EXHIBIT 10.1
FIRST AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MPT OPERATING PARTNERSHIP, L.P.
TABLE OF CONTENTS
ARTICLE I DEFINED TERMS..........................................................................................1
ARTICLE II FORMATION OF PARTNERSHIP..............................................................................8
2.01 Continuation..................................................................................8
2.02 Name, Office and Registered Agent.............................................................8
2.03 Partners......................................................................................8
2.04 Term and Dissolution..........................................................................8
2.05 Filing of Certificate and Perfection of Limited Partnership...................................9
2.06 Certificates Describing Partnership Units.....................................................9
ARTICLE III BUSINESS OF THE PARTNERSHIP.........................................................................10
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...........................................................................13
4.04 Capital Accounts.............................................................................13
4.05 Percentage Interests.........................................................................13
4.06 No Interest on Contributions.................................................................13
4.07 Return of Capital Contributions..............................................................14
4.08 No Third Party Beneficiary...................................................................14
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......................................................................21
6.03 Indemnification and Exculpation of Indemnitees...............................................21
6.04 Liability of the General Partner.............................................................23
6.05 Partnership Obligations......................................................................24
6.06 Outside Activities...........................................................................24
6.07 Employment or Retention of Affiliates........................................................24
6.08 General Partner Activities...................................................................25
6.09 Title to Partnership Assets..................................................................25
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6.10 Redemption of General Partner Partnership Units..............................................25
ARTICLE VII CHANGES IN THE COMPANY OR THE GENERAL PARTNER.......................................................25
7.01 Transfer of the General Partner's Partnership Interest.......................................25
7.02 Admission of a Substitute or Additional General Partner......................................27
7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner..................28
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..................................................30
8.04 Redemption Right.............................................................................30
ARTICLE IX TRANSFERS OF PARTNERSHIP INTERESTS...................................................................32
9.01 Purchase for Investment......................................................................32
9.02 Restrictions on Transfer of Partnership Interests............................................32
9.03 Admission of Substitute Limited Partner......................................................34
9.04 Rights of Assignees of Partnership Interests.................................................35
9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner................35
9.06 Joint Ownership of Interests.................................................................35
ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS............................................................36
10.01 Books and Records............................................................................36
10.02 Custody of Partnership Funds; Bank Accounts..................................................36
10.03 Fiscal and Taxable Year......................................................................36
10.04 Annual Tax Information and Report............................................................36
10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments................................36
10.06 Reports to Limited Partners..................................................................37
ARTICLE XI AMENDMENT OF AGREEMENT; MERGER.......................................................................37
ARTICLE XII GENERAL PROVISIONS..................................................................................38
12.01 Notices......................................................................................38
12.02 Survival of Rights...........................................................................38
12.03 Additional Documents.........................................................................38
12.04 Severability.................................................................................38
12.05 Entire Agreement.............................................................................38
12.06 Pronouns and Plurals.........................................................................39
12.07 Headings.....................................................................................39
12.08 Counterparts.................................................................................39
12.09 Governing Law................................................................................39
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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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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
MPT OPERATING PARTNERSHIP, L.P.
This Amended and Restated Agreement of Limited Partnership of MPT
Operating Partnership, L.P. is made and entered into as of the 29th day of
February, 2004 by and among MPT Operating Partnership, L.P. (the "Partnership"),
Medical Properties Trust, LLC, a Delaware limited liability company and
currently the sole general partner of the Partnership, and Medical Properties
Trust, Inc., a Maryland corporation (the "Company"), as well as the other
limited partners who from time to time execute this Agreement or counterparts
hereof as limited partners.
RECITALS:
WHEREAS, the Partnership was formed as a limited partnership
under the laws of the State of Delaware, pursuant to a Certificate of Limited
Partnership filed with the Secretary of State of the State of Delaware effective
as of September 10, 2003 and an Agreement of Limited Partnership entered into as
of September 10, 2003;
WHEREAS, the parties desire to amend the Agreement of Limited
Partnership and restate it in its entirety as set forth in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, the mutual
covenants of the parties hereto, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree that the Agreement of Limited Partnership shall be amended and restated as
follows:
ARTICLE I
DEFINED TERMS
The following defined terms used in this Agreement shall have the
meanings specified below:
"ACT" means the Delaware Revised Uniform Limited Partnership Act, as it
may be amended from time to time.
"ADDITIONAL FUNDS" has the meaning set forth in Section 4.03 hereof.
