FORM OF AGREEMENT OF LIMITED PARTNERSHIP OF LEGACY HEALTHCARE PROPERTIES, LP (a Delaware limited partnership)
Exhibit 10.1
FORM OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEGACY HEALTHCARE PROPERTIES, LP
(a Delaware limited partnership)
(a Delaware limited partnership)
TABLE OF CONTENTS
ARTICLE I | DEFINED TERMS | 1 | ||||||
ARTICLE II | FORMATION OF PARTNERSHIP | 10 | ||||||
2.01 | Formation of the Partnership | 10 | ||||||
2.02 | Name | 11 | ||||||
2.03 | Registered Office and Agent; Principal Office | 11 | ||||||
2.04 | Term and Dissolution | 11 | ||||||
2.05 | Filing of Certificate and Perfection of Limited Partnership | 12 | ||||||
2.06 | Certificates Describing Partnership Units | 12 | ||||||
ARTICLE III | BUSINESS OF THE PARTNERSHIP | 12 | ||||||
ARTICLE IV | CAPITAL CONTRIBUTIONS AND ACCOUNTS | 13 | ||||||
4.01 | Capital Contributions | 13 | ||||||
4.02 | Additional Capital Contributions and Issuances of Additional Partnership Units | 13 | ||||||
4.03 | Additional Funding | 16 | ||||||
4.04 | LTIP Units | 16 | ||||||
4.05 | Conversion of LTIP Units | 19 | ||||||
4.06 | Capital Accounts | 22 | ||||||
4.07 | Percentage Interests | 23 | ||||||
4.08 | No Interest on Contributions | 23 | ||||||
4.09 | Return of Capital Contributions | 23 | ||||||
4.10 | No Third-Party Beneficiary | 23 | ||||||
ARTICLE V | PROFITS AND LOSSES; DISTRIBUTIONS | 24 | ||||||
5.01 | Allocation of Profit and Loss | 24 | ||||||
5.02 | Distribution of Cash | 26 | ||||||
i |
5.03 | REIT Distribution Requirements | 27 | ||||||
5.04 | No Right to Distributions in Kind | 27 | ||||||
5.05 | Limitations on Return of Capital Contributions | 27 | ||||||
5.06 | Distributions Upon Liquidation | 27 | ||||||
5.07 | Substantial Economic Effect | 28 | ||||||
ARTICLE VI | RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER | 28 | ||||||
6.01 | Management of the Partnership | 28 | ||||||
6.02 | Delegation of Authority | 31 | ||||||
6.03 | Indemnification and Exculpation of Indemnitees | 31 | ||||||
6.04 | Liability of the General Partner | 32 | ||||||
6.05 | Partnership Obligations | 33 | ||||||
6.06 | Outside Activities | 34 | ||||||
6.07 | Employment or Retention of Affiliates | 34 | ||||||
6.08 | General Partner Activities | 34 | ||||||
6.09 | Title to Partnership Assets | 35 | ||||||
ARTICLE VII | CHANGES IN GENERAL PARTNER | 35 | ||||||
7.01 | Transfer of the General Partner’s Partnership Interest | 35 | ||||||
7.02 | Admission of a Substitute or Additional General Partner | 37 | ||||||
7.03 | Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner | 37 | ||||||
7.04 | Removal of General Partner | 38 | ||||||
ARTICLE VIII | RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS | 39 | ||||||
8.01 | Management of the Partnership | 39 | ||||||
8.02 | Power of Attorney | 39 | ||||||
8.03 | Limitation on Liability of Limited Partners | 39 | ||||||
8.04 | Common Unit Redemption Right | 40 | ||||||
ii |
8.05 | Registration | 42 | ||||||
ARTICLE IX | TRANSFERS OF PARTNERSHIP INTERESTS | 47 | ||||||
9.01 | Purchase for Investment | 47 | ||||||
9.02 | Restrictions on Transfer of Partnership Units | 47 | ||||||
9.03 | Admission of Substitute Limited Partner | 48 | ||||||
9.04 | Rights of Assignees of Partnership Units | 50 | ||||||
9.05 | Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner | 50 | ||||||
9.06 | Joint Ownership of Partnership Units | 50 | ||||||
ARTICLE X | BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS | 51 | ||||||
10.01 | Books and Records | 51 | ||||||
10.02 | Custody of Partnership Funds; Bank Accounts | 51 | ||||||
10.03 | Fiscal and Taxable Year | 51 | ||||||
10.04 | Annual Tax Information and Report | 51 | ||||||
10.05 | Tax Matters Partner; Tax Elections; Special Basis Adjustments | 51 | ||||||
10.06 | Reports to Limited Partners | 52 | ||||||
ARTICLE XI | AMENDMENT OF AGREEMENT; MERGER | 53 | ||||||
11.01 | Amendment of Agreement | 53 | ||||||
11.02 | Merger of Partnership | 53 | ||||||
ARTICLE XII | GENERAL PROVISIONS | 53 | ||||||
12.01 | Notices | 53 | ||||||
12.02 | Survival of Rights | 54 | ||||||
12.03 | Additional Documents | 54 | ||||||
12.04 | Severability | 54 | ||||||
12.05 | Entire Agreement | 54 | ||||||
12.06 | Pronouns and Plurals | 54 | ||||||
iii |
12.07 | Headings | 54 | ||||||
12.08 | Counterparts | 54 | ||||||
12.09 | Governing Law | 54 |
EXHIBITS
EXHIBIT A —
|
Partners, Capital Contributions and Percentage Interests | |
EXHIBIT B —
|
Notice of Exercise of Common Unit Redemption Right | |
EXHIBIT C-1 —
|
Certification of Non-Foreign Status (For Redeeming Limited Partners That Are Entities) | |
EXHIBIT C-2 —
|
Certification of Non-Foreign Status (For Redeeming Limited Partners That Are Individuals) | |
EXHIBIT D —
|
Notice of Election by Partner to Convert LTIP Units into Common Units | |
EXHIBIT E —
|
Notice of Election by Partnership to Force Conversion of LTIP Units into Common Units |
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EXHIBIT
10.1
FORM
OF
AGREEMENT OF LIMITED PARTNERSHIP
OF
LEGACY HEALTHCARE PROPERTIES, LP
RECITALS
Legacy Healthcare Properties, LP (together with any successor entity, the “Partnership”) was
formed as a limited partnership under the laws of the State of Delaware, pursuant to a Certificate
of Limited Partnership filed with the Secretary of State of the State of Delaware effective as of
April 16, 2010, and this Agreement of Limited Partnership,
entered into this ___day of _______________, 2010, by and between Legacy Healthcare Properties Trust Inc., a Maryland
corporation (together with its successors and assigns, the “General Partner”) and the Limited
Partners set forth on Exhibit A hereto. Capitalized terms used herein but not otherwise
defined have the meanings given to such terms in Article I below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants between the parties
hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the meanings specified below:
“Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from
time to time.
“Additional Funds” has the meaning set forth in Section 4.03 hereof.
“Additional Securities” means any: (1) shares of capital stock of the General Partner now or
hereafter authorized or reclassified that has dividend rights, or rights upon liquidation, winding
up and dissolution, that are superior or prior to the REIT Shares (“Preferred Shares”), (2) REIT
Shares, (3) shares of capital stock of the General Partner now or hereafter authorized or
reclassified that has dividend rights, or rights upon liquidation, winding up and dissolution, that
are junior in rank to the REIT Shares (“Junior Shares”) and (4) (i) rights, options, warrants or
convertible or exchangeable securities entitling the holder to subscribe for or purchase or otherwise acquire REIT Shares,
Preferred Shares or Junior Shares, or (ii) indebtedness issued by the General Partner that
provides any of the rights described in clause (4)(i) of this definition (any such securities
referred to in clause (4)(i) or (ii) of this definition, “New Securities”).
“Adjustment Event” has the meaning set forth in Section 4.04(a)(i) hereof.
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“Administrative Expenses” means (i) all administrative and operating costs and expenses
incurred by the Partnership, (ii) administrative costs and expenses of the General Partner,
including any salaries or other payments to directors, officers or employees of the General
Partner, and any accounting and legal expenses of the General Partner, which expenses, the Partners
have agreed, are expenses of the Partnership and not the General Partner, and (iii) to the extent
not included in clauses (i) or (ii) above, REIT Expenses; provided, however, that Administrative
Expenses shall not include any administrative costs and expenses incurred by the General Partner
that are attributable to Properties or interests in a Subsidiary that are owned by the General
Partner other than through its ownership interest in the Partnership.
“Affiliate” means, (i) any Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person, (ii) any other Person that owns, beneficially,
directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of
such Person, or (iii) any officer, director, employee, partner, member, manager or trustee of such
Person or any Person controlling, controlled by or under common control with such Person (excluding
directors and persons serving in similar capacities who are not otherwise an Affiliate of such
Person). For the purposes of this definition, “control” (including the correlative meanings of the
terms “controlled by” and “under common control with”), as used with respect to any Person, shall
mean the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, through the ownership of voting securities or partnership
interests or otherwise.
“Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of
the date of contribution as agreed to by such Partner and the General Partner. The names and
addresses of the Partners, number of Partnership Units issued to each Partner, and the Agreed Value
of non-cash Capital Contributions as of the date of contribution is set forth on Exhibit A, as it may be amended or restated from time to time.
“Agreement” means this Agreement of Limited Partnership, as it may be amended, supplemented or
restated from time to time.
“Board of Directors” means the board of directors of the General Partner.
“Capital Account” has the meaning provided in Section 4.06 hereof.
“Capital Account Limitation” has the meaning set forth in Section 4.05(b) hereof.
“Capital Contribution” means the total amount of cash, cash equivalents, and the Agreed Value
of any Property or other asset contributed or agreed to be contributed, as the context requires, to
the Partnership by each Partner pursuant to the terms of the Agreement. Any reference to the
Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor
holder of the Partnership Interest of such Partner.
“Cash Amount” means an amount of cash per Common Unit equal to the Value of the REIT Shares
Amount on the date of receipt by the Partnership and the General Partner of a Notice of Redemption.
2
“Certificate” means any instrument or document that is required under the laws of the State of
Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and
sworn to by the Partners of the Partnership (either by themselves or pursuant to the
power-of-attorney granted to the General Partner in Section 8.02 hereof) and filed for recording in
the appropriate public offices within the State of Delaware or such other jurisdiction to qualify
or maintain the Partnership as a limited partnership, to effect the admission, withdrawal or
substitution of any Partner of the Partnership, or to protect the limited liability of the Limited
Partners as limited partners under the laws of the State of Delaware or such other jurisdiction.
“Change of Control” means, as to the General Partner, the occurrence of any of the following:
(i) the sale, lease or transfer, in one or a series of related transactions, of 80% or more of the
assets of the General Partner, taken as a whole, to any Person or group (within the meaning of
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision), other than
an Affiliate of the General Partner; or (ii) the acquisition by any Person or group (within the
meaning of Section 13(d)(3) or Section 14(d)(2) of the Exchange Act, or any successor provision),
including any group acting for the purpose of acquiring, holding or disposing of securities (within
the meaning of Rule 13d-5(b)(1) under the Exchange Act), other than an Affiliate of the General
Partner in a single transaction or in a related series of transactions, by way of merger, share
exchange, consolidation or other business combination or purchase of beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act, or any successor provision) of more than 50% of
the total voting power of the voting capital securities of the General Partner.
“Charter”
means the charter of the General Partner filed with the State Department of Assessments and
Taxation of the State of Maryland.
“Code” means the Internal Revenue Code of 1986, as amended from time to time. Reference to
any particular provision of the Code means that provision in the Code on the date of this Agreement
and any successor provision to such provision.
“Common Partnership Unit Distribution” has the meaning set forth in Section 4.04(a)(ii)
hereof.
“Common Redemption Amount” means either the Cash Amount or the REIT Shares Amount, as selected
by the General Partner pursuant to Section 8.04(b) hereof.
“Common Unit” means a Partnership Unit which is designated as a Common Unit of the
Partnership.
“Common Unit Economic Balance” has the meaning set forth in Section 5.01(g) hereof.
“Common Unit Redemption Right” has the meaning provided in Section 8.04(a) hereof.
“Common Unit Transaction” has the meaning set forth in Section 4.05(f) hereof.
3
“Commission” means the U.S. Securities and Exchange Commission.
“Constituent Person” has the meaning set forth in Section 4.05(f) hereof.
“Conversion Date” has the meaning set forth in Section 4.05(b) hereof.
“Conversion Factor” means a factor of 1.0, as adjusted as provided in this definition and in
Section 6.08. The Conversion Factor will be adjusted in the event that the General Partner (i)
declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution
to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT
Shares or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares. In each
of such events, the Conversion Factor shall be adjusted by multiplying the Conversion Factor by a
fraction, the numerator of which shall be the number of REIT Shares issued and outstanding on the
record date for such dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date. In addition, in the event that an entity other
than an Affiliate of the General Partner shall become General Partner pursuant to any merger,
consolidation or combination of the General Partner with or into another entity (the “Successor
Entity”), the Conversion Factor shall be adjusted by multiplying the Conversion Factor by the
number of shares of the Successor Entity into which one REIT Share is converted pursuant to such
merger, consolidation or combination, determined as of the date of such merger, consolidation or
combination. Any adjustment to the Conversion Factor shall become effective immediately after the
effective date of such event retroactive to the record date, if any, for such event. If, however,
the General Partner receives a Notice of Redemption after the record date, if any, but prior to the
effective date of such event, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Redemption immediately prior to the record date for such event.
“Conversion Notice” has the meaning set forth in Section 4.05(b).
“Conversion Right” has the meaning set forth in Section 4.05(a).
“Defaulting Limited Partner” means a Limited Partner that has failed to pay any amount owed to
the Partnership under a Partnership Loan within 15 days after demand for payment thereof is made by
the Partnership.
“Distributable Amount” has the meaning set forth in Section 5.02(d).
“Economic Capital Account Balances” has the meaning set forth in Section 5.01(g).
“Equity Incentive Plan” means any equity incentive or compensation plan adopted by the
Partnership or the General Partner, including, without limitation, the General Partner’s 2010
Equity Incentive Plan.
“Event of Bankruptcy” as to any Person means (i) the filing of a petition for relief as to
such Person as debtor or bankrupt under the Bankruptcy Code of 1978, as amended, or similar
provision of law of any jurisdiction (except if such petition is contested by such Person and has
4
been dismissed within 90 days); (ii) the insolvency or bankruptcy of such Person as finally
determined by a court proceeding; (iii) the filing by such Person of a petition or application to
accomplish the same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; or (iv) the commencement of any proceedings relating to such Person
as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in effect, either by
such Person or by another, provided that if such proceeding is commenced by
another, such Person indicates approval of, consents to or acquiesces in such proceeding, or, if
such proceeding is contested by such Person, such proceeding has not been finally dismissed within
90 days.
“Excepted Holder Limit” has the meaning set forth in the Charter.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Forced Conversion” has the meaning set forth in Section 4.05(c).
“Forced Conversion Notice” has the meaning set forth in Section 4.05(c).
“General Partner” has the meaning set forth in the Recitals.
“General Partner Loan” means a loan extended by the General Partner to a Defaulting Limited
Partner in the form of a payment on a Partnership Loan by the General Partner to the Partnership on
behalf of the Defaulting Limited Partner.
“General Partnership Interest” means the Partnership Interest held by the General Partner in
its capacity as the general partner of the Partnership, which Partnership Interest is an interest
as a general partner under the Act. The General Partnership Interest will be a number of Common
Units held by the General Partner equal to one percent (1.0%) of all outstanding Partnership Units.
All other Partnership Units owned by the General Partner and any Partnership Units owned by any
Affiliate or Subsidiary of the General Partner shall be considered to constitute a Limited
Partnership Interest.
“Indemnified Party” has the meaning set forth in Section 8.05(f).
“Indemnifying Party” has the meaning set forth in Section 8.05(f).
“Indemnitee” means (i) any Person made a party to a proceeding by reason of its status as (A)
the General Partner or (B) a director of the General Partner or an officer or employee of the
Partnership or the General Partner, and (ii) such other Persons (including Affiliates of the
General Partner or the Partnership) as the General Partner may designate from time to time (whether
before or after the event giving rise to potential liability), in its sole and absolute discretion.
“Independent Director” means a director of the General Partner who meets the NYSE requirements
for an independent director as set forth from time to time.
“Junior Shares” has the meaning specified in the definition of “Additional Securities.”
5
“Limited Partner” means any Person named as a Limited Partner on Exhibit A attached
hereto, as it may be amended or restated from time to time, and any Person who becomes a Substitute
Limited Partner or any additional Limited Partner, in such Person’s capacity as a Limited Partner
in the Partnership.
“Limited Partnership Interest” means a Partnership Interest held by a Limited Partner at any
particular time representing a fractional part of the Partnership Interest of all Limited Partners,
and includes any and all benefits to which the holder of such a Limited Partnership Interest may be
entitled as provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and of the Act. Limited
Partnership Interests may be expressed as a number of Common Units, LTIP Units or other Partnership
Units.
“Liquidating Gains” has the meaning set forth in Section 5.01(g).
“LTIP Unit” means a Partnership Unit which is designated as an LTIP Unit and which has the
rights, preferences and other privileges designated in Section 4.04 and elsewhere in this Agreement
with respect to holders of LTIP Units. The allocation of LTIP Units among the Partners will be set
forth on Exhibit A, as it may be amended or restated from time to time.
