LIMITED PARTNERSHIP AGREEMENT
OF
LABRADOR (AZ) LP
NOVEMBER ___, 2001
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TABLE OF CONTENTS
Page EXPLANATORY STATEMENT 1
SECTION 1 DEFINED TERMS............................................................................ 1
SECTION 2 FORMATION AND NAME; OFFICE; PURPOSE; TERM................................................ 7
Section 2.1. Formation................................................................... 7
Section 2.2. Name of the Company......................................................... 7
Section 2.3. Purpose..................................................................... 7
Section 2.4. Term........................................................................ 7
Section 2.5. Registered Office........................................................... 7
Section 2.6. Registered Agent............................................................ 7
Section 2.7. Principal Office............................................................ 8
Section 2.8. Members..................................................................... 8
Section 2.9. Fiscal Year................................................................. 8
Section 2.10. Amendment Permitted........................................................ 8
SECTION 3 PARTNERS; CAPITAL; CAPITAL ACCOUNTS...................................................... 8
Section 3.1. Partners.................................................................... 8
Section 3.2. Initial Capital Contributions............................................... 8
Section 3.3. Additional Capital Contributions............................................ 8
Section 3.4. No Interest on Capital Contributions........................................ 9
Section 3.5. Return of Capital Contributions............................................. 9
Section 3.6. Form of Return of Capital................................................... 9
Section 3.7. Capital Accounts............................................................ 9
SECTION 4 PROFIT, LOSS AND DISTRIBUTIONS........................................................... 9
Section 4.1. Distributions of Cash Flow and Allocations of Profit or Loss................ 9
Section 4.2. Regulatory Allocations...................................................... 9
Section 4.3. Liquidation and Dissolution................................................. 11
Section 4.4. General..................................................................... 12
SECTION 5 MANAGEMENT; RIGHTS, POWERS, AND DUTIES; RESTRICTIONS ON POWERS........................... 13
Section 5.1. Management of the Company................................................... 13
Section 5.2. General Powers; Operations.................................................. 13
Section 5.2. Meetings of and Voting By Partners.......................................... 14
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Section 5.4. Limitations on Power of General Partner..................................... 15
Section 5.5. Duties of Parties........................................................... 16
Section 5.6. Liability and Indemnification............................................... 19
Section 5.7. Removal of the General Partner.............................................. 19
SECTION 6 TRANSFER OF INTERESTS AND WITHDRAWALS OF MEMBERS......................................... 19
Section 6.1. Restrictions on Transfers................................................... 19
Section 6.2. Right of First Refusal...................................................... 21
Section 6.3. Closing of a Transfer....................................................... 22
Section 6.4. Effective Date of Sale...................................................... 22
Section 6.5. Transfers to Permitted Transferees.......................................... 22
Section 6.6. Voluntary Withdrawal........................................................ 23
Section 6.7. Involuntary Withdrawal...................................................... 23
Section 6.8. Transfer of Ownership....................................................... 23
SECTION 7 DISSOLUTION, LIQUIDATION, CONSOLIDATION, MERGER AND SALE OF ASSETS....................... 24
Section 7.1. Events of Dissolution....................................................... 24
Section 7.2. Procedure for Winding Up and Dissolution.................................... 24
Section 7.3. Continuation of Business.................................................... 25
SECTION 8 BOOKS, RECORDS, ACCOUNTING AND TAX ELECTIONS............................................. 26
Section 8.1. Accounts.................................................................... 26
Section 8.2. Books and Records........................................................... 26
Section 8.3. Annual Accounting Period.................................................... 27