"ADDITIONAL SECURITIES" means any additional REIT Shares (other than
REIT Shares issued in connection with an exchange pursuant to Section 8.04
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 or the Company, including any salaries or
other payments to directors, officers or employees of the General Partner or the
Company, and any accounting and legal expenses of the General Partner or the
Company, which expenses, the Partners have agreed, are expenses of the
Partnership and not the General Partner or the Company, and (iii) to the extent
not included in clauses (i) or (ii) above, REIT Expenses; provided, however,
that Administrative Expenses shall not include any administrative costs and
expenses incurred by the General Partner or the Company that are attributable to
Properties or partnership interests in a Subsidiary Partnership that are owned
by the General Partner or the Company or 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 (net of assumed liabilities) 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 First Amended and Restated Agreement of Limited
Partnership.
"ARTICLES OF INCORPORATION" means the Articles of Incorporation of the
Company filed with the Maryland State Department of Assessments and Taxation, as
amended or restated from time to time.
"BOARD OF DIRECTORS" means the Board of Directors 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
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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 Partnership and
the Company of a Notice of Redemption.
"CERTIFICATE" means any instrument or document that is required under
the laws of the State of Delaware, or any other jurisdiction in which the
Partnership conducts business, to be signed and sworn to by the Partners of the
Partnership (either by themselves or pursuant to the power-of-attorney granted
to the General Partner in Section 8.02 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.
"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 share of common stock, $.01 par value, of the
Company.
"COMPANY" means Medical Properties Trust, Inc., a Maryland corporation
electing to be taxed as a real estate investment trust under Sections 856
through 860 of the Code.
"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 and the Partnership receive 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 and
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the Partnership had received the Notice of Redemption immediately prior to the
record date for such dividend, distribution, subdivision or combination.
"DEFAULTING LIMITED PARTNER" has the meaning set forth in Section
5.02(c) hereof.
"DISTRIBUTABLE AMOUNT" has the meaning set forth in Section 5.02(c)
hereof.
"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 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 Medical Properties Trust, LLC 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.
"GENERAL PARTNER LOAN" has the meaning set forth in Section 5.02(c)
hereof.
"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.
"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.
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"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.
"ORIGINAL AGREEMENT" has the meaning set forth in the Recitals.
"ORIGINAL LIMITED PARTNER" means ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
"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 stockholders of some or all of its portion of
such distribution received through the General Partner.
"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.
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"PROPERTY" means any property or other investment in which the
Partnership holds an ownership interest.
"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 8.04(b) hereof.
"REDEMPTION RIGHT" has the meaning provided in Section 8.04(a) hereof.
"REDEEMING LIMITED PARTNER" has the meaning provided in Section 8.04(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, or private offering, of securities by the Company 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 or any subsidiary, including the General Partner, 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 stockholders to subscribe for or purchase
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REIT Shares, or any other securities or property (collectively, the "rights"),
and the rights have not expired at the Specified Redemption Date, then the REIT
Shares Amount shall also include the rights issuable to a holder of the REIT
Shares Amount 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 Partnership of a
Notice of Redemption.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, limited liability company or other entity of which a majority of
(i) the voting power of the voting equity securities or (ii) the outstanding
equity interests is owned, directly or indirectly, by such Person.
"SUBSIDIARY PARTNERSHIP" means any partnership or limited liability
company in which the Company, a 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 the NYSE or
any securities exchange, the last reported sale price, regular way, on such day,
or if no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, on such day, (ii) if the security is not listed or
admitted to trading on the NYSE or any securities exchange, the last reported
sale price on such day or, if no sale takes place on such day, the average of
the closing bid and asked prices on such day, as reported by a reliable
quotation source designated by the General Partner, or (iii) if the security is
not listed or admitted to trading on the NYSE or on any securities exchange and
no such last reported sale price or closing bid and asked prices are available,
the average of the reported high bid and low
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asked prices on such day, as reported by a reliable quotation source designated
by the General Partner, or if there shall be no bid and asked prices on such
day, the average of the high bid and low asked prices, as so reported, on the
most recent day (not more than ten days prior to the date in question) for which
prices have been so reported; 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 General Partner 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
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.
"WITHHELD AMOUNT" has the meaning set forth in Section 5.02(c) hereof.
ARTICLE II
FORMATION OF PARTNERSHIP
2.01 CONTINUATION. The Partners hereby agree to continue the
Partnership pursuant to the Act and upon the terms and conditions set forth in
this Agreement.
2.02 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership is
MPT Operating Partnership, 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 National Registered Agents,
Inc. whose business address is ▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The sole duty of the registered agent as such is to forward to
the Partnership any notice that is served on it as registered agent.
2.03 PARTNERS.
(a) The General Partner of the Partnership is Medical
Properties Trust, LLC, a Delaware limited liability company. 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.
