[EXHIBIT 10.1]
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WINDROSE MEDICAL PROPERTIES, L.P.
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS..........................................................................................1
ARTICLE II FORMATION OF PARTNERSHIP..............................................................................8
2.01 Name, Office and Registered Agent.............................................................8
2.02 Partners......................................................................................8
2.03 Term and Dissolution..........................................................................8
2.04 Filing of Certificate and Perfection of Limited Partnership...................................9
2.05 Certificates Describing Partnership Units.....................................................9
ARTICLE III BUSINESS OF THE PARTNERSHIP..........................................................................9
ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS...................................................................10
4.01 Capital Contributions........................................................................10
4.02 Additional Capital Contributions and Issuances of Additional Partnership Interests...........10
4.03 Additional Funding...........................................................................12
4.04 Capital Accounts.............................................................................13
4.05 Percentage Interests.........................................................................13
4.06 No Interest on Contributions.................................................................13
4.07 Return of Capital Contributions..............................................................13
4.08 No Third Party Beneficiary...................................................................13
ARTICLE V PROFITS AND LOSSES; DISTRIBUTIONS.....................................................................14
5.01 Allocation of Profit and Loss................................................................14
5.02 Distribution of Cash.........................................................................16
5.03 REIT Distribution Requirements...............................................................17
5.04 No Right to Distributions in Kind............................................................17
5.05 Limitations on Return of Capital Contributions...............................................17
5.06 Distributions Upon Liquidation...............................................................17
5.07 Substantial Economic Effect..................................................................18
ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER................................................18
6.01 Management of the Partnership................................................................18
6.02 Delegation of Authority......................................................................20
6.03 Indemnification and Exculpation of Indemnitees...............................................21
6.04 Liability of the General Partner.............................................................22
6.05 Partnership Obligations......................................................................23
6.06 Outside Activities...........................................................................23
6.07 Employment or Retention of Affiliates........................................................24
6.08 General Partner Activities...................................................................24
6.09 Title to Partnership Assets..................................................................24
6.10 Miscellaneous................................................................................24
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ARTICLE VII CHANGES IN GENERAL PARTNER..........................................................................25
7.01 Transfer of the General Partner's Partnership Interest.......................................25
7.02 Admission of a Substitute or Additional General Partner......................................26
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.................27
7.04 Removal of a General Partner.................................................................28
ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS.....................................................29
8.01 Management of the Partnership................................................................29
8.02 Power of Attorney............................................................................29
8.03 Limitation on Liability of Limited Partners..................................................29
8.04 Ownership by Limited Partner of Corporate General Partner or Affiliate.......................29
8.05 Redemption Right.............................................................................29
8.06 Registration.................................................................................31
ARTICLE IX TRANSFERS OF PARTNERSHIP INTERESTS...................................................................35
9.01 Purchase for Investment......................................................................35
9.02 Restrictions on Transfer of Partnership Interests............................................35
9.03 Admission of Substitute Limited Partner......................................................36
9.04 Rights of Assignees of Partnership Interests.................................................37
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner................37
9.06 Joint Ownership of Interests.................................................................38
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS............................................................38
10.01 Books and Records............................................................................38
10.02 Custody of Partnership Funds; Bank Accounts..................................................38
10.03 Fiscal and Taxable Year......................................................................39
10.04 Annual Tax Information and Report............................................................39
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments................................39
10.06 Reports to Limited Partners..................................................................39
ARTICLE XI AMENDMENT OF AGREEMENT; MERGER.......................................................................40
ARTICLE XII GENERAL PROVISIONS..................................................................................40
12.01 Notices......................................................................................40
12.02 Survival of Rights...........................................................................40
12.03 Additional Documents.........................................................................41
12.04 Severability.................................................................................41
12.05 Entire Agreement.............................................................................41
12.06 Pronouns and Plurals.........................................................................41
12.07 Headings.....................................................................................41
12.08 Counterparts.................................................................................41
12.09 Governing Law................................................................................41
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EXHIBITS
EXHIBIT A - Partners, Capital Contributions and Percentage Interests
EXHIBIT B - Notice of Exercise of Redemption Right
EXHIBIT C - Certification of Non-Foreign Status
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FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
WINDROSE MEDICAL PROPERTIES, L.P.
RECITALS
Windrose Medical Properties, L.P. (the "Partnership") was formed as a
limited partnership under the laws of the Commonwealth of Virginia, pursuant to
a Certificate of Limited Partnership filed with the Virginia State Corporation
Commission effective as of May 23, 2002 and an Agreement of Limited Partnership
entered into as of May __, 2002, by and between Windrose Medical Properties
Trust, a Maryland real estate investment trust (the "General Partner" or the
"Company") and ▇▇▇▇ ▇. Klipsch (the "Original Limited Partner"). This First
Amended and Restated Agreement of Limited Partnership is entered into this __
day of _____, 2002 among the General Partner and the Limited Partners set forth
on Exhibit A hereto, for the purpose of amending and restating the Agreement of
Limited Partnership.
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 to amend the Agreement of Limited Partnership to read in its entirety as
follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the
meanings specified below:
"ACT" means the Virginia Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other than
REIT Shares issued in connection with an exchange 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).
"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, officers or
employees of the General Partner, and any accounting and legal expenses of the
General Partner, which expenses, the Partners have agreed, are expenses of the
Partnership and not the General Partner, and (iii) to the extent not included in
clauses (i) or (ii) above, REIT Expenses; provided, however, that Administrative
Expenses shall not include any administrative costs and expenses incurred by the
Company that are attributable to Properties or partnership interests in a
Subsidiary Partnership that are owned by the Company other than through its
ownership interest in the Partnership.
"AFFILIATE" means, (i) any Person that, directly or indirectly,
controls or is controlled by or is under common control with such Person, (ii)
any other Person that owns, beneficially, directly or indirectly, 10% or more of
the outstanding capital stock, shares or equity interests of such Person, or
(iii) any officer, director, employee, partner, member, manager or trustee of
such Person or any Person controlling, controlled by or under common control
with such Person (excluding 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 or partnership interests or
otherwise.
"AGREED VALUE" means the fair market value of a Partner's non-cash
Capital Contribution as of the date of contribution as agreed to by such Partner
and the General Partner. The names and addresses of the Partners, number of
Partnership Units issued to each Partner, and the Agreed Value of non-cash
Capital Contributions as of the date of contribution is set forth on Exhibit A.
"AGREEMENT" means this Amended and Restated Agreement of Limited
Partnership.
"BOARD OF TRUSTEES" means the Board of Trustees of the Company.
"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 per Partnership Unit equal to the
Value of the REIT Shares Amount on the date of receipt by the Company of a
Notice of Redemption.
"CERTIFICATE" means any instrument or document that is required under
the laws of the Commonwealth of Virginia, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the Commonwealth of Virginia 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
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liability of the Limited Partners as limited partners under the laws of the
Commonwealth of Virginia or such other jurisdiction.
"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 SHARE" means one common share of beneficial interest in the
Company.
"COMPANY" means Windrose Medical Properties Trust, a Maryland real
estate investment trust.
"CONVERSION FACTOR" means 1.0, provided that in the event that the
Company (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the 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, provided further, that in the event
that an entity other than an Affiliate of the Company shall become General
Partner pursuant to any merger, consolidation or combination of the Company with
or into another entity (the "Successor Entity"), the Conversion Factor shall be
adjusted by multiplying the Conversion Factor by the number of shares of the
Successor Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination. Any adjustment to the Conversion Factor shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event; provided, however, that if the
Company 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 Company had received the Notice
of Redemption immediately prior to the record date for such dividend,
distribution, subdivision or combination.
"DECLARATION OF TRUST" means the Declaration of Trust of the Company
filed with the Maryland State Department of Assessments and Taxation, as amended
or restated from time to time.
