessary, subsequent years) in an amount equal to such
Partner's share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section
1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(i)(4). This Section 1.B is intended to comply
with the minimum gain chargeback requirement in such Section of the Regulations
and shall be
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<PAGE> 72
interpreted consistently therewith. Solely for the purposes of this Section 1.B,
each Partner's Adjusted Capital Account Deficit shall be determined prior to any
other allocations pursuant to Section 6.1 of the Agreement or this Exhibit C
with respect to such Partnership Year, other than allocations-pursuant to
Section 1.A hereof.
C. Qualified Income Offset. In the event any Partner
unexpectedly receives any adjustments, allocations or distributions described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), or
1.704-1(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.A and 1.B hereof, such Partner has an Adjusted Capital Account
Deficit, items of Partnership income and gain shall be specifically allocated to
such Partner in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, its Adjusted Capital Account Deficit created by
such adjustments, allocations or distributions as quickly as possible.
D. Nonrecourse Deductions. Nonrecourse Deductions for any
Partnership Year shall be allocated to the Partners in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that Nonrecourse Deductions for any Partnership Year must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner is
authorized, upon notice to the Initial Limited Partner and the Limited Partners,
to revise the prescribed ratio for such Partnership Year to the numerically
closest ratio which does satisfy such requirements.
E. Partner Nonrecourse Deductions. Any Partner Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Partner
who bears the economic risk of loss with respect to the Partner Nonrecourse Debt
to which such Partner Nonrecourse Deductions are attributable in accordance with
Regulations Section 1.704-2(i)(2).
F. Code Section 754 Adjustments. To the extent an adjustment
to the adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-1(b)(2)(iv)(m) to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital
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<PAGE> 73
Accounts are required to be adjusted pursuant to such Section of the
Regulations.
2. Allocations for Tax Purposes
A. Except as otherwise provided in this Section 2, for federal
income tax purposes, each item of income, gain, loss and deduction shall be
allocated among the Partners in the same manner as its correlative item of
"book" income, gain, loss or deduction is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.
B. In an attempt to eliminate Book-Tax Disparities
attributable to a Contributed Property or Adjusted Property, items of income,
gain, loss and deduction shall be allocated for federal income tax purposes
among the Partners as follows:
(1) (a) In the case of a Contributed Property,
such items attributable thereto shall be allocated among the
Partners consistent with the principles of Section 704(c) of the
Code that takes into account the variation between the 704(c)
Value of such property and its adjusted basis at the time of
contribution; and
(b) any item of Residual Gain or Residual
Loss attributable to a Contributed Property shall be allocated
among the Partners in the same manner as its correlative item of
"book" gain or loss is allocated pursuant to Section 6.1 of the
Agreement and Section 1 of this Exhibit C.
(2) (a) In the case of an Adjusted Property,
such items shall
(1) first, be allocated among the
Partners in a manner consistent with the principles of
Section 704(c) of the Code to take into account the
Unrealized Gain or Unrealized Loss attributable to such
property and the allocations thereof pursuant to Exhibit B
and
(2) second, in the event such property
was originally a Contributed Property, be allocated among
the Partners in a manner consistent with Section 2.B.(1)
of this Exhibit C; and
(b) any item of Residual Gain or
Residual Loss attributable to an Adjusted Property shall
be allocated among the Partners in the same
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<PAGE> 74
manner as its correlative item of "book" gain or loss is allocated
pursuant to Section 6.1 of the Agreement and Section 1 of this
Exhibit C.
(3) All other items of income, gain, loss and
deduction shall be allocated among the Partners in the same manner as their
correlative item of "book" gain or loss is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.
C. To the extent Regulations promulgated pursuant to 704(c) of
the Code permit a partnership to utilize creative methods to eliminate the
disparities between the value of property and its adjusted basis (including,
without limitation, the implementation of curative allocations), the General
Partner shall have the authority to elect the method used by the Partnership and
such election shall be binding on the Partners.