2.04 TERM AND DISSOLUTION.
(a) The Partnership's existence shall be perpetual, 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
the General Partner or the dissolution, death, removal or
withdrawal of the General Partner unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof;
provided that if the General Partner is on the date of such
occurrence a partnership, the dissolution of the General
Partner as a result of the dissolution, death, withdrawal,
removal or Event of
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Bankruptcy of a partner in such partnership shall not be an
event of dissolution of the Partnership if the business of the
General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and the
General Partner and such partners comply with any other
applicable requirements of this Agreement;
(ii) The passage of 90 days after the sale or other
disposition of all or substantially all of the assets of the
Partnership (provided that if the Partnership receives an
installment obligation as consideration for such sale or other
disposition, the Partnership shall continue, unless sooner
dissolved under the provisions of this Agreement, until such
time as such note or notes are paid in full); or
(iii) The election by the General Partner that the
Partnership should be dissolved.
(b) Upon dissolution of the Partnership (unless the business
of the Partnership is continued pursuant to Section 7.03(b) hereof), the General
Partner (or its trustee, receiver, successor or legal representative) shall
amend or cancel the Certificate and liquidate the Partnership's assets and apply
and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, [the liquidating General Partner] may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any
assets of the Partnership (including those necessary to satisfy the
Partnership's debts and obligations), or (ii) distribute the assets to the
Partners in kind.
2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP. The
General Partner shall execute, acknowledge, record and file at the expense of
the Partnership the Certificate and any and all amendments thereto and all
requisite fictitious name statements and notices in such places and
jurisdictions as may be necessary to cause the Partnership to be treated as a
limited partnership under, and otherwise to comply with, the laws of each state
or other jurisdiction in which the Partnership conducts business.
2.06 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. 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 MPT Operating Partnership,
L.P., as amended from time to time.
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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 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 and/or
the Company 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 and
the Company) 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. The General Partner's determination that
consideration is adequate shall be conclusive insofar as the adequacy
of consideration relates to whether the Partnership Interests are
validly issued and fully paid. 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,
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preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior
to Limited Partnership Interests, all as shall be determined by the
General Partner in its sole and absolute discretion and without the
approval of any Limited Partner, subject to Delaware law, including,
without limitation, (i) the allocations of items of Partnership income,
gain, loss, deduction and credit to each such class or series of
Partnership Interests; (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions; and (iii)
the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership; provided, however, that
no additional Partnership Interests shall be issued to the General
Partner or the Company (or any direct or indirect wholly-owned
Subsidiary of the General Partner or the Company) unless:
(1) (A) the additional Partnership Interests are
issued in connection with an issuance of REIT Shares of the
Company or other interests in the Company, 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 the Company (or any direct or indirect wholly-owned
Subsidiary of the General Partner or the Company) by the
Partnership in accordance with this Section 4.02 and (B) the
General Partner or the Company (or any direct or indirect
wholly-owned Subsidiary of the General Partner or the Company)
shall make a Capital Contribution to the Partnership in an
amount equal to the cash consideration received by the General
Partner or the Company from the issuance of such shares of
stock of or other interests in the General Partner or the
Company;
(2) the additional Partnership Interests are
issued in exchange for property owned by the General Partner
or the Company (or any direct or indirect wholly-owned
Subsidiary of the General Partner or the Company) 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 (other than in the case of an issuance under clause 2 above)
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 Company
shall not issue any additional REIT Shares (other than REIT Shares
issued in connection with an exchange pursuant to Section 8.04 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 Company or the General Partner Partnership Interests or
rights, options, warrants or convertible or
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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 Company 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
Company is allowed to issue Additional Securities in connection with an
acquisition of a property to be held directly by the Company, 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 Company and the Partnership by a majority of the Board
of Directors. Without limiting the foregoing, the Company is expressly
authorized to issue Additional Securities for less than fair market
value, and to cause the Partnership to issue to the Company or the
General Partner corresponding Partnership Interests, so long as (x) the
General Partner concludes in good faith that such issuance is in the
best interests of the General Partner and the Partnership and (y) the
Company 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, or restricted or other stock
awards. For example, in the event the Company issues REIT Shares for a
cash purchase price and the Company contributes all of the proceeds of
such issuance to the Partnership as required hereunder, the Company
shall be issued a number of additional Partnership Units equal to the
product of (A) the number of such REIT Shares issued by the Company,
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 Company or
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 Company 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, which shall be REIT Expenses hereunder), then the
Company or 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
Company, the Company's or the General Partner's Capital Account shall be
increased pursuant to Section 4.04 hereof by the amount of the gross proceeds of
the issuance.
(c) If the Company shall repurchase shares of any class of the
Company's capital stock, all costs incurred in connection with such repurchase
shall be reimbursed to the Company 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
Company or 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.
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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, the Company or any of their Affiliates
provide such Additional Funds to the Partnership through loans or otherwise.