Section 8.4. Reports..................................................................... 27
Section 8.5. Tax Matters Partner......................................................... 27
Section 8.6. Tax Elections............................................................... 27
SECTION 9 GENERAL PROVISIONS....................................................................... 28
Section 9.1. Assurances.................................................................. 28
Section 9.2. Notifications............................................................... 28
Section 9.3. Specific Performance........................................................ 28
Section 9.4. Complete Agreement.......................................................... 28
Section 9.5. Applicable Law.............................................................. 28
Section 9.6. Section Titles.............................................................. 29
Section 9.7. Binding Provisions.......................................................... 29
Section 9.8. Arbitration, Jurisdiction and Venue......................................... 29
Section 9.9. Terms....................................................................... 29
Section 9.10. Separability of Provisions................................................. 29
Section 9.11. Counterparts............................................................... 29
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Section 9.12. Estoppel Certificate....................................................... 29
Section 9.13. Indemnity.................................................................. 29
Section 9.14 Effective Date of Agreement............................................. 30
Section 9.15. Conflict................................................................... 30
EXHIBIT A-List of Members; Capital ; and Percentages............................................... 32
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LABRADOR (AZ) LP
AGREEMENT OF
Delaware LIMITED PARTNERSHIP
THIS LIMITED PARTNERSHIP AGREEMENT (this "AGREEMENT") is made as of November ___, 2001, by and between CORPORATE PROPERTY ASSOCIATES 14 INCORPORATED, a Maryland corporation, ("CPA:14" and a "LIMITED PARTNER"), CORPORATE PROPERTY ASSOCIATES 15 INCORPORATED, a Maryland corporation ("CPA:15" and a "LIMITED PARTNER") a Maryland corporation and TERRIER (AZ) 14-78, INC., a Delaware corporation (the "GENERAL PARTNER").
BACKGROUND
WHEREAS, the parties hereto desire to conduct business as a limited partnership to be created pursuant to the Delaware Revised Uniform Limited Partnership Act, Del. Code Ann. Tit. 6, Section 17-101, as amended (the "ACT");
WHEREAS, the parties hereto desire to set forth in this Agreement all of the terms and provisions by which they will conduct their partnership;
WHEREAS, the purpose of the Partnership shall be to engage in and carry on any lawful business, purpose or activity for which limited partnerships may be formed under the Act.
NOW, THEREFORE, for good and valuable consideration, the General Partner and the Limited Partner, intending legally to be bound, agree as follows:
SECTION 1
DEFINED TERMS
The following capitalized terms shall have the meanings specified in this Section 1. Other terms are defined in the text of this Agreement; and, throughout this Agreement, those terms shall have the meanings respectively ascribed to them.
"Act" means the Delaware Revised Uniform Limited Partnership Act, 6 Del. C. Section 17-101 et seq., as amended from time to time.
"Adjusted Capital Account Deficit" means, with respect to any Interest Holder, the deficit balance, if any, in the Interest Holder's Capital Account as of the end of the relevant taxable year, after giving effect to the following adjustments:
(i) the deficit shall be decreased by the amounts which the Interest Holder is obligated to restore, if any, pursuant to Section 4.3.2, or is deemed to be obligated to restore pursuant to Treas. Reg. Section 1.704-1(b)(2)(ii)(c); and
(ii) the deficit shall be increased by the items described in Treas. Reg. Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
"Adjusted Capital Balance" means, as of any day, an Interest Holder's total Capital Contributions less all amounts actually distributed to the Interest Holder pursuant to Sections 4.3 hereof. If any Interest is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Adjusted Capital Balance of the transferor to the extent the Adjusted Capital Balance relates to the Interest transferred.
"Affiliate" means, with respect to any Partner, any Person: (i) which owns more than 5% of the voting interests in the Partner; or (ii) in which the Partner owns more than 5% of the voting interests; or (iii) in which more than 5% of the voting interests are owned by a Person who has a relationship with the Partner described in clause (i) or (ii) above.
"Agreement" means this Agreement, as amended, restated or supplemented from time to time.