“LTIP Unitholder” means a Partner that holds LTIP Units.
“Loss” has the meaning provided in Section 5.01(h).
“Majority in Interest” means the Limited Partners holding more than fifty percent (50%) of the
Percentage Interests of the Limited Partners.
“New Securities” has the meaning specified in the definition of “Additional Securities.”
“Notice of Redemption” means the Notice of Exercise of Common Unit Redemption Right
substantially in the form attached as Exhibit B.
“NYSE” means the New York Stock Exchange.
“Offer” has the meaning set forth in Section 7.01(c).
“Offering” means the underwritten initial public offering of REIT Shares by the General
Partner.
“Partner” means any General Partner or Limited Partner, and “Partners” means the General
Partner and the Limited Partners.
“Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(i)(5).
6
“Partnership” has the meaning set forth in the Recitals.
“Partnership Interest” means an ownership interest in the Partnership held by either a Limited
Partner or the General Partner, and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together with all obligations
of such Person to comply with the terms and provisions of this Agreement. A Partnership Interest
may be expressed as a number of Common Units, LTIP Units or other Partnership Units.
“Partnership Loan” means a loan from the Partnership to the Partner on the day the Partnership
pays over the excess of the Withheld Amount over the Distributable Amount to a taxing authority.
“Partnership Minimum Gain” has the meaning set forth in Regulations Section 1.704-2(d). In
accordance with Regulations Section 1.704-2(d), the amount of Partnership Minimum Gain is
determined by first computing, for each Partnership nonrecourse liability, any gain the Partnership
would realize if it disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately computed gains. A
Partner’s share of Partnership Minimum Gain shall be determined in accordance with Regulations
Section 1.704-2(g)(1).
“Partnership Record Date” means the record date established by the General Partner for the
distribution of cash pursuant to Section 5.02, which record date shall be the same as the record
date established by the General Partner for a distribution to its stockholders of some or all of
its portion of such distribution.
“Partnership Unit” means a fractional, undivided share of the Partnership Interests of all
Partners issued under this Agreement, and includes Common Units, LTIP Units and any other class or
series of Partnership Units that may be established after the date of this Agreement. The number
of Partnership Units outstanding and the Percentage Interests represented by such Partnership Units
are specified on Exhibit A, as it may be amended or restated from time to time. The
ownership of Partnership Units may be evidenced by a certificate in a form approved by the General
Partner.
“Partnership Unit Designation” has the meaning provided in Section 4.02(a)(i).
“Percentage Interest” means the percentage determined by dividing the number of Partnership
Units of a Partner by the sum of the number of Partnership Units of all Partners.
“Person” means any individual, partnership, corporation, limited liability company, joint
venture, trust or other entity.
“Preferred Shares” has the meaning specified in the definition of “Additional Securities.”
“Profit” has the meaning provided in Section 5.01(h).
7
“Property” means any property or other investment in which the Partnership, directly or
indirectly, holds an ownership interest.
“Redeeming Limited Partner” has the meaning provided in Section 8.04(a).
“Redemption Shares” has the meaning set forth in Section 8.05(a).
“Regulations” means the Federal Income Tax Regulations issued under the Code, as amended and
as subsequently amended from time to time. Reference to any particular provision of the
Regulations shall mean that provision of the Regulations on the date of this Agreement and any
successor provision of the Regulations.
“REIT” means a real estate investment trust under Sections 856 through 860 of the Code.
“REIT Expenses” means (i) costs and expenses relating to the formation and continuity of
existence and operation of the General Partner and any of its Subsidiaries (which Subsidiaries
shall, for purposes hereof, be included within the definition of the General Partner), including
taxes, fees and assessments associated therewith, any and all costs, expenses or fees payable to
any director, officer or employee of the General Partner, (ii) costs and expenses relating to any
public offering and registration, or private offering, of securities by the General Partner, and
all statements, reports, fees and expenses incidental thereto, including, without limitation,
underwriting discounts and selling commissions applicable to any such offering of securities, and
any costs and expenses associated with any claims made by any holders of such securities or any
underwriters or placement agents thereof, (iii) costs and expenses associated with any repurchase
of any securities by the General Partner, (iv) costs and expenses associated with the preparation
and filing of any periodic or other reports and communications by the General Partner under
federal, state or local laws or regulations, including filings with the Commission, (v) costs and
expenses associated with compliance by the General Partner with laws, rules and regulations
promulgated by any regulatory body, including the Commission and any securities exchange, (vi)
costs and expenses associated with any 401(k) plan, incentive plan, bonus plan or other plan
providing for compensation for the employees of the General Partner, (vii) costs and expenses
incurred by the General Partner relating to any issuing or redemption of Partnership Interests and
(viii) all other operating or administrative costs of the General Partner incurred in the ordinary
course of its business on behalf of or in connection with the Partnership.
“REIT Share” means one share of common stock, par value $0.01 per share, of the General
Partner (or Successor Entity, as the case may be).
“REIT Shares Amount” means the number of REIT Shares equal to the product of (X) the number of
Common Units offered for redemption by a Redeeming Limited Partner, multiplied by (Y) the
Conversion Factor as adjusted to and including the Specified Redemption Date. In the event the
General Partner issues to all holders of REIT Shares rights, options, warrants or convertible or
exchangeable securities entitling the holders of REIT Shares to
subscribe for or purchase or otherwise acquire additional REIT Shares, or any other securities or property (collectively, the “Rights”), and such
Rights have not expired at the Specified Redemption Date, then the REIT Shares Amount shall also
include such Rights issuable to a holder of the REIT
8
Shares Amount on the record date fixed for purposes of determining the holders of REIT Shares
entitled to Rights.
“Restriction Notice” has the meaning set forth in Section 8.04(f).
“Rights” has the meaning specified in the definition of “REIT Shares Amount.”
“Rule 144” has the meaning set forth in Section 8.05(c).
“S-3 Eligible Date” has the meaning set forth in Section 8.05(a).
“Safe Harbor Election” has the meaning set forth in Section 10.05(d).
“Safe Harbor Interest” has the meaning set forth in Section 10.05(d).
“Secondary Market Safe Harbors” has the meaning set forth in Section 9.02(f).
“Securities Act” means the Securities Act of 1933, as amended.
“Service” means the Internal Revenue Service.
“Stock Ownership Limit” has the meaning set forth in the Charter.
“Specified Redemption Date” means the first business day of the month that is at least 60
calendar days after the receipt by the General Partner of a Notice of Redemption.
“Subsidiary” means, with respect to any Person, any corporation or other entity of which a
majority of (i) the voting power of the voting equity securities is held, or (ii) the outstanding
equity interests is owned, in each case, directly or indirectly, by such Person.
“Subsidiary Partnership” means any partnership or limited liability company in which the
General Partner, the Partnership, or a wholly-owned subsidiary of the General Partner or the
Partnership owns a partnership or limited liability company interest.
“Substitute Limited Partner” means any Person admitted to the Partnership as a Limited Partner
pursuant to Section 9.03.
“Successor Entity” has the meaning specified in the definition of “Conversion Factor.”
“Survivor” has the meaning set forth in Section 7.01(d).
“Tax Matters Partner” has the meaning set forth within Section 6231(a)(7) of the Code.
“Trading Day” means a day on which the principal national securities exchange on which a
security is listed or admitted to trading is open for the transaction of business or, if a security
is not listed or admitted to trading on any national securities exchange, shall mean any day other
than a Saturday, a Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
9
“Transaction” has the meaning set forth in Section 7.01(c).
“Transfer” has the meaning set forth in Section 9.02(a).
“TRS” means a taxable REIT subsidiary (as defined in Section 856(l) of the Code) of the
General Partner.
“Unvested LTIP Units” has the meaning set forth in Section 4.04(c).
“Value” means, with respect to any security, the average of the daily market price of such
security for the ten consecutive Trading Days immediately preceding the date of such valuation.
The market price for each such Trading Day shall be: (i) if the security is listed or admitted to
trading on the NYSE or any other national securities exchange, the last reported sale price,
regular way, on such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day, (ii) if the security is not listed or admitted to
trading on the NYSE or any other national securities exchange, the last reported sale price on such
day or, if no sale takes place on such day, the average of the closing bid and asked prices on such
day, as reported by a reliable quotation source designated by the General Partner, or (iii) if the
security is not listed or admitted to trading on the NYSE or any other national securities exchange
and no such last reported sale price or closing bid and asked prices are available, the average of
the reported high bid and low asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or if there shall be no bid and asked prices on such day, the
average of the high bid and low asked prices, as so reported, on the most recent day (not more than
ten days prior to the date in question) for which prices have been so reported. If there are no
bid and asked prices reported during the ten days prior to the date in question, the General
Partner, acting in good faith, shall determine the value of such security on the basis of such
quotations and other information as it considers, in its reasonable judgment, appropriate. In the
event the security includes any additional rights (including any Rights), then the General Partner
shall determine the value of such rights acting in good faith on the basis of such quotations and
other information as it considers, in its reasonable judgment, appropriate.
“Vested LTIP Units” has the meaning set forth in Section 4.04(c).
“Vesting Agreement” means each or any, as the context implies, agreement or instrument entered
into by an LTIP Unitholder upon acceptance of an award of LTIP Units under an Equity Incentive
Plan.
“Withheld Amount” means any amount required to be withheld by the Partnership to pay over to
any taxing authority as a result of any allocation or distribution of income to a Partner.
ARTICLE II
FORMATION OF PARTNERSHIP
2.01 Formation of the Partnership. The Partnership was formed as a limited
partnership pursuant to the provisions of the Act and upon the terms and conditions set forth in
this Agreement. Except as expressly provided in this Agreement to the contrary, the rights and
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obligations of the Partners and 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.
2.02 Name. The Name of the Partnership is “Legacy Healthcare Properties, LP” and 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,” “LP,” “L.P.” or “Ltd.” or similar words or letters shall be included in the
Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may change the name of
the Partnership at any time and from time to time and, in such event, shall notify the Partners of
such change in the next regular communication to the Partners.
2.03 Registered Office and Agent; Principal Office. The address of the registered
office of the Partnership in the State of Delaware is located at 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxxx 00000, and the registered agent for service of process on the Partnership in
the State of Delaware at such registered office is Corporation Service Company, a Delaware
corporation. The principal office of the Partnership is located at 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx
Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxx 00000 or such other place as the General Partner may from time
to time designate by notice to the Limited Partners. The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General Partner deems
necessary or desirable.
2.04 Term and Dissolution.
(a) The term of the Partnership shall continue in full force and effect until dissolved upon
the first to occur of any of the following events:
(i) the occurrence of an Event of Bankruptcy as to a General Partner or the
dissolution, death, removal or withdrawal of a General Partner unless the business of the
Partnership is continued pursuant to Section 7.03(b); provided that if a General Partner is
on the date of such occurrence a partnership, the dissolution of such General Partner as a
result of the dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in
such partnership shall not be an event of dissolution of the Partnership if the business of
such General Partner is continued by the remaining partner or partners, either alone or with
additional partners, and such General Partner and such partners comply with any other
applicable requirements of this Agreement;
(ii) 90 days after the sale or other disposition of all or substantially all of the
assets of the Partnership (unless the Partnership receives installment obligations as
consideration for such sale or other disposition, in which event the Partnership shall
continue, unless sooner dissolved under the provisions of this Agreement, until such time as
such installment obligations are paid in full);
(iii) the redemption of all Limited Partnership Interests (other than any such Limited
Partnership Interests held by the General Partner), unless the General
11
Partner determines to continue the term of the Partnership by the admission of one or
more additional Limited Partners; or
(iv) the election by the General Partner that the Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business of the Partnership is continued
pursuant to Section 7.03(b)), the General Partner (or its trustee, receiver, successor or legal
representative) shall amend or cancel the Certificate and liquidate the Partnership’s assets and
apply and distribute the proceeds thereof in accordance with Section 5.06. Notwithstanding the
foregoing, the liquidating General Partner may either (i) defer liquidation of, or withhold from
distribution for a reasonable time, any assets of the Partnership (including those necessary to
satisfy the Partnership’s debts and obligations), or (ii) distribute the assets to the Partners in
kind.
2.05 Filing of Certificate and Perfection of Limited Partnership. The General Partner
shall execute, acknowledge, record and file at the expense of the Partnership the Certificate and
any and all amendments to the Certificate and all requisite fictitious name statements and notices
in such places and jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state or other
jurisdiction in which the Partnership conducts business.
2.06 Certificates Describing Partnership Units. At the request of a Limited Partner,
the General Partner, at its option, may issue a certificate summarizing the terms of such Limited
Partner’s interest in the Partnership, including the class or series and number of Partnership
Units owned and the Percentage Interest represented by such Partnership Units as of the date of
such certificate. Any such certificate (i) shall be in form and substance as determined by the
General Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the following
effect:
THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE
PROVISIONS OF THE AGREEMENT OF LIMITED PARTNERSHIP OF LEGACY HEALTHCARE PROPERTIES,
LP, AS AMENDED, SUPPLEMENTED OR RESTATED FROM TIME TO TIME, AND (B) ANY APPLICABLE
FEDERAL OR STATE SECURITIES OR BLUE SKY LAWS.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the Partnership is:
(i) to conduct any business that may be lawfully conducted by a limited partnership organized
pursuant to the Act, so long as such business shall be limited to and conducted in such a manner as
to permit the General Partner at all times to qualify as a REIT, unless the General Partner
otherwise ceases to, or the Board of Directors determines, pursuant to Section 5.7 of the Charter,
that the General Partner will no longer qualify as a REIT;
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(ii) to enter into any partnership, joint venture or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing;
and
(iii) to do anything necessary or incidental to the foregoing.
In connection with the foregoing, and without limiting the General Partner’s right in its sole and
absolute discretion to cease qualifying as a REIT, the Partners acknowledge that the General
Partner intends to elect REIT status and the avoidance of income and excise taxes on the General
Partner inures to the benefit of all the Partners and not solely to the General Partner.
Notwithstanding the foregoing, the Limited Partners agree that the General Partner may terminate or
revoke its status as a REIT under the Code at any time. The General Partner shall also be
empowered to do any and all acts and things necessary or prudent to ensure that the Partnership
will not be classified as a “publicly traded partnership” taxable as a corporation for purposes of
Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 Capital Contributions. The General Partner and each Limited Partner has made a
capital contribution to the Partnership in exchange for the Partnership Units set forth opposite
such Partner’s name on Exhibit A, as it may be amended or restated from time to time by the
General Partner to the extent necessary to reflect accurately sales, exchanges or other Transfers,
redemptions, Capital Contributions, the issuance of additional Partnership Units or similar events
having an effect on a Partner’s ownership of Partnership Units.
4.02 Additional Capital Contributions and Issuances of Additional Partnership Units.
Except as provided in this Section 4.02 or in Section 4.03 hereof, the Partners shall have no right
or obligation to make any additional Capital Contributions or loans to the Partnership. The
General Partner may contribute additional capital to the Partnership, from time to time, and
receive additional Partnership Interests, in the form of Partnership Units, in respect thereof, in
the manner contemplated in this Section 4.02.
(a) Issuances of Additional Partnership Units.
(i) General. As of the effective date of this Agreement, the Partnership shall
have two classes of Partnership Units, entitled “Common Units” and “LTIP Units.” The
General Partner is authorized to cause the Partnership to issue such additional Partnership
Interests, in the form of Partnership Units, for any Partnership purpose at any time or from
time to time to the Partners (including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established by the General
Partner in its sole and absolute discretion, all without the approval of any of the Limited
Partners. The General Partner’s determination that consideration is adequate shall be
conclusive insofar as the adequacy of consideration relates to whether the Partnership Units
are validly issued and fully paid. Any additional Partnership Units issued may be issued in
one or more classes, or one or more series of
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any of such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers and duties
senior to the then-outstanding Partnership Units held by the Limited Partners, all as shall
be determined by the General Partner in its sole and absolute discretion and without the
approval of any Limited Partner, subject to Delaware law, and set forth in a written
document thereafter attached to and made an exhibit to this Agreement (each, a
“Partnership Unit Designation”). The power and authority of the General Partner to
determine rights, powers and duties includes, without limitation, the power to determine (i)
the allocations of items of Partnership income, gain, loss, deduction and credit to each
such class or series of Partnership Units; (ii) the right of each such class or series of
Partnership Units to share in Partnership distributions; and (iii) the rights of each such
class or series of Partnership Units upon dissolution and liquidation of the Partnership.