Subject to the provisions of Section 6.05, no person shall have any preemptive,
preferential or similar right or rights to subscribe for or acquire any
Partnership Interests except as set forth in this Article.
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 or for services, (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.
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4.07 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled to
withdraw any part of its Capital Contribution or its Capital Account or to
receive any distribution from the Partnership, except as specifically provided
in this Agreement. Except as otherwise provided herein, there shall be no
obligation to return to any Partner or withdrawn Partner any part of such
Partner's Capital Contribution for so long as the Partnership continues in
existence.
4.08 NO THIRD PARTY BENEFICIARY. No creditor or other third party
having dealings with the Partnership shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans or to pursue
any other right or remedy hereunder or at law or in equity, it being understood
and agreed that the provisions of this Agreement shall be solely for the benefit
of, and may be enforced solely by, the parties hereto and their respective
successors and assigns. None of the rights or obligations of the Partners herein
set forth to make Capital Contributions or loans to the Partnership shall be
deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned
by the Partnership or pledged or encumbered by the Partnership to secure any
debt or other obligation of the Partnership or of any of the Partners. In
addition, it is the intent of the parties hereto that no distribution to any
Limited Partner shall be deemed a return of money or other property in violation
of the Act. However, if any court of competent jurisdiction holds that,
notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the
obligation of such Limited Partner and not of the General Partner. Without
limiting the generality of the foregoing, a deficit Capital Account of a Partner
shall not be deemed to be a liability of such Partner nor an asset or property
of the Partnership.
ARTICLE V
PROFITS AND LOSSES; DISTRIBUTIONS
5.01 ALLOCATION OF PROFIT AND LOSS.
(a) Profit. Profit of the Partnership for each taxable 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 taxable 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
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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 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
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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 private placement of the Company's
securities. 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.
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
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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(c) shall bear interest at the lesser of (i) 300
basis points above the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in The Wall Street
Journal, or (ii) the maximum lawful rate of interest on such obligation, such
interest to accrue from the date the Partnership or the General Partner, as
applicable, is deemed to extend the loan until such loan is repaid in full.
(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 Company to pay stockholder dividends that will allow the Company 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 Company 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 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.
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(c) Any distributions pursuant to this Section 5.06 shall be
made by the end of the Partnership's taxable year in which the liquidation
occurs (or, if later, within 90 days after the date of the liquidation). To the
extent deemed advisable by the General Partner, appropriate arrangements
(including the use of a liquidating trust) may be made to assure that adequate
funds are available to pay any contingent debts or obligations.
5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners that
the allocations of Profit and Loss under the Agreement have substantial economic
effect (or be consistent with the Partners' interests in the Partnership in the
case of the allocation of losses attributable to nonrecourse debt) within the
meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.
ARTICLE VI
RIGHTS, OBLIGATIONS AND
POWERS OF THE GENERAL PARTNER
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;
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(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;
(vi) to guarantee or become a co-maker of indebtedness of any
Subsidiary of the Company or the Partnership, refinance, increase the
amount of, modify, amend or change the terms of, or extend the time for
the payment of, any such guarantee or indebtedness, and secure such
guarantee or indebtedness by mortgage, deed of trust, pledge or other
lien on the Partnership's assets;
(vii) to use assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with this
Agreement, including, without limitation, payment, either directly or
by reimbursement, of all operating costs and general and administrative
expenses of the General Partner, the Company, the Partnership or any
Subsidiary of any of them 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;
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(xv) to retain other services of any kind or nature in
connection with the Partnership business, and to pay therefor such
remuneration as the General Partner may deem reasonable and proper;
(xvi) to negotiate and conclude agreements on behalf of the
Partnership with respect to any of the rights, powers and authority
conferred upon the General Partner;
(xvii) to maintain accurate accounting records and to file
promptly all federal, state and local income tax returns on behalf of
the Partnership;
(xviii) to distribute Partnership cash or other Partnership
assets in accordance with this Agreement;
(xix) to form or acquire an interest in, and contribute
property to, any further limited or general partnerships, joint
ventures or other relationships that it deems desirable (including,
without limitation, the acquisition of interests in, and the
contributions of property to, its Subsidiaries and any other Person in
which it has an equity interest from time to time);
(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 Company at all times to qualify as a REIT
unless the Company 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.
Except as otherwise provided herein, each of the Limited
Partners agrees that the General Partner is authorized to execute,
deliver and perform the above mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of
the Partners, notwithstanding any other provision of this Agreement,
the Act or any applicable law. The execution, delivery and performance
by the General Partner of the above mentioned agreements and
transactions shall not constitute a breach of any duty under this
Agreement or implied in law or equity.