"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 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
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reorganization, arrangement, insolvency, adjustment of debt or liquidation law
of any jurisdiction, whether now in existence or hereinafter in effect, either
by such Person or by another, provided that if such proceeding is commenced by
another, such Person indicates 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.
"GENERAL PARTNER" means the Company 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.
"INDEMNITEE" means (i) any Person made a party to a proceeding by
reason of its status as the Company, the General Partner or a director, officer
or employee of the Company, the Partnership or the General Partner, and (ii)
such other Persons (including Affiliates of the Company, General Partner or the
Partnership) as the General Partner may designate from time to time, in its sole
and absolute discretion.
"INDEPENDENT TRUSTEE" means a person who is not an officer or employee
of the Company or an Affiliate or a lessee of any Property.
"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.
"LOSS" has the meaning provided in Section 5.01(g) hereof.
"MINIMUM LIMITED PARTNERSHIP INTEREST" means the lesser of (i) 1% or
(ii) if the total Capital Contributions to the Partnership exceed $50 million,
1% divided by the ratio of the total Capital Contributions to the Partnership to
$50 million; provided, however, that the Minimum Limited Partnership Interest
shall not be less than 0.2% at any time.
"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.
"OFFERING" means the initial offer and sale by the Company and the
purchase by the Underwriters (as defined in the Prospectus) of Common Shares for
sale to the public.
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"ORIGINAL LIMITED PARTNER" means ▇▇▇▇ ▇. Klipsch.
"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 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
Company 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, corporation, limited
liability company, joint venture, trust or other entity.
"PROFIT" has the meaning provided in Section 5.01(g) hereof.
"PROPERTY" means any 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.
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"REDEMPTION AMOUNT" means either the Cash Amount or the REIT Shares
Amount, as selected by the Partnership or as directed by the General Partner
pursuant to Section 8.05(b) hereof.
"REDEMPTION RIGHT" has the meaning provided in Section 8.05(a) hereof.
"REDEEMING LIMITED PARTNER" 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 Company and any Subsidiaries
thereof (which Subsidiaries shall, for purposes hereof, be included within the
definition of Company), including taxes, fees and assessments associated
therewith, any and all costs, expenses or fees payable to any director, officer
or employee of the Company, (ii) costs and expenses relating to any public
offering and registration of securities by the Company, including the Offering,
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 Company, (iv) costs and expenses associated with the
preparation and filing of any periodic or other reports and communications by
the Company under federal, state or local laws or regulations, including filings
with the Commission, (v) costs and expenses associated with compliance by the
Company 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 Company, (vii) costs and
expenses incurred by the Company relating to any issuing or redemption of
Partnership Interests and (viii) all other operating or administrative costs of
the Company incurred in the ordinary course of its business on behalf of or in
connection with the Partnership.
"REIT SHARE" means a Common Share of the Company (or Successor Entity,
as the case may be).
"REIT SHARES AMOUNT" means a number of REIT Shares equal to the product
of the number of Partnership Units offered for redemption by a Redeeming Limited
Partner, multiplied by the Conversion Factor as adjusted to and including the
Specified Redemption Date; provided that in the event the Company 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
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the rights issuable to a holder of the REIT Shares Amount 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.
"SERVICE" means the Internal Revenue Service.
"SPECIFIED REDEMPTION DATE" means the first business day of the month
that is at least 60 calendar days after the receipt by the Company of a Notice
of Redemption.
"SUBSIDIARY" means, with respect to any Person, any corporation or
other entity of which a majority of (i) the voting power of the voting equity
securities or (ii) the outstanding equity interests is owned, directly or
indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership in which the Company, a
wholly-owned subsidiary of the Company or the Partnership owns a partnership
interest.
"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the
Partnership as a Limited Partner pursuant to Section 9.03 hereof.
"SUCCESSOR ENTITY" has the meaning provided in the definition of
"Conversion Factor" contained herein.
"SURVIVING GENERAL PARTNER" has the meaning set forth in Section
7.01(d) hereof.
"TRADING DAY" means a day on which the principal national securities
exchange on which a security is listed or admitted to trading is open for the
transaction of business or, if a security is not listed or admitted to trading
on any national securities exchange, shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of New York are
authorized or obligated by law or executive order to close.
"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 daily
market price of such security for the ten consecutive Trading Days immediately
preceding the date of such valuation. The market price for each such Trading Day
shall be: (i) if the security is listed or admitted to trading on any securities
exchange or the NYSE, the last reported sale price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, (ii) if the security is not listed or
admitted to trading on any securities exchange or the NYSE, the last reported
sale price on such day or, if no sale takes place on such day, the average of
the closing bid and asked prices on such day, as reported by a reliable
quotation source designated by the Company, or (iii) if the security is not
listed or admitted to trading on any securities exchange or the NYSE and no such
last reported sale price or closing bid and asked prices are available, the
average of the reported high bid and low asked prices on such day, as reported
by a reliable quotation source designated by the Company, or if there shall be
no bid and asked prices on such day, the average of the high bid and low asked
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prices, as so reported, on the most recent day (not more than ten days prior to
the date in question) for which prices have been so reported; provided that if
there are no bid and asked prices reported during the ten days prior to the date
in question, the value of the security shall be determined by the Company acting
in good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate. In the event the security
includes any additional rights, then the value of such rights shall be
determined by the Company acting in good faith on the basis of such quotations
and other information as it considers, in its reasonable judgment, appropriate.
ARTICLE II
FORMATION OF PARTNERSHIP
2.01 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership
is Windrose Medical Properties, L.P. The specified office and place of business
of the Partnership shall be ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇. The General Partner may at any time change the location of such
office, provided the General Partner gives notice to the Partners of any such
change. The name of the Partnership's registered agent is ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.,
who is a resident of Virginia and a member of the Virginia State Bar, and whose
business address is Hunton & ▇▇▇▇▇▇▇▇, Riverfront Plaza, East Tower, ▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇. 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.
2.02 PARTNERS.
(a) The General Partner of the Partnership is Windrose
Medical Properties Trust, a Maryland real estate investment trust. Its principal
place of business is the same as that of the Partnership.
(b) The Limited Partners are those Persons identified as
Limited Partners on Exhibit A hereto, as amended from time to time.
2.03 TERM AND DISSOLUTION.
(a) The term of the Partnership shall continue in full
force and effect until December 31, 2075, 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;
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(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);
(iii) The redemption of all Limited Partnership
Interests (other than any of such interests held by the General
Partner); or
(iv) The election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the
business of the Partnership is continued pursuant to Section 7.03(b) 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.
2.04 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.
2.05 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request of a
Limited Partner, the General Partner, at its option, may issue a certificate
summarizing the terms of such Limited Partner's interest in the Partnership,
including the number of Partnership Units owned and the Percentage Interest
represented by such Partnership Units as of the date of such certificate. Any
such certificate (i) shall be in form and substance as 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 Windrose Medical
Properties, L.P., as amended from time to time.
ARTICLE III
BUSINESS OF THE PARTNERSHIP
The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in
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such a manner as to permit the Company at all times to qualify as a REIT, unless
the Company 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 or incidental to the foregoing. In
connection with the foregoing, and without limiting the Company's right in its
sole and absolute discretion to cease qualifying as a REIT, the Partners
acknowledge that the Company's current status as a REIT and the avoidance of
income and excise taxes on the Company inures to the benefit of all the Partners
and not solely to the Company. Notwithstanding the foregoing, the Limited
Partners agree that the Company may terminate its status as a REIT under the
Code at any time. The General Partner shall also be empowered to do any and all
acts and things necessary or prudent to ensure that the Partnership will not be
classified as a "publicly traded partnership" taxable as a corporation for
purposes of Section 7704 of the Code.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND ACCOUNTS
4.01 CAPITAL CONTRIBUTIONS. The General Partner and the Limited
Partners have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as amended
from time to time.