Without limiting the foregoing, the General Partner shall take
all steps (including, without limitation, implementing curative allocations)
that it determines are necessary or appropriate to ensure that the amount of
taxable gain required to recognized by the General Partner upon a disposition by
the Partnership of any Contributed Property or Adjusted Property does exceed the
sum of (i) the gain that would be recognized by the General Partner if such
property had an adjusted tax basis at the time of disposition equal to the
704(c) Value of such property plus (ii) the deductions for depreciation,
amortization or other cost recovery actually allowed to the General Partner with
respect to such property for federal income tax purposes (after giving effect to
the "ceiling rule").
D. Notwithstanding the foregoing, except as otherwise set
forth in this Section 2.D of Exhibit C, a Property Limited Partner shall not be
allocated any items of Partnership income or gain prior to such Property Limited
Partner's applicable Redemption Exercise Date (or such earlier date as a
Property Limited Partner is entitled to exercise its Property Limited Partner
Redemption Right under the second paragraph of Section 8.4.B). Items of income
or gain may be specially allocated to certain limited partners pursuant to
Section 6.1.A. Items of Depreciation shall be allocated to the Property Limited
Partners only to the extent of such Property Limited Partner's Percentage
Interest multiplied by the total book depreciation allocated to the Partnership
by the Underlying Partnership contributed by such Property Limited Partner, with
corresponding tax items allocable to such Property Limited Partner under
principles set forth in Section 2.B of this Exhibit C. Income and gain
recognized on a sale by the Partnership of an interest in an Underlying
Partnership, or the sale by an
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<PAGE> 75
Underlying Partnership of an interest in its assets, shall be allocated first to
the Property Limited Partners that contributed the interests in such Underlying
Partnership to the Partnership, in an amount necessary to eliminate the Book-Tax
Disparity in such Property Limited Partner's Capital Account, and then in
accordance with such Partners' Percentage Interest. The Partnership shall make a
curative allocation of income and gain in the taxable year of the Partnership in
which a Property Limited Partner exercises its Redemption Right set forth in
Section 8.4.B of this Agreement, or in any other taxable year in which a
Property Limited Partner's interest in LCIF is liquidated. Such curative
allocation of income and gain shall provide that items of Partnership taxable
income or gain will be allocated to such Property Limited Partner, and items of
Partnership book income or gain will be allocated to Partners other than the
Property Limited Partners, to the extent necessary to eliminate the Property
Limited Partner's remaining Book-Tax Disparity immediately prior to the exercise
of the Redemption Right.
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<PAGE> 76
EXHIBIT D-1
NOTICE OF REDEMPTION
The undersigned Special Limited Partner hereby irrevocably (i)
redeems ___________ Partnership Units in Lepercq Corporate Income Fund L.P. in
accordance with the terms of the Agreement of Limited Partnership of Lepercq
Corporate Income Fund L.P., as amended, and the Special Limited Partner
Redemption Right referred to therein, (ii) surrenders such Partnership Units and
all right, title and interest therein, and (iii) directs that the Redemption
Amount deliverable upon exercise of the Special Limited Partner Redemption Right
be delivered to the address and placed in the name(s) and at the address(es)
specified below. The undersigned hereby represents, warrants, certifies and
agrees (a) that the undersigned has good, marketable and unencumbered title to
such Partnership Units, free and clear of the rights or interests of any other
person or entity, (b) that the undersigned has the full right, power and
authority to redeem and surrender such Partnership Units as provided herein, (c)
that the undersigned has obtained the consent or approval of all persons or
entities, if any, having the right to consent to or approve such redemption and
surrender, (d) that if the undersigned is acquiring REIT Shares, the undersigned
is doing so with the understanding that such REIT Shares may only be resold or
distributed pursuant to a registration statement under the Securities Act of
1933 or in a transaction exempt from the registration requirements of such Act
and (e) that Lexington Corporate Properties, Inc. may refuse to transfer such
REIT Shares as to which evidence satisfactory to it of such registration or
exemption is not provided to it.