(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
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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, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
section, except to the extent otherwise expressly agreed to by such Partner and
the Partnership.
6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any or
all of its powers, rights and obligations hereunder to any Person that the
General Partner may from time to time determine, including, without limitation,
the officers and employees of the Partnership, the General Partner, the Company
and any Subsidiary of the Company and may further 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.
Without limiting the generality of the foregoing, the following officers of the
Partnership, who, subject to the general supervision and control of the General
Partner, may exercise the rights and powers of the General Partner to manage the
day-to-day operations of the Partnership: Chief Executive Officer, President,
one or more Vice Presidents, Chief Financial Officer, Chief Operations Officer,
Secretary and Treasurer.
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
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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, but shall not be obligated to,
purchase and maintain insurance, on behalf of the Indemnitees and such other
Persons as the General Partner shall determine, against any liability that may
be asserted against or expenses that may be incurred by such Person in
connection with the Partnership's activities, regardless of whether the
Partnership would have the power to indemnify such Person against such liability
under the provisions of this Agreement.
(e) For purposes of this Section 6.03, the Partnership shall
be deemed to have requested an Indemnitee to serve as fiduciary of an employee
benefit plan whenever the performance by it of its duties to the Partnership
also imposes duties on, or otherwise involves services by, it to the plan or
participants or beneficiaries of the plan; excise taxes assessed on an
Indemnitee with respect to an employee benefit plan pursuant to applicable law
shall constitute fines within the meaning of this Section 6.03; and actions
taken or omitted by the Indemnitee with respect to an employee benefit plan in
the performance of its duties for a purpose reasonably believed by it to be in
the interest of the participants and beneficiaries of the plan shall be deemed
to be for a purpose 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.
(j) If and to the extent any reimbursements to the General
Partner pursuant to this section constitute gross income of the General Partner
(as opposed to the repayment of advances made by the General Partner on behalf
of the Partnership) such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be
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treated consistently therewith by the Partnership and all Partners, and shall
not be treated as distributions for purposes of computing the Partners' Capital
Accounts.
6.04 LIABILITY OF THE GENERAL PARTNER.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, none of the General Partner, the Company, nor any of their directors,
officers, agents or employees shall be liable for monetary damages to the
Partnership or any Partners for losses sustained or liabilities incurred or
benefits not derived as a result of errors in judgment or mistakes of fact or
law 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 Company's
stockholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or the tax consequences to
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 stockholders of the Company 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 stockholders of
the Company or the Limited Partners; provided, however, that for so long as the
Company owns a controlling interest in the Partnership, any such conflict that
the General Partner, in its sole and absolute discretion, determines cannot be
resolved in a manner not adverse to either the stockholders of the Company or
the Limited Partners shall be resolved in favor of the stockholders of the
Company. 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.
(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
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General Partner's or any of its officer's, director's, agent's or employee's
liability to the Partnership and the Limited Partners under this Section 6.04 as
in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating 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 each of the General Partner and the Company 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 Articles
of Incorporation and any agreements entered into by the General Partner, the
Company or any of their respective Affiliates with the Partnership, any
Subsidiary or any officer, director, employee, agent, trustee, Affiliate or
stockholder of the Company, the General Partner and the Company 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. None
of the Partnership, 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 and the Company shall have no obligation pursuant to this Agreement to
offer any interest in any such business ventures, interests and activities to
the Partnership or any Limited Partner, even if such opportunity is of a
character that, if presented to the Partnership or any Limited Partner, could be
taken by such Person.
6.07 EMPLOYMENT OR RETENTION OF AFFILIATES.
(a) Any Affiliate of the General Partner may be employed or
retained by the Partnership and may otherwise deal with the Partnership (whether
as a buyer, lessor, lessee, manager, furnisher of goods or services, broker,
agent, lender or otherwise) and may receive from the Partnership any
compensation, price or other payment 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
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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 and the Company
agree that, generally, all business activities of the General Partner and the
Company, including activities pertaining to the acquisition, development or
ownership of a healthcare property or other property, shall be conducted through
the Partnership or one or more Subsidiaries of the Partnership; provided,
however, that the General Partner or the Company may make a direct acquisition
or undertake a business activity directly if such acquisition is made in
connection with the issuance of Additional Securities and direct acquisition and
issuance or the business activity has been approved by a majority of the Board
Directors.
6.09 TITLE TO PARTNERSHIP ASSETS. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion thereof. Title to any or all of the Partnership assets may be held
in the name of the Partnership, the General Partner or one or more nominees, as
the General Partner may determine, including Affiliates of the General Partner.