4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL
PARTNERSHIP INTERESTS. Except as provided in this Section 4.02 or in Section
4.03, 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.
(a) Issuances of Additional Partnership Interests.
(i) General. The General Partner is hereby
authorized to cause the Partnership to issue such additional
Partnership Interests in the form of Partnership Units for any
Partnership purpose at any time or from time to time to the Partners
(including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established
by the General Partner in its sole and absolute discretion, all without
the approval of any 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 Virginia 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,
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however, that no additional Partnership Interests shall be issued to
the General Partner (or any direct or indirect wholly-owned Subsidiary
of the General Partner) unless:
(1) (A) the additional Partnership
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 (or any direct or indirect wholly-owned Subsidiary of
the General Partner) by the Partnership in accordance with
this Section 4.02 and (B) the General Partner (or any direct
or indirect wholly-owned Subsidiary of the General Partner)
shall make a Capital Contribution to the Partnership in an
amount equal to the cash consideration received by the General
Partner from the issuance of such shares of stock of or other
interests in the General Partner;
(2) the additional Partnership
Interests are issued in exchange for property owned by the
General Partner (or any direct or indirect wholly-owned
Subsidiary of the General Partner) with a fair market value,
as determined by the General Partner, in good faith, equal to
the value of the Partnership 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 an exchange 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 (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 Trustees. 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
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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 and (y) the
General Partner contributes all proceeds from such issuance to the
Partnership, including without limitation, the issuance of REIT Shares
and corresponding Partnership Units pursuant to a share purchase plan
providing for 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. 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 Contributions of Proceeds of Issuance of REIT
Shares. 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 or other expenses paid or incurred in
connection with such issuance, then the General Partner shall make a Capital
Contribution of such net proceeds to the Partnership but shall receive
additional Partnership Units with a value equal to the aggregate amount of the
gross proceeds of such issuance pursuant to Section 4.02(a) hereof. Upon any
such Capital Contribution by the General Partner, the General Partner's Capital
Account shall be increased by the actual amount of its Capital Contribution
pursuant to Section 4.04 hereof.
(c) Minimum Limited Partnership Interest. In the event
that either a redemption pursuant to Section 8.05 hereof or additional Capital
Contributions by the General Partner would result in the Limited Partners (other
than the General Partner), in the aggregate, owning less than the Minimum
Limited Partnership Interest, the General Partner and the Limited Partners shall
form another partnership and contribute sufficient Limited Partnership Interests
together with such other Limited Partners so that the limited partners (other
than the General Partner) of such partnership own at least the Minimum Limited
Partnership Interest.
(d) If the General Partner shall repurchase shares of any
class of the General Partner's capital stock, all costs incurred in connection
with such repurchase shall be reimbursed to the General Partner by the
Partnership pursuant to Section 6.05 hereof and the General Partner shall cause
the Partnership to redeem an equivalent number of Partnership Interests of the
appropriate class held by the General Partner (which, in the case of Common
Shares, shall be a number equal to the quotient of the number of such Common
Shares divided by the Conversion Factor) in the manner provided in Section 6.10.
4.03 ADDITIONAL FUNDING. If the General Partner determines that it
is in the best interests of the Partnership to provide for additional
Partnership funds ("Additional Funds") for any Partnership purpose, the General
Partner may (i) cause the Partnership to obtain such funds from outside
borrowings, or (ii) elect to have the General Partner or any of its Affiliates
provide such Additional Funds to the Partnership through loans or otherwise.
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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). 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 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
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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.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) Profit. Profit of the Partnership for each fiscal
year of the Partnership shall be allocated to the Partners in accordance with
their respective Percentage Interests.
(b) Loss. Loss of the Partnership for each fiscal year of
the Partnership shall be allocated to the Partners in accordance with their
respective Percentage Interests.
(c) Minimum Gain Chargeback. Notwithstanding any
provision to the contrary, (i) any expense of the Partnership that is a
"nonrecourse deduction" within the meaning of Regulations Section 1.704-2(b)(1)
shall be allocated in accordance with the Partners' respective Percentage
Interests, (ii) any expense of the Partnership that is a "partner nonrecourse
deduction" within the meaning of Regulations Section 1.704-2(i)(2) shall be
allocated to the Partner that bears the "economic risk of loss" of such
deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there
is a net decrease in Partnership Minimum Gain within the meaning of Regulations
Section 1.704-2(f)(1) for any Partnership taxable year, then, subject to the
exceptions set forth in Regulations Section 1.704-2(f)(2),(3), (4) and (5),
items of gain and income shall be allocated among the Partners in accordance
with Regulations Section 1.704-2(f) and the ordering rules contained in
Regulations Section 1.704-2(j), and (iv) if there is a net decrease in Partner
Nonrecourse Debt Minimum Gain within the meaning of Regulations Section
1.704-2(i)(4) for any Partnership taxable year, then, subject to the exceptions
set forth in Regulations Section 1.704(2)(g), items of gain and income shall be
allocated among the Partners in accordance with Regulations Section
1.704-2(i)(4) and the ordering rules contained in Regulations Section
1.704-2(j). 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.
(d) Qualified Income Offset. If a Partner receives in any
taxable year an adjustment, allocation or distribution described in
subparagraphs (4), (5) or (6) of Regulations
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Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such
Partner's Capital Account that exceeds the sum of such Partner's shares of
Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such taxable year (and, if
necessary, later taxable years) items of income and gain in an amount and manner
sufficient to eliminate such deficit Capital Account balance as quickly as
possible as provided in Regulations Section 1.704-1(b)(2)(ii)(d). After the
occurrence of an allocation of income or gain to a Partner in accordance with
this Section 5.01(d), to the extent permitted by Regulations Section 1.704-1(b),
items of expense or loss shall be allocated to such Partner in an amount
necessary to offset the income or gain previously allocated to such Partner
under this Section 5.01(d).
(e) Capital Account Deficits. Loss shall not be allocated
to a Limited Partner to the extent that such allocation would cause a deficit in
such Partner's Capital Account (after reduction to reflect the items described
in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum
of such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to
the General Partner. After the occurrence of an allocation of Loss to the
General Partner in accordance with this Section 5.01(e), to the extent permitted
by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in
an amount necessary to offset the Loss previously allocated to each Partner
under this Section 5.01(e).
(f) Allocations Between Transferor and Transferee. If a
Partner transfers any part or all of its Partnership Interest, the distributive
shares of the various items of Profit and Loss allocable among the Partners
during such fiscal year of the Partnership shall be allocated between the
transferor and the transferee Partner either (i) as if the Partnership's fiscal
year had ended on the date of the transfer, or (ii) based on the number of days
of such fiscal year that each was a Partner without regard to the results of
Partnership activities in the respective portions of such fiscal year in which
the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to
allocate the distributive shares of the various items of Profit and Loss between
the transferor and the transferee Partner.
(g) 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(c), 5.01(d) or 5.01(e). 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 Partnership shall use the
traditional method for allocating items of income, gain and expense as required
by Section 704(c) of the Code with respect to the properties acquired by the
Partnership in connection with the Offering. With respect to other properties
acquired by the Partnership, the General Partner shall have the authority to
elect the method to be used by the Partnership for allocating items of income,
gain and expense as required by Section 704(c) of the Code with respect to such
properties, and such election shall be binding on all Partners.
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5.02 DISTRIBUTION OF CASH.
(a) Subject to Section 5.02(c) hereof, the Partnership
shall distribute cash at such times and in such amounts as are determined by the
General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other
distribution period) in accordance with their respective Percentage Interests on
the Partnership Record Date.
(b) 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.