"Capital Account" means the account to be maintained by the Partnership for each Interest Holder in accordance with the following provisions:
(i) an Interest Holder's Capital Account shall be credited with the Interest Holder's Capital Contributions, the amount of any Partnership liabilities assumed by the Interest Holder (or which are secured by Partnership property distributed to the Interest Holder), the Interest Holder's distributive share of Profit and any item in the nature of income or gain specially allocated to such Interest Holder pursuant to the provisions of Section 4 (other than Section 4.2.3.); and
(ii) an Interest Holder's Capital Account shall be debited with the amount of money and the fair market value of any Partnership property distributed to the Interest Holder, the amount of any liabilities of such Interest Holder assumed by the Partnership (or which are secured by property contributed by the Interest Holder to the Partnership), the Interest Holder's distributive share of Loss and any item in the nature of expenses or losses specially allocated to the Interest Holder pursuant to the provisions of Section 4 (other than Section 4.2.3).
If any Interest is transferred pursuant to the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent the Capital Account is attributable to the transferred Interests. If the book value of Partnership property is adjusted pursuant to Section 4.2.3, the Capital Account of each Interest Holder shall be adjusted to reflect the aggregate adjustment in the same manner as if the Partnership had recognized gain or loss equal to the amount of such aggregate adjustment. It is intended that the Capital Accounts of all Interest Holders shall be maintained in compliance with the provisions of Treas. Reg. Section 1.704-1(b), and all provisions of this Agreement relating to the maintenance of Capital Accounts shall be interpreted and applied in a manner consistent with that Regulation.
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"Capital Contribution" means the total amount of cash and the fair market value of any other assets contributed (or deemed contributed under Treas. Reg. Section 1.704-1(b)(2)(iv)(d)) to the Partnership by a Partner, net of liabilities assumed or to which the assets are subject.
"Cash Flow" for a given period (or portion thereof) means all gross revenues or receipts for such period (or portion thereof), from any source whatsoever of the Partnership (determined on a cash basis), including distributions from any escrow account, less Permitted Expenses for such period (or portion thereof).
"Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership and any and all amendments thereto and restatements thereof filed on behalf of the Partnership with the Office of the Secretary of State of the State of Delaware pursuant to the Act.
"Code" means the Internal Revenue Code of 1986, or any corresponding provision of any succeeding law.
"General Partner" has the meaning set forth in the introduction to this Agreement.
"Interest" means an Interest Holder's limited partnership interest in the Partnership in accordance with the provisions of this Agreement and the Act.
"Interest Holder" means any Person who holds an Interest, whether as a Partner or an unadmitted assignee of a Partner.
"Involuntary Withdrawal" means, with respect to any Partner, the occurrence of any of the following events:
(i) the Partner makes an assignment for the benefit of creditors;
(ii) the Partner files a voluntary petition of bankruptcy;
(iii) the Partner is adjudged bankrupt or insolvent or there is entered against the Partner an order for relief in any bankruptcy or insolvency proceeding;
(iv) the Partner files a petition or answer seeking for the Partner any reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law, or regulation;
(v) the Partner seeks, consents to, or acquiesces in the appointment of a trustee for, receiver for, or liquidation of the Partner or of all or any substantial part of the Partner's properties;
(vi) 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 described in Subsections (i) through (v) above;
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(vii) any proceeding against the Partner seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution, or similar relief under any statute, law or regulation, continues for one hundred twenty (120) days after the commencement thereof, or the appointment of a trustee, receiver, or liquidator for the Partner or all or any substantial part of the Partner's properties without the Partner's agreement or acquiescence, which appointment is not vacated or stayed for one hundred twenty (120) days or, if the appointment is stayed, for one hundred twenty (120) days after the expiration of the stay during which period the appointment is not vacated;
(viii) if the Partner is an individual, the Partner's death or adjudication by a court of competent jurisdiction as incompetent to manage the Partner's person or property;
(ix) if the Partner is acting as a Partner by virtue of being a trustee of a trust, the termination of the trust;
(x) if the Partner is a partnership or a limited liability company, the dissolution and commencement of winding up of the partnership or limited liability company;
(xi) if the Partner is a corporation, the dissolution of the corporation or the revocation of its charter; or
(xii) if the Partner is an estate, the distribution by the fiduciary of the estate's entire interest in the Partnership.
