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EXHIBIT 10.2
AGREEMENT
OF LIMITED PARTNERSHIP
OF
HCFP REIT OPERATING PARTNERSHIP, L.P.
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TABLE OF CONTENTS
ARTICLE I
DEFINED TERMS...........................................................................................1
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION.............................................................9
2.01 Organization...................................................................................9
2.02 Name, Office and Registered Agent..............................................................9
2.03 Partners.......................................................................................9
2.04 Term and Dissolution..........................................................................10
2.05 Filing of Certificate and Perfection of Limited Partnership...................................10
2.06 Certificates Describing Partnership Units.....................................................10
ARTICLE III
BUSINESS OF THE PARTNERSHIP............................................................................11
3.01 Purpose and Business..........................................................................11
3.02 Powers........................................................................................12
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS.....................................................................12
4.01 Capital Contributions.........................................................................12
4.02 Additional Capital Contributions and Issuances of Additional
Partnership Interests.....................................................................12
4.03 Additional Funding............................................................................15
4.04 Capital Accounts..............................................................................15
4.05 Percentage Interests..........................................................................15
4.06 No Interest on Contributions..................................................................16
4.07 Return of Capital Contributions...............................................................16
4.08 No Third Party Beneficiary....................................................................16
4.09 No Preemptive Rights..........................................................................16
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS......................................................................17
5.01 Allocation of Profit and Loss.................................................................17
5.02 Distribution of Cash..........................................................................19
5.03 REIT Distribution Requirements................................................................21
5.04 Distributions in Kind.........................................................................21
5.05 Limitations on Return of Capital Contributions................................................21
5.06 Distributions upon Liquidation................................................................21
5.07 Substantial Economic Effect...................................................................22
5.08 Allocations to Reflect Issuance of Additional Partnership Interests...........................22
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ARTICLE VI
RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER..................................................22
6.01 Management of the Partnership.................................................................22
6.02 Delegation of Authority.......................................................................25
6.03 Indemnification and Exculpation of Indemnitees................................................25
6.04 Liability of the General Partner..............................................................27
6.05 Reimbursement of General Partner..............................................................28
6.06 Outside Activities............................................................................28
6.07 Employment or Retention of Affiliates.........................................................28
6.08 General Partner Participation.................................................................29
6.09 Title to Partnership Assets...................................................................29
6.10 Miscellaneous.................................................................................29
ARTICLE VII
CHANGES IN GENERAL PARTNER.............................................................................30
7.01 Transfer of the General Partner's Partnership Interest........................................30
7.02 Admission of a Substitute or Additional General Partner.......................................31
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner...................32
7.04 Removal of General Partner....................................................................33
ARTICLE VIII
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.........................................................34
8.01 Management of the Partnership.................................................................34
8.02 Power of Attorney.............................................................................34
8.03 Limitation on Liability of Limited Partners...................................................35
8.04 Redemption Right..............................................................................35
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS ............................................................37
9.01 Purchase of Investment........................................................................37
9.02 Restrictions on Transfer of Limited Partnership Interests.....................................38
9.03 Admission of Substitute Limited Partner.......................................................40
9.04 Rights of Assignees of Partnership Interests..................................................41
9.05 Effect of Bankruptcy, Death, Incompetence of
Termination of a Limited Partner..........................................................41
9.06 Joint Ownership of Interests..................................................................42
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS.............................................................42
10.01 Books and Records.............................................................................42
10.02 Custody of Partnership Funds; Bank Accounts...................................................43
10.03 Fiscal and Taxable Year.......................................................................43
10.04 Annual Tax Information and Report.............................................................43
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10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.................................43
10.06 Reports to Limited Partners...................................................................44
ARTICLE XI
AMENDMENT OF AGREEMENT.................................................................................45
ARTICLE XII
GENERAL PROVISIONS.....................................................................................46
12.01 Notices.......................................................................................46
12.02 Survival of Rights............................................................................46
12.03 Additional Documents..........................................................................46
12.04 Severability..................................................................................46
12.05 Entire Agreement..............................................................................46
12.06 Pronouns and Plurals..........................................................................46
12.07 Headings......................................................................................46
12.08 Counterparts..................................................................................46
12.09 Governing Law.................................................................................46
12.10 Partner Representations and Warranties........................................................47
12.11 Waiver........................................................................................47
12.12 Partition.....................................................................................47
EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Redemption Right
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AGREEMENT OF LIMITED PARTNERSHIP
OF
HCFP REIT OPERATING PARTNERSHIP, L.P.
RECITALS
HCFP REIT Operating Partnership, L.P. (the "Partnership") is being
formed as a limited partnership under the laws of the State of Delaware
pursuant to a Certificate of Limited Partnership filed with the Office of the
Secretary of State of the State of Delaware effective as of April 9, 1998. This
Agreement of Limited Partnership (the "Agreement") is entered into this 6th day
of May 1998 among HealthCare Financial Partners REIT, Inc., a Maryland
corporation (the "General Partner") and HCFP Limited Inc., a Maryland
corporation (the "Initial Limited Partner").
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants
between the parties hereto, and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree 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 Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 4.02 hereof.
"Additional Securities" means any additional REIT Shares (other than
REIT Shares issued in connection with a redemption pursuant to Section 8.05
hereof) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.02(a)(ii).
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"Adjusted Capital Account Deficit" means, with respect to any partner,
the deficit balance, if any, in such Partner's Capital account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(i) Credit to such Capital Account any amounts which such Partner is
obligated to restore pursuant to any provisions of this Agreement or is
otherwise treated as being obligated to restore under Regulations Section
1.704-1(b)(2)(ii)(c) or is deemed to be obligated to restore pursuant to the
penultimate sentence of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5);
and
(ii) Debit to such Capital Account the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5), and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations Section 1.704(b)(2)(ii)(d) and shall
be interpreted consistently therewith.
"Administrative Expenses" means (i) all administrative and operating
costs and expenses incurred by the Partnership, (ii) those administrative costs
and expenses of the General Partner, including any salaries or other payments
to directors, trustees, officers or employees of the General Partner, and any
accounting and legal expenses of the General Partner, which expenses, the
Partners agree, are expenses of the Partnership and not the General Partner,
and (iii) to the extent not included in clause (ii) above, REIT Expenses;
PROVIDED, HOWEVER, that Administrative Expenses shall not include any
administrative costs and expenses incurred by the General Partner that are
attributable to Properties or partnership interests in a Subsidiary Partnership
that are owned by the General Partner directly.
"Affiliate" means with respect to any Person, (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, trustee, employee,
partner or trustee of such Person or any Person controlling, controlled by or
under common control with such Person (excluding trustees and persons serving
in similar capacities who are not otherwise an Affiliate of such Person). For
the purposes of this definition, "control" (including the correlative meanings
of the terms "controlled by" and "under common control with"), as used with
respect to any Person, shall mean the possession, directly or indirectly, of
the power to direct or cause the direction of the management and policies of
such Person, through the ownership of voting securities, partnership or limited
liability company 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.
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"Agreement" means this Agreement of Limited Partnership, as it may be
amended, supplemented or restated from time to time.
"Capital Account" has the meaning provided in Section 4.04 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 equal to the Value of the REIT
Shares Amount on the date of receipt by the General Partner of a Notice of
Redemption. Notwithstanding the foregoing, if the General Partner raises the
Cash Amount through an offering of securities, borrowings or otherwise, the
cash Amount shall be reduced by an amount equal to the expenses incurred by the
General Partner in connection with raising such funds (to the extent that such
expenses are allocable to funds used to pay the Cash Amount); provided,
however, that the total reduction of the Cash Amount for such expenses shall
not exceed five percent (5%) of the total Cash Amount as determined prior to
reduction for such expenses.
"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 or sworn to by one or more 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 in the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership,
to effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.
"Charter" means the Articles of Incorporation of the General Partner,
as amended, filed with the Maryland State Department of Assessments and
Taxation, as amended, supplemented or restated from time to time.
"Code" means the Internal Revenue Code of 1986, as amended, and as
hereafter amended from time to time. Reference to any particular provision of
the Code shall mean that provision in the Code at the date hereof and any
successor provision of the Code.
"Commission" means the U.S. Securities and Exchange Commission.
"Common Stock" means the common stock of the General Partner, $0.0001
par value per share.
"Conversion Factor" means 1.0, PROVIDED THAT, (a) 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
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outstanding REIT Shares, or (iii) combines its outstanding REIT Shares into a
smaller number of REIT Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall
be the number of REIT Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time), and the denominator of which shall be the actual number of REIT
Shares (determined without the above assumption) issued and outstanding on such
date; and (b) in the event that the General Partner declares or pays a dividend
or other distribution on its outstanding REIT Shares (other than (A) cash
dividends payable in the ordinary course of the General Partner's business or
(B) dividends payable in REIT Shares that give rise to an adjustment in the
Conversion Factor under subsection (a) hereof) and the Value of the REIT Shares
on the 20th trading day following the record date ("Record Date") for such
dividend or distribution (the "Post-Distribution Value") is less than the Value
of the REIT Shares on the business day immediately preceding such Record Date
(the "Pre-Distribution Value"), then the Conversion Factor in effect after the
Record Date shall be adjusted by multiplying the Conversion Factor in effect
prior to the Record Date by a fraction, the numerator of which is the
Pre-Distribution Value and the denominator of which is the Post-Distribution
Value, PROVIDED, HOWEVER, that no adjustment shall be made if (x) with respect
to any cash dividend or distribution with respect to REIT Shares, the
Partnership distributes with respect to each Partnership Unit an amount equal
to the amount of such dividend or distribution multiplied by the Conversion
Factor or (y) with respect to any dividend or distribution of securities or
property other than cash, the Partnership distributes with respect to each
Partnership Unit an amount of securities or other property equal to the amount
distributed with respect to each REIT Share multiplied by the Conversion Factor
or a partnership interest or other security readily convertible into such
securities or other property. 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; PROVIDED, HOWEVER, that if the
General Partner receives a Notice of Redemption after the record date, but
prior to the effective date of such dividend, distribution, subdivision or
combination, 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 dividend, distribution, subdivision or combination.
"Event of Bankruptcy" as to any Person means the filing of a petition
for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of
1978, as amended, or similar provision of law of any jurisdiction (except if
such petition is contested by such Person and has been dismissed within 90
days); insolvency or bankruptcy of such Person as finally determined by a court
proceeding; filing by such Person of a petition or application to accomplish
the same or for the appointment of a receiver or a trustee for such Person or a
substantial part of his assets; commencement of any proceedings relating to
such Person as a debtor under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction, whether
now in existence or hereinafter in effect, either by such Person or by another,
PROVIDED, HOWEVER, that if such proceeding is commenced by another, such Person
indicates his approval of such proceeding, consents thereto or acquiesces
therein, or such proceeding is contested by such Person and has not been
finally dismissed within 90 days.