(c) Notwithstanding any other provision of this
Agreement, the General Partner is authorized to take any action that it
determines to be necessary or appropriate to cause the Partnership to comply
with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to a Partner or assignee
(including by reason of Section 1446 of the Code), either (i) if the actual
amount to be distributed to the Partner (the "Distributable Amount") equals or
exceeds the amount required to be withheld by the Partnership (the "Withheld
Amount"), the entire Distributable Amount shall be treated as a distribution of
cash to such Partner, or (ii) if the Distributable Amount is less than the
Withheld Amount, the excess of the Withheld Amount over the Distributable Amount
shall be treated as a loan (a "Partnership Loan") from the Partnership to the
Partner on the day the Partnership pays over such amount to a taxing authority.
A Partnership Loan shall be repaid upon the demand of the Partnership or,
alternatively, through withholding by the Partnership with respect to subsequent
distributions to the applicable Partner or assignee. In the event that a Limited
Partner (a "Defaulting Limited Partner") fails to pay any amount owed to the
Partnership with respect to the Partnership Loan within 15 days after demand for
payment thereof is made by the Partnership on the Limited Partner, the General
Partner, in its sole and absolute discretion, may elect to make the payment to
the Partnership on behalf of such Defaulting Limited Partner. In such event, on
the date of payment, the General Partner shall be deemed to have extended a loan
(a "General Partner Loan") to the Defaulting Limited Partner in the amount of
the payment made by the General Partner and shall succeed to all rights and
remedies of the Partnership against the Defaulting Limited Partner as to that
amount. Without limitation, the General Partner shall have the right to receive
any distributions that otherwise would be made by the Partnership to the
Defaulting Limited Partner until such time as the General Partner Loan has been
paid in full, and any such distributions so received by the General Partner
shall be treated as having been received by the Defaulting Limited Partner and
immediately paid to the General Partner.
Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.02(d) shall bear interest at the lesser of (i) the
base rate on corporate loans at large
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United States money center commercial banks, as published from time to time in
The Wall Street Journal, or (ii) the maximum lawful rate of interest on such
obligation, such interest to accrue from the date the Partnership or the General
Partner, as applicable, is deemed to extend the loan until such loan is repaid
in full.
(d) 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, other than to the extent the
General Partner elects to retain and pay income tax on its net capital gain.
5.04 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be
entitled to demand property other than cash in connection with any distributions
by the Partnership.
5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS.
Notwithstanding any of the provisions of this Article V, no Partner shall have
the right to receive, and the General Partner shall not have the right to make,
a distribution that includes a return of all or part of a Partner's Capital
Contributions, unless after giving effect to the return of a Capital
Contribution, the sum of all Partnership liabilities, other than the liabilities
to a Partner for the return of his Capital Contribution, does not exceed the
fair market value of the Partnership's assets.
5.06 DISTRIBUTIONS UPON LIQUIDATION.
(a) Upon liquidation of the Partnership, after payment
of, or adequate provision for, debts and obligations of the Partnership,
including any Partner loans, any remaining assets of the Partnership shall be
distributed to all Partners with positive Capital Accounts in accordance with
their respective positive Capital Account balances.
(b) For purposes of Section 5.06(a), the Capital Account
of each Partner shall be determined after the following adjustments: (i) all
adjustments made in accordance with Sections 5.01 and 5.02 resulting from
Partnership operations and from all sales and dispositions of all or any part of
the Partnership's assets, and (ii) allocating to the General Partner an amount
equal to the excess of (A) the value of the Partnership Units it received in
exchange for Capital Contributions of the proceeds of an issuance of REIT Shares
pursuant to Section 4.02(b) hereof over (B) the actual amount of its Capital
Contributions pursuant to Section 4.02(b) hereof (i.e., as a result of any
underwriters' discount or other expenses paid or incurred in connection with
such issuance).
(c) Any distributions pursuant to this Section 5.06 shall be made
by the end of the Partnership's taxable year in which the liquidation occurs
(or, if later, within 90 days after the date of the liquidation). To the extent
deemed advisable by the General Partner, appropriate arrangements (including the
use of a liquidating trust) may be made to assure that adequate funds are
available to pay any contingent debts or obligations.
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5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners
that the allocations of Profit and Loss under the Agreement have substantial
economic effect (or be consistent with the Partners' interests in the
Partnership in the case of the allocation of losses attributable to nonrecourse
debt) within the meaning of Section 704(b) of the Code as interpreted by the
Regulations promulgated pursuant thereto. Article V and other relevant
provisions of this Agreement shall be interpreted in a manner consistent with
such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
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. Subject to the restrictions specifically contained in
this Agreement, the powers of the General Partner shall include, without
limitation, the authority to take the following actions on behalf of the
Partnership:
(i) to acquire, purchase, own, operate, lease
and dispose of any real property and any other property or assets
including, but not limited to, notes and mortgages that the General
Partner determines are necessary or appropriate in the business of the
Partnership;
(ii) to construct buildings and make other
improvements on the properties owned or leased by the Partnership;
(iii) to authorize, issue, sell, redeem or
otherwise purchase any Partnership 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,
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 indebtedness by mortgage, deed of trust, pledge or other lien on
the Partnership's assets;
(v) to pay, either directly or by reimbursement,
for all operating costs and general administrative expenses of the
Partnership to third parties or to the General Partner or its
Affiliates as set forth in this Agreement;
(vi) to guarantee or become a co-maker of
indebtedness of any Subsidiary of the Company, 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,
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and secure such guarantee or indebtedness by mortgage, deed of trust,
pledge or other lien on the Partnership's assets;
(vii) to use assets of the Partnership (including,
without limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly or
by reimbursement, of all operating costs and general and administrative
expenses of the General Partner, the Partnership or any Subsidiary of
either, to third parties or to the General Partner as set forth in this
Agreement;
(viii) to lease all or any portion of any of the
Partnership's assets, 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;
(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, 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;
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(xvi) to negotiate and conclude agreements on
behalf of the Partnership with respect to any of the rights, powers and
authority conferred upon the General Partner;
(xvii) to maintain accurate accounting records and
to file promptly all federal, state and local income tax returns on
behalf of the Partnership;
(xviii) to distribute Partnership cash or other
Partnership assets in accordance with this Agreement;
(xix) to form or acquire an interest in, and
contribute property to, any further limited or general partnerships,
joint ventures or other relationships that it deems desirable
(including, without limitation, the acquisition of interests in, and
the contributions of property to, its Subsidiaries and any other Person
in which it has an equity interest from time to time);
(xx) to establish Partnership reserves for
working capital, capital expenditures, contingent liabilities or any
other valid Partnership purpose;
(xxi) to merge, consolidate or combine the
Partnership with or into another person;
(xxii) to do any and all acts and things necessary
or prudent to ensure that the Partnership will not be classified as a
"publicly traded partnership" taxable as a corporation under Section
7704 of the Code; and
(xxiii) to take such other action, execute,
acknowledge, swear to or deliver such other documents and instruments,
and perform any and all other acts that the General Partner deems
necessary or appropriate for the formation, continuation and conduct of
the business and affairs of the Partnership (including, without
limitation, all actions consistent with allowing the General Partner at
all times to qualify as a REIT unless the General Partner voluntarily
terminates 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.
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6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.
(a) The Partnership shall indemnify an Indemnitee from
and against any and all losses, claims, damages, liabilities, joint or several,
expenses (including reasonable legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement
in which any Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless it is established that: (i) the act or omission of
the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) the Indemnitee actually received an improper personal benefit
in money, property or services; or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. The termination of any proceeding by judgment, order or settlement
does not create a presumption that the Indemnitee did not meet the requisite
standard of conduct set forth in this Section 6.03(a). The termination of any
proceeding by conviction or upon a plea of nolo contendere or its equivalent, or
an entry of an order of probation prior to judgment, creates a rebuttable
presumption that the Indemnitee acted in a manner contrary to that specified in
this Section 6.03(a). Any indemnification pursuant to this Section 6.03 shall be
made only out of the assets of the Partnership.