Dated: _____________
Name of Special Limited Partner:
________________________________________
(Signature of Special Limited Partner)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
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<PAGE> 77
Signature Guaranteed by:
________________________________________
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
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<PAGE> 78
EXHIBIT D-2
NOTICE OF REDEMPTION
The undersigned Property Limited Partner hereby irrevocably
(i) redeems ___________ Partnership Units in Lepercq Corporate Income Fund L.P.
in accordance with the terms of the Agreement of Limited Partnership of Lepercq
Corporate Income Fund L.P., as amended, and the Property Limited Partner
Redemption Right referred to therein, (ii) surrenders such Partnership Units and
all right, title and interest therein, and (iii) directs that the Redemption
Amount deliverable upon exercise of the Property Limited Partner Redemption
Right be delivered to the address and placed in the name(s) and at the
address(es) specified below. The undersigned hereby represents, warrants,
certifies and agrees (a) that the undersigned has good, marketable and
unencumbered title to such Partnership Units, free and clear of the rights or
interests of any other person or entity, (b) that the undersigned has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein, (c) that the undersigned has obtained the consent or approval
of all persons or entities, if any, having the right to consent to or approve
such redemption and surrender, (d) that if the undersigned is acquiring REIT
Shares, the undersigned is doing so with the understanding that such REIT Shares
may only be resold or distributed pursuant to a registration statement under the
Securities Act of 1933 or in a transaction exempt from the registration
requirements of such Act and (e) that Lexington Corporate Properties, Inc. may
refuse to transfer such REIT Shares as to which evidence satisfactory to it of
such registration or exemption is not provided to it.
Dated: _____________
Name of Property Limited Partner:
________________________________________
(Signature of Property Limited Partner)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
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<PAGE> 79
Signature Guaranteed by:
________________________________________
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
-D-2-2-
<PAGE> 80
EXHIBIT D-3
NOTICE OF REDEMPTION
The undersigned Red Butte Limited Partner hereby irrevocably
(i) redeems ___________ Partnership Units in Lepercq Corporate Income Fund L.P.
in accordance with the terms of the Agreement of Limited Partnership of Lepercq
Corporate Income Fund L.P., as amended, and the Red Butte Limited Partner
Redemption Right referred to therein, (ii) surrenders such Partnership Units and
all right, title and interest therein, and (iii) directs that the Redemption
Amount deliverable upon exercise of the Red Butte Limited Partner Redemption
Right be delivered to the address and placed in the name(s) and at the
address(es) specified below. The undersigned hereby represents, warrants,
certifies and agrees (a) that the undersigned has good, marketable and
unencumbered title to such Partnership Units, free and clear of the rights or
interests of any other person or entity, (b) that the undersigned has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein, (c) that the undersigned has obtained the consent or approval
of all persons or entities, if any, having the right to consent to or approve
such redemption and surrender, (d) that if the undersigned is acquiring REIT
Shares, the undersigned is doing so with the understanding that such REIT Shares
may only be resold or distributed pursuant to a registration statement under the
Securities Act of 1933 or in a transaction exempt from the registration
requirements of such Act and (e) that Lexington Corporate Properties, Inc. may
refuse to transfer such REIT Shares as to which evidence satisfactory to it of
such registration or exemption is not provided to it.
Dated: _____________
Name of Red Butte Limited Partner:
________________________________________
(Signature of Red Butte Limited Partner)
________________________________________
(Street Address)
________________________________________
(City) (State) (Zip Code)
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<PAGE> 81
Signature Guaranteed by:
________________________________________
If REIT Shares are issued, issue them to:
Please insert social security or identifying number:
Name:
-D-3-2-
<PAGE> 1
Exhibit 20.1
BULLETIN
FROM:
FRB LEXINGTON CORPORATE PROPERTIES, INC.