Notwithstanding the foregoing, no additional Partnership Units shall be issued to the
General Partner (or any direct or indirect wholly-owned Subsidiary of the General Partner)
unless:
(1) (A) the additional Partnership Units are issued in connection with an
issuance of REIT Shares or other capital stock of or other interests in the General
Partner, which REIT Shares, capital stock or other interests have designations,
preferences and other rights, all such that the economic interests are substantially
similar to the designations, preferences and other rights of the additional
Partnership Units issued to the General Partner (or any direct or indirect
wholly-owned Subsidiary of the General Partner) by the Partnership in accordance
with this Section 4.02 and (B) the General Partner (or any direct or indirect
wholly-owned Subsidiary of the General Partner) shall make a Capital Contribution to
the Partnership in an amount equal to the cash consideration received by the General
Partner from the issuance of such REIT Shares, capital stock or other interests in
the General Partner;
(2) (A) the additional Partnership Units are issued in connection with an
issuance of REIT Shares or other capital stock of or other interests in the General
Partner pursuant to a taxable stock dividend declared by the General Partner, which
REIT Shares, capital stock or other interests have designations, preferences and
other rights, all such that the economic interests are substantially similar to the
designations, preferences and other rights of the additional Partnership Units
issued to the General Partner (or any direct or indirect wholly-owned Subsidiary of
the General Partner) by the Partnership in accordance with this Section 4.02, (B) if
the General Partner allows the holders of its REIT Shares to elect whether to
receive such dividend in REIT Shares or other capital stock of or other interests in
the General Partner or cash, the Partnership will give the Limited Partners
(excluding the General Partner or any direct or indirect Subsidiary of the General
Partner) the same election to elect to receive (I) Partnership Units or cash or,
(II) at the election of the General Partner, such REIT Shares, capital stock, other
interests in the General Partner or cash, and (C) if the Partnership issues
additional Partnership Units pursuant to this Section 4.02(a)(i)(2), then an amount
of income equal to the value of the
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Partnership Units received will be allocated to those holders of Common Units that elect to
receive additional Partnership Units;
(3) the additional Partnership Units are issued in exchange for property owned
by the General Partner (or any direct or indirect wholly-owned Subsidiary of the
General Partner) with a fair market value, as determined by the General Partner, in
good faith, equal to the value of the Partnership Units; or
(4) the additional Partnership Units are issued to all Partners in proportion
to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Units for less than fair market value, so long as the
General Partner concludes in good faith that such issuance is in the best interests of the
General Partner and the Partnership. Upon the issuance of any additional Partnership Units,
the General Partner shall amend Exhibit A as appropriate to reflect such issuance.
(ii) Upon Issuance of Additional Securities. The General Partner shall not
issue any Additional Securities (other than REIT Shares issued in connection with an
exchange pursuant to Section 8.04 hereof or REIT Shares or other capital stock of or other
interests in the General Partner issued in connection with a taxable stock dividend as
described in Section 4.02(a)(i)(2) hereof) other than to all holders of REIT Shares,
Preferred Shares, Junior Shares or New Securities, as the case may be, unless (A) the
General Partner shall cause the Partnership to issue to the General Partner (or any direct
or indirect wholly-owned Subsidiary of the General Partner) Partnership Units having
designations, preferences and other rights, all such that the economic interests are
substantially similar to those of the Additional Securities, and (B) the General Partner (or
any direct or indirect wholly-owned Subsidiary of the General Partner) contributes the
proceeds from the issuance of such Additional Securities and from any exercise of the rights
contained in such Additional Securities to the Partnership. Notwithstanding the foregoing,
the General Partner may issue Additional Securities in connection with an acquisition of
Property to be held directly by the General Partner, but if and only if, such direct
acquisition and issuance of Additional Securities have been approved by a majority of the
Independent Directors. Without limiting the foregoing, the General Partner is expressly
authorized to issue Additional Securities for less than fair market value, and the General
Partner is authorized to cause the Partnership to issue to the General Partner (or any
direct or indirect wholly-owned Subsidiary of the General Partner) corresponding Partnership
Units, so long as (x) the General Partner concludes in good faith that such issuance is in
the best interests of the General Partner and the Partnership and (y) the General Partner
(or any direct or indirect wholly-owned Subsidiary of the General Partner) contributes all
proceeds from such issuance to the Partnership, including without limitation, the issuance
of REIT Shares and corresponding Partnership Units pursuant to a stock purchase plan
providing for purchases of REIT Shares at a discount from fair market value or pursuant to
stock awards, including stock options that have an exercise price that is less than the fair
market value of the REIT Shares, either at the time of issuance or at the time of exercise,
and restricted or other stock awards approved by the Board of Directors. For example, in
the event the General Partner issues REIT Shares for
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a cash purchase price and the General Partner (or any direct or indirect wholly-owned
Subsidiary of the General Partner) contributes all of the proceeds of such issuance to the
Partnership as required hereunder, the General Partner (or any direct or indirect
wholly-owned Subsidiary of the General Partner) shall be issued a number of additional
Partnership Units equal to the product of (A) the number of such REIT Shares issued by the
General Partner, the proceeds of which were so contributed, multiplied by (B) a fraction,
the numerator of which is 100%, and the denominator of which is the Conversion Factor in
effect on the date of such contribution.
(b) Certain Contributions of Proceeds of Issuance of REIT Shares. In connection with
any and all issuances of REIT Shares, the General Partner (or any direct or indirect wholly-owned
Subsidiary of the General Partner) shall make Capital Contributions to the Partnership of the
proceeds therefrom, provided that if the proceeds actually received and contributed by the
General Partner (or any direct or indirect wholly-owned Subsidiary of the General Partner) are less
than the gross proceeds of such issuance as a result of any underwriter’s discount, commissions,
placement fees or other expenses paid or incurred in connection with such issuance, then the
General Partner (or any direct or indirect wholly-owned Subsidiary of the General Partner) shall be
deemed to have made a Capital Contribution to the Partnership in the amount equal to the sum of the
net proceeds of such issuance plus the amount of such underwriter’s discount, commissions,
placement fees or other expenses paid by the General Partner, and the Partnership shall be deemed
simultaneously to have reimbursed such discount, commissions, placement fees and expenses as an
Administrative Expense for the benefit of the Partnership for purposes of Section 6.05(b).
(c) Repurchases of General Partner Securities. If the General Partner shall
repurchase shares of any class or series of its capital stock, the purchase price thereof and all
costs incurred in connection with such repurchase shall be reimbursed to the General Partner by the
Partnership pursuant to Section 6.05 hereof and the General Partner shall cause the Partnership to
redeem an equivalent number of Partnership Units of the appropriate class or series held by the
General Partner, or by the General Partner in its capacity as a Limited Partner (which, in the case
of REIT Shares, shall be a number equal to the quotient of the number of such REIT Shares divided
by the Conversion Factor).
4.03
Additional Funding. If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds (“Additional Funds”) for
any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds
from outside borrowings, or (ii) elect to have the General Partner or any of its Affiliates provide
such Additional Funds to the Partnership through loans or otherwise.
4.04 LTIP Units.
(a) Issuance of LTIP Units. The General Partner may from time to time issue LTIP
Units to Persons who provide services to the Partnership or the General Partner, for such
consideration as the General Partner may determine to be appropriate, and admit such Persons as
Limited Partners. Subject to the following provisions of this Section 4.04 and the special
provisions of Sections 4.05 and 5.01(g) hereof, LTIP Units shall be treated as Common Units, with
all of the rights, privileges and obligations attendant thereto. For purposes of computing the
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Partners’ Percentage Interests, holders of LTIP Units shall be treated as Common Unit holders
and LTIP Units shall be treated as Common Units. In particular, the Partnership shall maintain at
all times a one-to-one correspondence between LTIP Units and Common Units for conversion,
distribution and other purposes, including, without limitation, complying with the following
procedures:
(i) If an Adjustment Event (as defined below) occurs, then the General Partner shall
make a corresponding adjustment to the LTIP Units to maintain a one-for-one conversion and
economic equivalence ratio between Common Units and LTIP Units. The following shall be
“Adjustment Events”: (A) the Partnership makes a distribution on all outstanding Common
Units in Partnership Units, (B) the Partnership subdivides the outstanding Common Units into
a greater number of units or combines the outstanding Common Units into a smaller number of
units, or (C) the Partnership issues any Partnership Units in exchange for its outstanding
Common Units by way of a reclassification or recapitalization of its Common Units. If more
than one Adjustment Event occurs, the adjustment to the LTIP Units need be made only once
using a single formula that takes into account each and every Adjustment Event as if all
Adjustment Events occurred simultaneously. For the avoidance of doubt, the following shall
not be Adjustment Events: (x) the issuance of Partnership Units in a financing,
reorganization, acquisition or other similar business Common Unit Transaction, (y) the
issuance of Partnership Units pursuant to any employee benefit or compensation plan or
distribution reinvestment plan or (z) the issuance of any Partnership Units to the General
Partner in respect of a capital contribution to the Partnership of proceeds from the sale of
Additional Securities by the General Partner. If the Partnership takes an action affecting
the Common Units other than actions specifically described above as “Adjustment Events” and
in the opinion of the General Partner such action would require an adjustment to the LTIP
Units to maintain the one-to-one correspondence described above, the General Partner shall
have the right to make such adjustment to the LTIP Units, to the extent permitted by law and
by any Equity Incentive Plan, in such manner and at such time as the General Partner, in its
sole discretion, may determine to be appropriate under the circumstances. If an adjustment
is made to the LTIP Units, as provided in this Agreement, the Partnership shall promptly
file in the books and records of the Partnership an officer’s certificate setting forth such
adjustment and a brief statement of the facts requiring such adjustment, which certificate
shall be conclusive evidence of the correctness of such adjustment absent manifest error.
Promptly after filing of such certificate, the Partnership shall mail a notice to each LTIP
Unitholder setting forth the adjustment to his or her LTIP Units and the effective date of
such adjustment; and
(ii) The LTIP Unitholders shall, when, as and if authorized and declared by the General
Partner out of assets legally available for that purpose, be entitled to receive
distributions in an amount per LTIP Unit equal to the distributions per Common Unit (the
“Common Partnership Unit Distribution”), paid to holders of Common Units on such Partnership
Record Date established by the General Partner with respect to such distribution. So long
as any LTIP Units are outstanding, no distributions (whether in cash or in kind) shall be
authorized, declared or paid on Common Units, unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP Units.
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(b) Priority. Subject to the provisions of this Section 4.04 and the special
provisions of Sections 4.05 and 5.01(g) hereof, the LTIP Units shall rank pari passu with the
Common Units as to the payment of regular and special periodic or other distributions and
distribution of assets upon liquidation, dissolution or winding up. As to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or winding up, any
class or series of Partnership Units which by its terms specifies that it shall rank junior to, on
a parity with, or senior to the Common Units shall also rank junior to, or pari passu with, or
senior to, as the case may be, the LTIP Units. Subject to the terms of any Vesting Agreement, an
LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the same extent, and subject
to the same restrictions as holders of Common Units are entitled to transfer their Common Units
pursuant to Article IX.
(c) Special Provisions. LTIP Units shall be subject to the following special
provisions:
(i) Vesting Agreements. LTIP Units may, in the sole discretion of the General
Partner, be issued subject to vesting, forfeiture and additional restrictions on transfer
pursuant to the terms of a Vesting Agreement. The terms of any Vesting Agreement may be
modified by the General Partner from time to time in its sole discretion, subject to any
restrictions on amendment imposed by the relevant Vesting Agreement or by the Equity
Incentive Plan, if applicable. LTIP Units that have vested under the terms of a Vesting
Agreement are referred to as “Vested LTIP Units.” All other LTIP Units shall be treated as
“Unvested LTIP Units.”
(ii) Forfeiture. Unless otherwise specified in the Vesting Agreement, upon the
occurrence of any event specified in a Vesting Agreement as resulting in either the right of
the Partnership or the General Partner to repurchase LTIP Units at a specified purchase
price or some other forfeiture of any LTIP Units, then if the Partnership or the General
Partner exercises such right to repurchase or forfeiture in accordance with the applicable
Vesting Agreement, the relevant LTIP Units shall immediately, and without any further
action, be treated as cancelled and no longer outstanding for any purpose. Unless otherwise
specified in the Vesting Agreement, no consideration or other payment shall be due with
respect to any LTIP Units that have been forfeited, other than any distributions declared
with respect to a Partnership Record Date prior to the effective date of the forfeiture. In
connection with any repurchase or forfeiture of LTIP Units, the balance of the portion of
the Capital Account of the LTIP Unitholder that is attributable to all of his or her LTIP
Units shall be reduced by the amount, if any, by which it exceeds the target balance
contemplated by Section 5.01(g) hereof, calculated with respect to the LTIP Unitholder’s
remaining LTIP Units, if any.
(iii) Allocations. LTIP Unitholders shall be entitled to receive certain
special allocations of gain under Section 5.01(g).
(iv) Redemption. The Common Unit Redemption Right provided to Limited Partners
under Section 8.04 hereof shall not apply with respect to LTIP Units unless and until such
LTIP Units are converted to Common Units as provided in clause (v) below and Section 4.05.
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(v) Conversion to Common Units. Vested LTIP Units are eligible to be converted
into Common Units in accordance with Section 4.05.
(d) Voting. LTIP Unitholders shall (a) have the same voting rights as the holders of
Common Units, with the LTIP Units voting as a single class with the Common Units and having one
vote per LTIP Unit; and (b) have the additional voting rights that are specified below. So long as
any LTIP Units remain outstanding, the Partnership shall not, without the affirmative vote of the
holders of a majority of the LTIP Units outstanding at the time, given in person or by proxy,
either in writing or at a meeting (voting separately as a class), amend, alter or repeal, whether
by merger, consolidation or otherwise, the provisions of this Agreement applicable to LTIP Units so
as to materially and adversely affect any right, privilege or voting power of the LTIP Units or the
LTIP Unitholders as such, unless such amendment, alteration, or repeal affects equally, ratably and
proportionately the rights, privileges and voting powers of the holders of Common Units; but
subject, in any event, to the following:
(i) With respect to any Common Unit Transaction (as defined in Section 4.05(f)), so
long as the LTIP Units are treated in accordance with Section 4.05(f), the consummation of
such Common Unit Transaction shall not be deemed to materially and adversely affect such
rights, preferences, privileges or voting powers of the LTIP Units or the LTIP Unitholders
as such; and
(ii) Any creation or issuance of any Partnership Units or of any class or series of
Partnership Interest including without limitation additional Common Units or LTIP Units,
whether ranking senior to, junior to, or on a parity with the LTIP Units with respect to
distributions and the distribution of assets upon liquidation, dissolution or winding up,
shall not be deemed to materially and adversely affect such rights, preferences, privileges
or voting powers of the LTIP Units or the LTIP Unitholders as such.
The foregoing voting provisions will not apply if, at or prior to the time when the act with
respect to which such vote would otherwise be required will be effected, all outstanding LTIP Units
shall have been converted into Common Units.
4.05 Conversion of LTIP Units.
(a) Subject to the provisions of this section, an LTIP Unitholder, at such LTIP Unitholder’s
option, at any time, may elect to convert (the “Conversion Right”) all or a portion of such LTIP
Unitholder’s Vested LTIP Units into Common Units. An LTIP Unitholder may not exercise the
Conversion Right for less than 1,000 Vested LTIP Units or, if such holder holds less than 1,000
Vested LTIP Units, all of the Vested LTIP Units held by such holder. LTIP Unitholders shall not
have the right to convert Unvested LTIP Units into Common Units until they become Vested LTIP
Units. When an LTIP Unitholder is notified of the expected occurrence of an event that will cause
such LTIP Unitholder’s Unvested LTIP Units to become Vested LTIP Units, such LTIP Unitholder may
give the Partnership a Conversion Notice conditioned upon and effective as of the time of vesting
and such Conversion Notice, unless subsequently revoked by the LTIP Unitholder, which shall be
accepted by the Partnership subject to such condition. The General Partner shall have the right at
any time to cause a conversion of
19
Vested LTIP Units into Common Units. In all cases, the conversion of any LTIP Units into
Common Units shall be subject to the conditions and procedures set forth in this Section 4.05.
(b) A holder of Vested LTIP Units may convert such LTIP Units into an equal number of duly
authorized and validly issued Common Units, giving effect to all adjustments (if any) made pursuant
to Section 4.04. Notwithstanding the foregoing, in no event may a holder of Vested LTIP Units
convert a number of Vested LTIP Units that exceeds (x) the Economic Capital Account Balance of such
Limited Partner, to the extent attributable to its ownership of LTIP Units, divided by (y) the
Common Unit Economic Balance, in each case as determined as of the effective date of conversion
(the “Capital Account Limitation”).
In order to exercise such LTIP Unitholder’s Conversion Right, an LTIP Unitholder shall deliver
a notice (a “Conversion Notice”) in the form attached as Exhibit D to the Partnership (with
a copy to the General Partner) not less than ten nor more than 60 days prior to a date (the
“Conversion Date”) specified in such Conversion Notice. If the General Partner has not given to
the LTIP Unitholders notice of a proposed or upcoming Common Unit Transaction (as defined in
Section 4.05(f)) at least 30 days prior to the effective date of such Common Unit Transaction, then
LTIP Unitholders shall have the right to deliver a Conversion Notice until the earlier of (x) the
tenth day after such notice from the General Partner of a Common Unit Transaction or (y) the third
Trading Day immediately preceding the effective date of such Common Unit Transaction. An LTIP
Unitholder shall provide the Conversion Notice in the manner provided in Section 12.01 hereof.
Each LTIP Unitholder covenants and agrees that all Vested LTIP Units to be converted pursuant to
this Section 4.05 shall be free and clear of all liens. Notwithstanding anything in this Agreement
to the contrary, a holder of LTIP Units may deliver a Notice of Redemption pursuant to Section
8.04(a) relating to those Common Units that will be issued to such holder upon conversion of such
LTIP Units into Common Units in advance of the Conversion Date. The redemption of such Common
Units by the Partnership shall in no event take place until after the Conversion Date. For
clarity, it is noted that the objective of this paragraph is to put an LTIP Unitholder in a
position where, if such LTIP Unitholder so wishes, the Common Units into which such LTIP
Unitholder’s Vested LTIP Units will be converted can be redeemed by the Partnership simultaneously
with such conversion, with the further consequence that, if the General Partner elects to assume
the Partnership’s redemption obligation with respect to such Common Units under Section 8.04(b) by
delivering to such holder REIT Shares rather than cash, then such LTIP Unitholder can have such
REIT Shares issued to such LTIP Unitholder simultaneously with the conversion of such LTIP
Unitholder’s Vested LTIP Units into Common Units. The General Partner and the LTIP Unitholder
shall reasonably cooperate to coordinate the timing of the foregoing event.