(b) The Partnership shall reimburse an Indemnitee for
reasonable expenses incurred by an Indemnitee who is a party to a proceeding in
advance of the final disposition of the proceeding upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee's
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 6.03 has been met, and (ii) a
written undertaking by or on behalf of the Indemnitee to repay the amount if it
shall ultimately be determined that the standard of conduct has not been met.
(c) The indemnification provided by this Section 6.03
shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity.
(d) The Partnership may purchase and maintain insurance,
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
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reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose that is not
opposed to the best interests of the Partnership.
(f) In no event may an Indemnitee subject the Limited
Partners to personal liability by reason of the indemnification provisions set
forth in this Agreement.
(g) An Indemnitee shall not be denied indemnification in
whole or in part under this Section 6.03 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.
(h) The provisions of this Section 6.03 are for the
benefit of the Indemnitees, their heirs, successors, assigns and administrators
and shall not be deemed to create any rights for the benefit of any other
Persons.
(i) Any amendment, modification or repeal of this
Section 6.03 or any provision hereof shall be prospective only and shall not in
any way affect the indemnification of an Indemnitee by the Partnership under
this Section 6.03 as in effect immediately prior to such amendment, modification
or repeal with respect to matters occurring, in whole or in part, prior to such
amendment, modification or repeal, regardless of when claims relating to such
matters may arise or be asserted.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in
this Agreement, 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 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.
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(c) Subject to its obligations and duties as General
Partner set forth in Section 6.01 hereof, the General Partner may exercise any
of the powers granted to it under this Agreement and perform any of the duties
imposed upon it hereunder either directly or by or through its agents. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any such agent appointed by it in good faith.
(d) Notwithstanding any other provisions of this
Agreement or the Act, any action of the General Partner on behalf of the
Partnership or any decision of the General Partner to refrain from acting on
behalf of the Partnership, undertaken in the good faith belief that such action
or omission is necessary or advisable in order (i) to protect the ability of the
Company to continue to qualify as a REIT or (ii) to prevent the Company 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 PARTNERSHIP OBLIGATIONS.
(a) Except as provided in this Section 6.05 and elsewhere
in this Agreement (including the provisions of Articles V and VI regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.
(b) All Administrative Expenses shall be obligations of
the Partnership, and the General Partner shall be entitled to reimbursement by
the Partnership for any expenditure (including Administrative Expenses) incurred
by it on behalf of the Partnership that shall be made other than out of the
funds of the Partnership.
6.06 OUTSIDE ACTIVITIES. Subject to Section 6.08 hereof, the
Declaration of Trust and any agreements entered into by the General Partner or
its Affiliates with the Partnership or a Subsidiary, any officer, director,
employee, agent, trustee, Affiliate or shareholder of the General Partner, the
General Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities substantially similar or identical
to those of the Partnership. Neither the Partnership nor any of the Limited
Partners shall have any rights by virtue of this Agreement in any such business
ventures, interest or activities. None of the Limited Partners nor any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any such business ventures, interests or
activities, and the General Partner shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures, interests and
activities to the Partnership or any Limited Partner, even if such opportunity
is of a character that, if presented to the Partnership or any Limited Partner,
could be taken by such Person.
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6.07 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed
or retained by the Partnership and may otherwise deal with the Partnership
(whether as a buyer, lessor, lessee, manager, furnisher of goods or services,
broker, agent, lender or otherwise) and may receive from the Partnership any
compensation, price or other payment therefor that the General Partner
determines to be fair and reasonable.
(b) The Partnership may lend or contribute to its
Subsidiaries or other Persons in which it has an equity investment, and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which
it is or thereby becomes a participant upon such terms and subject to such
conditions as the General Partner deems are consistent with this Agreement and
applicable law.
6.08 GENERAL PARTNER ACTIVITIES. The General Partner agrees that,
generally, all business activities of the General Partner, including activities
pertaining to the acquisition, development or ownership of healthcare property
or other property, shall be conducted through the Partnership or one or more
Subsidiary Partnerships; provided, however, that the General Partner may make a
direct acquisition if such acquisition is made in connection with the issuance
of Additional Securities and direct acquisition and issuance have been approved
by a majority of the Independent Trustees.
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 REDEMPTION OF GENERAL PARTNER PARTNERSHIP UNITS. 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 redeemed 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
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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
redeemed by the General Partner pursuant to such offer, the Partnership shall
redeem an 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 Partnership Interest or withdraw as General Partner except as
provided in or in connection with a transaction contemplated by Section 7.01(c),
(d) or (e).
(b) The General Partner agrees that its Percentage
Interest will at all times be in the aggregate at least 1%.
(c) Except as otherwise provided in 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 that 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
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greatest amount of cash, securities or other property (expressed as an
amount per REIT Share) received in the Transaction by any holder of
REIT Shares.
(d) Notwithstanding Section 7.01(c), the General Partner
may merge with or into or consolidate with another entity if immediately after
such merger or consolidation (i) substantially all of the assets of the
successor or surviving entity (the "Survivor"), other than Partnership Units
held by the General Partner, are contributed, directly or indirectly, to the
Partnership as a Capital Contribution in exchange for Partnership Units with a
fair market value equal to the value of the assets so contributed as determined
by the Survivor in good faith and (ii) the Survivor expressly agrees to assume
all obligations of the General Partner hereunder. Upon such contribution and
assumption, the Survivor shall have the right and duty to amend this Agreement
as set forth in this Section 7.01(d). The Survivor shall in good faith arrive at
a new method for the calculation of the Cash Amount, the REIT Shares Amount and
Conversion Factor for a Partnership Unit after any such merger or consolidation
so as to approximate the existing method for such calculation as closely as
reasonably possible. Such calculation shall take into account, among other
things, the kind and amount of securities, cash and other property that was
receivable upon such merger or consolidation by a holder of REIT Shares or
options, warrants or other rights relating thereto, and which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Survivor 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(d) 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 Trustees' fiduciary duties to the shareholders
of the General Partner under applicable law.
(e) Notwithstanding anything in this Article VII,
(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
(ii) the General Partner may engage in a
transaction required by law or by the rules of any national securities
exchange on which the REIT Shares are listed.
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:
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(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 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. The merger of the General Partner with or into any entity that is
admitted as a substitute or successor General Partner pursuant to Section 7.02
hereof shall not be deemed to be the withdrawal, dissolution or removal of the
General Partner.
(b) Following the occurrence of an Event of Bankruptcy as
to 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. Each Limited Partner hereby irrevocably
appoints the General Partner its true and lawful attorney-in-fact, who may act
for each Limited Partner and in its name, place and stead, and for its use and
benefit, to sign, acknowledge, swear to, deliver, file or record, at the
appropriate public offices, any and all documents, certificates and instruments
as may be deemed necessary or desirable by the General Partner to carry out
fully the provisions of this Agreement and the Act in accordance with their
terms, including amendments hereto, which power of attorney is coupled with an
interest and shall survive the death, dissolution or legal incapacity of the
Limited Partner, or the transfer by the Limited Partner of any part or all of
its Partnership Interest.
8.03 LIMITATION ON LIABILITY OF LIMITED PARTNERS. No Limited
Partner shall be liable for any debts, liabilities, contracts or obligations of
the Partnership. A Limited Partner shall be liable to the Partnership only to
make payments of its Capital Contribution, if any, as and when due 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 [Intentionally Reserved].