"Lender" means Morgan Stanley Bank, and its successors and/or assigns under the Loan.
"Limited Partner" means each Person signing this Agreement as of the date hereof as a limited partner and includes any Person who subsequently is admitted as an additional or substitute limited partner of the Partnership pursuant to the provisions of this Agreement.
"Loan" means the loan evidenced by the Note and extended by Lender to the Partnership as part of the purchase price for the Property.
"Negative Capital Account" Account with a balance of less than zero.
"Nonrecourse Deductions" has the meaning set forth in Treas. Reg. Section 1.704-2(b)(1). The amount of Nonrecourse Deductions for a taxable year of the Partnership equals the net increase, if any, in the amount of Minimum Gain during that taxable year, determined according to the provisions of Treas. Reg. Section 1.704-2(c).
"Nonrecourse Liability" has the meaning set forth in Treas. Reg. Section 1.704-2(b)(3).
"Note" means the promissory note executed by the Partnership in favor of Lender for extension of the Loan.
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"Ordinary Course of Business" means any transaction which is undertaken to further the purposes for which the Partnership has been organized as set forth in Section 2.3.
"Partner Nonrecourse Debt" has the meaning set forth in Treas. Reg. Section 1.704-2(b)(4) for partnership nonrecourse debt.
"Partner Nonrecourse Debt 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 Treas. Reg. Section 1.704-2(i)(3).
"Partner Nonrecourse Deductions" has the meaning set forth in Treas. Reg. Sections 1.704-2(i)(1) and 1.704-2(i)(2.
"Partners" (and, individually, a "Partner") shall mean the General Partner and the Limited Partners.
"Partnership" means LABRADOR (AZ) LP, the limited partnership formed in accordance with this Agreement and the Act.
"Partnership Minimum Gain" has the meaning set forth in Treas. Reg. Sections 1.704-2(b)(2) and 1.704-2(d) for partnership minimum gain.
"Partnership Rights" means all of the rights of a Limited Partner in the Partnership, including a Limited Partner's (i) Interest; (ii) right to inspect the Partnership's books and records; (iii) right to vote on matters coming before the Limited Partners; and (iv) only if this Agreement so provides act as an agent of the Partnership.
"Percentage" means, as to a Partner, the percentage set forth after the Partner's name on Exhibit A, as amended from time to time, and as to an Interest Holder who is not a Partner, the Percentage of the Limited Partner whose Interest is held by such Interest Holder, to the extent the Interest Holder has succeeded to that Limited Partner's Interest.
"Permitted Expenses" means all costs (capital, operating, and otherwise) of the Partnership during any period or portion thereof, determined on the basis of sound cash basis accounting practices applied on a consistent basis (including, but not limited to, principal and interest payments on Partnership debt and amounts spent on improving property owned or leased by the Partnership and reasonable reserves as determined by the General Partner, in its sole discretion, but specifically excluding depreciation, amortization and any other non-cash deductions of the Partnership for income tax purposes.
"Permitted Transferee" means (i) any Limited Partner, (ii) any Wholly-Owned Subsidiary of a Limited Partner, (iii) any Person to which a Limited Partner transfers all or substantially all of its assets, and (v) any Person that is managed by a Limited Partner or any of its affiliates.
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"Person" means any individual, corporation, partnership, association, limited liability company, trust, estate or other entity.
"Positive Capital Account" means a Capital Account with a balance greater than zero.