The General Partner hereby declares and warrants that any Partnership assets for
which legal title is held in the name of the General Partner or any nominee or
Affiliate of the General Partner shall be held by the General Partner for the
use and benefit of the Partnership in accordance with the provisions of this
Agreement; provided, however, that the General Partner shall use its best
efforts to cause beneficial and record title to such assets to be vested in the
Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is
held.
6.10 REDEMPTION OF COMPANY PARTNERSHIP UNITS. In the event the Company
redeems or repurchases any REIT Shares, then the General Partner shall cause the
Partnership to purchase from the Company a number of Partnership Units as
determined based on the application of the Conversion Factor on substantially
the same terms that the Company redeemed such REIT Shares.
ARTICLE VII
CHANGES IN THE COMPANY OR THE GENERAL PARTNER
7.01 TRANSFER OF THE GENERAL PARTNER'S PARTNERSHIP INTEREST.
(a) Except as provided in Section 4.02 or Section 6.10 hereof,
neither the General Partner nor the Company shall transfer all or any portion of
its Partnership Interest and the General Partner shall not 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) hereof,
the Company shall not engage in any merger, consolidation or other combination
with or into another Person
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or sale of all or substantially all of its assets (other than in connection with
a change in the Company's state of incorporation or organizational form), in
each case which results in a change of control of the Company (a "Transaction"),
unless at least one of the following conditions is met:
(i) the consent of Limited Partners (other than the General
Partner, the Company or any Subsidiary of either of them) 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;
or
(ii) as a result of such Transaction all Limited Partners will
receive, or have the right to elect to receive, for each Partnership
Unit an amount of cash, securities or other property equal in value 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 or the Company 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 for each Partnership Unit an amount of cash,
securities or other property having a value (expressed as an amount per
REIT Share) that is no less than the product of the Conversion Factor
and the greatest amount of cash, securities or other property
(expressed as an amount per REIT Share) received in the Transaction by
any holder of REIT Shares.
(d) Notwithstanding Section 7.01(c), the General Partner or the Company
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 or the Company, 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 and the
Company 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
-26-
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 8.04 hereof so as to approximate the
existing rights and obligations set forth in Section 8.04 as closely as
reasonably possible. The above provisions of this Section 7.01(d) shall
similarly apply to successive mergers or consolidations permitted hereunder.
(e) Notwithstanding anything in this Article VII,
(i) the General Partner may transfer all or any portion of its
General Partnership Interest to (A) the Company or (B) any direct or
indirect Subsidiary of the Company and, following a transfer of all of
its General Partnership Interest, may withdraw as General Partner; and
(ii) the General Partner or the Company 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:
(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 2.06 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 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.
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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 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 a 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 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 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) If on the date of an occurrence of an Event of Bankruptcy
as to, or the dissolution of, a General Partner, such General Partner is 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 Section
7.03 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 (excluding the
Company) within 10 days following the removal of the General Partner. In the
event that the parties are
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unable to agree upon an appraiser, the removed General Partner and a majority in
interest of the Limited Partners (excluding the Company) 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. The cost of all
such appraisals shall be borne by the Partnership.
(c) The General Partnership Interest of a removed General
Partner, during the time after removal 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).
(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. Subject to Section 8.03, 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.
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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 REDEMPTION RIGHT.
(a) Subject to Sections 8.04(b), 8.04(c), 8.04(d), 8.04(e) and
8.04(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 or the
Partnership. The Redemption Right shall be exercised pursuant to a Notice of
Redemption delivered to the Partnership (with a copy to the Company) by the
Limited Partner who is exercising the Redemption Right (the "Redeeming Limited
Partner"); provided, further, that the Partnership shall, in its sole and
absolute discretion, have the option to deliver 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 Company 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. Subject to the immediately succeeding sentence, a Limited
Partner may not, without the consent of the General Partner, exercise the
Redemption Right for less than 1,000 Partnership Units. If a Limited Partner
holds less than 1,000 Partnership Units, such Limited Partner may, without the
consent of the General Partner, exercise the Redemption Right for 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 8.04(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 Company, and the Company 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 Company (in its sole and absolute discretion), on the Specified Redemption
Date, whereupon the Company 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
Company shall elect to exercise its right to purchase Partnership Units under
this Section 8.04(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
Company of such Notice of Redemption.
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In the event the Company 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 Company shall treat the transaction between the Company and the Redeeming
Limited Partner for federal income tax purposes as a sale of the Redeeming
Limited Partner's Partnership Units to the Company. Each Redeeming Limited
Partner agrees to execute such documents as the Company may reasonably require
in connection with the issuance of REIT Shares upon exercise of the Redemption
Right.