8.05 REDEMPTION RIGHT.
(a) Subject to Sections 8.05(b), 8.05(c), 8.05(d),
8.05(e) and 8.05(f) and the provisions of any agreements between the Partnership
and one or more Limited Partners with respect to Partnership Units held by them,
each Limited Partner, other than the Company, 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 Redemption Amount
to be paid by the Partnership, provided that such Partnership Units shall have
been outstanding for at least one year, and subject to any restriction agreed to
in writing between the Redeeming Limited Partner and the General Partner. 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 Limited Partner");
provided, however, that the Partnership shall, in its sole and absolute
discretion, have the option to deliver
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either the Cash Amount or the REIT Shares Amount; provided, further, that the
Partnership shall not be obligated to satisfy such Redemption Right if the
General Partner elects to purchase the Partnership Units subject to the Notice
of Redemption; 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 Limited Partner shall have
no right, with respect to any Partnership Units so redeemed, to receive any
distribution 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 Limited Partner either the Cash Amount or the REIT
Shares Amount, as elected by the General Partner (in its sole and absolute
discretion), on the Specified Redemption Date, whereupon the General Partner
shall acquire the Partnership Units offered for redemption by the Redeeming
Limited 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 Limited Partner
within five Business Days after the receipt by the General Partner of such
Notice of Redemption.
In the event the General Partner shall exercise its right to purchase
Partnership Units with respect to the exercise of a Redemption Right, the
Partnership shall have no obligation to pay any amount to the Redeeming Limited
Partner with respect to such Redeeming Limited Partner's exercise of such
Redemption Right, and each of the Redeeming Limited Partner, the Partnership and
the General Partner shall treat the transaction between the General Partner and
the Redeeming Limited Partner for federal income tax purposes as a sale of the
Redeeming Limited Partner's Partnership Units to the General Partner. Each
Redeeming Limited Partner agrees to execute such documents as the General
Partner may reasonably require in connection with the issuance of REIT Shares
upon exercise of the Redemption Right.
(c) Notwithstanding the provisions of Section 8.05(a) and
8.05(b), a Limited Partner shall not be entitled to exercise the Redemption
Right if 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 Limitation (as defined in
the Declaration of Trust) and calculated in accordance therewith, except as
provided in the Declaration of Trust, (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
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registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"). The General Partner, in its sole and absolute discretion, may
waive the restriction on redemption set forth in this Section 8.05(c).
(d) Any Cash Amount to be paid to a Redeeming Limited
Partner pursuant to this Section 8.05 shall be paid on the Specified Redemption
Date; provided, however, that the General Partner may elect to cause the
Specified Redemption Date to be delayed for up to an additional 90 days to the
extent required for the General Partner to cause additional REIT Shares to be
issued to provide financing to be used to make such payment of the Cash Amount.
Notwithstanding the foregoing, the General Partner agrees to use its 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 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 that apply upon a Redeeming Limited Partner's
exercise of the Redemption Right. If a Redeeming Limited Partner believes that
it is exempt from such withholding upon the exercise of the Redemption Right,
such Partner must furnish the General Partner with a FIRPTA Certificate in the
form attached hereto as Exhibit C. If the Partnership or the General Partner is
required to withhold and pay over to any taxing authority any amount upon a
Redeeming Limited Partner's exercise of the Redemption Right and if the
Redemption Amount equals or exceeds the Withheld Amount, the Withheld Amount
shall be treated as an amount received by such Partner in redemption of its
Partnership Units. If, however, the Redemption Amount is less than the Withheld
Amount, the Redeeming Limited Partner shall not receive any portion of the
Redemption Amount, the Redemption Amount shall be treated as an amount received
by such Partner in redemption of its Partnership Units, and the Partner shall
contribute the excess of the Withheld Amount over the Redemption Amount to the
Partnership before the Partnership is required to pay over such excess to a
taxing authority.
(f) Notwithstanding any other provision of this
Agreement, the General Partner shall place appropriate restrictions on the
ability of the Limited Partners to exercise their Redemption Rights as and if
deemed necessary to ensure that the Partnership does not constitute a "publicly
traded partnership" taxable as a corporation under section 7704 of the Code. If
and when the General Partner determines that imposing such restrictions is
necessary, the General Partner shall give prompt written notice thereof (a
"Restriction Notice") to each of the Limited Partners, which notice shall be
accompanied by a copy of an opinion of counsel to the Partnership that states
that, in the opinion of such counsel, restrictions are necessary in order to
avoid the Partnership being treated as a "publicly traded partnership" under
section 7704 of the Code.
8.06 REGISTRATION. Subject to the terms of any agreement between
the General Partner and one or more Limited Partners with respect to Partnership
Units held by them:
(a) Shelf Registration of the Common Stock. The General
Partner agrees to file with the Commission, within one year following the date
Partnership Units are issued, a shelf registration statement under Rule 415 of
the Securities Act (a "Registration Statement"), or any
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similar rule that may be adopted by the Commission, covering (i) the issuance of
the Common Shares issuable upon redemption of the Partnership Units ("Redemption
Shares") and/or (ii) the resale by the holder of the Redemption ; provided,
however, that only two such registrations may occur each year. In connection
therewith, the Company will:
(i) use its best efforts to have such
Registration Statement declared effective;
(ii) furnish to each holder of Redemption Shares
such number of copies of prospectuses, and supplements or amendments
thereto, and such other documents as such holder reasonably requests;
(iii) register or qualify the Redemption Shares
covered by the Registration Statement under the securities or blue sky
laws of such jurisdictions within the United States as any holder of
Redemption Shares shall reasonably request, and do such other
reasonable acts and things as may be required of it to enable such
holders to consummate the sale or other disposition in such
jurisdictions of the Redemption Shares; provided, however, that the
General Partner shall not be required to (i) qualify as a foreign
corporation or consent to a general or unlimited service or process in
any jurisdictions in which it would not otherwise be required to be
qualified or so consent or (ii) qualify as a dealer in securities; and
(iv) otherwise use its best efforts to comply
with all applicable rules and regulations of the Commission.
The General Partner further agrees to supplement or make amendments to
each Registration Statement, if required by the rules, regulations or
instructions applicable to the registration form utilized by the General Partner
or by the Securities Act or rules and regulations thereunder for such
Registration Statement. Each Limited Partner agrees to furnish the General
Partner, upon request, such information with respect to the Limited Partner as
may be required to complete and file the Registration Statement.
(b) Listing on Securities Exchange. If the General
Partner shall list or maintain the listing of any Common Shares on any
securities exchange or national market system, it will at its expense and as
necessary to permit the registration and sale of the Redemption Shares
hereunder, list thereon, maintain and, when necessary, increase such listing to
include such Redemption Shares.
(c) Registration Not Required. Notwithstanding the
foregoing, the General Partner shall not be required to file or maintain the
effectiveness of a registration statement relating to Redemption Shares after
the first date upon which, in the opinion of counsel to the General Partner, all
of the Redemption Shares covered thereby could be sold by the holders thereof in
any period of three months pursuant to Rule 144 under the Securities Act, or any
successor rule thereto.
(d) Allocation of Expenses. The Partnership shall pay all
expenses in connection with the Registration Statement, including without
limitation (i) all expenses incident to filing with the National Association of
Securities Dealers, Inc., (ii) registration fees, (iii)
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printing expenses, (iv) accounting and legal fees and expenses, except to the
extent holders of Redemption Shares elect to engage accountants or attorneys in
addition to the accountants and attorneys engaged by the General Partner or the
Partnership, (v) accounting expenses incident to or required by any such
registration or qualification and (vi) expenses of complying with the securities
or blue sky laws of any jurisdictions in connection with such registration or
qualification; provided, however, the Partnership shall not be liable for (A)
any discounts or commissions to any underwriter or broker attributable to the
sale of Redemption Shares, or (B) any fees or expenses incurred by holders of
Redemption Shares in connection with such registration that, according to the
written instructions of any regulatory authority, the Partnership is not
permitted to pay.
(e) Indemnification.