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"General Partner" means HealthCare Financial Partners REIT, Inc., a
Maryland corporation, and any Person who becomes a substitute or additional
General Partner as provided herein, and any of their successors as General
Partner.
"General Partnership Interest" means a Partnership Interest held by
the General Partner that is a general partnership interest.
"HCFP" means HealthCare Financial Partners, Inc., a Delaware
corporation.
"Indemnitee" means (i) any Person made a party to a proceeding by
reason of its status as the General Partner or a director, trustee, officer or
employee of the Partnership or the General Partner, and (ii) such other Persons
(including the Manager and Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time, in its
sole and absolute discretion.
"Independent Director" means a person who is (i) independent of
management of the General Partner, HCFP and the Manager, (ii) not employed by
or an officer of the Company, HCFP or the Manager, (iii) not an "affiliate" (as
defined in Rule 405 under the Securities Act) of the Company, HCFP, the
Manager, or of any subsidiary of the Company, HCFP or the Manager, and (iv) not
a person who acts on a regular basis as an individual or representative of an
organization serving as a professional advisor, legal counsel or consultant to
the management of the Company, HCFP or the Manager.
"Initial Limited Partner" means HCFP Limited, Inc., a Maryland
corporation.
"Limited Partner" means any Person named as a Limited Partner on
EXHIBIT A attached hereto, and any Person who becomes a Substitute or
Additional Limited Partner, in such Person's capacity as a Limited Partner in
the Partnership.
"Limited Partnership Interest" means the ownership interest of a
Limited Partner in the Partnership at any particular time, including the right
of such Limited Partner to any and all benefits to which such Limited Partner
may be entitled as provided in this Agreement and in the Act, together with the
obligations of such Limited Partner to comply with all the provisions of this
Agreement and of such Act. A Limited Partnership Interest may be expressed as a
number of Partnership Units.
"Loss" has the meaning provided in Section 5.01(f) hereof.
"Manager" means HCFP REIT Management, Inc., a Maryland corporation.
"Notice Of Redemption" means the Notice of Exercise of Redemption
Right substantially in the form attached as EXHIBIT B hereto.
"NYSE" means the New York Stock Exchange.
"Offer" has the meaning set forth in Section 7.01(c) hereof.
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"Offering" means the initial offer and sale by the General Partner and
the purchase by the Underwriters (as defined in the Prospectus) of REIT Shares
for sale to the public.
"Partner" means any General Partner or Limited Partner.
"Partner Nonrecourse Debt Minimum Gain" has the meaning set forth in
Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt
Minimum Gain shall be determined in accordance with Regulations Section
1.704-2(i)(5).
"Partnership" means the limited partnership formed under the Act and
pursuant to this Agreement, and any successor thereto.
"Partnership Interest" means an ownership interest in the Partnership
held by either a Limited Partner or the General Partner and includes any and
all benefits to which the holder of such a Partnership Interest may be entitled
as provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
"Partnership Minimum Gain" has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner's share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).
"Partnership Record Date" means the record date established by the
General Partner for the distribution of cash pursuant to Section 5.02 hereof,
which record date shall be the same as the record date established by the
General Partner for a distribution to its shareholders of some or all of its
portion of such distribution.
"Partnership Unit" means a fractional, undivided share of the
Partnership Interests of all Partners issued hereunder. The allocation of
Partnership Units among the Partners shall be as set forth on EXHIBIT A, as may
be amended from time to time.
"Percentage Interest" means the percentage ownership interest in the
Partnership of each Partner, as determined by dividing the Partnership Units
owned by a Partner by the total number of Partnership Units then outstanding.
The Percentage Interest of each Partner shall be as set forth on EXHIBIT A, as
may be amended from time to time.
"Person" means any individual, partnership, limited liability company,
corporation, joint venture, trust or other entity.
"Profit" has the meaning provided in Section 5.01(f) hereof.
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"Property" means any loan, real property or other investment in which
the Partnership holds an ownership interest.
"Prospectus" means the final prospectus delivered to purchasers of
REIT Shares in the Offering.
"Redeeming Partner" has the meaning provided in Section 8.05(a)
hereof.
"Redemption Amount" means either the Cash Amount or the REIT Shares
Amount, as selected by the General Partner in its sole and absolute discretion
pursuant to Section 8.05(b) hereof.
"Redemption Right" has the meaning provided in Section 8.05(a) hereof.
"Regulations" means the Federal Income Tax Regulations issued under
the Code, as amended and as hereafter amended from time to time. Reference to
any particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
"REIT" means a real estate investment trust under Sections 856 through
860 of the Code.
"REIT Expenses" means (i) costs and expenses relating to the formation
and continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be
included within the definition of General Partner), including taxes, fees and
assessments associated therewith, any and all costs, expenses or fees payable
to any trustee, officer, or employee of the General Partner, (ii) costs and
expenses relating to any public offering and registration 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,
(viii) costs and expenses associated with the management of the General Partner
by the Manager, and (ix) 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 a share of Common Stock of the General Partner (or
successor entity, as the case may be).
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"REIT Shares Amount" means a whole number of REIT Shares equal to the
product of the number of Partnership Units offered for redemption by a
Redeeming Partner, multiplied by the Conversion Factor as adjusted to and
including the Specified Redemption Date (rounded down to the nearest whole
number in the event such product is not a whole number); PROVIDED THAT in the
event the General Partner issues to all holders of REIT Shares rights, options,
warrants or convertible or exchangeable securities entitling the shareholders
to subscribe for or purchase REIT Shares, or any other securities or property
(collectively, the "rights"), and the rights have not expired at the Specified
Redemption Date, then the REIT Shares Amount shall also include the rights
issuable to a holder of the REIT Shares Amount of REIT Shares on the record
date fixed for purposes of determining the holders of REIT Shares entitled to
rights.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Service" means the Internal Revenue Service.
"Share Incentive Plans" means the HealthCare Financial Partners REIT,
Inc. 1998 Stock Incentive Plan, as amended from time to time, or any stock
incentive plan adopted in the future by the General Partner.
"Specified Redemption Date" means (i) with respect any Notice of
Redemption received by the General Partner after one year following the closing
of the Offering and before one year and one month following the closing of
Offering, the first business day that is at least 30 calendar days after the
receipt by the General Partner of the Notice of Redemption and (ii) with
respect any Notice of Redemption received by the General Partner after one year
and one month following the closing of Offering, the first business day that is
at least 15 calendar days after the receipt by the General Partner of the
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 or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"Subsidiary Partnership" means any partnership (or limited liability
company) of which the partnership interests therein are owned by the General
Partner or a wholly-owned subsidiary of the General Partner.
"Substitute Limited Partner" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.
"Surviving General Partner" has the meaning set forth in Section
7.01(d) hereof.
"Transaction" has the meaning set forth in Section 7.01(c) hereof.
"Transfer" has the meaning set forth in Section 9.02(a) hereof.
"Value" means, with respect to any security, the average of the
"closing price" of such security for the ten consecutive trading days
immediately preceding the date of such valuation.
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The "closing price" for each such trading day means the last sale price,
regular way on such day, or, if no such sale takes place on that day, the
average of the closing bid and asked prices on that day, regular way, in either
case as reported on the principal consolidated transaction reporting system
with respect to securities listed or admitted to trading on the New York Stock
Exchange, or if the securities are not so listed or admitted to trading, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities exchange
(including the National Market System of the National Association of Securities
Dealers, Inc. Automated Quotation System) on which the securities are listed or
admitted to trading or, if the securities are not so listed or admitted to
trading, the last quoted price or, if not quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or,
if such system is no longer in use, the principal automated quotation system
then in use or, if the securities are not so quoted by any such system, the
average of the closing bid and asked prices as furnished by a professional
market maker selected by the General Partner making a market in the securities,
or, if there is no such market maker or such closing prices otherwise are not
available, the fair market value of the securities as of such day, as
determined by the General partner in its sole discretion.
ARTICLE II
PARTNERSHIP CONTINUATION AND IDENTIFICATION
2.01 ORGANIZATION. The Partners hereby agree to organize the
Partnership pursuant to the Act and upon the terms and conditions set forth in
this Agreement.
2.02 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership
is HCFP REIT Operating Partnership, L.P. The specified office and place of
business of the Partnership shall be 0 Xxxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxx
Xxxxx, Xxxxxxxx 00000. The General Partner may at any time change the name of
the Partnership or the location of its specified office and place of business,
PROVIDED the General Partner gives notice to the Partners of any such change.
The Partnership may maintain offices at such other place or places as the
General Partner deems advisable. The initial registered agent is [THE
CORPORATION TRUST COMPANY, CORPORATION TRUST CENTER, 0000 XXXXXX XXXXXX,
XXXXXXXXXX, XXX XXXXXX XXXXXX, XXXXXXXX 00000]. The sole duty of the registered
agent as such is to forward to the Partnership any notice that is served on him
as registered agent.
2.03 PARTNERS.
(a) The General Partner of the Partnership is HealthCare
Financial Partners REIT, Inc., a Maryland corporation. Its principal place of
business is the same as that of the Partnership.
(b) The Initial Limited Partner is HCFP Limited Inc., a
Maryland corporation, and the Limited Partners are those Persons identified as
Limited Partners on EXHIBIT A hereto, as amended from time to time.
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2.04 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in full force
and effect until December 31, 2098, except that the Partnership shall be
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) hereof; PROVIDED THAT if a General Partner
is on the date of such occurrence a partnership, the dissolution of
such General Partner as a result of the dissolution, death,
withdrawal, removal or Event of Bankruptcy of a partner in such
partnership shall not be an event of dissolution of the Partnership if
the business of such General Partner is continued by the remaining
partner or partners, either alone or with additional partners, and
such General Partner and such partners comply with any other
applicable requirements of this Agreement;
(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (PROVIDED THAT if the Partnership receives an installment
obligation as consideration for such sale or other disposition, the
Partnership shall continue, unless sooner dissolved under the
provisions of this Agreement, until such time as such note or notes
are paid in full); or
(iii) At any time after 13 months following the closing of
the Offering, the election by the General Partner that the Partnership
should be dissolved.