(c) Notwithstanding the provisions of Section 8.04(a) and
8.04(b), a Limited Partner shall not be entitled to exercise the Redemption
Right if the delivery of REIT Shares to such Partner on the Specified Redemption
Date by the Company pursuant to Section 8.04(b) (regardless of whether or not
the Company would in fact exercise its rights under Section 8.04(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 Articles of
Incorporation) and calculated in accordance therewith, except as provided in the
Articles of Incorporation, (ii) result in REIT Shares being owned by fewer than
100 persons (determined without reference to any rules of attribution), (iii)
result in the Company being "closely held" within the meaning of Section 856(h)
of the Code, (iv) cause the Company to own, directly or constructively, 10% or
more of the ownership interests in a tenant of the Company's, the Partnership's
or a Subsidiary Partnership's real property, within the meaning of Section
856(d)(2)(B) of the Code, or (v) cause the acquisition of REIT Shares by such
Partner to be "integrated" with any other distribution of REIT Shares for
purposes of complying with the registration provisions of the Securities Act 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 8.04(c).
The consummation of any redemption in exchange for REIT Shares
shall be subject to the expiration or termination of any waiting period under
applicable law.
(d) Any Cash Amount to be paid to a Redeeming Limited Partner
pursuant to this Section 8.04 shall be paid on the Specified Redemption Date;
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 Company 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,
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the Company 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.
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 (i) the acquisition of its
Partnership Interests and Partnership Units is made as a principal for its
account for investment purposes only and not with a view to the resale or
distribution of such Partnership Interest or Partnership Units, (ii) the Limited
Partner understands and agrees that its acquisition of Partnership Interests and
Partnership Units are being made in reliance on an exemption from registration
under the Securities Act, and (iii) the Limited Partner is an "accredited
investor" as that term may be defined pursuant to the rules and regulations of
the Securities and Exchange Commission from time to time.
(b) Subject to the provisions of Section 9.02, each Limited
Partner agrees that it will not sell, assign or otherwise transfer his
Partnership Interest or Partnership Units or any fraction thereof, whether
voluntarily or by operation of law or at judicial sale or otherwise, to any
Person who does not make the representations and warranties to the General
Partner and the Partnership 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 Partnership
Units, or any of such Limited Partner's economic rights as a
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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
8.04. 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 or Partnership Units, in whole or in part, if, in the
opinion of legal counsel for the Partnership, such proposed Transfer would
require the registration of the Partnership Interest or Partnership Units under
the Securities Act or would otherwise violate any applicable federal or state
securities or blue sky law (including investment suitability standards).
(e) No Transfer by a Limited Partner of its Partnership
Interest or Partnership Units, 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 a publicly traded partnership
taxable as a corporation or an association taxable as a corporation (other than
a qualified REIT subsidiary within the meaning of Section 856(i) of the Code) or
(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.
(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 and as a condition of 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.
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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) or Partnership Units shall be deemed
admitted as a Limited Partner of the Partnership only with the consent of the
General Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion, and upon the satisfactory completion of the
following:
(i) The assignee shall have accepted and agreed to be bound by
the terms and provisions of this Agreement by executing a counterpart
or an amendment thereof, including a revised Exhibit A, and such other
documents or instruments as the General Partner may require in order to
effect the admission of such Person as a Limited Partner.
(ii) To the extent required, an amended Certificate evidencing
the admission of such Person as a Limited Partner shall have been
signed, acknowledged and filed 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.
(vi) The assignee shall have paid all legal fees and other
expenses of the Partnership and the General Partner and filing and
publication costs in connection with its substitution as a Limited
Partner.
(vii) The assignee shall have obtained the prior written
consent of the General Partner to its admission as a Substitute Limited
Partner, which consent may be given or denied in the exercise of the
General Partner's sole and absolute discretion.
(b) For the purpose of allocating Profits and Losses and
distributing cash received by the Partnership, a Substitute Limited Partner
shall be treated as having become, and appearing in the records of the
Partnership as, a Partner upon the filing of the Certificate described in
Section 9.03(a)(ii) hereof or, if no such filing is required, the later of the
date specified in the transfer documents or the date on which the General
Partner has received all necessary instruments of transfer and substitution.
(c) The General Partner shall cooperate with the Person
seeking to become a Substitute Limited Partner by preparing the documentation
required by this Section and making
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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.
(d) The General Partner's failure or refusal to permit a
transferee of any such interests to become a Substitute Limited Partner shall
not give rise to any cause of action against the Partnership or any partner.
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 or Partnership Units until the Partnership
has received notice thereof.
(b) Any Person who is the assignee of all or any portion of a
Limited Partner's Partnership Interest or Partnership Units, but does not become
a Substitute Limited Partner and desires to make a further assignment of such
Partnership Interest or Partnership Units, shall be subject to all the
provisions of this Article IX to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of its Partnership Interest or
Partnership Units.