(i) In connection with the Registration
Statement, the General Partner and the Partnership agree to indemnify
holders of Redemption Shares within the meaning of Section 15 of the
Securities Act, against all losses, claims, damages, liabilities and
expenses (including reasonable costs of investigation) caused by any
untrue, or alleged untrue, statement of a material fact contained in
the Registration Statement, preliminary prospectus or prospectus (as
amended or supplemented if the General Partner shall have furnished any
amendments or supplements thereto) or caused by any omission or alleged
omission, to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, liabilities or expenses
are caused by any untrue statement, alleged untrue statement, omission,
or alleged omission based upon information furnished to the General
Partner by the Limited Partner of the holder for use therein. The
General Partner and each officer, director and controlling person of
the General Partner shall be indemnified by each Limited Partner or
holder of Redemption Shares covered by the Registration Statement for
all such losses, claims, damages, liabilities and expenses (including
reasonable costs of investigation) caused by any untrue, or alleged
untrue, statement or any omission, or alleged omission, based upon
information furnished to the General Partner by the Limited Partner or
the holder for use therein.
(ii) Promptly upon receipt by a party indemnified
under this Section 8.06(e) of notice of the commencement of any action
against such indemnified party in respect of which indemnity or
reimbursement may be sought against any indemnifying party under this
Section 8.06(e), such indemnified party shall notify the indemnifying
party in writing of the commencement of such action, but the failure to
so notify the indemnifying party shall not relieve it of any liability
that it may have to any indemnified party otherwise than under this
Section 8.06(e) unless such failure shall materially adversely affect
the defense of such action. In case notice of commencement of any such
action shall be given to the indemnifying party as above provided, the
indemnifying party shall be entitled to participate in and, to the
extent it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense of such action at its own expense, with
counsel chosen by it and reasonably satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but
the reasonable fees and expenses of such counsel (other than reasonable
costs of investigation) shall be paid by the indemnified
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party unless (i) the indemnifying party agrees to pay the same, (ii)
the indemnifying party fails to assume the defense of such action with
counsel reasonably satisfactory to the indemnified party or (iii) the
named parties to any such action (including any impleaded parties) have
been advised by such counsel that representation of such indemnified
party and the indemnifying party by the same counsel would be
inappropriate under applicable standards of professional conduct (in
which case the indemnified party shall have the right to separate
counsel and the indemnifying party shall pay the reasonable fees and
expenses of such separate counsel). No indemnifying party shall be
liable for any settlement entered into without its consent.
(f) Contribution.
(i) If for any reason the indemnification
provisions contemplated by Section 8.06(e) are either unavailable or
insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities referred to therein, then the
party that would otherwise be required to provide indemnification or
the indemnifying party (in either case, for purposes of this Section
8.06(f), the "Indemnifying Party") in respect of such losses, claims,
damages or liabilities, shall contribute to the amount paid or payable
by the party that would otherwise be entitled to indemnification or the
indemnified party (in either case, for purposes of this Section
8.06(f), the "Indemnified Party") as a result of such losses, claims,
damages, liabilities or expense, in such proportion as is appropriate
to reflect the relative fault of the Indemnifying Party and the
Indemnified Party, as well as any other relevant equitable
considerations. The relative fault of the Indemnifying Party and
Indemnified Party shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material
fact or omission or alleged omission to state a material fact related
to information supplied by the Indemnifying Party or Indemnified Party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to
include any legal or other fees or expenses reasonably incurred by such
party.
(ii) The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 8.06(f)
were determined by pro rata allocation (even if the holders were
treated as one entity for such purpose) or by any other method of
allocation that does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No person or entity
determined to have committed a fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person or entity who was not guilty of such
fraudulent misrepresentation.
(iii) The contribution provided for in this
Section 8.06(f) shall survive the termination of this Agreement and
shall remain in full force and effect regardless of any investigation
made by or on behalf of any Indemnified Party.
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ARTICLE IX
TRANSFERS OF PARTNERSHIP INTERESTS
9.01 PURCHASE FOR INVESTMENT.
(a) Each Limited Partner hereby represents and warrants
to the General Partner and to the Partnership that the acquisition of his
Partnership Interests is made as a principal for his account for investment
purposes only and not with a view to the resale or distribution of such
Partnership Interest.
(b) Subject to the provisions of Section 9.02, 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.
9.02 RESTRICTIONS ON TRANSFER OF PARTNERSHIP INTERESTS.
(a) Subject to the provisions of Sections 9.02(b), (c)
and (d), no Limited Partner may offer, sell, assign, hypothecate, pledge or
otherwise transfer all or any portion of his 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 consent of the General Partner, which consent may be
granted or withheld in its sole and absolute discretion. The General Partner may
require, as a condition of any Transfer to which it consents, that the
transferor assume all costs incurred by the Partnership in connection therewith.
(b) No Limited Partner may withdraw from the Partnership
other than as a result of a permitted Transfer (i.e., a Transfer consented to as
contemplated by clause (a) above or clause (c) below or a Transfer pursuant to
Section 9.05 below) of all of his Partnership Units pursuant to this Article IX
or pursuant to a redemption of all of his Partnership Units pursuant to Section
8.05. Upon the permitted Transfer or redemption of all of a Limited Partner's
Partnership Units, such Limited Partner shall cease to be a Limited Partner.
(c) Subject to Sections 9.02(d) and (e) below, a Limited
Partner may Transfer, with the consent of the General Partner, all or a portion
of his Partnership Units to (i) 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, partnership or 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
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 Partnership Interest under the Securities Act or would otherwise violate any
applicable federal or state securities or blue sky law (including investment
suitability standards).
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(e) No Transfer by a Limited Partner of its 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), (ii) in the opinion of legal counsel for the Partnership, it would
adversely affect the ability of the Company to continue to qualify as a REIT or
subject the Company to any additional taxes under Section 857 or Section 4981 of
the Code or (iii) such transfer is effectuated through an "established
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Section 7704 of the Code.
(f) Any purported Transfer in contravention of any of the
provisions of this Article IX shall be void ab initio and ineffectual and shall
not be binding upon, or recognized by, the General Partner or the Partnership.
(g) 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 Partnership Interest of a Limited Partner (which shall be
understood to include any purchaser, transferee, donee or other recipient of any
disposition of such Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the 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 Section 9.01(a) hereof and
the agreement set forth in Section 9.01(b) hereof.
(iv) If the assignee is a corporation,
partnership or trust, the assignee shall have provided the General
Partner with evidence satisfactory to counsel for the Partnership of
the assignee's authority to become a Limited Partner under the terms
and provisions of this Agreement.
(v) The assignee shall have executed a power of
attorney containing the terms and provisions set forth in Section 8.02
hereof.
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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 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 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.
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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 this Agreement and any financial statements of the Partnership for the
three most recent years and (e) all documents and information required under the
Act. Any Partner or its duly authorized representative, upon paying the costs of
collection, duplication and mailing, shall be entitled to inspect or copy such
records during ordinary business hours.
10.02 CUSTODY OF PARTNERSHIP FUNDS; BANK ACCOUNTS.
(a) All funds of the Partnership not otherwise invested
shall be deposited in one or more accounts maintained in such banking or
brokerage institutions as the General Partner shall determine, and withdrawals
shall be made only on such signature or signatures as the General Partner may,
from time to time, determine.
(b) All deposits and other funds not needed in the
operation of the business of the Partnership may be invested by the General
Partner 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).
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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. As Tax
Matters Partner, the General Partner shall have the right and obligation to take
all actions authorized and required, respectively, by the Code for the Tax
Matters Partner. The General Partner shall have the right to retain professional
assistance in respect of any audit of the Partnership by the Service and all
out-of-pocket expenses and fees incurred by the General Partner on behalf of the
Partnership as Tax Matters Partner shall constitute Partnership expenses. In the
event the General Partner receives notice of a final Partnership adjustment
under Section 6223(a)(2) of the Code, the General Partner shall either (i) file
a court petition for judicial review of such final adjustment within the period
provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all Limited Partners on the date such petition is filed, or (ii) mail
a written notice to all Limited Partners, within such period, that describes the
General Partner's reasons for determining not to file such a petition.