(c) The
Partnership, at any time at the election of the General Partner, may cause any number
of Vested LTIP Units held by an LTIP Unitholder to be converted (a “Forced Conversion”) into an
equal number of Common Units, giving effect to all adjustments (if any) made pursuant to Section
4.04. The Partnership may not cause a Forced Conversion of any LTIP Units, however, that would not
at the time be eligible for conversion at the option of such LTIP Unitholder pursuant to Section
4.05(b). In order to exercise its right of Forced Conversion, the Partnership shall deliver a
notice (a “Forced Conversion Notice”) in the form attached as Exhibit E to the applicable
LTIP Unitholder not less than ten nor more than 60 days prior to the
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Conversion Date specified in such Forced Conversion Notice and the Partnership shall provide a
Forced Conversion Notice in the manner provided in Section 12.01 hereof.
(d) A conversion of Vested LTIP Units for which the LTIP Unitholder has given a Conversion
Notice or the Partnership has given a Forced Conversion Notice shall occur automatically after the
close of business on the applicable Conversion Date without any action on the part of such LTIP
Unitholder. As of such time, such LTIP Unitholder shall be credited on the books and records of
the Partnership with the issuance as of the opening of business on the next day of the number of
Common Units issuable upon such conversion. After such a conversion of LTIP Units, the Partnership
shall deliver to such LTIP Unitholder, upon such LTIP Unitholder’s written request, a certificate
of the General Partner certifying the number of Common Units and remaining LTIP Units, if any, held
by such person immediately after such conversion. The Assignee of any Limited Partner pursuant to
Article IX may exercise the rights of such Limited Partner pursuant to this Section 4.05 and such
Limited Partner shall be bound by the exercise of such rights by the Assignee.
(e) For purposes of making future allocations under Section 5.01(g) and applying the Capital
Account Limitation, the portion of the Economic Capital Account Balance of the applicable LTIP
Unitholder that is treated as attributable to his or her LTIP Units shall be reduced, as of the
date of conversion, by the product of the number of LTIP Units converted and the Common Unit
Economic Balance.
(f) If the Partnership or the General Partner shall be a party to any Common Unit Transaction
(including without limitation a merger, consolidation, unit exchange, self tender offer for all or
substantially all Common Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership’s assets, but excluding any Common Unit Transaction which
constitutes an Adjustment Event) in each case as a result of which Common Units shall be exchanged
for or converted into the right, or the holders of such Units shall otherwise be entitled, to
receive cash, securities or other property or any combination thereof (each of the foregoing being
referred to herein as a “Common Unit Transaction”), then the General Partner shall, subject to the
terms of any applicable Equity Incentive Plan or Vesting Agreement, exercise, immediately prior to
the Common Unit Transaction, its right to cause a Forced Conversion with respect to the maximum
number of LTIP Units then eligible for conversion, taking into account any allocations that occur
in connection with the Common Unit Transaction or that would occur in connection with the Common
Unit Transaction if the assets of the Partnership were sold at the Common Unit Transaction price
or, if applicable, at a value determined by the General Partner in good faith using the value
attributed to the Partnership Units in the context of the Common Unit Transaction (in which case
the Conversion Date shall be the effective date of the Common Unit Transaction).
In anticipation of such Forced Conversion and the consummation of the Common Unit Transaction,
the Partnership shall use commercially reasonable efforts to cause each LTIP Unitholder to be
afforded the right to receive in connection with such Common Unit Transaction in consideration for
the Common Units into which such LTIP Unitholder’s Units will be converted the same kind and amount
of cash, securities and other property (or any combination thereof) receivable upon the
consummation of such Common Unit Transaction by a holder of the same number of Common Units,
assuming such holder of Common Units is not a Person with
21
which the Partnership consolidated or into which the Partnership merged or which merged into
the Partnership or to which such sale or transfer was made, as the case may be (a “Constituent
Person”), or an affiliate of a Constituent Person. In the event that holders of Common Units have
the opportunity to elect the form or type of consideration to be received upon consummation of the
Common Unit Transaction, prior to such Common Unit Transaction the General Partner shall give
prompt written notice to each LTIP Unitholder of such election, and shall use commercially
reasonable efforts to afford the LTIP Unitholders the right to elect, by written notice to the
General Partner, the form or type of consideration to be received upon conversion of each LTIP Unit
held by such holder into Common Units in connection with such Common Unit Transaction. If an LTIP
Unitholder fails to make such an election, such holder (and any of its transferees) shall receive
upon conversion of each LTIP Unit held him or her (or by any of his or her transferees) the same
kind and amount of consideration that a holder of a Common Unit would receive if such Common Unit
holder failed to make such an election.
Subject to the rights of the Partnership and the General Partner under any Vesting Agreement
and any Equity Incentive Plan, the Partnership shall use commercially reasonable efforts to cause
the terms of any Common Unit Transaction to be consistent with the provisions of this Section
4.05(f) and to enter into an agreement with the successor or purchasing entity, as the case may be,
for the benefit of any LTIP Unitholders whose LTIP Units will not be converted into Common Units in
connection with the Common Unit Transaction that will (i) contain provisions enabling the holders
of LTIP Units that remain outstanding after such Common Unit Transaction to convert their LTIP
Units into securities as comparable as reasonably possible under the circumstances to the Common
Units and (ii) preserve as far as reasonably possible under the circumstances the distribution,
special allocation, conversion, and other rights set forth in this Agreement for the benefit of the
LTIP Unitholders.
4.06 Capital Accounts. The Partnership shall establish and maintain a separate
capital account (a “Capital Account”) for each Partner in accordance with Regulations Section
1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership Interest in
exchange for more than a de minimis Capital Contribution, (ii) the Partnership distributes to a
Partner more than a de minimis amount of Partnership property as consideration for a Partnership
Interest, (iii) the Partnership is liquidated within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g) or (iv) the Partnership grants a Partnership Interest (other than a de minimis
Partnership Interest) as consideration for the provision of services to or for the benefit of the
Partnership to an existing Partner acting in a Partner capacity, or to a new Partner acting in a
Partner capacity or in anticipation of being a Partner, the General Partner shall revalue the
property of the Partnership to its fair market value (as determined by the General Partner, in its
sole and absolute discretion, and taking into account Section 7701(g) of the Code) in accordance
with Regulations Section 1.704-1(b)(2)(iv)(f); provided that the issuance of any LTIP Unit
shall be deemed to require a revaluation pursuant to this Section 4.06. When the Partnership’s
property is revalued by the General Partner, the Capital Accounts of the Partners shall be adjusted
in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require such
Capital Accounts to be adjusted to reflect the manner in which the unrealized gain or loss inherent
in such property (that has not been reflected in the Capital Accounts previously) would be
allocated among the Partners pursuant to Section 5.01 hereof if there were a taxable disposition of
such property for its fair market value (as determined by the General Partner, in its
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sole and absolute discretion, and taking into account Section 7701(g) of the Code) on the date
of the revaluation.
4.07 Percentage Interests. If the number of outstanding Common Units or other class
or series of Partnership Units increases or decreases during a taxable year, each Partner’s
Percentage Interest shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to a percentage equal to the number of Common Units or other class
or series of Partnership Units held by such Partner divided by the aggregate number of Common Units
or other class or series of Partnership Units, as applicable, outstanding after giving effect to
such increase or decrease. If the Partners’ Percentage Interests are adjusted pursuant to this
Section 4.07, the Profits and Losses for the taxable year in which the adjustment occurs shall be
allocated between the part of the year ending on the day when the Partnership’s property is
revalued by the General Partner and the part of the year beginning on the following day either (i)
as if the taxable year had ended on the date of the adjustment or (ii) based on the number of days
in each part. The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in which the adjustment
occurs. The allocation of Profits and Losses for the earlier part of the year shall be based on
the Percentage Interests before adjustment, and the allocation of Profits and Losses for the later
part shall be based on the adjusted Percentage Interests.
4.08 No Interest on Contributions. No Partner shall be entitled to, or will receive,
interest on its Capital Contribution.
4.09 Return of Capital Contributions. No Partner shall be entitled to withdraw any
part of its Capital Contribution or its Capital Account or to receive any distribution from the
Partnership, except as specifically provided in this Agreement. Except as otherwise provided
herein, the Partnership has no obligation to return to any Partner or withdrawn Partner any part of
such Partner’s Capital Contribution for so long as the Partnership continues in existence.
4.10 No Third-Party Beneficiary. No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in
equity, it being understood and agreed that the provisions of this Agreement shall be solely for
the benefit of, and may be enforced solely by, the parties to this Agreement and their respective
permitted successors and assigns. None of the rights or obligations of the Partners to make
Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for
any purpose by any creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure
any debt or other obligation of the Partnership or of any of the Partners. In addition, it is the
intent of the parties that no distribution to any Limited Partner be deemed a return of money or
other property in violation of the Act. However, if any court of competent jurisdiction holds
that, notwithstanding the provisions of this Agreement, any Limited Partner is obligated to return
such money or property, such obligation shall be the obligation of such Limited Partner and not of
the General Partner. Without limiting the generality of the foregoing, a deficit Capital Account
of a Partner shall not constitute or be deemed to constitute a liability of such Partner nor shall
a deficit Capital Account constitute an asset or property of the Partnership.
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ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 Allocation of Profit and Loss.
(a) Profit. Profit of the Partnership for each fiscal year of the Partnership shall
be allocated to the Partners in accordance with their respective Percentage Interests.
(b) Loss. Loss of the Partnership for each fiscal year of the Partnership shall be
allocated to the Partners in accordance with their respective Percentage Interests.
(c) Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any
expense of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations
Section 1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage
Interests, (ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the
meaning of Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the
“economic risk of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1),
(iii) if there is a net decrease in Partnership Minimum Gain within the meaning of Regulations
Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the exceptions set forth
in Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be allocated
among the Partners in accordance with Regulations Section 1.704-2(f) and the ordering rules
contained in Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain within the meaning of Regulations Section 1.704-2(i)(4) for any
Partnership taxable year, then, subject to the exceptions set forth in Regulations Section
1.704(2)(g), items of gain and income shall be allocated among the Partners in accordance with
Regulations Section 1.704-2(i)(4) and the ordering rules contained in Regulations Section
1.704-2(j). The manner in which it is reasonably expected that the deductions attributable to
nonrecourse liabilities will be allocated for purposes of determining a Partner’s share of the
nonrecourse liabilities of the Partnership within the meaning of Regulations Section 1.752-3(a)(3)
shall be in accordance with a Partner’s Percentage Interest.
(d) Qualified Income Offset. If a Partner receives in any taxable year an adjustment,
allocation or distribution described in subparagraphs (4), (5) or (6) of Regulations Section
1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account
that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable
years) items of income and gain in an amount and manner sufficient to eliminate such deficit
Capital Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b),
items of expense or loss shall be allocated to such Partner in an amount necessary to offset the
income or gain previously allocated to such Partner under this Section 5.01(d).
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(e) Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the
extent that such allocation would cause a deficit in such Partner’s Capital Account (after
reduction to reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5)
and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General Partner in
accordance with this Section 5.01(e), to the extent permitted by Regulations Section 1.704-1(b),
Profit first shall be allocated to the General Partner in an amount necessary to offset the Loss
previously allocated to the General Partner under this Section 5.01(e).
(f) Allocations Between Transferor and Transferee. If a Partner transfers any part or
all of its Partnership Interest, the distributive shares of the various items of Profit and Loss
allocable among the Partners during such fiscal year of the Partnership shall be allocated between
the transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended
on the date of the transfer or (ii) based on the number of days of such fiscal year that each was a
Partner without regard to the results of Partnership activities in the respective portions of such
fiscal year in which the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the transferor and the
transferee Partner.
(g) Special Allocations Regarding LTIP Units. Notwithstanding the provisions of
Sections 5.01(a) and (b) hereof, Liquidating Gains shall first be allocated to the LTIP Unitholders
until their Economic Capital Account Balances, to the extent attributable to their ownership of
LTIP Units, are equal to (i) the Common Unit Economic Balance, multiplied by (ii) the number of
their LTIP Units. For this purpose, “Liquidating Gains” means net capital gains realized in
connection with the actual or hypothetical sale of all or substantially all of the assets of the
Partnership, including but not limited to net capital gain realized in connection with an
adjustment to the value of Partnership assets under Section 704(b) of the Code. The “Economic
Capital Account Balances” of the LTIP Unit holders will be equal to their Capital Account balances
to the extent attributable to their ownership of LTIP Units. Similarly, the “Common Unit Economic
Balance” shall mean (i) the Capital Account balance of the General Partner, plus the amount of the
General Partner’s share of any Partner Nonrecourse Debt Minimum Gain or Partnership Minimum Gain,
in either case to the extent attributable to the General Partner’s ownership of Common Units and
computed on a hypothetical basis after taking into account all allocations through the date on
which any allocation is made under this Section 5.01(g), divided by (ii) the number of the General
Partner’s Common Units. Any such allocations shall be made among the LTIP Unitholders in
proportion to the amounts required to be allocated to each under this Section 5.01(g). The parties
agree that the intent of this Section 5.01(g) is to make the Capital Account balance associated
with each LTIP Unit to be economically equivalent to the Capital Account balance associated with
the General Partner’s Common Units (on a per-Unit basis).
(h) Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain,
expense or loss referred to in this Agreement shall be determined in accordance with federal income
tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit
and Loss shall not include items of income, gain and expense that
25
are specially allocated pursuant
to Sections 5.01(c), (d) or (e) hereof. All allocations of income, Profit, gain, Loss and expense
(and all items contained therein) for federal income tax purposes
shall be identical to all allocations of such items set forth in this Section 5.01, except as
otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). With
respect to properties acquired by the Partnership, the General Partner shall have the authority to
elect the method to be used by the Partnership for allocating items of income, gain and expense as
required by Section 704(c) of the Code with respect to such properties, and such election shall be
binding on all Partners.
5.02 Distribution of Cash.
(a) Subject to Sections 5.02(c), (d) and (e) and to the terms of any Partnership Unit
Designation, the Partnership shall distribute cash at such times and in such amounts as are
determined by the General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other distribution period)
in proportion with their respective Common Units on the Partnership Record Date.
(b) In accordance with Section 4.04(a)(ii), the LTIP Unitholders shall be entitled to receive
distributions in an amount per LTIP Unit equal to the Common Partnership Unit Distribution.
(c) If a new or existing Partner acquires additional Partnership Units in exchange for a
Capital Contribution on any date other than a Partnership Record Date, the cash distribution
attributable to such additional Partnership Units relating to the Partnership Record Date next
following the issuance of such additional Partnership Units shall be reduced in the proportion to
(i) the number of days that such additional Partnership Units are held by such Partner bears to
(ii) the number of days between such Partnership Record Date and the immediately preceding
Partnership Record Date.
(d) Notwithstanding any other provision of this Agreement, the General Partner is authorized
to take any action that it determines to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other federal, state or
local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code. To the extent that the Partnership is required to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income to a Partner or
assignee (including by reason of Section 1446 of the Code), either (i) if the actual amount to be
distributed to the Partner (the “Distributable Amount”) equals or exceeds the Withheld Amount, the
entire Distributable Amount shall be treated as a distribution of cash to such Partner, or (ii) if
the Distributable Amount is less than the Withheld Amount, the excess of the Withheld Amount over
the Distributable Amount shall be treated as a Partnership Loan from the Partnership to the Partner
on the day the Partnership pays over such amount to a taxing authority. A Partner shall repay a
Partnership Loan upon the demand of the Partnership or, alternatively, through withholding by the
Partnership with respect to subsequent distributions to the applicable Partner or assignee. In the
event that a Limited Partner fails to pay any amount owed to the Partnership with respect to the
Partnership Loan within 15 days after demand for payment thereof is made by the Partnership on the
Limited Partner, the General Partner, in its sole and absolute discretion, may elect to make the
payment to the Partnership on behalf of such
26
Defaulting Limited Partner. In such event, on the
date of payment, the General Partner shall be deemed to have extended a General Partner Loan to the
Defaulting Limited Partner in the
amount of the payment made by the General Partner and the General Partner shall succeed to all
rights and remedies of the Partnership against the Defaulting Limited Partner as to that amount.
Without limitation, the General Partner shall have the right to receive any distributions that
otherwise would be made by the Partnership to the Defaulting Limited Partner until such time as the
General Partner Loan has been paid in full, and any such distributions so received by the General
Partner shall be treated as having been received by the Defaulting Limited Partner and immediately
paid to the General Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to this Section
5.02(d) shall bear interest at the lesser of (i) 300 basis points above 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, or (ii) the maximum lawful rate of interest on such obligation,
such interest to accrue from the date the Partnership or the General Partner, as applicable, is
deemed to extend the loan until such loan is repaid in full.
(e) In no event may a Partner receive a distribution of cash with respect to a Partnership
Unit if such Partner is entitled to receive a cash dividend or other distribution of cash as the
holder of record of a REIT Share for which all or part of such Partnership Unit has been or will be
redeemed.