"Profit" and "Loss" means, for each taxable year of the Partnership (or other period for which Profit or Loss must be computed), the Partnership's taxable income or loss determined in accordance with Code Section 703(a), with the following adjustments:
(i) all items of income, gain, loss, deduction, or credit required to be stated separately pursuant to Code Section 703(a)(1) shall be included in computing taxable income or loss; and
(ii) any tax-exempt income of the Partnership, not otherwise taken into account in computing Profit or Loss, shall be included in computing taxable income or loss; and
(iii) any expenditures of the Partnership described in Code Section 705(a)(2)(b) (or treated as such pursuant to Treas. Reg. Section 1.704-1(b)(2)(iv)(i)) and not otherwise taken into account in computing Profit or Loss, shall be subtracted from taxable income or loss; and
(iv) gain or loss resulting from any taxable disposition of Partnership property shall be computed by reference to the adjusted book value of the property disposed of, notwithstanding the fact that the adjusted book value differs from the adjusted basis of such property for federal income tax purposes; and
(v) in lieu of the depreciation, amortization or cost recovery deductions allowable in computing taxable income or loss, there shall be taken into account the depreciation computed based upon the adjusted book value of the asset; and
(vi) notwithstanding any other provision of this definition, any items which are specially allocated pursuant to Section 4.2. hereof shall not be taken into account in computing Profit or Loss.
"Property" means property located at 7650 W. Latham Street, Phoenix, Arizona.
"Regulation" means the income tax regulations, including any temporary regulations, from time to time promulgated under the Code.
"Security" shall have the same meaning as in Section 2(1) of the Securities Act of 1933, as amended.
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"Transfer" means, when used as a noun, any voluntary sale, hypothecation, pledge, assignment, attachment or other transfer, and, when used as a verb, means voluntarily to sell, hypothecate, pledge, assign or otherwise transfer.
"Voluntary Withdrawal" means a Partner's disassociation with the Partnership by means other than by a Transfer or an Involuntary Withdrawal.
"Voting Stock" means Securities of any class or classes, the holders of which are ordinarily, in the absence of contingencies, entitled to elect the corporate directors (or Persons performing similar functions).
"Wholly-Owned Subsidiary" means, as to any particular parent corporation, any entity of which all of the Voting Stock shall be beneficially owned, directly or indirectly, by such parent corporation.
SECTION 2
FORMATION AND NAME; OFFICE; PURPOSE; TERM
2.1. Formation. The Partners hereby agree that the Partnership shall be conducted as a limited tpartnership pursuant to the provisions of the Act. The General Partner shall be the sole general partner and the Limited Partners shall initially be the sole limited partners.
2.2. Name of the Partnership. The name of the Partnership shall be "LABRADOR (AZ) LP." The artnership shall do business only under that name.
2.3. Purpose. The Partnership is formed for the express and sole purpose of acquiring, owning, anaging and disposing of the Property.
2.4. Term. The Partnership shall continue for 50 years unless earlier terminated or dissolved pursuant to applicable law or to any other provision of this Agreement.
2.5. Registered Office. The registered office of the Partnership required by the Act to be maintained in the State of Delaware shall be located at c/o Corporation Service Company, whose post office address is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, or such other office (which need not be a place of business of the Partnership) as the General Partner may designate from time to time.
2.6. Registered Agent. The registered agent of the Partnership in the State of Delaware shall be Corporation Service Company, whose post office address is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, or such other Person or Persons within the State of Delaware as the General Partner may designate from time to time.
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2.7. Principal Office. The principal office of the Partnership shall be located at c/o W. P. Carey & Co. LLC, 50 Rockefeller Plaza, Second Floor, New York, New York 10020, or at any other place which the General Partner may designate from time to time.
2.8. Partners. The name, present mailing address, taxpayer identification number, and Percentage of each Partner are set forth on Exhibit A. Upon execution of this Agreement, the Persons listed on Exhibit A shall be deemed admitted as Partners (General or Limited as so designated) of the Partnership. Scott A. Stanley, as an authorized person within the meaning of the Act, has executed, delivered and filed the Certificate of Limited Partnership with the office of the Secretary of State of the State of Delaware.
2.9. Fiscal Year. The fiscal year of the Partnership shall end on the last day of December in each year.
2.10. Amendment Permitted. The Certificate of Limited Partnership of the Partnership and this Agreement may be amended with the consent of the General Partner and all Limited Partners, subject to the provision of Section 5.4.2.
SECTION 3
PARTNERS; CAPITAL; CAPITAL ACCOUNTS
3.1. Partners. The only Partners of the Partnership shall be the Gen ...