(b) All elections required or permitted to be made by the
Partnership under the Code or any applicable state or local tax law shall be
made by the General Partner in its sole and absolute discretion.
(c) In the event of a transfer of all or any part of the
Partnership Interest of any Partner, the Partnership, at the option of the
General Partner, may elect pursuant to Section 754 of the Code to adjust the
basis of the Properties. Notwithstanding anything contained in Article V of this
Agreement, any adjustments made pursuant to Section 754 shall affect only the
successor in interest to the transferring Partner and in no event shall be taken
into account in establishing, maintaining or computing Capital Accounts for the
other Partners for any purpose under this Agreement. Each Partner will furnish
the Partnership with all information necessary to give effect to such election.
10.06 REPORTS TO LIMITED PARTNERS.
(a) If the General Partner is required to furnish an
annual report to its shareholders containing financial statements of the General
Partner, the General Partner will, at the same time and in the same manner,
furnish such annual report to each Limited Partner. 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.
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ARTICLE XI
AMENDMENT OF AGREEMENT; MERGER
The General Partner's consent shall be required for any amendment to
this Agreement. The General Partner, without the consent of the Limited
Partners, may amend this Agreement in any respect; provided, however, that the
following amendments shall require the consent of 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):
(a) any amendment affecting the operation of the
Conversion Factor or the Redemption Right (except as otherwise provided herein)
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,
other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof;
(c) any amendment that would alter the Partnership's
allocations of Profit and Loss to the Limited Partners, other than with respect
to the issuance of additional Partnership Units pursuant to Section 4.02 hereof;
(d) any amendment that would impose on the Limited
Partners any obligation to make additional Capital Contributions to the
Partnership; or
(e) any amendment to this Article XI.
The General Partner, without the consent of the Limited Partners, may
(i) merge or consolidate the Partnership with or into any other domestic or
foreign partnership, limited partnership, limited liability company or
corporation in a transaction pursuant to Section 7.01(c), (d) or (e) hereof, or
(ii) sell the assets of the Partnership.
ARTICLE XII
GENERAL PROVISIONS
12.01 NOTICES. All communications required or permitted under this
Agreement shall be in writing and shall be deemed to have been given when
delivered personally or upon deposit in the United States mail, registered,
postage prepaid return receipt requested, to the Partners at the addresses set
forth in Exhibit A 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.
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12.03 ADDITIONAL DOCUMENTS. Each Partner agrees to perform all
further acts and execute, swear to, acknowledge and deliver all further
documents that may be reasonable, necessary, appropriate or desirable to carry
out the provisions of this Agreement or the Act.
12.04 SEVERABILITY. If any provision of this Agreement shall be
declared illegal, invalid or unenforceable in any jurisdiction, then such
provision shall be deemed to be severable from this Agreement (to the extent
permitted by law) and in any event such illegality, invalidity or
unenforceability shall not affect the remainder hereof.
12.05 ENTIRE AGREEMENT. This Agreement and 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 Commonwealth of Virginia.
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IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this First Amended and Restated Agreement of Limited Partnership,
all as of the __ day of _______, 2002.
GENERAL PARTNER:
WINDROSE MEDICAL PROPERTIES TRUST
By:
--------------------------------
Name:
Title:
LIMITED PARTNERS:
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▇▇▇▇ ▇. Klipsch
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▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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▇.▇. ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇
-42-
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▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ Klipsch
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▇▇▇▇▇ Klipsch
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▇▇▇▇ ▇. ▇▇▇▇▇, M.D.
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▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
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▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D.
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H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D.
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D.
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇, LLC
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇, Inc. MPP
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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EXHIBIT A
Agreed Value of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
GENERAL PARTNER:
Windrose Medical Properties Trust $ %
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LIMITED PARTNERS:
▇▇▇▇ ▇. Klipsch 114,731
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 5,663
▇.▇. ▇▇▇▇▇▇ 51,923
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 10,814
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 28,868
▇▇▇ ▇▇▇▇▇▇ 2,000
▇▇▇▇▇▇ ▇▇▇▇▇ 6,333
▇▇▇▇▇ ▇▇▇▇▇ 2,000
▇▇▇▇ ▇▇▇▇▇▇ 3,733
▇▇▇▇ Klipsch 3,500
▇▇▇▇▇ Klipsch 3,500
▇▇▇▇ ▇. ▇▇▇▇▇, M.D. 2,600
▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 2,600
▇▇▇▇ ▇▇▇▇▇ 4,333
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, M.D. 2,600
H. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, M.D. 2,600
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 8,667
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, M.D. 2,600
Mr. & ▇▇▇. ▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,333
▇▇▇▇▇ ▇▇▇▇▇▇ 877
▇▇▇▇ ▇▇▇▇▇ 4,333
▇▇▇▇ ▇▇▇▇▇▇▇ 4,333
▇▇▇ ▇▇▇▇▇▇▇▇ 4,333
Totals $ $ 100.00000%
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Exhibit A-1
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.05 of the First Amended and Restated
Agreement of Limited Partnership (the "Agreement") of Windrose Medical
Properties, L.P., the undersigned hereby irrevocably (i) presents for redemption
________ Partnership Units in Windrose Medical Properties, 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: ,
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Name of Limited Partner:
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(Signature of Limited Partner)
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(Mailing Address)
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(City) (State) (Zip Code)
Signature Guaranteed by:
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If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
Exhibit B-1
EXHIBIT C
For Redeeming Limited Partners that are entities:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform Windrose Medical Properties Trust (the
"Company") and Windrose Medical Properties, L.P. (the "Partnership") that no
withholding is required with respect to the redemption by ____________
("Partner") of its units of limited partnership interest in the Partnership, the
undersigned hereby certifies the following on behalf of Partner:
1. Partner is not a foreign corporation, foreign partnership, foreign
trust, or foreign estate, as those terms are defined in the Code and the
Treasury regulations thereunder.
2. The U.S. employer identification number of Partner is _____________.
3. The principal business address of Partner is:
______________________________________________________________ and Partner's
place of incorporation is __________.
4. Partner agrees to inform the Company if it becomes a foreign person at
any time during the three-year period immediately following the date of this
notice.
5. Partner understands that this certification may be disclosed to the
Internal Revenue Service by the Company and that any false statement contained
herein could be punished by fine, imprisonment, or both.
PARTNER
By:
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Name:
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Its:
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Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare that I have authority to sign this document on behalf of
Partner.
Date: [NAME]
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Title
Exhibit C-1
For Redeeming Limited Partners that are individuals:
CERTIFICATION OF NON-FOREIGN STATUS
Under section 1445(e) of the Internal Revenue Code of 1986, as amended
(the "Code"), in the event of a disposition by a non-U.S. person of a
partnership interest in a partnership in which (i) 50% or more of the value of
the gross assets consists of United States real property interests ("USRPIs"),
as defined in section 897(c) of the Code, and (ii) 90% or more of the value of
the gross assets consists of USRPIs, cash, and cash equivalents, the transferee
will be required to withhold 10% of the amount realized by the non-U.S. person
upon the disposition. To inform Windrose Medical Properties Trust (the
"Company") and Windrose Medical Properties, L.P. (the "Partnership") that no
withholding is required with respect to my redemption of my units of limited
partnership interest in the Partnership, I, ___________, hereby certify the
following:
1. I am not a nonresident alien for purposes of U.S. income taxation.
2. My U.S. taxpayer identification number (social security number)
is _____________.
3. My home address is: __________________________________________________.
4. I agree to inform the Company promptly if I become a nonresident alien
at any time during the three-year period immediately following the date of this
notice.
5. I understand that this certification may be disclosed to the Internal
Revenue Service by the Company and that any false statement contained herein
could be punished by fine, imprisonment, or both.
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Name:
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete.
Date:
---------------------- ---------------------------------------
Name:
Exhibit C-2