5.03 REIT Distribution Requirements. The General Partner shall use commercially
reasonable efforts to cause the Partnership to distribute amounts sufficient to enable the General
Partner to pay distributions to its stockholders that will allow the General Partner to (i) meet
its distribution requirement for qualification as a REIT as set forth in Section 857 of the Code
and (ii) avoid any federal income or excise tax liability imposed by the Code, other than to the
extent the General Partner elects to retain and pay income tax on its net capital gain.
5.04 No Right to Distributions in Kind. No Partner shall be entitled to demand
property other than cash in connection with any distributions by the Partnership.
5.05 Limitations on Return of Capital Contributions. Notwithstanding any of the
provisions of this Article V, no Partner shall have the right to receive, and the General Partner
shall not have the right to make, a distribution that includes a return of all or part of a
Partner’s Capital Contributions, unless, after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities to a Partner for
the return of his Capital Contribution, does not exceed the fair market value of the Partnership’s
assets.
5.06 Distributions Upon Liquidation.
(a) Upon liquidation of the Partnership, after payment of, or adequate provision for, debts
and obligations of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts in accordance with
their respective positive Capital Account balances.
(b) For purposes of Section 5.06(a) hereof, the Capital Account of each Partner shall be
determined after all adjustments made in accordance with Sections 5.01 and 5.02
27
hereof resulting
from Partnership operations and from all sales and dispositions of all or any part of the
Partnership’s assets.
(c) Any distributions pursuant to this Section 5.06 shall be made by the end of the
Partnership’s taxable year in which the liquidation occurs (or, if later, within 90 days after the
date of the liquidation). To the extent deemed advisable by the General Partner, appropriate
arrangements (including the use of a liquidating trust) may be made to assure that adequate funds
are available to pay any contingent debts or obligations.
5.07 Substantial Economic Effect. It is the intent of the Partners that the
allocations of Profit and Loss under the Agreement have substantial economic effect (or be
consistent with the Partners’ interests in the Partnership in the case of the allocation of losses
attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted
by the Regulations promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
POWERS OF THE GENERAL PARTNER
6.01 Management of the Partnership.
(a) Except as otherwise expressly provided in this Agreement, the General Partner shall have
the full, complete and exclusive discretion to manage and control the business of the Partnership
for the purposes stated in this Agreement, and shall make all decisions affecting the business and
assets of the Partnership. Subject to the restrictions specifically contained in this Agreement,
the powers of the General Partner shall include, without limitation, the authority to take the
following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, lease and dispose of any real property and any
other property or assets including, but not limited to, notes and mortgages that the General
Partner determines are necessary or appropriate in the business of the Partnership;
(ii) to construct buildings and make other improvements on the properties owned or
leased by the Partnership;
(iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership Units or
any securities (including secured and unsecured debt obligations of the Partnership, debt
obligations of the Partnership convertible into any class or series of Partnership Units, or
Rights relating to any class or series of Partnership Units) of the Partnership;
(iv) to borrow or lend money for the Partnership, issue or receive evidences of
indebtedness in connection therewith, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such
28
indebtedness, and
secure indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s
assets;
(v) to pay, either directly or by reimbursement, for all operating costs and general
administrative expenses of the Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement;
(vi) to guarantee or become a co-maker of indebtedness of any Subsidiary of the General
Partner or the Partnership, refinance, increase the amount of, modify, amend or change the
terms of, or extend the time for the payment of, any such guarantee or indebtedness, and
secure such guarantee or indebtedness by mortgage, deed of trust, pledge or other lien on
the Partnership’s assets;
(vii) to use assets of the Partnership (including, without limitation, cash on hand)
for any purpose consistent with this Agreement, including, without limitation, payment,
either directly or by reimbursement, of all operating costs and general and administrative
expenses of the General Partner, the Partnership or any Subsidiary of either, to third
parties or to the General Partner as set forth in this Agreement;
(viii) to lease all or any portion of any of the Partnership’s assets, irrespective of
whether the terms of such leases extend beyond the termination date of the Partnership and
irrespective of whether any portion of the Partnership’s assets so leased are to be occupied
by the lessee, or, in turn, subleased in whole or in part to others, for such consideration
and on such terms as the General Partner may determine;
(ix) to prosecute, defend, arbitrate or compromise any and all claims or liabilities in
favor of or against the Partnership, on such terms and in such manner as the General Partner
may reasonably determine, and similarly to prosecute, settle or defend litigation with
respect to the Partners, the Partnership or the Partnership’s assets;
(x) to file applications, communicate and otherwise deal with any and all governmental
agencies having jurisdiction over, or in any way affecting, the Partnership’s assets or any
other aspect of the Partnership’s business;
(xi) to make or revoke any election permitted or required of the Partnership by any
taxing authority;
(xii) to maintain such insurance coverage for public liability, fire and casualty, and
any and all other insurance for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in
such amounts and such types, as it shall determine from time to time;
(xiii) to determine whether to apply any insurance proceeds for any property to the
restoration of such property or to distribute the same;
(xiv) to establish one or more divisions of the Partnership, to hire and dismiss
employees of the Partnership or any division of the Partnership, and to retain legal
counsel, accountants, consultants, real estate brokers and such other Persons as the
29
General
Partner may deem necessary or appropriate in connection with the Partnership business and to
pay such reasonable remuneration to such Persons as the General Partner may deem reasonable
and proper;
(xv) to retain other services of any kind or nature in connection with the Partnership
business, including managerial, investment, advisory and/or related services (including, if
deemed advisable by the General Partner, the management or supervisions of the investments
of the Partnership), and to pay for such services such remuneration as the General Partner
may deem reasonable and proper;
(xvi) to negotiate and conclude agreements on behalf of the Partnership with respect to
any of the rights, powers and authority conferred upon the General Partner;
(xvii) to maintain accurate accounting records and to file promptly all federal, state
and local income tax returns on behalf of the Partnership;
(xviii) to distribute Partnership cash or other Partnership assets in accordance with
this Agreement;
(xix) to form or acquire an interest in, and contribute property to, any further
limited or general partnerships, joint ventures or other relationships that it deems
desirable (including, without limitation, the acquisition of interests in, and the
contributions of property to, its Subsidiaries and any other Person in which it has an
equity interest from time to time);
(xx) to establish Partnership reserves for working capital, capital expenditures,
contingent liabilities or any other valid Partnership purpose;
(xxi) to merge, consolidate or combine the Partnership with or into another Person;
(xxii) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” taxable as a
corporation under Section 7704 of the Code; and
(xxiii) to take such other action, execute, acknowledge, swear to or deliver such other
documents and instruments, and perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and conduct of the business and
affairs of the Partnership (including, without limitation, all actions consistent with
allowing the General Partner at all times to qualify as a REIT unless the General Partner
voluntarily terminates or revokes its REIT status) and to possess and enjoy all of the
rights and powers of a general partner as provided by the Act.
(b) Except as otherwise provided in this Agreement, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General Partner shall not
have any obligations under this Agreement except to the extent that Partnership funds are
reasonably available to it for the performance of such duties, and nothing in this Agreement
30
authorizes or requires the General Partner, in its capacity as such, to expend its individual funds
for payment to third parties or to undertake any individual liability or obligation on behalf of
the Partnership.
6.02 Delegation of Authority. The General Partner may delegate any or all of its
powers, rights and obligations under this Agreement, and may appoint, employ, contract or otherwise
deal with any Person for the transaction of the business of the Partnership, which Person may,
under supervision of the General Partner, perform any acts or services for the Partnership as the
General Partner may approve.
6.03 Indemnification and Exculpation of Indemnitees.
(a) The Partnership shall indemnify an Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses),
judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that relate to the
operations of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is established that:
(i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding
and either was committed in bad faith or was the result of active and deliberate dishonesty; (ii)
the Indemnitee actually received an improper personal benefit in money, property or services; or
(iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that
the act or omission was unlawful. The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet the requisite standard of
conduct set forth in this Section 6.03(a). The termination of any proceeding by conviction or upon
a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee acted in a manner contrary to that
specified in this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be made
only out of the assets of the Partnership.
(b) The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an
Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.03 has been met, and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct
has not been met.
(c) The indemnification provided by this Section 6.03 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any
vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who
has ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance, as an expense of the Partnership, on
behalf of the Indemnitees and such other Persons as the General Partner shall determine, against
any liability that may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership’s activities, regardless of whether the Partnership
31
would have the
power to indemnify such Person against such liability under the provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan
or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of
this Section 6.03; and actions taken or omitted by the Indemnitee with respect to an employee
benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose that
is not opposed to the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in whole or in part under this Section
6.03 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.
(i) Any amendment, modification or repeal of this Section 6.03 or any provision hereof shall
be prospective only and shall not in any way affect the indemnification of an Indemnitee by the
Partnership under this Section 6.03 as in effect immediately prior to such amendment, modification
or repeal with respect to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when claims relating to such matters may arise or be
asserted.
6.04 Liability of the General Partner.
(a) Notwithstanding anything to the contrary set forth in this Agreement, neither the General
Partner, nor any of its directors, officers, agents or employees shall be liable for monetary
damages to the Partnership or any Partners for losses sustained or liabilities incurred as a result
of errors in judgment or mistakes of fact or law or of any act or omission if any such party acted
in good faith. The General Partner shall not be in breach of any duty that the General Partner may
owe to the Limited Partners or the Partnership or any other Persons under this Agreement or of any
duty stated or implied by law or equity provided the General Partner, acting in good faith, abides
by the terms of this Agreement.
(b) The Limited Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership, the Limited Partners and the General Partner’s stockholders collectively, that the
General Partner is under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the tax consequences of
some, but not all, of the Limited Partners) in deciding whether to cause
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the Partnership to take
(or decline to take) any actions. In the event of a conflict between the interests of the
stockholders of the General Partner on the one hand and the Limited Partners on
the other, the General Partner shall endeavor in good faith to resolve the conflict in a
manner not adverse to either the stockholders of the General Partner or the Limited Partners. For
so long as the General Partner owns a controlling interest in the Partnership, any such conflict
that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a
manner not adverse to either the stockholders of the General Partner or the Limited Partners shall
be resolved in favor of the stockholders of the General Partner. The General Partner shall not be
liable for monetary damages for losses sustained, liabilities incurred or benefits not derived by
the Limited Partners in connection with such decisions.
(c) Subject to its obligations and duties as General Partner set forth in Section 6.01 hereof,
the General Partner may exercise any of the powers granted to it under this Agreement and perform
any of the duties imposed upon it hereunder either directly or by or through its agents. The
General Partner shall not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
(d) Notwithstanding any other provisions of this Agreement or the Act, any action of the
General Partner on behalf of the Partnership or any decision of the General Partner to refrain from
acting on behalf of the Partnership, undertaken in the good faith belief that such action or
omission is necessary or advisable in order (i) to protect the ability of the General Partner to
continue to qualify as a REIT or (ii) to prevent the General Partner from incurring any taxes under
Section 857, Section 4981 or any other provision of the Code, is expressly authorized under this
Agreement and is deemed approved by all of the Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.04 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the General Partner’s or any
of its officer’s, director’s, agent’s or employee’s liability to the Partnership and the Limited
Partners under this Section 6.04 as in effect immediately prior to such amendment, modification or
repeal with respect to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when claims relating to such matters may arise or be
asserted.
6.05 Partnership Obligations.
(a) Except as provided in this Section 6.05 and elsewhere in this Agreement (including the
provisions of Articles V and VI hereof 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) All Administrative Expenses shall be obligations of the Partnership, and the General
Partner shall be entitled to reimbursement by the Partnership for any expenditure (including
Administrative Expenses) incurred by it on behalf of the Partnership that shall be made other than
out of the funds of the Partnership. All reimbursements hereunder shall be characterized for
federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as
expenses of the General Partner.
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6.06 Outside Activities. Subject to Section 6.08 hereof, the Charter and any
agreements entered into by the General Partner or its Affiliates with the Partnership or a
Subsidiary, any officer, director, employee, agent, Affiliate or stockholder of the General
Partner, the General Partner shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including business interests
and activities substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of this Agreement in
any such business ventures, interest or activities. None of the Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership relationship
established hereby in any such business ventures, interests or activities, and the General Partner
shall have no obligation pursuant to this Agreement to offer any interest in any such business
ventures, interests and activities to the Partnership or any Limited Partner, even if such
opportunity is of a character that, if presented to the Partnership or any Limited Partner, could
be taken by such Person.
6.07 Employment or Retention of Affiliates.
(a) Any Affiliate of the General Partner may be employed or retained by the Partnership and
may otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager, furnisher of
goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any
compensation, price or other payment that the General Partner determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries or other Persons in which it
has an equity investment, and such Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the General Partner. The foregoing
authority shall not create any right or benefit in favor of any Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other partnerships, corporations or
other business entities in which it is or thereby becomes a participant upon such terms and subject
to such conditions as the General Partner deems are consistent with this Agreement and applicable
law.
6.08 General Partner Activities. The General Partner agrees that, generally, all
business activities of the General Partner, including activities pertaining to the acquisition,
development, ownership of or investment in real properties shall be conducted through the
Partnership or one or more Subsidiaries of the Partnership; provided, however, that
the General Partner may make direct acquisitions or undertake business activities if such
acquisitions or activities are made in connection with the issuance of Additional Securities by the
General Partner or the business activity has been approved by a majority of the Independent
Directors. If, at any time, the General Partner acquires material assets (other than Partnership
Units or other assets on behalf of the Partnership) without transferring such assets to the
Partnership, the definition of “REIT Shares Amount” may be adjusted, as reasonably determined by
the General Partner, to reflect only the fair market value of a REIT Share attributable to the
General Partner’s Partnership Units and other assets held on behalf of the Partnership.
34
6.09 Title to Partnership Assets. Partnership assets, whether real, personal or mixed
and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity,
and no Partner, individually or collectively, shall have any ownership interest in or title to
such Partnership assets or any portion thereof. Title to any or all of the Partnership assets may
be held in the name of the Partnership, the General Partner or one or more nominees, as the General
Partner may determine, including Affiliates of the General Partner. The General Partner declares
and warrants that any Partnership assets for which legal title is held in the name of the General
Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for
the use and benefit of the Partnership in accordance with the provisions of this Agreement.
Notwithstanding the foregoing, the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be vested in the Partnership as soon as reasonably practicable.
All Partnership assets shall be recorded as the property of the Partnership in its books and
records, irrespective of the name in which legal title to such Partnership assets is held.
ARTICLE VII
CHANGES IN GENERAL PARTNER
7.01 Transfer of the General Partner’s Partnership Interest.
(a) The General Partner shall not transfer all or any portion of its General Partnership
Interests, and the General Partner shall not withdraw as General Partner, except as provided in or
in connection with a transaction contemplated by Sections 7.01(c), (d) or (e).
(b) The General Partner agrees that its General Partnership Interest will at all times be in
the aggregate at least 0.1%.
(c) Except as otherwise provided in Section 7.01(d) or (e), the General Partner shall not
engage in any merger, consolidation or other combination with or into another Person or sale of all
or substantially all of its assets (other than in connection with a change in the General Partner’s
state of incorporation or organizational form), in each case which results in a Change of Control
of the General Partner (a “Transaction”), unless at least one of the following conditions is met:
(i) the consent of a Majority in Interest (other than the General Partner or any
Subsidiary of the General Partner) is obtained;
(ii) as a result of such Transaction, all Limited Partners (other than the General
Partner and any Subsidiary of the General Partner, and, to the extent provided for in any
applicable Equity Incentive Plan or Vesting Agreement, LTIP Unitholders) will receive, or
have the right to receive, for each Partnership Unit an amount of cash, securities or other
property equal or substantially equivalent in value, as determined by the General Partner in
good faith, to the product of the Conversion Factor and the greatest amount of cash,
securities or other property paid in the Transaction to a holder of one REIT Share in
consideration of one REIT Share, provided that if, in connection with such
Transaction, a purchase, tender or exchange offer (“Offer”) shall have been made to and
accepted by the holders of more than 50% of the outstanding REIT Shares, each holder of
35
Partnership Units (other than the General Partner and any Subsidiary of the General Partner)
shall be given the option to exchange its Partnership Units for an amount of cash,
securities or other property equal or substantially equivalent in value, as determined
by the General Partner in good faith, to the greatest amount of cash, securities or other
property that such Limited Partner would have received had it (A) exercised its Common Unit
Redemption Right pursuant to Section 8.04 hereof and (B) sold, tendered or exchanged
pursuant to the Offer the REIT Shares received upon exercise of the Common Unit Redemption
Right immediately prior to the expiration of the Offer; or
(iii) the General Partner is the surviving entity in the Transaction and either (A) the
holders of REIT Shares do not receive cash, securities or other property in the Transaction
or (B) all Limited Partners (other than the General Partner or any Subsidiary of the General
Partner, and, to the extent provided for in any applicable Equity Incentive Plan or Vesting
Agreement, LTIP Unitholders) receive for each Partnership Unit an amount of cash, securities
or other property (expressed as an amount per REIT Share) equal or substantially equivalent
in value, as determined by the General Partner in good faith, to the product of the
Conversion Factor and the greatest amount of cash, securities or other property (expressed
as an amount per REIT Share) received in the Transaction by any holder of REIT Shares.