355 LEXINGTON AVENUE
The Financial Relations Board, Inc. NEW YORK, NY 10017
FOR FURTHER INFORMATION
AT THE COMPANY AT FINANCIAL RELATIONS BOARD
- -------------- ----------------------------
T. Wilson Eglin Laurie Dascal Stephanie Mishra Judith Sylk-Siegel
President (General Info.) (Analyst Info.) (Media Info.)
(212) 692-7260 (212) 616-8030 (703) 960-7255 (212) 661-8030
FOR IMMEDIATE RELEASE
- ---------------------
May 23, 1996
LEXINGTON CORPORATE PROPERTIES, INC. ACQUIRES HEADQUARTERS OF
NORTHWEST PIPELINE CORPORATION
New York, NY (May 23, 1996) -- Lexington Corporate Properties, Inc. (NYSE:
LXP), a real estate investment trust, announced today that the Company has
acquired the headquarters of Northwest Pipeline Corporation for $59.0 million,
consisting of the assumption of $37.4 million of first mortgage debt and the
issuance of $21.5 million of partnership interests in one of Lexington's
subsidiary partnerships and 9,000 shares of Lexington common stock.
THE PROPERTY
- ------------
The property, a 295,000 square foot, four story, Class-A office building and a
600 car parking garage located in Salt Lake City, Utah, is 100% occupied by
Northwest Pipeline Corporation. The senior unsecured debt of Northwest Pipeline
is currently rated BBB by Standard & Poors and Baa1 by Moody's.
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<PAGE> 2
The property is subject to a net lease which extends until September 30, 2009,
subject to two renewal options for a total of 19 years and is located on land
leased through September 17, 2018, subject to a ten year renewal option. During
1996, the property is expected to generate approximately $8.16 million of
rental revenue, net of payments under the land lease.
The property is subject to two mortgage notes which have a total outstanding
principal balance of approximately $37.4 million. The first note has an
outstanding principal balance of approximately $14.0 million, bears interest at
7.87% per annum and requires quarterly debt service payments of $524,724 which
will fully amortize the first note at maturity on October 1, 2005. The second
note has an outstanding principal balance of approximately $23.4 million, bears
interest at 12.9% per annum and requires quarterly debt service payments of
$1,079,200 which will fully amortize the second note balance at maturity on
October 1, 2005. The second note may be prepaid commencing on October 1, 1997,
subject to a 4.75% prepayment penalty.
The annual net rent generated from the property in 1996 of $8.16 million will
exceed the total debt-service payments of $6.42 million by $1.74 million.
THE EXCHANGE
The transaction was effected as an exchange of property for approximately
1,715,300 units in one of Lexington's subsidiary partnerships. The holders of
the units will receive quarterly distributions of $.165 per unit through 1997
and $.27 per unit thereafter. Annual distributions to such unitholders will
approximate $1.13 million through 1997 and $1.85 million commencing in 1998.
The units become exchangeable for Lexington common stock, on a one-for-one
basis, beginning on the second anniversary of the transaction.
In addition, 114,006 units and 9,000 shares of Lexington common stock were
issued in exchange for the contribution of certain contractual rights. These
units and the stock will require additional distributions of approximately
$133,000 per year.
Lexington Corporate Properties, Inc. is a self-managed and self administered
real estate investment trust that owns and manages a diverse portfolio of 29
triple-net-lease properties, and minority interests in two additional
properties, which are located in 18 states, including warehouses, distribution
centers, manufacturing facilities and office and retail properties. Shares of
Lexington common stock closed Wednesday, May 22, 1996, at $11.75 per share.
Lexington, which pays a current annual dividend of $1.08 per share, has
approximately 9.37 million shares outstanding and approximately 2.16 million
operating partnership units outstanding which are exchangeable into common
stock on a one-for-one basis at certain points in the future.
# # #
TO RECEIVE ADDITIONAL INFORMATION ON LEXINGTON CORPORATE PROPERTIES, VIA FAX AT
NO CHARGE, DIAL 1-800-PRO-INFO AND ENTER COMPANY CODE 093 OR TICKER SYMBOL LXP.