(b) Upon dissolution of the Partnership (unless the business of
the Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and
apply and distribute the proceeds thereof in accordance with Section 5.06
hereof. Notwithstanding the foregoing, the liquidating General Partner may
either (i) defer liquidation of, or withhold from distribution for a reasonable
time, any assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership, the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. The General Partner,
at its option, may issue a certificate summarizing the terms of each Limited
Partner's interest in the Partnership, including the 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)
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shall be in form and substance as approved 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 the
provisions of the Agreement of Limited Partnership
of HCFP REIT Operating Partnership, L.P., as amended
from time to time. Upon surrender to the General
Partner of any such certificate, accompanied by proper
evidence of authority to transfer, the General Partner
shall cancel the old certificate, issue a new
certificate to the Person entitled thereto and record
the transaction upon its books. The General Partner
may issued a new certificate or certificates in place
of any certificate or certificates previously issued,
which previously-issued certificate or certificates
are alleged to have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the
owner claiming the certificate or certificates to
be lost, stolen or destroyed. When issuing such new
certificate or certificates, the General Partner may,
in its discretion and as a condition precedent to the
issuance thereof, require the owner of such lost,
stolen or destroyed certificate or certificates, or
its legal representative, to give the Partnership a
bond in such sum as the General Partner may direct as
indemnity against any claim that may be made against
the Partnership with respect to the certificate or
certificates alleged to have been lost, stolen or
destroyed.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
3.01 PURPOSE AND BUSINESS. The purpose and nature of the business to
be conducted by the Partnership is (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Act,
including, without limitation, to acquire, hold own, develop, construct,
improve, maintain, operate, sell, lease, transfer, encumber, convey, exchange,
and otherwise dispose of or deal with real and personal property of all kinds,
PROVIDED, HOWEVER, that 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 qualify as a REIT, (ii) to enter
into any partnership, joint venture or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged in any
of the foregoing and (iii) to do anything necessary, appropriate, proper,
advisable, desirable, convenient 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's current status as a REIT and the
avoidance of income and excise taxes on the General Partner inures to the
benefit
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of all the Partners and not solely to the General Partner. Notwithstanding the
foregoing, the Limited Partners agree that the General Partner may terminate
its status as a REIT under the Code at any time to the full extent permitted
under its Charter. The General Partner shall also be empowered to do any and
all acts and things necessary or prudent to ensure that the Partnership will
not be classified as a "publicly traded partnership" for purposes of Section
7704 of the Code.
3.02 POWERS. Subject to all of the terms, covenants, conditions and
limitations contained in this Agreement and any other agreement entered into by
the Partnership, the Partnership shall have full power and authority to do any
and all acts and things necessary, appropriate, proper, advisable, desirable,
incidental to or convenient for the furtherance and accomplishment of the
purposes and business described herein and for the protection and benefit of
the Partnership, including, without limitation, full power and authority,
directly or through its ownership interest in other entities, to enter into,
perform and carry out contract of any kind, borrow money and issue evidences of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or
other lien, acquire and develop real property, and lease, sell, transfer or
otherwise dispose of real property; PROVIDED, HOWEVER, that the Partnership
shall not take, or refrain from taking, any action which, in the judgment of
General Partner, in its sole and absolute discretion, (i) could adversely
affect the ability of the General Partner to achieve or maintain qualifications
a REIT, (ii) could subject the General Partner to any additional taxes under
Section 857, Section 860E(e) or Section 4981 of the Code, (iii) could cause the
Partnership to be classified as a "publicly traded partnership" within the
meaning of Section 7704 of the Code , or (iv) could violate any law or
regulation of any governmental body or agency having jurisdiction over the
General Partner or its securities, unless such action (or inaction) shall have
been specifically consented to by the General Partner in writing.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 CAPITAL CONTRIBUTIONS. The General Partner and the Limited
Partners have made capital contributions to the Partnership in exchange for the
Partnership Units and Partnership Interests set forth opposite their names on
EXHIBIT A, as amended from time to time. The General Partner shall have the
authority to adjust the Percentage Interests of the Partners set forth on
EXHIBIT A from time to time, to the extent necessary to reflect accurately
Capital Contributions, admissions of Additional Limited Partners, the
redemption or transfer of any Partnership Interest or similar events having an
effect on a Partner's Percentage Interest.
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in this Section 4.02, in Section
4.03, or Section 5.02(a), the Partners shall have no right or obligation to
make any additional Capital Contributions or loans to the Partnership. The
General Partner may contribute additional capital to the Partnership, from time
to time, and receive additional Partnership Interests in respect thereof, in
the manner contemplated in this Section 4.02; provided, however, that the
General Partner in making any determination with respect to additional Capital
Contributions shall arrange, to the extent possible, so that additional Capital
Contributions are
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made in a manner that avoids classification of the Partnership as a "investment
company" within the meaning of Sections 721(b) and 351(e)(1) of the Code.
(a) ISSUANCES OF ADDITIONAL PARTNERSHIP INTERESTS.
(i) GENERAL. The General Partner is hereby
authorized to cause the Partnership to issue such additional Partnership Units
or other Partnership Interests for any Partnership purpose at any time or from
time to time, to the Partners (including the General Partner) or to other
Persons for such consideration and on such terms and conditions as shall be
established by the General Partner in its sole and absolute discretion, all
without the approval of any Limited Partners. Any additional Partnership
Interests issued thereby may be issued in one or more classes, or one or more
series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties,
including rights, powers and duties senior to Limited Partnership Interests,
all as shall be determined by the General Partner in its sole and absolute
discretion and without the approval of any Limited Partner, subject to Delaware
law, including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii) the
rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership; PROVIDED, HOWEVER, that no additional
Partnership Interests shall be issued to the General Partner unless
(1) (A) the additional Partnership Interests are issued
in connection with an issuance of REIT Shares of or other interests in the
General Partner, which shares or interests have designations, preferences and
other rights, all such that the economic interests are substantially similar to
the designations, preferences and other rights of the additional Partnership
Interests issued to the General Partner by the Partnership in accordance with
this Section 4.02 and (B) the General Partner shall make a Capital Contribution
to the Partnership in an amount equal to the proceeds raised in connection with
the issuance of such shares of stock of or other interests in the General
Partner;
(2) the additional Partnership Interests are issued in
exchange for property (including cash) owned by the General Partner with a fair
market value, as determined by the General Partner, in good faith, equal to the
value of the Partnership Interests; or
(3) the additional Partnership Interests are issued to
all Partners in proportion to their respective Percentage Interests.
Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units for less than fair market
value, so long as the General Partner concludes in good faith that such
issuance is in the best interests of the General Partner and the Partnership.
(ii) UPON ISSUANCE OF ADDITIONAL SECURITIES. The
General Partner shall not issue any additional REIT Shares (other than REIT
Shares issued in connection with a redemption pursuant to Section 8.05 hereof)
or rights, options, warrants or
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convertible or exchangeable securities containing the right to subscribe for or
purchase REIT Shares (collectively, "Additional Securities") other than to all
holders of REIT Shares, unless (A) the General Partner shall cause the
Partnership to issue to the General Partner Partnership Interests or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the Additional Securities, and
(B) the General Partner contributes the proceeds from the issuance of such
Additional Securities and from any exercise of rights contained in such
Additional Securities to the Partnership; PROVIDED, HOWEVER, that the General
Partner is allowed to issue Additional Securities in connection with an
acquisition of a property to be held directly by the General Partner, but if
and only if, such direct acquisition and issuance of Additional Securities have
been approved and determined to be in the best interests of the General Partner
and the Partnership by a majority of the Independent Directors. Without
limiting the foregoing, the General Partner is expressly authorized to issue
Additional Securities for less than fair market value, and to cause the
Partnership to issue to the General Partner corresponding Partnership
Interests, so long as (x) the General Partner concludes in good faith that such
issuance is in the best interests of the General Partner and the Partnership,
including without limitation, the issuance of REIT Shares and corresponding
Partnership Units pursuant to an employee share purchase plan providing for
employee purchases of REIT Shares at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair
market value of the REIT Shares, either at the time of issuance or at the time
of exercise, and (y) the General Partner contributes all proceeds from such
issuance to the Partnership. For example, in the event the General Partner
issues REIT Shares for a cash purchase price and contributes all of the
proceeds of such issuance to the Partnership as required hereunder, the General
Partner shall be issued a number of additional Partnership Units equal to the
product of (A) the number of such REIT Shares issued by the General Partner,
the proceeds of which were so contributed, multiplied by (B) a fraction, the
numerator of which is 100%, and the denominator of which is the Conversion
Factor in effect on the date of such contribution.
(b) CERTAIN DEEMED CONTRIBUTIONS OF PROCEEDS OF ISSUANCE
OF REIT SHARES. Except as provided in Section 4.02(d), in connection with any
and all issuances of REIT Shares, 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, are less
than the gross proceeds of such issuance as a result of any underwriter's
discount, commission, fee or other expenses paid or incurred in connection with
such issuance, then the General Partner shall be deemed to have made Capital
Contributions to the Partnership in the aggregate amount of the gross proceeds
of such issuance and the Partnership shall be deemed simultaneously to have
paid such offering expenses in accordance with Section 6.05 hereof and in
connection with the required issuance of additional Partnership Units to the
General Partner for such Capital Contributions pursuant to Section 4.02(a)
hereof.
(c) If the General Partner shall repurchase shares of
any class of the General Partner's 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 cancel a number of
Partnership Units of the appropriate class held by the General Partner equal to
the quotient of the number of such shares of the General Partner's capital
stock divided by the Conversion Factor.
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(d) Notwithstanding Section 4.02(b) or any other provision of
this Section 4.02, the General Partner may decide, whether in connection with
the issuance of additional REIT Shares or otherwise, to defer making additional
Capital Contributions if the General Partner determines, in its sole
discretion, that such deferral is necessary in order to facilitate the
acquisition of property by the Partnership in the future by avoiding
classification of the Partnership as a "investment company" within the meaning
of Sections 721(b) and 351(e)(1) of the Code.
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 provide such Additional Funds to the
Partnership through loans or otherwise.
4.04 CAPITAL ACCOUNTS. A separate capital account (a "Capital
Account") shall be established and maintained for each Partner in accordance
with Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner
acquires 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, or (iii) the Partnership is liquidated within the meaning
of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue
the property of the Partnership to its fair market value (as determined by the
General Partner, 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, HOWEVER, that adjustments pursuant to clauses
(i) and (ii) above shall be made only if the General Partner determines that
such adjustments are necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership. 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 if there were a taxable disposition
of such property for 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) on the date of the revaluation.
4.05 PERCENTAGE INTERESTS. If the number of outstanding Partnership
Units increases or decreases during a taxable year, each Partner's Percentage
Interest shall be adjusted by the General Partner effective as of the effective
date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners' Percentage Interests are adjusted pursuant to this Section
4.05, the Profits and Losses for the taxable year in which the adjustment
occurs shall be allocated between the part of the year ending on the day when
the Partnership's property is revalued by the General Partner and the part of
the year beginning on the following day either (i) as if the taxable year had
ended on the date of the adjustment or (ii) based on the number of days in each
part. The
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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.
4.06 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to
interest on its Capital Contribution.
4.07 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08 NO THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to
pursue any other right or remedy hereunder or at law or in equity, it being
understood and agreed that the provisions of this Agreement shall be solely for
the benefit of, and may be enforced solely by, the parties hereto and their
respective successors and assigns. None of the rights or obligations of the
Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any
creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the
Partnership to secure any debt or other obligation of the Partnership or of any
of the Partners. In addition, it is the intent of the parties hereto that no
distribution to any Limited Partner shall be deemed a return of money or other
property in violation of the Act. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any
Limited Partner is obligated to return such money or property, such obligation
shall be the obligation of such Limited Partner and not of the General Partner.