(d) Notwithstanding Section 7.01(c), the General Partner may merge with or into or consolidate
with another entity if immediately after such merger or consolidation (i) substantially all of the
assets of the successor or surviving entity (the “Survivor”), other than Partnership Units held by
the General Partner, are contributed, directly or indirectly, to the Partnership as a Capital
Contribution in exchange for Partnership Units with a fair market value equal to the value of the
assets so contributed as determined by the Survivor in good faith and (ii) the Survivor expressly
agrees to assume all obligations of the General Partner under this Agreement. Upon such
contribution and assumption, the Survivor shall have the right and duty to amend this Agreement as
set forth in this Section 7.01(d). The Survivor shall in good faith arrive at a new method for the
calculation of the Cash Amount, the REIT Shares Amount and Conversion Factor for a Partnership Unit
after any such merger or consolidation so as to approximate the existing method for such
calculation as closely as reasonably possible. Such calculation shall take into account, among
other things, the kind and amount of securities, cash and other property that was receivable upon
such merger or consolidation by a holder of REIT Shares or options, warrants or other rights
relating thereto, and which a holder of Partnership Units could have acquired had such Partnership
Units been exchanged immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which shall be as nearly
equivalent as may be practicable to the adjustments provided for with respect to the Conversion
Factor. The Survivor shall also in good faith modify the definition of REIT Shares and make such
amendments to Section 8.04 so as to approximate the existing rights and obligations set forth in
Section 8.04 as closely as reasonably possible. The above provisions of this Section 7.01(d) shall
similarly apply to successive permitted mergers or consolidations.
In respect of any transaction described in the preceding paragraph, the General Partner is
required to use its commercially reasonable efforts to structure such transaction to avoid causing
the Limited Partners (other than the General Partner or any Subsidiary of the General Partner) to
36
recognize a gain for federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, so long as such efforts are consistent with and subject in all
respects to the exercise of the Board of Directors’ duties to the General Partner and the stockholders of
the General Partner under applicable law.
(e) Notwithstanding anything in this Article VII,
(i) The General Partner may transfer all or any portion of its General Partnership
Interest to (A) any wholly-owned Subsidiary of the General Partner or (B) the owner of all
of the ownership interests of the General Partner or a Subsidiary of such owner, and
following a transfer of all of its General Partnership Interest, may withdraw as General
Partner; and
(ii) the General Partner may engage in a transaction required by law or by the rules of
any national securities exchange or over-the-counter interdealer quotation system on which
the REIT Shares are listed or traded.
7.02 Admission of a Substitute or Additional General Partner. A Person shall be
admitted as a substitute or additional General Partner of the Partnership only if the following
terms and conditions are satisfied:
(a) the Person to be admitted as a substitute or additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a
counterpart and such other documents or instruments as may be required or appropriate in order to
effect the admission of such Person as a General Partner, and a certificate evidencing the
admission of such Person as a General Partner shall have been filed for recordation and all other
actions required by Section 2.05 in connection with such admission shall have been performed;
(b) if the Person to be admitted as a substitute or additional General Partner is a
corporation, partnership, limited liability company or trust, it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such Person’s authority to
become a General Partner and to be bound by the terms and provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion (relying on such opinions from
other counsel as may be necessary) that the admission of the Person to be admitted as a substitute
or additional General Partner is in conformity with the Act, that none of the actions taken in
connection with the admission of such Person as a substitute or additional General Partner will
cause (i) the Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner’s limited liability.
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of General Partner.
(a) Upon the occurrence of an Event of Bankruptcy as to the General Partner (and its removal
pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of the General
Partner the Partnership shall be dissolved and terminated unless the Partnership is continued
pursuant to Section 7.03(b) hereof. However, if the General Partner is on the date of such
occurrence a partnership, the withdrawal, death, dissolution, Event of
37
Bankruptcy as to, or removal
of a partner in, such partnership shall be deemed not to be a dissolution of the General Partner if
the business of the General Partner is continued by the
remaining partner or partners. The merger of the General Partner with or into any entity that
is admitted as a substitute or successor General Partner pursuant to Section 7.02 shall not be
deemed to be the withdrawal, dissolution or removal of the General Partner.
(b) Following the occurrence of an Event of Bankruptcy as to the General Partner (and its
removal pursuant to Section 7.04(a)) or the death, withdrawal, removal or dissolution of the
General Partner (except that, if the General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner
in, such partnership shall be deemed not to be a dissolution of the General Partner if the business
of such General Partner is continued by the remaining partner or partners), the Limited Partners,
within 90 days after such occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.04 by selecting, subject to Section 7.02 and any other
provisions of this Agreement, a substitute General Partner by consent of a Majority in Interest.
If the Limited Partners elect to continue the business of the Partnership and admit a substitute
General Partner, the relationship with the Partners and of any Person who has acquired an interest
of a Partner in the Partnership shall be governed by this Agreement.
7.04 Removal of General Partner.
(a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, the General
Partner, the General Partner shall be deemed to be removed automatically, except that if the
General Partner is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall not be
deemed to be a dissolution of the General Partner if the business of the General Partner is
continued by the remaining partner or partners. The Limited Partners may not remove the General
Partner, with or without cause.
(b) If the General Partner has been removed pursuant to this Section 7.04 and the Partnership
is continued pursuant to Section 7.03 hereof, the General Partner shall promptly transfer and
assign its General Partnership Interest in the Partnership to the substitute General Partner
approved by a Majority in Interest in accordance with Section 7.03(b) and otherwise be admitted to
the Partnership in accordance with Section 7.02. At the time of assignment, the removed General
Partner shall be entitled to receive from the substitute General Partner the fair market value of
the General Partnership Interest of such removed General Partner as reduced by any damages caused
to the Partnership by such General Partner. Such fair market value shall be determined by an
appraiser mutually agreed upon by the General Partner and a Majority in Interest (excluding the
General Partner and any Subsidiary of the General Partner) within ten days following the removal of
the General Partner. In the event that the parties are unable to agree upon an appraiser, the
removed General Partner and a Majority in Interest (excluding the General Partner and any
Subsidiary of the General Partner) each shall select an appraiser. Each such appraiser shall
complete an appraisal of the fair market value of the removed General Partner’s General Partnership
Interest within 30 days of the General Partner’s removal, and the fair market value of the removed
General Partner’s General Partnership Interest shall be the average of the two appraisals. If,
however, the higher appraisal exceeds the lower appraisal by more than 20% of the amount of the
lower appraisal, the two appraisers, no later than 40 days
38
after the removal of the General
Partner, shall be required to select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner’s General
Partnership Interest no later than 60 days after the removal of the General Partner. In such
case, the fair market value of the removed General Partner’s General Partnership Interest shall be
the average of the two appraisals closest in value to one another.
(c) The General Partnership Interest of a removed General Partner, during the time after
default until transfer under Section 7.04(b), shall be converted to that of a special Limited
Partner. Such removed General Partner shall not have any rights to participate in the management
and affairs of the Partnership, and shall not be entitled to any portion of the income, expense,
profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to
the Limited Partners. Instead, such removed General Partner shall receive and be entitled only to
retain distributions or allocations of such items that it would have been entitled to receive in
its capacity as General Partner, until the transfer is effective pursuant to Section 7.04(b).
(d) All Partners shall have given and hereby do give such consents, and shall take such
actions and shall execute such documents as shall be legally necessary and sufficient to effect all
the foregoing provisions of this Section 7.04.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
OF THE LIMITED PARTNERS
8.01 Management of the Partnership. The Limited Partners shall not participate in the
management or control of Partnership business nor shall they transact any business for the
Partnership, nor shall they have the power to sign for or bind the Partnership, such powers being
vested solely and exclusively in the General Partner.
8.02 Power of Attorney. Each Limited Partner hereby irrevocably appoints the General
Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and in its name,
place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or
record, at the appropriate public offices, any and all documents, certificates and instruments as
may be deemed necessary or desirable by the General Partner to carry out fully the provisions of
this Agreement and the Act in accordance with their terms, including amendments hereto, which power
of attorney is coupled with an interest and shall survive the death, dissolution or legal
incapacity of the Limited Partner, or the transfer by the Limited Partner of any part or all of its
Partnership Interest.
8.03 Limitation on Liability of Limited Partners. No Limited Partner shall be liable
for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall
be liable to the Partnership only to make payments of its Capital Contribution, if any, as and when
due. After its Capital Contribution is fully paid, no Limited Partner shall be required, except as
otherwise required by the Act, to make any further Capital Contributions or other payments or lend
any funds to the Partnership.
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8.04 Common Unit Redemption Right.
(a) Subject to Sections 8.04(b), (c), (d), (e) and (f) hereof and the provisions of any
agreements between the Partnership and one or more Limited Partners with respect to Common Units
(including any LTIP Units that are converted into Common Units) held by them, each Limited Partner
(other than the General Partner or any Subsidiary of the General Partner), shall have the right the
“Common Unit Redemption Right”) to require the Partnership to redeem on a Specified Redemption Date
all or a portion of the Common Units held by such Limited Partner at a redemption price equal to
and in the form of the Common Redemption Amount to be paid by the Partnership, provided that (i)
such Common Units shall have been outstanding for at least one year (or such lesser time as
determined by the General Partner in its sole and absolute discretion), and (ii) subject to any
restriction agreed to in writing between the Redeeming Limited Partner and the Partnership or
General Partner. The Common Unit Redemption Right shall be exercised pursuant to a Notice of
Exercise of Redemption Right in the form attached hereto as Exhibit B delivered to the
Partnership (with a copy to the General Partner) by the Limited Partner who is exercising the
Common Unit Redemption Right (the “Redeeming Limited Partner”). In such event, the Partnership
shall deliver the Cash Amount to the Redeeming Limited Partner. Notwithstanding the foregoing, the
Partnership shall not be obligated to satisfy such Common Unit Redemption Right if the General
Partner elects to purchase the Common Units subject to the Notice of Redemption pursuant to Section
8.04(b). No Limited Partner may deliver more than one Notice of Redemption during each calendar
quarter. A Limited Partner may not exercise the Common Unit Redemption Right for less than 1,000
Common Units or, if such Limited Partner holds less than 1,000 Common Units, all of the Common
Units held by such Limited Partner. The Redeeming Limited Partner shall have no right, with
respect to any Common Units so redeemed, to receive any distribution paid with respect to Common
Units if the record date for such distribution is on or after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 8.04(a) hereof, a Limited Partner that exercises
the Common Unit Redemption Right shall be deemed to have offered to sell the Common Units described
in the Notice of Redemption to the General Partner, and the General Partner may, in its sole and
absolute discretion, elect to purchase directly and acquire such Common Units by paying to the
Redeeming Limited Partner either the Cash Amount or the REIT Shares Amount, as elected by the
General Partner (in its sole and absolute discretion), on the Specified Redemption Date. In such
event, the General Partner shall acquire the Common Units offered for redemption by the Redeeming
Limited Partner and shall be treated for all purposes of this Agreement as the owner of such Common
Units. If the General Partner shall elect to exercise its right to purchase Common Units under
this Section 8.04(b) with respect to a Notice of Redemption, it shall so notify the Redeeming
Limited Partner within five Trading Days after the receipt by the General Partner of such Notice of
Redemption.
In the event the General Partner shall exercise its right to purchase Common Units with
respect to the exercise of a Common Unit Redemption Right, the Partnership shall have no obligation
to pay any amount to the Redeeming Limited Partner with respect to such Redeeming Limited Partner’s
exercise of such Common Unit Redemption Right, and each of the Redeeming Limited Partner, the
Partnership and the General Partner shall treat the transaction between the General Partner and the
Redeeming Limited Partner for federal income tax purposes as a sale of
40
the Redeeming Limited
Partner’s Common Units to the General Partner. Each Redeeming Limited Partner agrees to execute
such documents as the General Partner may reasonably require
in connection with the issuance of REIT Shares upon exercise of the Common Unit Redemption
Right.
(c) Notwithstanding the provisions of Section 8.04(a) and 8.04(b), a Limited Partner shall not
be entitled to exercise the Common Unit Redemption Right if the delivery of REIT Shares to such
Limited Partner on the Specified Redemption Date by the General Partner pursuant to Section 8.04(b)
(regardless of whether the General Partner would in fact exercise its rights under Section 8.04(b))
would (i) result in such Limited Partner or any other Person (as defined in the Charter) owning,
directly or indirectly, REIT Shares in excess of the Stock Ownership Limit or any Excepted Holder
Limit (each as defined in Charter) and calculated in accordance therewith, except as provided in
the Charter, (ii) result in REIT Shares being owned by fewer than 100 persons (determined without
reference to any rules of attribution), (iii) result in the General Partner being “closely held”
within the meaning of Section 856(h) of the Code, (iv) cause the General Partner to own, actually
or constructively, 10% or more of the ownership interests in a tenant (other than a TRS) of the
General Partner’s, the Partnership’s or a Subsidiary Partnership’s real property, within the
meaning of Section 856(d)(2)(B) of the Code, (v) otherwise cause the General Partner to fail to
qualify as a REIT under the Code, including, but not limited to, as a result of any “eligible
independent contractor” (as defined in Section 856(d)(9)(A) of the Code) that operates a “qualified
health care property” (as defined in Section 856(e)(6)(D) of the Code) on behalf of a TRS failing
to qualify as such or (vi) cause the acquisition of REIT Shares by such Limited Partner to be
“integrated” with any other distribution of REIT Shares or Common Units for purposes of complying
with the registration provisions of the Securities Act. The General Partner, in its sole and
absolute discretion, may waive the restriction on redemption set forth in this Section 8.04(c).
(d) Any Cash Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04
shall be paid on the Specified Redemption Date, except that the General Partner may elect to cause
the Specified Redemption Date to be delayed for up to an additional 90 days to the extent required
for the General Partner to cause additional REIT Shares to be issued to provide financing to be
used to make such payment of the Cash Amount and may also delay such Specified Redemption Date to
the extent necessary to effect compliance with any applicable requirements of law. Any REIT Share
Amount to be paid to a Redeeming Limited Partner pursuant to this Section 8.04 shall be paid on the
Specified Redemption Date, except that the General Partner may elect to cause the Specified
Redemption Date to be delayed for up to an additional 180 days to the extent required for the
General Partner to cause additional REIT Shares to be issued and may also delay such Specified
Redemption Date to the extent necessary to effect compliance with any applicable requirements of
law. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause
the closing of the acquisition of redeemed Common Units hereunder to occur as quickly as reasonably
possible.
(e) Notwithstanding any other provision of this Agreement, the General Partner is authorized
to take any action that it determines to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other federal, state,
local or foreign law that apply upon a Redeeming Limited Partner’s exercise of the Common Unit
Redemption Right. If a Redeeming Limited Partner believes that it is
41
exempt from such withholding
upon the exercise of the Common Unit Redemption Right, such Partner must furnish the General
Partner with a FIRPTA Certificate in the form attached hereto
as Exhibit C and any similar forms or certificates required to avoid or reduce the
withholding under federal, state, local or foreign law. If the Partnership or the General Partner
is required to withhold and pay over to any taxing authority any amount upon a Redeeming Limited
Partner’s exercise of the Common Unit Redemption Right and if the Common Redemption Amount equals
or exceeds the Withheld Amount, the Withheld Amount shall be treated as an amount received by such
Partner in redemption of its Common Units. If, however, the Common Redemption Amount is less than
the Withheld Amount, the Redeeming Limited Partner shall not receive any portion of the Common
Redemption Amount, the Common Redemption Amount shall be treated as an amount received by such
Partner in redemption of its Common Units, and the Partner shall contribute the excess of the
Withheld Amount over the Common Redemption Amount to the Partnership before the Partnership is
required to pay over such excess to a taxing authority.
(f) Notwithstanding any other provision of this Agreement, the General Partner shall place
appropriate restrictions on the ability of the Limited Partners to exercise their Common Unit
Redemption Rights as and if deemed necessary or reasonable to ensure that the Partnership does not
constitute a “publicly traded partnership” taxable as a corporation under Section 7704 of the Code.
If and when the General Partner determines that imposing such restrictions is necessary, the
General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the
Limited Partners, which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership that states that, in the opinion of such counsel, restrictions are necessary or
reasonable in order to avoid the Partnership being treated as a “publicly traded partnership” under
Section 7704 of the Code.
8.05 Registration.
Subject to the terms of any agreement between the General Partner and a Limited Partner with
respect to Common Units held by such Limited Partner:
(a) Shelf Registration of the REIT Shares. Following the date on which the General
Partner becomes eligible to use a registration statement on Form S-3 for the registration of
securities under the Securities Act (the “S-3 Eligible Date”) and within the time period that may
be agreed by the General Partner and a Limited Partner (other than the General Partner or any
Subsidiary of the General Partner), the General Partner shall file with the Commission a shelf
registration statement under Rule 415 of the Securities Act (a “Registration Statement”), or any
similar rule that may be adopted by the Commission, covering (i) the issuance of REIT Shares
issuable upon redemption of the Common Units held by such Limited Partner (“Redemption Shares”)
and/or (ii) the resale by the holder of the Redemption Shares, with respect to Common Units issued
prior to the S-3 Eligible Date; provided, however, that the General Partner shall
be required to file only two such registrations in any 12-month period. In connection therewith,
the General Partner will:
(1) use its reasonable best efforts to have such Registration Statement
declared effective;
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(2) furnish to each holder of Redemption Shares such number of copies of
prospectuses, and supplements or amendments thereto, and such other documents as
such holder reasonably requests;
(3) register or qualify the Redemption Shares covered by the Registration
Statement under the securities or blue sky laws of such jurisdictions within the
United States as any holder of Redemption Shares shall reasonably request, and do
such other reasonable acts and things as may be required of it to enable such
holders to consummate the sale or other disposition in such jurisdictions of the
Redemption Shares; provided, however, that the General Partner shall
not be required to (i) qualify as a foreign corporation or consent to a general or
unlimited service or process in any jurisdictions in which it would not otherwise be
required to be qualified or so consent or (ii) qualify as a dealer in securities;
and
(4) otherwise use its commercially reasonable efforts to comply with all
applicable rules and regulations of the Commission.