9.05 EFFECT OF BANKRUPTCY, DEATH, INCOMPETENCE OR TERMINATION OF A
LIMITED PARTNER. The occurrence of an Event of Bankruptcy as to a Limited
Partner, the death of a Limited Partner or a final adjudication that a Limited
Partner is incompetent (which term 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.
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
-35-
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).
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
-36-
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 Company is required to furnish an annual report to
its stockholders containing financial statements of the Company , the Company
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 Company.
(b) Any Partner shall further have the right to a private
audit of the books and records of the Partnership, provided such audit is made
for Partnership purposes, at the expense of the Partner desiring it and is made
during normal business hours.
ARTICLE XI
AMENDMENT OF AGREEMENT; 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 Company or any Subsidiary of the Company) holding more than 50% of the
Percentage Interests of the Limited Partners (other than those held by the
Company or any Subsidiary of the Company):
(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;
-37-
(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) and (d) hereof, or (ii)
sell any, all or substantially all of the assets of the Partnership and may
amend this Agreement in connection with any such transaction.
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.
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.
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12.06 PRONOUNS AND PLURALS. When the context in which words are used in
the Agreement indicates that such is the intent, words in the singular number
shall include the plural and the masculine gender shall include the neuter or
female gender as the context may require.
12.07 HEADINGS. The Article headings or sections in this Agreement are
for convenience only and shall not be used in construing the scope of this
Agreement or any particular Article.
12.08 COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original copy and all of
which together shall constitute one and the same instrument binding on all
parties hereto, notwithstanding that all parties shall not have signed the same
counterpart.
12.09 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware.
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IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Amended and Restated Agreement of Limited Partnership, all as
of the date first above written.
PARTNERSHIP:
MPT OPERATING PARTNERSHIP, L.P.
BY: MEDICAL PROPERTIES TRUST, LLC
ITS: GENERAL PARTNER
BY: MEDICAL PROPERTIES TRUST, INC.
ITS: SOLE MEMBER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Title: President & CEO
----------------------------------------
GENERAL PARTNER:
MEDICAL PROPERTIES TRUST, LLC
BY: MEDICAL PROPERTIES TRUST, INC.
ITS: SOLE MEMBER
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Title: President & CEO
----------------------------------------
LIMITED PARTNERS:
MEDICAL PROPERTIES TRUST, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-----------------------------------------
Title: President & CEO
---------------------------------------
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EXHIBIT A
Agreed Value
of Number of
Cash Capital Partnership Percentage
Partner Contribution Contribution Units Interest
------------ ------------ ------------ ------------
GENERAL PARTNER:
Medical Properties Trust, LLC
A Delaware limited liability
company $ 16.30 $ 16.30 16,304.35 1%
LIMITED PARTNERS:
Medical Properties Trust, Inc. $ 1,614.14 $ 1,614.14 1,614,130.65 99%
TOTALS: $ 1,630.44 $ 1,630.44 1,630,435 100%
Exhibit A-1
EXHIBIT B
NOTICE OF EXERCISE OF REDEMPTION RIGHT
In accordance with Section 8.04 of the First Amended and Restated
Agreement of Limited Partnership (the "Agreement") of MPT Operating Partnership,
L.P., the undersigned hereby irrevocably (i) presents for redemption ________
Partnership Units in MPT Operating Partnership, L.P. in accordance with the
terms of the Agreement and the Redemption Right referred to in Section 8.04
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 and the
Company deliverable upon exercise of the Redemption Right be delivered to the
address specified below, and if REIT Shares (as defined in the Agreement) are to
be delivered, such REIT Shares be registered or placed in the name(s) and at the
address(es) specified below.
Dated:________ __, _____
Name of Limited Partner:
--------------------------------------
(Signature of Limited Partner)
--------------------------------------
(Mailing Address)
--------------------------------------
(City) (State) (Zip Code)
Signature Guaranteed by:
--------------------------------------
If REIT Shares are to be issued, issue to:
Please insert social security or identifying number:
Name:
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 Medical Properties Trust, Inc. (the "Company")
and MPT Operating Partnership, L.P. (the "Partnership") that no withholding is
required with respect to the redemption by ____________ ("Partner") of its units
of 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:
--------------------------------------
Name:
------------------------------------
Its:
-------------------------------------
Under penalties of perjury, I declare that I have examined this certification
and, to the best of my knowledge and belief, it is true, correct, and complete,
and I further declare that I have authority to sign this document on behalf of
Partner.
Date: [NAME]
-----------------------------
-----------------------------------
Title
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 Medical Properties Trust, Inc. (the "Company")
and MPT Operating Partnership, L.P. (the "Partnership") that no withholding is
required with respect to my redemption of my units of 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.
-----------------------------------------
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