Without limiting the generality of the foregoing, a deficit Capital Account of
a Partner shall not be deemed to be a liability of such Partner nor an asset or
property of the Partnership.
4.09 NO PREEMPTIVE RIGHTS. No Person shall have any preemptive,
preferential or other similar right with respect to (i) additional Capital
Contributions or loans to the Partnership; or (ii) issuance or sale of any
Partnership Units or other Partnership Interests.
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ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) GENERAL. After giving effect to the special allocations set
forth in Sections 5.01(b) through (d), Profit and Loss of the Partnership for
each fiscal year of the Partnership shall be allocated among the Partners as
follows:
(i) Profit shall be allocated first to the Partners (pro
rata, in proportion to the respective amounts allocable to each partner under
this clause (i)), until each Partner has received cumulative allocations of
Profit for the current fiscal year and all prior fiscal years under this clause
(i) equal to the cumulative distributions made to such partner under Section
5.02 hereof for the current fiscal year and all prior fiscal years, with any
remaining profit allocated among the Partners in proportion to their respective
Percentage Interests; and (ii) Loss shall be allocated among the Partners in
accordance with their respective Percentage Interests. Notwithstanding the
foregoing, any income or gain from the sale or other disposition of all or
substantially all of the assets of the Partnership (in one transaction or a
series of related transactions) shall be allocated among the Partners in a
manner so as to cause the positive Capital Account of each Partner (determined
after all other allocations of Profit, Loss and items of income, gain or loss,
including loss realized and recognized in connection with such sale or other
disposition, and all prior distributions under Section 5.02, but prior to any
distribution(s) of proceeds from such sale or other disposition, have been
reflected in such Capital Account) to be equal to an amount that would be
payable to such Partner if any amounts to be distributed in connection with
such sale or other disposition were distributed to the Partners in accordance
with Section 5.02 hereof (the "Final Distribution Amounts"); provided further
that, in the event the amount of such income or gain exceeds the amount
necessary to cause the positive balance of each Partner's Capital Account to
equal such Partner's Final Distribution Amount, the excess income or gain shall
be allocated among the Partners in accordance with their Percentage Interests,
and in the event there is insufficient income or gain to cause the positive
balance of each Partner's Capital Account to equal such Partner's Final
Distribution Amount, then an amount equal to the total of the shortfalls for
all Partners shall be treated as if it were a loss incurred by the Partnership
that is allocated to all the Partners in accordance with their Percentage
Interests and shall serve to reduce the amount of income or gain otherwise
allocable to the Partners as set forth above. In addition, any loss from the
sale or other disposition of all or substantially all of the assets of the
Partnership (in one transaction or a series of related transactions) shall be
allocated among the Partners in a manner so as to cause the positive Capital
Account of each Partner (determined after all other allocations of Profit, Loss
and items of loss, income or gain, including income or gain realized and
recognized in connection with such sale or other disposition, and all
distributions under Section 5.02 and Section 5.06, including the Final
Distribution Amounts, if any, have been reflected in such Capital Account) to
be equal to zero; provided further that, in the event the amount of such loss
exceeds the amount necessary to cause each Partner's Capital Account to equal
zero, such excess loss shall be allocated among the Partners in accordance with
their Percentage Interests, and in the event that there is insufficient loss to
cause each Partner's Capital Account to equal zero, then an amount equal to the
loss
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required to reduce each Partner's Capital Account to zero shall be determined
tentatively for each Partner and that amount shall then be reduced for each
Partner by an amount equal to the difference between the total amount of loss
required to cause each Partner's Capital Account to equal zero and the actual
amount of loss available for allocation to the Partners times the respective
Partner's Percentage Interest in order to determine the actual amount of loss
allocable to each Partner.
(b) NONRECOURSE DEDUCTIONS; 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). A Partner's "interest in partnership profits"
for purposes of determining its share of the nonrecourse liabilities of the
Partnership within the meaning of Regulations Section 1.752-3(a)(3) shall be
such Partner's Percentage Interest.
(c) 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 an Adjusted Capital Account Deficit after giving effect to
the allocations in Section 5.01(b) above, 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(c), 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(c).
(d) CAPITAL ACCOUNT DEFICITS. Loss shall not be allocated
to a Limited Partner to the extent that such allocation would cause an Adjusted
Capital Account Deficit. 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(d), to the extent
permitted by Regulations Section 1.704-1(b), items of income or gain shall
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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(d).
(e) 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.
(f) DEFINITION OF PROFIT AND LOSS. "Profit" and "Loss" and any
items of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially
allocated pursuant to Sections 5.01(b), 5.01(c), or 5.01(d). 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). The General Partner shall
have the authority in its sole discretion to elect the method to be used by the
Partnership for allocating items of income, gain, and expense as required by
Section 704(c) of the Code and Regulations Section 1.704-3, including a method
that may result in a Partner receiving a disproportionately larger share of the
Partnership tax depreciation deductions, and such election shall be binding on
all Partners.
5.02 DISTRIBUTION OF CASH.
(a) The Partnership shall distribute cash on a quarterly (or,
at the election of the General Partner, more frequent) basis, in an amount
determined by the General Partner in its sole and absolute discretion, to the
Partners who are Partners on the Partnership Record Date with respect to such
quarter (or other distribution period) in accordance with their respective
Percentage Interests on the Partnership Record Date (other than the proceeds
from a sale or other disposition of all or substantially all of the assets of
the Partnership ( in one transaction or a series of related transactions),
which shall be distributed under Section 5.06); PROVIDED, HOWEVER, that if a
new or existing Partner acquires an additional Partnership Interest in exchange
for a Capital Contribution on any date other than a Partnership Record Date,
the cash distribution attributable to such additional Partnership Interest
relating to the Partnership Record Date next following the issuance of such
additional Partnership Interest shall be reduced in the proportion to (i) the
number of days that such additional Partnership Interest is held by such
Partner bears to (ii) the number of days between such Partnership Record Date
and the immediately preceding Partnership Record Date. The General Partner
shall use its reasonable discretion to distribute an amount of cash on a
quarterly (or, at the election of the General Partner, more frequent) basis so
that each Limited Partner receives under this Section 5.02, with
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respect to each quarter or more frequent period, a cash amount equal in value
to the aggregate cash dividends that would have been payable to such Limited
Partner in the event that such Limited Partner owned REIT Shares equal in
number to the REIT Shares Amount during such period of the Partnership (which
REIT Shares Amount shall be determined as if the Specified Redemption Date had
occurred prior to the dividends paid on any REIT Shares during such period)
reduced, as provided in the first sentence of this Section 5.02(a), to take
into account cash distributions attributable to any Partnership Interests
acquired in exchange for a Capital Contribution on any date other than a
Partnership Record Date; PROVIDED, HOWEVER, that in the event that the number
of Partnership Units held by the General Partner and any Limited Partner that
is a Subsidiary of the General Partner is less than the number of outstanding
REIT Shares of the General Partner, then all distributions of cash shall be
paid first to those Limited Partners (pro rata based upon such Limited
Partner's Partnership Units) that are not Subsidiaries of the General Partner
until the amount distributed to such Limited Partners equals the aggregate cash
dividends that would have been payable to such Limited Partners in the event
that such Limited Partners owned REIT Shares equal in number to the REIT Shares
Amount during such period of the Partnership. In the event that the amount of
cash available to the Partnership is not sufficient to enable the Partnership
to make distributions in the amounts provided in the last clause of the
immediately preceding sentence, the General Partner shall make a Capital
Contribution to the Partnership in an amount sufficient to allow the
Partnership to so make such distributions.
(b) 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 the 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
amount required to be withheld by the Partnership (the "Withheld Amount"), the
Withheld Amount withheld shall be treated as a distribution of cash in the
amount of such withholding to such Partner, or (ii) if the Distributable Amount
is less than the Withheld Amount no amount shall be distributed to the Partner,
the Distributable Amount shall be treated as a distribution of cash to such
Partner, and the excess of the Withheld Amount over the Distributable Amount
shall be treated as a loan (a "Partnership Loan") from the Partnership to the
Partner on the day the Partnership pays over such excess to a taxing authority.
A Partnership Loan may be repaid, at the election of the General Partner in its
sole discretion, either (i) through withholding by the Partnership with respect
to subsequent distributions to the applicable Partner or assignee, or (ii) at
any time more than 12 months after a Partnership Loan arises, by cancellation
of Partnership Units with a value equal to the unpaid balance of the
Partnership Loan (including accrued interest). Any amounts treated as a
Partnership Loan pursuant to this Section 5.02(b) shall bear interest at the
lesser of (i) 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 an equivalent successor publication), or (ii) the maximum lawful
rate of interest on such obligation, such interest to accrue from the date the
Partnership is deemed to extend the loan until such loan is repaid in full.
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(c) 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 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
its reasonable efforts to cause the Partnership to distribute amounts
sufficient to enable the General Partner to pay shareholder dividends 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.
5.04 DISTRIBUTIONS IN KIND. (a) Subject to Subsections (b) and (c)
hereof, no Partner shall be entitled to demand property other than cash in
connection with any distributions by the Partnership.
(b) If the General Partner decides to securitize mortgage loans
through the issuance of collateralized mortgage obligations, the General
Partner has the right to redeem a portion of its Partnership Interest in
exchange for the mortgage loans to be securitized. The portion of a Partnership
Interest redeemed pursuant to this Section will be determined based on the fair
market value of the mortgage loans and/or leases distributed to the General
Partner. Such fair market value will be determined by the General Partner, but
will be subject to the review of the Independent Directors.
(c) The General Partner has the authority to make in-kind
distributions of assets to the Partners. Any such distributions in kind shall
be distributed among the Partners in the same manner as set forth in Section
5.02 or 5.06, as applicable. The General Partner shall determine the fair
market value of any assets distributed in kind using such reasonable method of
valuation as it may adopt.
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. Upon liquidation of the
Partnership, after payment of, or adequate provision for, debts and obligations
of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners with positive Capital Accounts
in accordance with their respective positive Capital Account balances. For
purposes of the preceding sentence, the Capital Account of each Partner shall
be determined after all adjustments have been made in accordance with Section
5.01 to reflect from Partnership operations and from all sales and dispositions
of all or any part of the Partnership's assets and all distributions under
Section 5.02 have been reflected. 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
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(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.