The General Partner further agrees to supplement or make amendments to each Registration
Statement, if required by the rules, regulations or instructions applicable to the registration
form utilized by the General Partner or by the Securities Act or rules and regulations thereunder
for such Registration Statement. Each Limited Partner agrees to furnish to the General Partner,
upon request, such information with respect to the Limited Partner as may be required to complete
and file the Registration Statement.
In connection with and as a condition to the General Partner’s obligations with respect to the
filing of a Registration Statement pursuant to this Section 8.05, each Limited Partner agrees with
the General Partner that:
(x) it will not offer or sell its Redemption Shares until (A) such Redemption Shares have been
included in a Registration Statement and (B) it has received copies of a prospectus, and any
supplement or amendment thereto, as contemplated by Section 8.05(a), and receives notice that the
Registration Statement covering such Redemption Shares, or any post-effective amendment thereto,
has been declared effective by the Commission;
(y) if the General Partner determines in its good faith judgment, after consultation with
counsel, that the use of the Registration Statement, including any pre- or post-effective amendment
thereto, or the use of any prospectus contained in such Registration Statement would require the
disclosure of important information that the General Partner has a bona fide business purpose for
preserving as confidential or the disclosure of which would impede the General Partner’s ability to
consummate a significant transaction, upon written notice of such determination by the General
Partner, the rights of each Limited Partner to offer, sell or distribute its Redemption Shares
pursuant to such Registration Statement or prospectus or to require the General Partner to take
action with respect to the registration or sale of any Redemption Shares pursuant to a Registration
Statement (including any action contemplated by this Section 8.05) will be suspended until the date
upon which the General Partner notifies such Limited Partner in writing, which notice shall be
deemed sufficient if given through the issuance of a press release, that suspension of such rights
for the grounds set forth in this paragraph is no
43
longer necessary; provided,
however, that the General Partner may not suspend such rights for an aggregate period of
more than 180 days in any 12-month period; and
(z) in the case of the registration of any underwritten equity offering proposed by the
General Partner (other than any registration by the General Partner (A) on Form S-8, or a
successor or substantially similar form, of an employee stock option, stock purchase or
compensation plan or of securities issued or issuable pursuant to any such plan or (B) on Forms
S-3, or a successor of substantially similar form, of a dividend reinvestment plan), each Limited
Partner will agree, if requested in writing by the managing underwriter or underwriters
administering such offering, not to effect any offer, sale or distribution of any REIT Shares or
Redemption Shares (or any option or right to acquire REIT Shares or Redemption Shares) during the
period commencing on the tenth day prior to the expected effective date (which date shall be stated
in such notice) of the registration statement covering such underwritten primary equity offering
or, if such offering shall be a “take-down” from an effective shelf registration statement, the
tenth day prior to the expected commencement date (which date shall be stated in such notice) of
such offering, and ending on the date specified by such managing underwriter in such written
request to the Limited Partners; provided, however, that no Limited Partner shall
be required to agree not to effect any offer, sale or distribution of its Redemption Shares for a
period of time that is longer than the greater of 90 days or the period of time for which any
senior executive of the General Partner is required so to agree in connection with such offering.
Nothing in this paragraph shall be read to limit the ability of any Limited Partner to redeem its
Common Units in accordance with the terms of this Agreement.
(b) Listing on Securities Exchange. If the General Partner lists or maintains the
listing of REIT Shares on any securities exchange or national market system, it shall, at its
expense and as necessary to permit the registration and sale of the Redemption Shares hereunder,
list thereon, maintain and, when necessary, increase such listing to include such Redemption
Shares.
(c) Registration Not Required. Notwithstanding the foregoing, the General Partner
shall not be required to file or maintain the effectiveness of a registration statement relating to
Redemption Shares after the first date upon which, in the opinion of counsel to the General
Partner, all of the Redemption Shares covered thereby could be sold by the holders thereof either
(i) pursuant to Rule 144 under the Securities Act, or any successor rule thereto (“Rule 144”),
without limitation as to amount or manner of sale or (ii) pursuant to Rule 144 in one transaction
in accordance with the volume limitations contained in Rule 144(e).
(d) Allocation of Expenses. The Partnership shall pay all expenses in connection with
the Registration Statement, including without limitation (i) all expenses incident to filing with
the Financial Industry Regulatory Authority, Inc., (ii) registration fees, (iii) printing expenses,
(iv) accounting and legal fees and expenses, except to the extent holders of Redemption Shares
elect to engage accountants or attorneys in addition to the accountants and attorneys engaged by
the General Partner or the Partnership, which fees and expenses for such accountants or attorneys
shall be for the account of the holders of the Redemption Shares, (v) accounting expenses incident
to or required by any such registration or qualification and (vi) expenses of complying with the
securities or blue sky laws of any jurisdictions in connection with such registration or
qualification; provided, however, neither the Partnership nor the General Partner
shall be liable for (A) any discounts or commissions to any underwriter or
44
broker attributable to
the sale of Redemption Shares, or (B) any fees or expenses incurred by holders of Redemption Shares
in connection with such registration that, according to the written instructions of any regulatory
authority, the Partnership or the General Partner is not permitted to pay.
(e) Indemnification.
(i) In connection with the Registration Statement, the General Partner and the
Partnership agree to indemnify each Limited Partner or holder of Redemption Shares covered
thereby, and each Person who controls any such holder of Redemption Shares within the
meaning of Section 15 of the Securities Act, against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation) caused by any untrue,
or alleged untrue, statement of a material fact contained in the Registration Statement,
preliminary prospectus or prospectus (as amended or supplemented if the General Partner
shall have furnished any amendments or supplements thereto) or caused by any omission or
alleged omission, to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such losses,
claims, damages, liabilities or expenses are caused by any untrue statement, alleged untrue
statement, omission, or alleged omission based upon information furnished to the General
Partner by the Limited Partner or the holder for use therein. The General Partner and each
officer, director and controlling person of the General Partner and the Partnership shall be
indemnified by each Limited Partner or holder of Redemption Shares covered by the
Registration Statement for all such losses, claims, damages, liabilities and expenses
(including reasonable costs of investigation) caused by any untrue, or alleged untrue,
statement or any omission, or alleged omission, based upon information furnished to the
General Partner by the Limited Partner or the holder for use therein.
(ii) Promptly upon receipt by a party indemnified under this Section 8.05(e) of notice
of the commencement of any action against such indemnified party in respect of which
indemnity or reimbursement may be sought against any indemnifying party under this Section
8.05(e), such indemnified party shall notify the indemnifying party in writing of the
commencement of such action, but the failure to so notify the indemnifying party shall not
relieve it of any liability that it may have to any indemnified party otherwise than under
this Section 8.05(e) unless such failure shall materially adversely affect the defense of
such action. In case notice of commencement of any such action shall be given to the
indemnifying party as above provided, the indemnifying party shall be entitled to
participate in and, to the extent it may wish, jointly with any other indemnifying party
similarly notified, to assume the defense of such action at its own expense, with counsel
chosen by it and reasonably satisfactory to such indemnified party. The indemnified party
shall have the right to employ separate counsel in any such action and participate in the
defense thereof, but the reasonable fees and expenses of such counsel (other than reasonable
costs of investigation) shall be paid by the indemnified party unless (i) the indemnifying
party agrees to pay the same, (ii) the indemnifying party fails to assume the defense of
such action with counsel reasonably satisfactory to the indemnified party or (iii) the named
parties to any such action (including any impleaded parties) have been advised by such
counsel that representation of such indemnified party and the indemnifying party by the same
counsel would be inappropriate under applicable
45
standards of professional conduct (in which
case the indemnified party shall have the right to separate counsel and the indemnifying
party shall pay the reasonable fees and expenses of such separate counsel, provided that,
the indemnifying party shall not be liable for more than one separate counsel). No
indemnifying party shall be liable for any settlement of any proceeding entered into without
its consent. No indemnifying party
shall, without the consent of the indemnified party, which consent shall not be
unreasonably withheld, enter into any settlement of any proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been sought
hereunder by such indemnified party, unless such settlement includes an unconditional
release of such indemnified party from all liability arising out of such proceeding.
(f) Contribution.
(i) If for any reason the indemnification provisions contemplated by Section 8.05(e)
hereof are either unavailable or insufficient to hold harmless an indemnified party in
respect of any losses, claims, damages or liabilities referred to therein, then the party
that would otherwise be required to provide indemnification or the indemnifying party (in
either case, for purposes of this Section 8.05(f), the “Indemnifying Party”) in respect of
such losses, claims, damages or liabilities, shall contribute to the amount paid or payable
by the party that would otherwise be entitled to indemnification or the indemnified party
(in either case, for purposes of this Section 8.05(f), the “Indemnified Party”) as a result
of such losses, claims, damages, liabilities or expense, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and the Indemnified
Party, as well as any other relevant equitable considerations. The relative fault of the
Indemnifying Party and Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact related to information supplied by the
Indemnifying Party or Indemnified Party, and the parties’ relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission. The amount
paid or payable by a party as a result of the losses, claims, damages, liabilities and
expenses referred to above shall be deemed to include any legal or other fees or expenses
reasonably incurred by such party.
(ii) The parties hereto agree that it would not be just and equitable if contribution
pursuant to this Section 8.05(f) were determined by pro rata allocation (even if the holders
were treated as one entity for such purpose) or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately preceding
paragraph. No Person determined to have committed a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from
any Person who was not guilty of such fraudulent misrepresentation.
(iii) The contribution provided for in this Section 8.05(f) shall survive the
termination of this Agreement and shall remain in full force and effect regardless of any
investigation made by or on behalf of any Indemnified Party.
46
ARTICLE IX
TRANSFERS OF PARTNERSHIP INTERESTS
9.01 Purchase for Investment.
(a) Each Limited Partner, by its signature below or by its subsequent admission to the
Partnership, represents and warrants to the General Partner and to the Partnership that the
acquisition of such Limited Partner’s Partnership Units is made for investment purposes only and
not with a view to the resale or distribution of such Partnership Units.
(b) Subject to the provisions of Section 9.02, each Limited Partner agrees that such Limited
Partner will not sell, assign or otherwise transfer such Limited Partner’s Partnership Units or any
fraction thereof, whether voluntarily or by operation of law or at judicial sale or otherwise, to
any Person who does not make the representations and warranties to the General Partner set forth in
Section 9.01(a).
9.02 Restrictions on Transfer of Partnership Units.
(a) Subject to the provisions of Sections 9.02(b), (c) and (d), no Limited Partner may offer,
sell, assign, hypothecate, pledge or otherwise transfer all or any portion of such Limited
Partner’s Partnership Units, or any of such Limited Partner’s economic rights as a Limited Partner,
whether voluntarily or by operation of law or at judicial sale or otherwise (collectively, a
“Transfer”) without the consent of the General Partner, which consent may be granted or withheld in
its sole and absolute discretion; provided, however, that the term Transfer does
not include (a) any redemption of Common Units by the Partnership or the General Partner, or
acquisition of Common Units by the General Partner or the Parent, pursuant to Section 8.04
or (b) any redemption of Partnership Units pursuant to any Partnership Unit Designation. The
General Partner may require, as a condition of any Transfer to which it consents, that the
transferor assume all costs incurred by the Partnership in connection therewith.
(b) No Limited Partner may withdraw from the Partnership other than as a result of a permitted
Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or clause (c) below or
a Transfer pursuant to Section 9.05) of all of such Limited Partner’s Partnership Units pursuant to
this Article IX or pursuant to a redemption of all of such Limited Partner’s Common Units pursuant
to Section 8.04 hereof. Upon the permitted Transfer or redemption of all of a Limited Partner’s
Common Units, such Limited Partner shall cease to be a Limited Partner.
(c) Subject to Sections 9.02(d), (e) and (g), a Limited Partner may Transfer, with the consent
of the General Partner, all or a portion of such Limited Partner’s Partnership Units to such
Limited Partner’s (i) parent or parent’s spouse, (ii) spouse, (iii) natural or adopted descendant
or descendants, (iv) spouse of such Limited Partner’s descendant, (v) brother or sister, (vi) trust
created by such Limited Partner for the primary benefit of such Limited Partner and/or any such
Person(s) described in (i) through (v) above, of which trust such Limited Partner or any such
Person(s) or bank or other commercial entity in the business of acting as a fiduciary
47
in its ordinary course of business and having an equity capitalization of at least $100,000,000 is a
trustee, (vii) a corporation, partnership or limited liability company controlled by a Person or
Persons named in (i) through (v) above, or (viii) if the Limited Partner is an entity, its
beneficial owners.
(d) No Limited Partner may effect a Transfer of its Partnership Units, in whole or in part,
if, in the opinion of legal counsel for the Partnership, such proposed Transfer would require the
registration of the Partnership Units under the Securities Act or would otherwise violate any
applicable federal or state securities or blue sky law (including investment suitability
standards).
(e) No Transfer by a Limited Partner of its Partnership Units, in whole or in part, may be
made to any Person if (i) in the opinion of legal counsel for the Partnership, such Transfer would
result in the Partnership being treated as an association taxable as a corporation (other than a
qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion of
legal counsel for the Partnership, it would adversely affect the ability of the General Partner to
continue to qualify as a REIT or subject the General Partner to any additional taxes under Section
857 or Section 4981 of the Code or (iii) such Transfer is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent thereof)” within the
meaning of Section 7704 of the Code.
(f) The General Partner shall monitor the Transfers of Partnership Units (including any
acquisition of Common Units by the Partnership or the General Partner) to determine (i) if such
units could be treated as being traded on an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code and (ii)
whether such Transfers could result in the Partnership being unable to qualify for the “safe
harbors” set forth in Regulations Section 1.7704-1 (or such other guidance subsequently published
by the Service setting forth safe harbors under which interests will not be treated as “readily
tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of
Section 7704 of the Code) (the “Secondary Market Safe Harbors”). The General Partner shall have
the authority (but shall not be required) to take any steps it determines are necessary or
appropriate in its sole and absolute discretion (i) to prevent any Transfer of Partnership Units
which could cause the Partnership to become a “publicly traded partnership,” within the meaning of
Code Section 7704 or (ii) to ensure that one or more of the Secondary Market Safe Harbors is met.
(g) Any purported Transfer in contravention of any of the provisions of this Article IX shall
be void ab initio and ineffectual and shall not be binding upon, or recognized by, the General
Partner or the Partnership.
(h) Prior to the consummation of any Transfer under this Article IX, the transferor and/or the
transferee shall deliver to the General Partner such opinions, certificates and other documents as
the General Partner shall request in connection with such Transfer.
48
9.03 Admission of Substitute Limited Partner.
(a) Subject to the other provisions of this Article IX, an assignee of the Partnership Units
of a Limited Partner (which includes any purchaser, transferee, donee or other recipient of any
disposition of such Partnership Units) shall be admitted as a Limited Partner of the Partnership
only with the consent of the General Partner, which consent may be given or withheld by the General
Partner in its sole and absolute discretion, and upon the satisfactory completion of the following:
(i) The assignee shall have accepted and agreed to be bound by the terms and provisions
of this Agreement by executing a counterpart or an amendment thereof, including a revised
Exhibit A, and such other documents or instruments as the General Partner may
require in order to effect the admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate evidencing the admission of such
Person as a Limited Partner shall have been signed, acknowledged and filed in accordance
with the Act.
(iii) The assignee shall have delivered a letter containing the representation set
forth in Section 9.01(a) hereof and the representations and warranties set forth in Section
9.01(b) hereof.
(iv) If the assignee is a corporation, partnership, limited liability company or trust,
the assignee shall have provided the General Partner with evidence satisfactory to counsel
for the Partnership of the assignee’s authority to become a Limited Partner under the terms
and provisions of this Agreement.
(v) The assignee shall have executed a power of attorney containing the terms and
provisions set forth in Section 8.02 hereof.
(vi) The assignee shall have paid all legal fees and other expenses of the Partnership
and the General Partner and filing and publication costs in connection with its substitution
as a Limited Partner.
(vii) The assignee shall have obtained the prior written consent of the General Partner
to its admission as a Substitute Limited Partner, which consent may be given or denied in
the exercise of the General Partner’s sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and distributing cash received by the
Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the
records of the Partnership as, a Partner upon the filing of the Certificate described in Section
9.03(a)(ii) hereof or, if no such filing is required, the later of the date specified in the
transfer documents or the date on which the General Partner has received all necessary instruments
of transfer and substitution.
(c) The General Partner and the Substitute Limited Partner shall cooperate with each other by
preparing the documentation required by this Section 9.03 and making all official filings and
publications. The Partnership shall take all such action as promptly as
49
practicable after the satisfaction of the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.
9.04 Rights of Assignees of Partnership Units.
(a) Subject to the provisions of Sections 9.01 and 9.02, except as required by operation of
law, the Partnership shall not be obligated for any purposes whatsoever to recognize
the assignment by any Limited Partner of its Partnership Units until the Partnership has
received notice of such assignment.