5.08 ALLOCATIONS TO REFLECT ISSUANCE OF ADDITIONAL PARTNERSHIP
INTERESTS. In the event that the Partnership issues additional Partnership
Interests under Section 4.02, the General Partner is authorized to make such
revisions to the provisions for allocation of Profit and Loss and distribution
of cash and other assets set forth above in this Article V as it determines are
necessary to reflect the issuance of such additional Partnership Interests.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
6.01 MANAGEMENT OF THE PARTNERSHIP.
(a) Except as otherwise expressly provided in this Agreement,
the General Partner shall have full, complete and exclusive discretion to
manage and control the business of the Partnership for the purposes herein
stated, and shall make all decisions affecting the business and assets of the
Partnership, and no Limited Partner shall have any right to participate in or
exercise control or management power over the business and affairs of the
Partnership. In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement, the General
Partner shall have full power and authority to do all things and perform all
acts specified in this Agreement or otherwise deemed necessary or desirable by
it to conduct the business of the Partnership, to exercise all Partnership
powers set forth in Section 3.02 hereof and to effectuate the Partnership
purposes set forth in Section 3.01 hereof, including, without limitation, to
take the following actions on behalf of the Partnership:
(i) to acquire, purchase, own, operate, improve, alter,
demolish, lease, exchange 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 or in the best
interests of the business of the Partnership
(ii) to construct buildings and make other improvements on
the properties owned or leased by the Partnership;
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(iii) to authorize, issue, sell, redeem or otherwise
purchase any Partnership Interests 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 Interests, or
options, rights, warrants or appreciation rights relating to any Partnership
Interests) of the Partnership;
(iv) to borrow or lend money for the Partnership
(including, without limitation, to prepay loans and borrow money to permit the
Partnership to make distributions to its Partners in such amounts as will
permit the General Partner (so long as the General Partner elects to qualify as
a REIT) to avoid the payment of any federal income tax (including for this
purpose any excise tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit the General Partner to
maintain REIT status), 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 indebtedness, and secure
such 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 comaker of indebtedness of
the General Partner or any Affiliate thereof, 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 hold, manage, invest and reinvest cash and other
assets of the Partnership and use assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with this Agreement for
any purpose consistent with the terms of this Agreement and on any terms it
sees fit, including, without limitation, payment, either directly or by
reimbursement, of all operating costs and general 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, whether or not the terms of such leases extend beyond the
termination date of the Partnership and whether or not any portion of the
Partnership's assets so leased are to be occupied by the lessee, or, in turn,
subleased in whole or in part to others, for such consideration and on such
terms as the General Partner may determine;
(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;
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(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
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 or not 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, (including, without limitation, employees having titles
such as "president," "vice president," "secretary," and "treasurer" of the
partnership or any division thereof) and to retain legal counsel, accountants,
consultants, real estate brokers, and such other persons, as the General
Partner may deem necessary or appropriate in connection with the Partnership
business and to pay therefor such reasonable remuneration as the General
Partner may deem reasonable and proper;
(xv) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such remuneration
as the General Partner may deem reasonable and proper;
(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), and to exercise, directly or indirectly through any attorney-in-fact
acting under a general or limited power of attorney, any right, including the
right to vote, appurtenant to any asset or investment held by the Partnership;
(xx) to establish Partnership reserves for working
capital, capital expenditures, contingent liabilities, or any other valid
Partnership purpose; and
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(xxi) to merge, consolidate or combine the Partnership
with or into another person (to the extent permitted by applicable law);
(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" for purposes of 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 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 herein, to the extent the
duties of the General Partner require expenditures of funds to be paid to third
parties, the General Partner shall not have any obligations hereunder except to
the extent that partnership funds are reasonably available to it for the
performance of such duties, and nothing herein contained shall be deemed to
authorize or require the General Partner, in its capacity as such, to expend
its individual funds for payment to third parties or to undertake any
individual liability or obligation on behalf of the Partnership.
6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any or
all of its powers, rights and obligations hereunder, and may appoint, employ,
contract or otherwise deal with any Person for the transaction of the business
of the Partnership, which Person 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
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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. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness which the Partnership or any
subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 6.03 in favor of any Indemnitee having or potentially having
liability for any such indebtedness.
(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 unless otherwise provided
in a written agreement pursuant to which such Indemnitee is indemnified.
(d) The Partnership may purchase and maintain insurance,
on behalf of the Indemnitees and such other Persons as the General Partner
shall determine, against any liability that may be asserted against or expenses
that may be incurred by such Person in connection with the Partnership's
activities, regardless of whether the Partnership would have the power to
indemnify such Person against such liability under the provisions of this
Agreement.
(e) For purposes of this Section 6.03, the Partnership
shall be deemed to have requested an Indemnitee to serve as fiduciary of an
employee benefit plan whenever the performance by it of its duties to the
Partnership also imposes duties on, or otherwise involves services by, it to
the plan or participants or beneficiaries of the plan; excise taxes assessed on
an Indemnitee with respect to an employee benefit plan pursuant to applicable
law shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
Partnership.
(f) In no event may an Indemnitee subject any of the
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
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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. 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 limitations on
the Partnership's liability to any Indemnitee under this Section 6.03 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner shall not be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the General Partner
acted in good faith. 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 General Partner and the
General Partner's shareholders collectively, that the General Partner is under
no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or the
tax consequences of some, but not all, of the Limited Partners) in deciding
whether to cause the Partnership to take (or decline to take) any actions. In
the event of a conflict between the interests of the shareholders of the
General Partner on 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 shareholders of the General Partner or the Limited
Partners; PROVIDED, HOWEVER, that 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 shareholders of the General Partner or the
Limited Partners shall be resolved in favor of the shareholders. The General
Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in connection
with such decisions, PROVIDED that the General Partner has acted in good faith.
(c) Subject to its obligations and duties as General Partner
set forth in Section 6.01 hereof, the General Partner may exercise any of the
powers granted to it under this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its agents. The General
Partner shall not be responsible for any misconduct or negligence on the part
of any such agent appointed by it in good faith.
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(d) Notwithstanding any other provisions of this Agreement or
the Act, any action of the General Partner on behalf of the Partnership or any
decision of the General Partner to refrain from acting on behalf of the
Partnership, undertaken in the good faith belief that such action or omission
is necessary or advisable in order (i) to protect the ability of the General
Partner to continue to qualify as a REIT or (ii) to prevent the General Partner
from incurring any taxes under Section 857, Section 4981, or any other
provision of the Code, is expressly authorized under this Agreement and is
deemed approved by all of the Limited Partners.
(e) Any amendment, modification or repeal of this Section 6.04
or any provision hereof shall be prospective only and shall not in any way
affect the limitations on the General Partner's liability to the Partnership
and the Limited Partners under this Section 6.04 as in effect immediately prior
to such amendment, modification or repeal with respect to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless
of when claims relating to such matters may arise or be asserted.
6.05 REIMBURSEMENT OF GENERAL PARTNER.
(a) Except as provided in this Section 6.05 and elsewhere in
this Agreement (including the provisions of Articles 5 and 6 regarding
distributions, payments, and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
(b) In addition to the expenses that are directly attributable
to the Partnership, the REIT Expenses and Administrative Expenses shall be
obligations of the Partnership, and the Partnership shall pay the REIT Expenses
and Administrative Expenses. If the General Partner pays any REIT Expenses or
Administrative Expenses, the General Partner shall be reimbursed by the
Partnership therefor.
6.06 OUTSIDE ACTIVITIES. The Partners and any officer, director,
employee, agent, trustee, Affiliate, Subsidiary, or shareholder of any 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
which, 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
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from the Partnership any compensation, price, or other payment therefor which
the General Partner determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its Subsidiaries
or other Persons in which it has an equity investment, and such Persons may
borrow funds from the Partnership, on terms and conditions established in the
sole and absolute discretion of the General Partner. The foregoing authority
shall not create any right or benefit in favor of any Subsidiary or any other
Person.
(c) The Partnership may transfer assets to joint ventures,
other partnerships, corporations, limited liability companies or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions as the General Partner deems are consistent with
this Agreement and applicable law.
(d) Except as expressly permitted by this Agreement, neither
the General Partner nor any of its Affiliates shall sell, transfer or convey
any property to, or purchase any property from, the Partnership, directly or
indirectly, except pursuant to transactions that are on terms that are fair and
reasonable to the Partnership.
6.08 GENERAL PARTNER PARTICIPATION. The General Partner agrees that
all business activities of the General Partner shall generally be conducted
through the Partnership or one or more Subsidiary Partnerships, unless
otherwise determined by the Independent Directors.
6.09 TITLE TO PARTNERSHIP ASSETS. Title to 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 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 hereby
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; PROVIDED,
HOWEVER, that 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.
6.10 MISCELLANEOUS. In the event the General Partner redeems any REIT
Shares, then the General Partner shall cause the Partnership to purchase from
the General Partner a number of Partnership Units as determined based on the
application of the Conversion Factor on the same terms that the General Partner
exchanged such REIT Shares. Moreover, if the General Partner makes a cash
tender offer or other offer to acquire REIT Shares, then the General Partner
shall cause the Partnership to make a corresponding offer to the General
Partner to acquire an equal number of Partnership Units held by the General
Partner. In the event any REIT Shares are exchanged by the General Partner
pursuant to such offer, the Partnership shall redeem an
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equivalent number of the General Partner's Partnership Units for an equivalent
purchase price based on the application of the Conversion Factor.
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 Interest or withdraw as General Partner except as
provided in or in connection with a transaction contemplated by Section 7.01
(b), (c) or (d).
(b) Except as otherwise provided in Section 6.04(b) or Section
7.01(d) or (e) hereof, the General Partner shall not engage in any merger,
consolidation or other combination with or into another Person or sale of all
or substantially all of its assets, (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:
(i) the consent of Limited Partners (other than the
General Partner or any Subsidiary) holding more than 50% of the Percentage
Interests of the Limited Partners (other than those held by the General Partner
or any Subsidiary) is obtained;
(ii) as a result of such Transaction all Limited
Partners will receive for each Partnership Unit an amount of cash, securities,
or other property equal to the product of the Conversion Factor and the
greatest amount of cash, securities or other property paid in the Transaction
to a holder of one REIT Share in consideration of one REIT Share, PROVIDED THAT
if, in connection with the Transaction, a purchase, tender or exchange offer
("Offer") shall have been made to and accepted by the holders of more than 50%
of the outstanding REIT Shares, each holder of Partnership Units shall be given
the option to exchange its Partnership Units for the greatest amount of cash,
securities, or other property which a Limited Partner would have received had
it (A) exercised its Redemption Right and (B) sold, tendered or exchanged
pursuant to the Offer the REIT Shares received upon exercise of the 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) receive an amount of cash,
securities, or other property (expressed as an amount per REIT Share) that is
no less than 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.
(c) Notwithstanding Section 7.01(b), the General Partner may
merge with or into or consolidate with another entity if immediately after such
merger or consolidation (i)
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substantially all of the assets of the successor or surviving entity (the
"Surviving General Partner"), other than Partnership Units held by the General
Partner, are contributed, 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 Surviving
General Partner in good faith and (ii) the Surviving General Partner expressly
agrees to assume all obligations of the General Partner hereunder. Upon such
contribution and assumption, the Surviving General Partner shall have the right
and duty to amend this Agreement as set forth in this Section 7.01(c). The
Surviving General Partner 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 to 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 Surviving General Partner also shall in good
faith modify the definition of REIT Shares and make such amendments to Section
8.05 hereof so as to approximate the existing rights and obligations set forth
in Section 8.05 as closely as reasonably possible. The above provisions of this
Section 7.01(c) shall similarly apply to successive mergers or consolidations
permitted hereunder.
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 to
recognize a gain for federal income tax purposes by virtue of the occurrence of
or their participation in such transaction, PROVIDED such efforts are
consistent with the exercise of the Board of Directors' fiduciary duties to the
shareholders of the General Partner under applicable law.
(d) Notwithstanding Section 7.01(b),
(i) a General Partner may transfer all or any portion of
its General Partnership Interest to (A) a wholly-owned Subsidiary of such
General Partner or (B) the owner of all of the ownership interests of such
General Partner, and following a transfer of all of its General Partnership
Interest, may withdraw as General Partner; and the General Partner may engage
in a transaction not required by law or by the rules of any national securities
exchange on which the REIT Shares are listed to be submitted to the vote of the
holders of the REIT Shares.
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 thereof and such other
documents or instruments as may be required or
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appropriate in order to effect the admission of such Person as a General
Partner, and a certificate evidencing the admission of such Person as a General
Partner shall have been filed for recordation and all other actions required by
Section 2.05 hereof in connection with such admission shall have been
performed;
(b) if the Person to be admitted as a substitute or additional
General Partner is a corporation or a partnership it shall have provided the
Partnership with evidence satisfactory to counsel for the Partnership of such
Person's authority to become a General Partner and to be bound by the terms and
provisions of this Agreement; and
(c) counsel for the Partnership shall have rendered an opinion
(relying on such opinions from other counsel and the state or any other
jurisdiction as may be necessary) that the admission of the person to be
admitted as a substitute or additional General Partner is in conformity with
the Act, that none of the actions taken in connection with the admission of
such Person as a substitute or additional General Partner will cause (i) the
Partnership to be classified other than as a partnership for federal income tax
purposes, or (ii) the loss of any Limited Partner's limited liability.
7.03 EFFECT OF BANKRUPTCY, WITHDRAWAL, DEATH OR DISSOLUTION OF A
GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Partnership shall be dissolved and
terminated unless the Partnership is continued pursuant to Section 7.03(b)
hereof. Notwithstanding anything to the contrary contained in this Section
7.03(a) or in Sections 7.03(b) and 7.04(a) below, the merger of the General
Partner with or into any entity in accordance with Section 7.01(b), (c) or (d)
hereof, and the admission of such entity as a substitute or successor General
Partner pursuant to Section 7.02 hereof shall not be deemed to be the
withdrawal, dissolution or removal of the General Partner for purposes of this
Section 7.03(a) or for purposes of Sections 7.03(b) and 7.04(a) below.
(b) Following the occurrence of an Event of Bankruptcy as to a
General Partner (and its removal pursuant to Section 7.04(a) hereof) or the
death, withdrawal, removal or dissolution of a General Partner (except that, if
a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such
General Partner if the business of such General Partner is continued by the
remaining partner or partners), the Limited Partners, within 90 days after such
occurrence, may elect to continue the business of the Partnership for the
balance of the term specified in Section 2.04 hereof by selecting, subject to
Section 7.02 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a majority in interest of the Limited Partners.
If the Limited Partners elect to continue the business of the Partnership and
admit a substitute General Partner, the relationship
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with the Partners and of any Person who has acquired an interest of a Partner
in the Partnership shall be governed by this Agreement.
7.04 REMOVAL OF A GENERAL PARTNER.
(a) Upon the occurrence of an Event of Bankruptcy as to, or the
dissolution of, a General Partner, such General Partner shall be deemed to be
removed automatically; PROVIDED, HOWEVER, that if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution,
Event of Bankruptcy as to or removal of a partner in such partnership shall be
deemed not to be a dissolution of the General Partner if the business of such
General Partner is continued by the remaining partner or partners. The Limited
Partners may not remove the General Partner, with or without cause.
(b) If a General Partner has been removed pursuant to this
Section 7.04 and the Partnership is continued pursuant to Section 7.03 hereof,
such General Partner shall promptly transfer and assign its General Partnership
Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.03(b)
hereof and otherwise admitted to the Partnership in accordance with Section
7.02 hereof. At the time of assignment, the removed General Partner shall be
entitled to receive from the substitute General Partner the fair market value
of the General Partnership Interest of such removed General Partner as reduced
by any damages caused to the Partnership by such General Partner. Such fair
market value shall be determined by an appraiser mutually agreed upon by the
General Partner and a majority in interest of the Limited Partners within 10
days following the removal of the General Partner. In the event that the
parties are unable to agree upon an appraiser, the removed General Partner and
a majority in interest of the Limited Partners each shall select an appraiser.
Each such appraiser shall complete an appraisal of the fair market value of the
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; PROVIDED, HOWEVER, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the amount of the lower appraisal, the two
appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the 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.
(c) The General Partnership Interest of a removed General
Partner, during the time after default until transfer under Section 7.04(b),
shall be converted to that of a special Limited Partner; PROVIDED, HOWEVER,
such removed General Partner shall not have any rights to participate in the
management and affairs of the Partnership, and shall not be entitled to any
portion of the income, expense, profit, gain or loss allocations or cash
distributions allocable or payable, as the case may be, to the Limited
Partners. Instead, such removed General Partner shall receive and be entitled
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).
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(d) All Partners shall have given and hereby do give such
consents, shall take such actions and shall execute such documents as shall be
legally necessary and sufficient to effect all the foregoing provisions of this
Section.
ARTICLE VIII
RIGHTS AND OBLIGATIONS
OF THE LIMITED PARTNERS
8.01 MANAGEMENT OF THE PARTNERSHIP. The Limited Partners shall not
participate in the management or control of Partnership business nor shall they
transact any business for the Partnership, nor shall they have the power to
sign for or bind the Partnership, such powers being vested solely and
exclusively in the General Partner.
8.02 POWER OF ATTORNEY.
(a) Each Limited Partner hereby constitutes and appoints the General
Partner and its authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to:
(i) execute, swear to, acknowledge, deliver, file and record
in the appropriate public offices (a) all certificates, documents and other
instruments (including, without limitation, the Agreement and the Certificate
and all amendments to restatements thereof) that the General Partner deems
appropriate or necessary to qualify or continue the existence or qualification
of the Partnership as a limited partnership in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct business or own
property; (b) all instruments that the General Partner deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with the terms; (c) all conveyances and other
instruments or documents that the General Partner deems appropriate or
necessary to reflect the dissolution and liquidation of the Partnership
pursuant to the terms of this Agreement, including, without limitation, a
certificate of cancellation; (d) all instruments relating tot he admission,
withdrawal, removal or substitution of any Partner pursuant tot he terms of
this Agreement or the Capital Contribution of any Partner; and (e) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges of Partnership Interests; and
(ii) execute, swear to, seal, acknowledge and file all
ballots, consents, approvals, waivers, certificates and other instruments
appropriate or necessary, in the sole and absolute discretion of the General
Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote,
consent, approval, agreement or other action which is made or given by the
Partners hereunder or is consistent with the terms of this Agreement or
appropriate or necessary, in the sole discretion of the General Partner or any
Liquidator, to effectuate the terms or intent of this Agreement.
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(b) The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
to act as contemplated by this Agreement in any filing or other action by it on
behalf of the Partnership, and it shall survive and not be affected by the
subsequent Bankruptcy, death, dissolution or legal incapacity of any Limited
Partner and the transfer of all or any portion of such Limited Partner's
Partnership Units and shall extend to such Limited Partner's heirs, successors,
assigns and personal representatives. Each such Limited Partner hereby agrees
to be bound by any representation made by the General partner, acting in good
faith pursuant to such power of attorney, and each such Limited Partner hereby
waives any and all defenses which may be available to contest, negate or
disaffirm the action of the General Partner, taken in good faith under such
power of attorney. Each Limited Partner shall execute and deliver to the
General Partner, within fifteen (15) days after receipt of the General
partner's request therefor, such further designations, powers of attorney and
other instruments as the General Partner deems necessary to effectuate this
Agreement and the purposes of the Partnership.
(c) Nothing contained herein shall be construed as authorizing the
General Partner or any Liquidator to amend this Agreement except in accordance
with Article 11 hereof or as may be otherwise expressly provided for in this
Agreement.
8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited Partner
in its capacity as such 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 hereunder. After its Capital Contribution is fully paid, no Limited
Partner shall, except as otherwise required by the Act, be required to make any
further Capital Contributions or other payments or lend any funds to the
Partnership.
8.04 REDEMPTION RIGHT.
(a) Subject to Sections 8.05(b), 8.05(c), 8.05(d) and 8.05(e)
and the provisions of any agreements between the Partnership and one or more
Limited Partners with respect to Partnership Units held by them, on or after
the date which is one year after the closing of the Offering, each Limited
Partner, other than the General Partner, shall have the right (the "Redemption
Right") to require the Partnership to redeem on a Specified Redemption Date all
or a portion of the Partnership Units held by such Limited Partner at a
redemption price equal to and in the form of the Cash Amount to be paid by the
Partnership. The Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the Partnership (with a copy to the General Partner) by
the Limited Partner who is exercising the Redemption Right (the "Redeeming
Partner"); PROVIDED, HOWEVER, that the Partnership shall not be obligated to
satisfy such Redemption Right if the General Partner elects to purchase, and
does purchase, the Partnership Units subject to the Notice of Redemption
pursuant to Section 8.05(b); and PROVIDED, FURTHER, that no Limited Partner may
deliver more than two Notices of Redemption during each calendar year. A
Limited Partner may not exercise the Redemption Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Redeeming Partner
shall have no right, with respect to any Partnership Units so redeemed, to
receive any distribution
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paid with respect to Partnership Units if the record date for such distribution
is on or after the Specified Redemption Date.