(b) Any Person who is the assignee of all or any portion of a Limited Partner’s Partnership
Units, but does not become a Substitute Limited Partner and desires to make a further assignment of
such Partnership Units, shall be subject to all the provisions of this Article IX to the same
extent and in the same manner as any Limited Partner desiring to make an assignment of its
Partnership Units.
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.
The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or
a final adjudication that a Limited Partner is incompetent (which term includes, but is not limited
to, insanity) shall not cause the termination or dissolution of the Partnership, and the business
of the Partnership shall continue. If an order for relief in a bankruptcy proceeding is entered
against a Limited Partner, the trustee or receiver of his estate or, if such Limited Partner dies,
such Limited Partner’s executor, administrator or trustee, or, if such Limited Partner is finally
adjudicated incompetent, such Limited Partner’s committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing such Limited Partner’s
estate property and such power as the bankrupt, deceased or incompetent Limited Partner possessed,
to assign all or any part of such Limited Partner’s Partnership Units and to join with the assignee
in satisfying conditions precedent to the admission of the assignee as a Substitute Limited
Partner.
9.06 Joint Ownership of Partnership Units. A Partnership Unit may be acquired by two
individuals as joint tenants with right of survivorship if such individuals either are married or
are related and share the same home as tenants in common. The written consent or vote of both
owners of any such jointly held Partnership Unit shall be required to constitute the action of the
owners of such Partnership Unit, except that the written consent of only one joint owner will be
required if the Partnership has been provided with evidence satisfactory to the counsel for the
Partnership that the actions of a single joint owner can bind both owners under the applicable laws
of the state of residence of such joint owners. Upon the death of one owner of a Partnership Unit
held in a joint tenancy with a right of survivorship, the Partnership Unit shall be owned solely by
the survivor as a Limited Partner and not as an assignee. The Partnership need not recognize the
death of one of the owners of a jointly-held Partnership Unit until it shall have received notice
of such death. Upon notice to the General Partner of such event from either owner, the General
Partner shall cause the Partnership Unit to be divided into two equal Partnership Units, which
shall thereafter be owned separately by each of the former owners.
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ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 Books and Records. At all times during the continuance of the Partnership, the
General Partner shall keep or cause to be kept at the Partnership’s specified office true and
complete books of account in accordance with generally accepted accounting principles, including:
(a) a current list of the full name and last known business address of each Partner, (b) a copy of
the Certificate Limited Partnership and all certificates of amendment thereto, (c) copies
of the Partnership’s federal, state and local income tax returns and reports, (d) copies of
this Agreement and any financial statements of the Partnership for the three most recent years and
(e) all documents and information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing, shall be entitled to
inspect or copy such records during ordinary business hours.
10.02 Custody of Partnership Funds; Bank Accounts.
(a) All funds of the Partnership not otherwise invested shall be deposited in one or more
accounts maintained in such banking or brokerage institutions as the General Partner shall
determine, and withdrawals shall be made only on such signature or signatures as the General
Partner may, from time to time, determine.
(b) All deposits and other funds not needed in the operation of the business of the
Partnership may be invested by the General Partner. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may necessarily result
from an investment in those investment companies permitted by this Section 10.02(b).
10.03 Fiscal and Taxable Year. The fiscal and taxable year of the Partnership shall
be the calendar year unless otherwise required by the Code.
10.04 Annual Tax Information and Report. Within 75 days after the end of each fiscal
year of the Partnership, the General Partner shall furnish to each person who was a Limited Partner
at any time during such year the tax information necessary to file such Limited Partner’s
individual tax returns as shall be reasonably required by law.
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.
(a) The General Partner shall be the Tax Matters Partner of the Partnership. As Tax Matters
Partner, the General Partner shall have the right and obligation to take all actions authorized and
required, respectively, by the Code for the Tax Matters Partner. The General Partner shall have
the right to retain professional assistance in respect of any audit of the Partnership by the
Service and all out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the event the General
Partner receives notice of a final Partnership adjustment under Section 6223(a)(2) of the Code, the
General Partner shall either (i) file a court petition for judicial review of such final adjustment
within the period provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is
51
filed, or (ii) mail a written notice to all Limited Partners, within such period, that describes the General Partner’s reasons for
determining not to file such a petition.
(b) All elections required or permitted to be made by the Partnership under the Code or any
applicable state or local tax law shall be made by the General Partner in its sole and absolute
discretion.
(c) In the event of a transfer of all or any part of the Partnership Interest of any Partner,
the Partnership, at the option of the General Partner, may elect pursuant to Section
754 of the Code to adjust the basis of the Properties. Notwithstanding anything contained in
Article V of this Agreement, any adjustments made pursuant to Section 754 shall affect only the
successor in interest to the transferring Partner and in no event shall be taken into account in
establishing, maintaining or computing Capital Accounts for the other Partners for any purpose
under this Agreement. Each Partner will furnish the Partnership with all information necessary to
give effect to such election.
(d) The Partners, intending to be legally bound, hereby authorize the Partnership to make an
election (the “Safe Harbor Election”) to have the “liquidation value” safe harbor provided in
Proposed Treasury Regulation § 1.83-3(1) and the Proposed Revenue Procedure set forth in Internal
Revenue Service Notice 2005-43, (as such safe harbor may be modified when such proposed guidance is
issued in final form or as amended by subsequently issued guidance (the “Safe Harbor”)), apply to
any interest in the Partnership transferred to a service provider while the Safe Harbor Election
remains effective, to the extent such interest meets the Safe Harbor requirements (collectively,
such interests are referred to as “Safe Harbor Interests”). The Tax Matters Partner is authorized
and directed to execute and file the Safe Harbor Election on behalf of the Partnership and the
Partners. The Partnership and the Partners (including any person to whom an interest in the
Partnership is transferred in connection with the performance of services) agree to comply with all
requirements of the Safe Harbor (including forfeiture allocations) with respect to all Safe Harbor
Interests and to prepare and file all U.S. federal income tax returns reporting the tax
consequences of the issuance and vesting of Safe Harbor Interests consistent with such final Safe
Harbor guidance. The Partnership is also authorized to take such actions as are necessary to
achieve, under the Safe Harbor, the effect that the election and compliance with all requirements
of the Safe Harbor referred to above would be intended to achieve under Proposed Treasury
Regulation § 1.83-3, including amending this Agreement.
10.06 Reports to Limited Partners.
(a) If the General Partner is required to furnish an annual report to its stockholders
containing financial statements of the General Partner, the General Partner will, at the same time
and in the same manner, furnish such annual report to each Limited Partner.
(b) Any Partner shall have the right to a private audit of the books and records of the
Partnership, if such audit is made for Partnership purposes, at the expense of the Partner desiring
it and is made during normal business hours.
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ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
11.01 Amendment of Agreement
The General Partner’s consent shall be required for any amendment to this Agreement. The
General Partner, without the consent of the Limited Partners, may amend this Agreement in any
respect; provided, however, that the following amendments shall require the consent
of a Majority in Interest:
(a) any amendment affecting the operation of the Conversion Factor or the Common Unit
Redemption Right (except as otherwise provided herein) in a manner that adversely affects the
Limited Partners;
(b) any amendment that would adversely affect the rights of the Limited Partners to receive
the distributions payable to them, other than with respect to the issuance of additional
Partnership Units pursuant to Section 4.02 hereof;
(c) any amendment that would alter the Partnership’s allocations of Profit and Loss to the
Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof;
(d) any amendment that would impose on the Limited Partners any obligation to make additional
Capital Contributions to the Partnership; or
(e) any amendment to this Article XI.
11.02 Merger of Partnership
Subject to compliance with the provisions of Sections 7.01(c) or (d), if applicable, the
General Partner, with the consent of a Majority in Interest, may (i) merge or consolidate the
Partnership with or into any other domestic or foreign partnership, limited partnership, limited
liability company or corporation or (ii) sell all or substantially all of the assets of the
Partnership, and may amend this Agreement in connection with any such merger, consolidation or sale
consistent with the provisions of this Article.
ARTICLE XII
GENERAL PROVISIONS
12.01 Notices. All communications required or permitted under this Agreement shall be
in writing and shall be deemed to have been given when delivered personally or upon deposit in the
United States mail, registered, postage prepaid return receipt requested, to the Partners at the
addresses set forth in Exhibit A, as it may be amended or restated from time to time. Any
Partner may specify a different address by notifying the General Partner in writing of such
different address. Notices to the General Partner and the Partnership shall be delivered at or
mailed to its office address specified in Section 2.03 hereof. The General Partner and the
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Partnership may specify a different address by notifying the Limited Partners in writing of such
different address.
12.02 Survival of Rights. Subject to the provisions limiting transfers, this
Agreement shall be binding upon and inures to the benefit of the Partners and the Partnership and
their respective legal representatives, successors, transferees and assigns.
12.03 Additional Documents. Each Partner agrees to perform all further acts and
execute, swear to, acknowledge and deliver all further documents that may be reasonable, necessary,
appropriate or desirable to carry out the provisions of this Agreement or the Act.
12.04 Severability. If any provision of this Agreement shall be declared illegal,
invalid or unenforceable in any jurisdiction, then such provision shall be deemed to be severable
from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity
or unenforceability shall not affect the remainder hereof.
12.05 Entire Agreement. This Agreement and attached exhibits constitute the entire
Agreement of the Partners and supersede all prior written agreements and prior and contemporaneous
oral agreements, understandings and negotiations with respect to the subject matter hereof.
12.06 Pronouns and Plurals. When the context in which words are used in the Agreement
indicates that such is the intent, words in the singular number shall include the plural and the
masculine gender shall include the neuter or female gender as the context may require.
12.07 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement or any particular
Article.
12.08 Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original copy and all of which together shall constitute one and the
same instrument binding on all parties hereto, notwithstanding that all parties shall not have
signed the same counterpart.
12.09 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this
Agreement of Limited Partnership, all as of the date first above written.
GENERAL PARTNER: LEGACY HEALTHCARE PROPERTIES TRUST INC. |
||||
By: | ||||
Name: Xxxxxx X. Xxxxxxxxx III | ||||
Title: Chairman and Chief Executive Officer | ||||
LIMITED PARTNERS LEGACY HEALTHCARE PROPERTIES TRUST INC. |
||||
By: | ||||
Name: Xxxxxx X. Xxxxxxxxx III | ||||
Title: Chairman and Chief Executive Officer | ||||
[Other Limited Partners- Including LTIP Xxxxxxxxxxx] | ||||
00
EXHIBIT A
(As of ___, 2010)
Agreed Value of | ||||||||||||||||||||
Cash | Capital | Common | LTIP | Percentage | ||||||||||||||||
Partner | Contribution | Contribution | Units | Units | Interest | |||||||||||||||
General Partner: |
||||||||||||||||||||
Legacy Healthcare Properties Trust Inc. 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 |
$ | [ ] | $ | [ ] | [ ] | — | [1.0] | % | ||||||||||||
Limited Partners: |
||||||||||||||||||||
Legacy Healthcare Properties Trust Inc. 000 Xxxxx Xxxxxx Xxxxxx, Xxxxx Xxxxx Xxxxx 0000 Xxxxxxx, Xxxxxxx 00000 |
$ | [ ] | $ | [ ] | [ ] | — | [ ] | % | ||||||||||||
[LTIP Unitholders] |
— | — | — | [ ] | [ ] | % | ||||||||||||||
TOTALS |
$ | [ ] | $ | [ ] | [ ] | [ ] | 100 | % | ||||||||||||
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EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.04 of the Agreement of Limited Partnership (the “Agreement”) of
Legacy Healthcare Properties, LP, the undersigned hereby irrevocably (i) presents for redemption
Common Units in Legacy Healthcare Properties, LP in accordance with
the terms of the Agreement and the Common Unit Redemption Right referred to in Section 8.04
thereof, (ii) surrenders such Common Units and all right, title and interest therein and (iii)
directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as determined by
the General Partner deliverable upon exercise of the Common Unit Redemption Right be delivered to
the address specified below, and if REIT Shares (as defined in the Agreement) are to be delivered,
such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.
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Dated: , |
||
Name of Limited Partner: |
||
(Signature of Limited Partner) | ||
(Mailing Address) | ||
(City) (State) (Zip Code) | ||
Signature Guaranteed by: | ||
If REIT Shares are to be issued, issue to: |
||
Please insert social security or identifying number: |
||
Name: |
58
EXHIBIT C-1
CERTIFICATION OF NON-FOREIGN STATUS
(FOR REDEEMING LIMITED PARTNERS THAT ARE ENTITIES)
(FOR REDEEMING LIMITED PARTNERS THAT ARE ENTITIES)
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), in the
event of a disposition by a non-U.S. person of a partnership interest in a partnership in which (i)
50% or more of the value of the gross assets consists of United States real property interests
(“USRPIs”), as defined in Section 897(c) of the Code, and (ii) 90% or more of the value of the
gross assets consists of USRPIs, cash, and cash equivalents, the transferee will be required to
withhold 10% of the amount realized by the non-U.S. person upon the disposition. To inform Legacy
Healthcare Properties Trust Inc. (the “General Partner”) and Legacy Healthcare Properties, L.P (the
“Partnership”) that no withholding is required with respect to the redemption or exchange of its
Common Units in the Partnership owned by (“Partner”), the undersigned
hereby certifies the following on behalf of Partner:
1. | Partner is not a foreign corporation, foreign partnership, foreign trust, or foreign estate, as those terms are defined in the Code and the Treasury regulations thereunder. | |
2. | Partner is not a disregarded entity as defined in Treasury Regulation Section 1.1445-2(b)(2)(iii). | |
3. | The U.S. employer identification number of Partner is . | |
4. | The principal business address of Partner is: , and Partner’s place of incorporation is . | |
5. | Partner agrees to inform the General Partner if it becomes a foreign person at any time during the three-year period immediately following the date of this notice. | |
6. | Partner understands that this certification may be disclosed to the Internal Revenue Service by the General Partner and that any false statement contained herein could be punished by fine, imprisonment, or both. |
PARTNER: | ||||||
By: | ||||||
Name: | ||||||
Title: | ||||||
59
Under penalties of perjury, I declare that I have examined this certification and, to the best
of my knowledge and belief, it is true, correct, and complete, and I further declare that I have
authority to sign this document on behalf of Partner.
Date: | ||||
Name: | ||||
Title: | ||||
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EXHIBIT C-2
CERTIFICATION OF NON-FOREIGN STATUS
(FOR REDEEMING LIMITED PARTNERS THAT ARE INDIVIDUALS)
(FOR REDEEMING LIMITED PARTNERS THAT ARE INDIVIDUALS)
Under Section 1445(e) of the Internal Revenue Code of 1986, as amended (the “Code”), in the
event of a disposition by a non-U.S. person of a partnership interest in a partnership in which (i)
50% or more of the value of the gross assets consists of United States real property interests
(“USRPIs”), as defined in Section 897(c) of the Code, and (ii) 90% or more of the value of the
gross assets consists of USRPIs, cash, and cash equivalents, the transferee will be required to
withhold 10% of the amount realized by the non-U.S. person upon the disposition. To inform Legacy
Healthcare Properties Trust Inc. (the “General Partner”) and Legacy Healthcare Properties, LP (the
“Partnership”) that no withholding is required with respect to the redemption or exchange of my
Common Units in the Partnership, I, , hereby certify the following:
1. | I am not a nonresident alien for purposes of U.S. income taxation. | |
2. | My U.S. taxpayer identification number (social security number) is . | |
3. | My home address is: . | |
4. | I agree to inform the General Partner promptly if I become a nonresident alien at any time during the three-year period immediately following the date of this notice. | |
5. | I understand that this certification may be disclosed to the Internal Revenue Service by the General Partner and that any false statement contained herein could be punished by fine, imprisonment, or both. |
Name: | ||||
Under penalties of perjury, I declare that I have examined this certification and, to the best of
my knowledge and belief, it is true, correct, and complete.
Date: | ||||
Name: | ||||
Title: | ||||
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EXHIBIT D
NOTICE OF ELECTION BY PARTNER TO CONVERT
LTIP UNITS INTO COMMON UNITS
LTIP UNITS INTO COMMON UNITS
The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert the number of
LTIP Units in Legacy Healthcare Properties, LP (the “Partnership”) set forth below into Common
Units in accordance with the terms of the Agreement of Limited Partnership of the Partnership, as
amended; and (ii) directs that any cash in lieu of Common Units that may be deliverable upon such
conversion be delivered to the address specified below. The undersigned hereby represents,
warrants, and certifies that the undersigned (a) has title to such LTIP Units, free and clear of
the rights or interests of any other person or entity other than the Partnership; (b) has the full
right, power, and authority to cause the conversion of such LTIP Units as provided herein; and (c)
has obtained the consent to or approval of all persons or entities, if any, having the right to
consent or approve such conversion.
Name of Holder: |
||
(Please Print Exact Name as Registered with Partnership) |
Number of LTIP Units to be Converted: |
||
Date of this Notice: |
||
Signature Guaranteed By: |
||
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EXHIBIT E
NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF
LTIP UNITS INTO COMMON UNITS
LTIP UNITS INTO COMMON UNITS
Legacy Healthcare Properties, LP (the “Partnership”) hereby irrevocably elects to cause the
number of LTIP Units held by the holder of LTIP Units set forth below to be converted into Common
Units in accordance with the terms of the Agreement of Limited Partnership of the Partnership, as
amended.
Name of Holder: |
||
(Please Print Exact Name as Registered with Partnership) |
Number of LTIP Units to be Converted: |
||
Date of this Notice: |
||
63