(b) Notwithstanding the provisions of Section 8.05(a), a
Limited Partner that exercises the Redemption Right shall be deemed to have
offered to sell the Partnership 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 Partnership Units by
paying to the Redeeming 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, whereupon the General Partner
shall acquire for the Cash Amount or the REIT Shares Amount, as determined by
the General Partner (as set forth above), the Partnership Units offered for
redemption by the Redeeming Partner and shall be treated for all purposes of
this Agreement as the owner of such Partnership Units. If the General Partner
shall elect to exercise its right to purchase Partnership Units under this
Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the
Redeeming Partner within five business days after the receipt by the General
Partner of such Notice of Redemption. Unless the General Partner (in its sole
and absolute discretion) shall exercise its right to purchase Partnership Units
from the Redeeming Partner pursuant to this Section 8.05(b), the General
Partner shall have no obligation to the Redeeming Partner or the Partnership
with respect to the Redeeming Partner's exercise of the Redemption Right. In
the event the General Partner shall exercise its right to purchase, and does
purchase, Partnership Units with respect to the exercise of a Redemption Right
in the manner described in the first sentence of this Section 8.05(b), the
Partnership shall have no obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner's exercise of such Redemption Right, and
each of the Redeeming Partner, the Partnership, and the General Partner shall
treat the transaction between the General Partner and the Redeeming Partner for
federal income tax purposes as a sale of the Redeeming Partner's Partnership
Units to the General Partner. Each Redeeming 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 Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and
8.05(b), to the extent the delivery of REIT Shares to such Partner on the
Specified Redemption Date by the General Partner pursuant to Section 8.05(b)
(regardless of whether or not the General Partner would in fact exercise its
rights under Section 8.05(b)) would [(i) result in such Partner or any other
person owning, directly or indirectly, REIT Shares in excess of the Ownership
Limit (as defined in the Charter) and calculated in accordance therewith,
except as provided in the Charter, (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, directly or constructively, 10% or more of the ownership interests in a
tenant 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, or (v) cause the acquisition of REIT Shares by such Partner to be
"integrated" with any other distribution of REIT Shares for purposes of
complying with the registration provisions of the Securities Act, the
Partnership may elect in its sole and absolute discretion to either (i) pay
(or, to the extent the General Partner has elected to exercise its rights
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under Section 8.04(b), permit the General Partner to elect to pay) the Cash
Amount to the Redeeming Partner, or (ii) refuse, in whole or in part, to accept
the Notice of Redemption.
(d) Any REIT Shares Amounts to be paid to a Redeeming Partner
pursuant to this Section 8.04 shall be paid on the Specified Redemption Date.
Any Cash Amount to be paid to a Redeeming Partner by the Partnership or the
General Partner pursuant to this Section 8.04 shall be paid on the Specified
Redemption Date; PROVIDED, HOWEVER, that, if the Cash Amount is to be paid, the
General Partner, on its own behalf or on behalf of the Partnership, may elect
to cause the Specified Redemption Date to be delayed by providing notice to the
Redeeming Partner. If the General Partner elects to cause the Specified
Redemption Date to be delayed, the General Partner agrees to use its
commercially reasonable best efforts to cause the closing of the acquisition of
redeemed Partnership Units hereunder to occur as quickly as reasonably
possible.
(e) Notwithstanding any other provision of this Agreement, the
General Partner shall place appropriate restrictions on the ability of the
Limited Partners to exercise their Redemption Rights as and if deemed necessary
to ensure that the Partnership does not constitute a "publicly traded
partnership" 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 which states that, in the opinion of such
counsel, restrictions are necessary in order to avoid the Partnership being
treated as a "publicly traded partnership" under section 7704 of the Code.
ARTICLE IX
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
9.01 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner represents and warrants that its
Limited Partnership Interest is being acquired for its own account and not with
a view to the distribution or other sale thereof, except in a transaction which
is exempt from registration under the Securities Act or registered thereunder.
Such Limited Partner further represents and warrants to the Partnership and the
other Partners as follows:
(i) If such Limited Partner is a corporation,
partnership, limited liability company or a Massachusetts business trust or
similar business trust, it has not been formed for the specific purpose of
acquiring the Limited Partnership Interest, and has total assets in excess of
Five Million Dollars ($5,000,000);
(ii) If such limited Partner is an individual, he or she
had an individual income in excess of $200,000 in each of the two most recent
tax years or joint income with his or her spouse in excess of $300,000 in each
of those years and has a reasonable expectation of reaching at least the same
income level in the current year.
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(iii) Such Limited Partner is a sophisticated investor
with the capacity to protect its own interests in investments of this nature,
and is capable of evaluating the merits and risks of an investment in the
Limited Partnership Interest;
(iv) Such Limited Partner has had an opportunity to ask
questions and receive answers concerning the investment in the Limited
Partnership Interest, and has all of the information deemed by it to be
necessary or appropriate to evaluate the investment in the Limited Partnership
Interest and the risks and merits thereof;
(v) Such Limited Partner is aware of the following:
(1) An investment in the Limited Partnership
Interest in speculative, with no assurance of any income therefrom;
(2) No federal or state agency has made any
finding or determination as tot he fairness of the acquisition, or any
recommendation or endorsement of such acquisition;
(3) Transferability of the Limited Partnership
Interest is restricted and, accordingly, it may not be possible for such
Limited Partner to liquidate the Limited Partnership Interest in case of
emergency; and
(4) With respect to the tax aspects of an
investment in the Limited Partnership Interest, such Limited Partner in making
this acquisition is not relying to any degree upon the advice of the General
Partner or the Partnership, or any person affiliated therewith, but rather
solely upon its own legal, financial and tax advisors.
(b) Each Limited Partner agrees that he will not sell, assign
or otherwise transfer his Partnership Interest or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner set forth in Section 9.01(a) above and Section 12.10 hereof.
9.02 RESTRICTIONS ON TRANSFER OF LIMITED PARTNERSHIP INTERESTS.
(a) Subject to the provisions of 9.02(b) through (i), no
Limited Partner may offer, sell, assign, or otherwise transfer all or any
portion of his Limited Partnership Interest, 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
written consent of the General Partner, which consent may be granted or
withheld in its sole and absolute discretion. Any such purported transfer
undertaken without such consent shall be considered to be null and void AB
INITIO and shall not be given effect. 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. A Transfer shall not
include any pledge, grant of a security interest in, or other hypothecation of
all or any portion of a Limited Partnership Interest.
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(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
9.05 below) of all of his Limited Partnership Interest pursuant to this Article
IX or pursuant to a redemption of all of his Partnership Units pursuant to
8.04. Upon the permitted Transfer or redemption of all of a Limited Partner's
Limited Partnership Interest, such Limited Partner shall cease to be a Limited
Partner.
(c) Subject to 9.02(d), (e), (f) and (g) below, a Limited
Partner may Transfer, with the consent of the General Partner, all or a portion
of his Partnership Interests to (i) a spouse, a parent or parent's spouse,
natural or adopted descendant or descendants, spouse of such descendant, or
brother or sister, or a trust created by such Limited Partner for the benefit
of such Limited Partner and/or any such person(s), of which trust such Limited
Partner or any such person(s) is a trustee, (ii) a corporation, a general
partnership, a limited partnership, or a limited liability company controlled
by a Person or Persons named in (i) above, or (iii) if the Limited Partner is
an entity, its beneficial owners.
(d) No Limited Partner may effect a Transfer of its Limited
Partnership Interest, in whole or in part, if, in the opinion of legal counsel
for the Partnership, such proposed Transfer would require the registration of
the Limited Partnership Interest under the Securities Act, 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 Limited Partnership
Interest, in whole or in part, may be made to any Person if (i) in the opinion
of legal counsel for the Partnership, the Transfer would result in the
Partnership's being treated as an association taxable as a corporation (other
than a qualified REIT subsidiary within the meaning of Section 856(i) of the
Code) or would result in a termination of the Partnership for federal income
tax purposes, (ii) in the opinion of legal counsel for the Partnership, the
Transfer 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, (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, or (iv) such Transfer would cause the Partnership to have more than
100 Partners (including as Partners, to the extent required under Regulations
Section 1.7704-1(h)(3), those Persons indirectly owning an interest in the
Partnership through a partnership, limited liability company, "S" corporation,
or a grantor trust).
(f) No Transfer, pledge, grant of a security interest in, or
other hypothecation of any Limited Partnership Interest may be made to a lender
to the Partnership or any Person who is related (within the meaning of
Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan
constitutes a nonrecourse liability (within the meaning of Regulations Section
1.752-1(a)(2)), without the consent of the General Partner, which may be
withheld in its sole and absolute discretion, PROVIDED THAT, as a condition to
such consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the Cash Amount
any Partnership Units in which a security interest is
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held simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such
lender under Section 752 of the Code.
(g) No Transfer by a Limited Partner of its Limited Partnership
Interest may be made (i) to any Person who lacks the legal right, power or
capacity to own a Partnership Interest, (ii) in violation of any provision of
any mortgage or trust deed (or the note or bond secured thereby) constituting a
lien against an asset of the Partnership, (iii) in violation of applicable law,
or (iv) if such transfer would, in the opinion of legal counsel to the
Partnership, cause any portion of the assets of the Partnership to constitute
assets of any employee benefit plan pursuant to Department of Labor regulations
section 2510.2-101.
(h) Any Transfer in contravention of any of the provisions of
this Article IX shall be void and ineffectual and shall not be binding upon, or
recognized by, the Partnership.
(i) 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.
9.03 ADMISSION OF SUBSTITUTE LIMITED PARTNER.
(a) Subject to the other provisions of this Article IX, an
assignee of the Limited Partnership Interest of a Limited Partner (which shall
be understood to include any purchaser, transferee, donee, or other recipient
of any disposition of such Limited Partnership Interest) shall be deemed
admitted as a Limited Partner of the Partnership only with the written consent
of the General Partner 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 for record in accordance with the Act.
(iii) The assignee shall have delivered a letter
containing the representation set forth in Sections 9.01(a) and 12.10 hereof
and the agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation, partnership,
limited liability company, trust, or other entity, 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.
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(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 has 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 shall cooperate with the Person seeking
to become a Substitute Limited Partner by preparing the documentation required
by this Section and making all official filings and publications. The
Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such
Person as a Limited Partner of the Partnership.
9.04 RIGHTS OF ASSIGNEES OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.01 and 9.02 hereof,
except as required by operation of law, the Partnership shall not be obligated
for any purposes whatsoever to recognize the assignment by any Limited Partner
of its Partnership Interest until the Partnership has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited Partner's Limited Partnership Interest, but does not become a
Substitute Limited Partner and desires to make a further assignment of such
Limited Partnership Interest, shall be subject to all the provisions of this
Article IX to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of its Limited Partnership Interest.
9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death or termination of a Limited Partner or a final adjudication
that a Limited Partner is incompetent (which term shall include, but not be
limited to, insanity) shall not cause the termination or dissolution of the
Partnership, and the business of the Partnership shall continue if an order for
relief in a bankruptcy proceeding is entered against a Limited Partner, the
trustee or receiver of his estate or, if he dies, his executor, administrator
or trustee, or, if he is finally adjudicated incompetent, his committee,
guardian or conservator, shall have the rights of such Limited Partner for the
purpose of settling or managing his estate property and such power as the
bankrupt, deceased or incompetent Limited Partner possessed to assign all or
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any part of his Partnership Interest and to join with the assignee in
satisfying conditions precedent to the admission of the assignee as a
Substitute Limited Partner.
9.06 JOINT OWNERSHIP OF INTERESTS. A Partnership Interest may be
acquired by two individuals as joint tenants with right of survivorship,
PROVIDED that such individuals either are married or are related and share the
same home as tenants in common. The written consent or vote of both owners of
any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; PROVIDED, HOWEVER, that the
written consent of only one joint owner will be required if the Partnership has
been provided with evidence satisfactory to the counsel for the Partnership
that the actions of a single joint owner can bind both owners under the
applicable laws of the state of residence of such joint owners.
Upon the death of one owner of a Partnership Interest held in a joint
tenancy with a right of survivorship, the Partnership Interest shall become
owned solely by the survivor as a Limited Partner and not as an assignee. The
Partnership need not recognize the death of one of the owners of a jointly-held
Partnership Interest until it shall have received notice of such death. Upon
notice to the General Partner from either owner, the General Partner shall
cause the Partnership Interest to be divided into two equal Partnership
Interests, which shall thereafter be owned separately by each of the former
owners.
ARTICLE X
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
10.01 BOOKS AND RECORDS. At all times during the continuance of the
Partnership, the Partners shall keep or cause to be kept at the Partnership's
specified office true and complete books of account in accordance with
generally accepted accounting principles, including: (a) a current list of the
full name and last known business address of each Partner, (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto,
(c) copies of the Partnership's federal, state and local income tax returns and
reports, (d) copies of the Agreement and any financial statements of the
Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or 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. Notwithstanding the foregoing, the General Partner may keep confidential
from the Limited Partners, for such period of time as the General Partner
determines in its sole and absolute discretion to be reasonable, any
information that (i) the General Partner believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in
good faith believes is not in the best interests of the Partnership, or (ii)
the Partnership is required by law or by agreements with unaffiliated third
parties to keep confidential.
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10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested shall
be deposited in one or more accounts maintained in such banking or brokerage
institutions as the General Partner shall determine, and withdrawals shall be
made only on such signature or signatures as the General Partner may, from time
to time, determine.
(b) All deposits and other funds not needed in the operation
of the business of the Partnership may be invested by the General Partner in
investment grade instruments (or investment companies whose portfolio consists
primarily thereof), government obligations, certificates of deposit, bankers'
acceptances and municipal notes and bonds. The funds of the Partnership shall
not be commingled with the funds of any other Person except for such
commingling as may necessarily result from an investment in those investment
companies permitted by this Section 10.02(b).
10.03 FISCAL AND TAXABLE YEAR. The fiscal and taxable year of the
Partnership shall be the calendar
year.
10.04 ANNUAL TAX INFORMATION AND REPORT. Within 75 days after the end
of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner's individual tax returns as
shall be reasonably required by law.
10.05 TAX MATTERS PARTNER; TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS.
(a) The General Partner shall be the "tax matters partner" of
the Partnership within the meaning of Section 6231(a)(7) of the Code. The tax
matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with
respect to any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a "tax audit"
and such judicial proceedings being referred to as "judicial review"), and in
the settlement agreement the tax matters partner may expressly state that such
agreement shall bind all Partners, except that such settlement agreement shall
not bind any Partner (i) who (within the time prescribed pursuant to the Code
and Regulations) files a statement with the IRS providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner or (ii) who is a "notice partner" (as defined in Section
6231 of the Code) or a member of a "notice group" (as defined in Section
6223(b)(2) of the Code);
(ii) in the event that a notice of a final
administrative adjustment at the Partnership level of any item required to be
taken into account by a Partner for tax purposes (a "final adjustment") is
mailed to the tax matters partner, to seek judicial review of such final
adjustment, including the filing of a petition for readjustment with the Tax
Court or the United
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States Claims Court, or the filing of a complaint for refund with the District
Court of the United States for the district in which the Partnership's
principal place of business is located;
(iii) to intervene in any action brought by any other
Partner for judicial review of a final adjustment;
(iv) to file a request for an administrative
adjustment with the IRS at any time and, if any part of such request is not
allowed by the IRS, to file an appropriate pleading (petition or complaint) for
judicial review with respect to such request;
(v) to enter into an agreement with the IRS to extend
the period for assessing any tax which is attributable to any item required to
be taken into account by a Partner for tax purposes, or an item affected by
such item; and
(vi) to take any other action on behalf of the
partners of the Partnership in connection with any tax audit or judicial review
proceeding tot he extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required
by law, is a matter in the sole and absolute discretion of the tax matters
partner and the provisions relating to indemnification of Indemnitees set forth
in Section 6.03 of this Agreement shall be fully applicable to the tax matters
partner in its capacity as such.
(b) The tax matters partner shall have the right to retain
professional assistance to assist it in discharging its duties hereunder. All
third party costs and expenses incurred by the tax matters partner in
performing its duties as such (including legal and accounting fees) shall be
borne by the Partnership.
(c) 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.
(d) 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. Each Partner will furnish the Partnership with all
information necessary to give effect to such election.
10.06 REPORTS TO LIMITED PARTNERS.
(a) As soon as practicable after the close of each fiscal
quarter (other than the last quarter of the fiscal year), the General Partner
shall cause to be mailed to each Limited Partner a quarterly report containing
financial statements of the Partnership, or of the General Partner if such
statements are prepared solely on a consolidated basis with the General
Partner, for such fiscal quarter, presented in accordance with generally
accepted accounting principles. As soon as practicable after the close of each
fiscal year, the General Partner shall cause to be
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mailed to each Limited Partner an annual report containing financial statements
of the Partnership, or of the General Partner if such statements are prepared
solely on a consolidated basis with the General Partner, for such fiscal year,
presented in accordance with generally accepted accounting principles. The
annual financial statements shall be audited by accountants selected by the
General Partner.
(b) Any Partner shall further have the right to a private
audit of the books and records of the Partnership, provided such audit is made
for Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT
The General Partner'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 or merge or consolidate the
Partnership with or into any other partnership or business entity (as defined
in Section 17-211 of the Act) in a transaction pursuant to Section 7.01(b), (c)
or (d) hereof; PROVIDED, HOWEVER, that the following amendments shall require
the consent of Limited Partners (other than the General Partner and any Limited
Partner that is a Subsidiary of the General Partner) holding more that
two-thirds of the Partnership Units held by such Limited Partners:
(a) any amendment affecting the operation of the Conversion
Factor or the Redemption Right (except as provided in Section 8.05(e) or
7.01(c), as in effect on the date hereof) in a manner adverse to the Limited
Partners;
(b) any amendment that would adversely affect the rights of
the Limited Partners to receive the distributions payable to them hereunder,
except that the Partnership may issue additional Partnership Units or other
Partnership Interests in accordance with Section 4.02 hereof;
(c) any amendment that would alter the Partnership's
allocations of Profit and Loss to the Limited Partners (except that the
Partnership may issue additional Partnership Units or other Partnership
Interests in accordance with Section 4.02 hereof;
(d) any amendment that would impose on the Limited Partners
any obligation to make additional Capital Contributions to the Partnership;
(e) any amendment to Sections 8.04 or Section 9.02; or
(f) any amendment to this Article XI.
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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, or transmitted by overnight
commercial courier to the Partners at the addresses set forth in EXHIBIT A
attached hereto; PROVIDED, HOWEVER, that any Partner may specify a different
address by notifying the General Partner in writing of such different address.
Notices to the Partnership shall be delivered at or mailed to its specified
office.
12.02 SURVIVAL OF RIGHTS. Subject to the provisions hereof limiting
transfers, this Agreement shall be binding upon and inure to the benefit of the
Partners and the Partnership and their respective legal representatives,
successors, transferees and assigns.
12.03 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all
further acts and execute, swear to, acknowledge and deliver all further
documents which may be reasonable, necessary, appropriate or desirable to carry
out the provisions of this Agreement or the Act.
12.04 SEVERABILITY. If any provision of this Agreement shall be
declared illegal, invalid, or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof.
12.05 ENTIRE AGREEMENT. This Agreement and exhibits attached hereto
constitute the entire Agreement of the Partners and supersede all prior written
agreements and prior and contemporaneous oral agreements, understandings and
negotiations with respect to the subject matter hereof.
12.06 PRONOUNS AND PLURALS. When the context in which words are used
in the Agreement indicates that such is the intent, words in the singular
number shall include the plural and the masculine gender shall include the
neuter or female gender as the context may require.
12.07 HEADINGS. The Article headings or sections in this Agreement
are for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
12.08 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
12.09 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to the principles of conflicts of law.
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12.10 PARTNER REPRESENTATIONS AND WARRANTIES. Each Partner represents
and warrants severally and not jointly, and solely on behalf of itself, to the
Partnership and the other Partners as follows:
(a) Organization. If such Partner is not a natural person,
such Partner is duly formed and validly existing and is qualified to do
business and in good standing in the jurisdictions in which it does business.
(b) Due Authorization; Binding Agreement. This Agreement has
been duly executed and delivered by such Partner, or an authorized
representative of such Partner, and constitutes a legal, valid and binding
obligation of such Partner, enforceable against such Partner in accordance with
the terms hereof.
(c) Consents and Approvals. No consent, waiver, approval or
authorization of, or filing, registration or qualification with, or notice to,
any governmental unit or any other person is required to be made, obtained or
given by such partner in connection with the execution, delivery and
performance of this Agreement other than consents, waivers, approvals or
authorizations which have been obtained prior to the date hereof.
(d) No Conflict with Other Documents or Violation of Law. The
execution of this Agreement by such Partner and such Partner's performance of
the transactions contemplated herein will not violate any document, instrument,
agreement, stipulation, judgment, order, or any applicable federal, state or
local law, ordinance or regulation to which such Partner is a party or by which
such Partner is bound.
12.11 WAIVER. No failure by any party to insist upon the strict
performances of any covenant, duty agreement or condition of this Agreement or
to exercise any right or remedy consequent upon a breach thereof shall
constitute waiver of any such breach or any other covenant, duty, agreement or
condition.
12.12 PARTITION. Each Partner hereby waives any right to partition of
the Partnership property.
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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 6th day of
May 1998.
GENERAL PARTNER:
HEALTHCARE FINANCIAL PARTNERS REIT, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Secretary, CFO and Treasurer
INITIAL LIMITED PARTNER:
HCFP LIMITED, INC.
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
---------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: Secretary and CFO
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EXHIBIT A
Agreed
Value of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------- ------------ ------------ ----------- ----------
GENERAL PARTNER:
HealthCare Financial
Partners, Inc. $ 10 $ 10 10 1%
0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
INITIAL LIMITED PARTNER:
HCFP Limited, Inc. $990 $990 990 99%
0 Xxxxxxxxx Xxxxxx
Xxxxxx Xxxxx
Xxxxx Xxxxx, XX 00000
LIMITED PARTNERS:
------------------------
------------------------
------------------------
------------------------
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EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.05 of the Agreement of Limited
Partnership (the "Agreement") of HCFP REIT Operating Partnership, L.P., the
undersigned hereby irrevocably (i) presents for redemption ________ Partnership
Units in HCFP REIT Operating Partnership, L.P. in accordance with the terms of
the Agreement and the Redemption Right referred to in Section 8.05 thereof,
(ii) surrenders such Partnership 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 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.
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:
