Exhibit 10.1

 

 

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CYRUSONE LP

a Maryland limited partnership

 

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE
SECURITIES

LAWS OF ANY STATE AND MAY NOT BE SOLD,

TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH

REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP

AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT

THAT THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE

EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER

APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.

dated as of January 24, 2013

 

 

 

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TABLE OF CONTENTS

 

             Page   ARTICLE 1 DEFINED TERMS      1    ARTICLE 2 ORGANIZATIONAL
MATTERS      16     

Section 2.1

  Formation      16     

Section 2.2

  Name      16     

Section 2.3

  Principal Office and Resident Agent      16     

Section 2.4

  Power of Attorney      17     

Section 2.5

  Term      17    ARTICLE 3 PURPOSE      18     

Section 3.1

  Purpose and Business      18     

Section 3.2

  Powers      18     

Section 3.3

  Partnership Only for Purposes Specified      18     

Section 3.4

  Representations and Warranties by the Partners      18    ARTICLE 4 CAPITAL
CONTRIBUTIONS      20     

Section 4.1

  Capital Contributions of the Partners      20     

Section 4.2

  Issuances of Additional Partnership Interests      20     

Section 4.3

  Additional Funds and Capital Contributions      21     

Section 4.4

  Stock Option Plans      22     

Section 4.5

  Dividend Reinvestment Plan, Stock Incentive Plan or Other Plan      24     

Section 4.6

  No Interest; No Return      24     

Section 4.7

  Conversion or Redemption of Preferred Shares; Redemption of REIT Shares     
24     

Section 4.8

  Other Contribution Provisions      25     

Section 4.9

  Excluded Properties      25    ARTICLE 5 DISTRIBUTIONS      25     

Section 5.1

  Requirement and Characterization of Distributions      25     

Section 5.2

  Distributions in Kind      26     

Section 5.3

  Amounts Withheld      26     

Section 5.4

  Distributions upon Liquidation      26     

Section 5.5

  Distributions to Reflect Additional Partnership Units      26     

Section 5.6

  Restricted Distributions      26    ARTICLE 6 ALLOCATIONS      26     

Section 6.1

  Timing and Amount of Allocations of Net Income and Net Loss      26     

Section 6.2

  General Allocations      26     

Section 6.3

  Additional Allocation Provisions      27     

Section 6.4

  Tax Allocations      29    ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS   
  29     

Section 7.1

  Management      29     

Section 7.2

  Certificate of Limited Partnership      30     

Section 7.3

  Restrictions on General Partner’s Authority      31     

Section 7.4

  Reimbursement of the General Partner and the Special Limited Partner      33
    

Section 7.5

  Outside Activities of the General Partner and the Special Limited Partner     
33     

Section 7.6

  Transactions with Affiliates      34     

Section 7.7

  Indemnification      35     

Section 7.8

  Liability of the General Partner and the Special Limited Partner      36     

Section 7.9

  Title to Partnership Assets      38     

Section 7.10

  Reliance by Third Parties      38   

 

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ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     38     

Section 8.1

   Limitation of Liability      38     

Section 8.2

   Management of Business      39     

Section 8.3

   Outside Activities of Limited Partners      39     

Section 8.4

   Return of Capital      39     

Section 8.5

   Rights of Limited Partners Relating to the Partnership      39     

Section 8.6

   Partnership Right to Call Partnership Interests      40     

Section 8.7

   No Rights as Objecting Partner      40     

Section 8.8

   No Right to Certificate Evidencing Units; Article 8 Securities      40     

Section 8.9

   Board Nomination Rights      40   

ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS

     42     

Section 9.1

   Records and Accounting      42     

Section 9.2

   Partnership Year      42     

Section 9.3

   Reports      42   

ARTICLE 10 TAX MATTERS

     42     

Section 10.1

   Preparation of Tax Returns      42     

Section 10.2

   Tax Elections      43     

Section 10.3

   Tax Matters Partner      43     

Section 10.4

   Withholding      44     

Section 10.5

   Organizational Expenses      44   

ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS

     44     

Section 11.1

   Transfer      44     

Section 11.2

   Transfer of General Partner’s Partnership Interest      45     

Section 11.3

   Limited Partners’ Rights to Transfer      45     

Section 11.4

   Substituted Limited Partners      47     

Section 11.5

   Assignees      47     

Section 11.6

   General Provisions      48     

Section 11.7

   Restrictions on Termination Transactions      49   

ARTICLE 12 ADMISSION OF PARTNERS

     50     

Section 12.1

   Admission of Successor General Partner      50     

Section 12.2

   Admission of Additional Limited Partners      51     

Section 12.3

   Amendment of Agreement and Certificate of Limited Partnership      51     

Section 12.4

   Limit on Number of Partners      51     

Section 12.5

   Admission      51   

ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION

     52     

Section 13.1

   Dissolution      52     

Section 13.2

   Winding Up      52     

Section 13.3

   Deemed Contribution and Distribution      53     

Section 13.4

   Rights of Holders      53     

Section 13.5

   Notice of Dissolution      54     

Section 13.6

   Cancellation of Certificate of Limited Partnership      54     

Section 13.7

   Reasonable Time for Winding-Up      54   

ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS

     54     

Section 14.1

   Actions and Consents of Partners      54     

Section 14.2

   Amendments      54     

Section 14.3

   Procedures for Meetings and Actions of the Partners      54   

 

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ARTICLE 15 GENERAL PROVISIONS      55     

Section 15.1

   Redemption Rights of Qualifying Parties      55     

Section 15.2

   Addresses and Notice      61     

Section 15.3

   Titles and Captions      61     

Section 15.4

   Pronouns and Plurals      61     

Section 15.5

   Further Action      61     

Section 15.6

   Binding Effect      61     

Section 15.7

   Waiver      61     

Section 15.8

   Counterparts      61     

Section 15.9

   Applicable Law; Consent to Jurisdiction; Jury Trial      62     

Section 15.10

   Entire Agreement      62     

Section 15.11

   Invalidity of Provisions      62     

Section 15.12

   Limitation to Preserve REIT Status      62     

Section 15.13

   REIT Restrictions      63     

Section 15.14

   No Partition      63     

Section 15.15

   No Third-Party Rights Created Hereby      64     

Section 15.16

   No Rights as Stockholders      64   

 

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Exhibit A

  EXAMPLES REGARDING ADJUSTMENT FACTOR      A-1   

Exhibit B

  NOTICE OF REDEMPTION      B-1   

 

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AMENDED AND RESTATED AGREEMENT OF

LIMITED PARTNERSHIP OF CYRUSONE LP

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CYRUSONE LP, dated
as of January 24, 2013, is entered into by and among CYRUSONE GP, a Maryland
statutory trust, (the “Initial General Partner”), CyrusOne Inc., a Maryland
corporation (the “Special Limited Partner”), Cincinnati Bell Inc., an Ohio
corporation (“CBI”), Data Center Investments Holdco LLC, a Delaware limited
liability company (“Investments Holdco”), as a Limited Partner, Data Centers
South Holdings LLC, a Delaware limited liability company (“South Holdings”), as
a Limited Partner, and any additional partner that is admitted from time to time
to the Partnership, and

WHEREAS, a Certificate of Limited Partnership of the Partnership was accepted
for record by the State Department of Assessments and Taxation of Maryland on
July 31, 2012 (the “Formation Date”):

WHEREAS, the Initial General Partner and the Special Limited Partner entered
into an original Agreement of Limited Partnership of the Partnership effective
as of July 31, 2012 and an Amended and Restated Agreement of Limited Partnership
on September 27, 2012, and the General Partner, Data Center Investments Inc., a
Delaware corporation (“Data Investments”), Data Centers South Inc., a Delaware
corporation (“Data South”), and the Special Limited Partner entered into an
Amended and Restated Agreement of Limited Partnership on November 20, 2012,
which was amended by the Amendment One and Amendment Two thereto, among the
Initial General Partner, the Special Limited Partner, Investments Holdco, South
Holdings, Data Investments and Data South (as amended, the “Current Amended and
Restated Partnership Agreement”); and

WHEREAS, the Initial General Partner, the Special Limited Partner, the Original
Limited Partners (as defined herein) and CBI now desire to amend and restate the
Current Amended and Restated Partnership Agreement to read in its entirety as
set forth herein.

NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:

ARTICLE 1

DEFINED TERMS

The following definitions shall be for all purposes, unless otherwise clearly
indicated to the contrary, applied to the terms used in this Agreement:

“Act” means the Maryland Revised Uniform Limited Partnership Act, Title 10 of
the Corporations and Associations Article of the Annotated Code of Maryland, as
it may be amended from time to time, and any successor to such statute.

“Actions” has the meaning set forth in Section 7.7 hereof.

“Additional Funds” has the meaning set forth in Section 4.3.A hereof.

“Additional Limited Partner” means a Person who is admitted to the Partnership
as a Limited Partner pursuant to the Act and Section 12.2 hereof, who is shown
as such on the books and records of the Partnership, and who has not ceased to
be a Limited Partner pursuant to the Act and this Agreement.

“Adjusted Available Cash” means, as of any date of determination, the sum of
Available Cash and REIT Available Cash.

 

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“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Capital Account as of the end of the
relevant Partnership Year, after giving effect to the following adjustments:

(i) decrease such deficit by any amounts that such Partner is obligated to
restore pursuant to this Agreement or by operation of law upon liquidation of
such Partner’s Partnership Interest or that such Partner is deemed to be
obligated to restore pursuant to the penultimate sentence of each of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

(ii) increase such deficit by the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

The foregoing definition of “Adjusted Capital Account Deficit” is intended to
comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall
be interpreted consistently therewith.

“Adjustment Factor” means 1.0; provided, however, that in the event that:

(i) the Special Limited Partner (a) declares or pays a dividend on its
outstanding REIT Shares wholly or partly in REIT Shares or makes a distribution
to all holders of its outstanding REIT Shares wholly or partly in REIT Shares,
(b) splits or subdivides its outstanding REIT Shares or (c) effects a reverse
stock split or otherwise combines its outstanding REIT Shares into a smaller
number of REIT Shares, the Adjustment Factor shall be adjusted by multiplying
the Adjustment Factor previously in effect by a fraction, (i) the numerator of
which shall be the number of REIT Shares issued and outstanding on the record
date for such dividend, distribution, split, subdivision, reverse split or
combination (assuming for such purposes that such dividend, distribution, split,
subdivision, reverse split or combination has occurred as of such time) and
(ii) the denominator of which shall be the actual number of REIT Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, split, subdivision, reverse split or
combination;

(ii) the Special Limited Partner distributes any rights, options or warrants to
all holders of its REIT Shares to subscribe for or to purchase or to otherwise
acquire REIT Shares, or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares (other than REIT Shares issuable
pursuant to a Qualified DRIP), at a price per share less than the Value of a
REIT Share on the record date for such distribution (each a “Distributed
Right”), then, as of the distribution date of such Distributed Rights or, if
later, the time such Distributed Rights become exercisable, the Adjustment
Factor shall be adjusted by multiplying the Adjustment Factor previously in
effect by a fraction (a) the numerator of which shall be the number of REIT
Shares issued and outstanding on the record date (or, if later, the date such
Distributed Rights become exercisable) plus the maximum number of REIT Shares
purchasable under such Distributed Rights and (b) the denominator of which shall
be the number of REIT Shares issued and outstanding on the record date (or, if
later, the date such Distributed Rights become exercisable) plus a fraction
(1) the numerator of which is the maximum number of REIT Shares purchasable
under such Distributed Rights, multiplied by the minimum purchase price per REIT
Share under such Distributed Rights and (2) the denominator of which is the
Value of a REIT Share as of the record date (or, if later, the date such
Distributed Rights become exercisable); provided, however, that, if any such
Distributed Rights expire or become no longer exercisable, then the Adjustment
Factor shall be adjusted, effective retroactive to the date of distribution (or,
if later, the time the Distributed Rights become exercisable) of the Distributed
Rights, to reflect a reduced maximum number of REIT Shares or any change in the
minimum purchase price for the purposes of the above fraction; and

(iii) the Special Limited Partner shall, by dividend or otherwise, distribute to
all holders of its REIT Shares evidences of its indebtedness or assets
(including securities, but excluding any dividend or distribution referred to in
subsection (i) or (ii) above), which evidences of indebtedness or assets relate
to assets not received by the General Partner and/or any Special

 

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Limited Partner pursuant to a pro rata distribution by the Partnership, then the
Adjustment Factor shall be adjusted to equal the amount determined by
multiplying the Adjustment Factor in effect immediately prior to the close of
business as of the record date fixed for the determination of stockholders
entitled to receive such distribution by a fraction (a) the numerator of which
shall be such Value of a REIT Share on such record date and (b) the denominator
of which shall be the Value of a REIT Share as of such record date less the then
fair market value (as determined by the General Partner, whose determination
shall be conclusive) of the portion of the evidences of indebtedness or assets
so distributed applicable to one REIT Share.

Notwithstanding the foregoing, no adjustments to the Adjustment Factor will be
made for any class or series of Partnership Interests to the extent that the
Partnership makes or effects any correlative distribution or payment to all of
the Partners holding Partnership Interests of such class or series, or effects
any correlative split or reverse split in respect of the Partnership Interests
of such class or series. Any adjustments to the Adjustment Factor shall become
effective immediately after such event, retroactive to the record date, if any,
for such event. For illustrative purposes, examples of adjustments to the
Adjustment Factor are set forth on Exhibit A attached hereto.

“Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling or controlled by or under common control with such Person. For the
purposes of this definition, “control” when used with respect to any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have meanings correlative to the foregoing.

“Affiliated REIT” means the Special Limited Partner and any Affiliate of the
Special Limited Partner that has elected to be taxed as a REIT under the Code.

“Agreement” means this Amended and Restated Limited Partnership Agreement of
CyrusOne LP, as now or hereafter amended, restated, modified, supplemented or
replaced.

“Applicable Percentage” has the meaning set forth in Section 15.1B hereof.

“Appraisal” means, with respect to any assets, the written opinion of an
independent third party experienced in the valuation of similar assets, selected
by the General Partner. Such opinion may be in the form of an opinion by such
independent third party that the value for such property or asset as set by the
General Partner is fair, from a financial point of view, to the Partnership.

“Assignee” means a Person to whom a Partnership Interest has been Transferred
but who has not become a Substituted Limited Partner, and who has the rights set
forth in Section 11.5 hereof.

“Available Cash” means, with respect to any period for which such calculation is
being made,

(i) the sum, without duplication, of:

(1) the Partnership’s Net Income or Net Loss (as the case may be) for such
period,

(2) Depreciation and all other noncash charges to the extent deducted in
determining Net Income or Net Loss for such period,

(3) the amount of any reduction in reserves of the Partnership established by
the General Partner (including, without limitation, reductions resulting because
the General Partner determines such amounts are no longer necessary),

(4) the excess, if any, of the net cash proceeds from the sale, exchange,
disposition, financing or refinancing of Partnership property for such period
over the gain (or loss, as the case may be) recognized from such sale, exchange,
disposition, financing or refinancing during such period, and

 

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(5) all other cash received (including amounts previously accrued as Net Income
and amounts of deferred income) or any net amounts borrowed by the Partnership
for such period that was not included in determining Net Income or Net Loss for
such period;

(ii) less the sum, without duplication, of:

(1) all principal debt payments made during such period by the Partnership,

(2) capital expenditures made by the Partnership during such period,

(3) investments in any entity (including loans made thereto) to the extent that
such investments are not otherwise described in clause (ii)(1) or clause (ii)(2)
above,

(4) all other expenditures and payments not deducted in determining Net Income
or Net Loss for such period (including amounts paid in respect of expenses
previously accrued),

(5) any amount included in determining Net Income or Net Loss for such period
that was not received by the Partnership during such period,

(6) the amount of any increase in reserves (including, without limitation,
working capital reserves) established by the General Partner during such period,
and

(7) any amount distributed or paid in redemption of any Limited Partner’s
Partnership Interest or Partnership Units, including, without limitation, any
Cash Amount paid.

Notwithstanding the foregoing, Available Cash shall not include (a) any cash
received or reductions in reserves, or take into account any disbursements made,
or reserves established, after dissolution and the commencement of the
liquidation and winding up of the Partnership or (b) any Capital Contributions,
whenever received or any payments, expenditures or investments made with such
Capital Contributions.

“Board of Directors” means the Board of Directors of the Special Limited
Partner.

“Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to
close.

“Bylaws” means the bylaws of the Special Limited Partner, as in effect from time
to time.

“Capital Account” means, with respect to any Partner, the Capital Account
maintained by the General Partner for such Partner on the Partnership’s books
and records in accordance with the following provisions:

(a) To each Partner’s Capital Account, there shall be added such Partner’s
Capital Contributions, such Partner’s distributive share of Net Income and any
items in the nature of income or gain that are specially allocated pursuant to
Section 6.3 hereof, and the amount of any Partnership liabilities assumed by
such Partner or that are secured by any property distributed to such Partner.

(b) From each Partner’s Capital Account, there shall be subtracted the amount of
cash and the Gross Asset Value of any property distributed to such Partner
pursuant to any provision of this Agreement, such Partner’s distributive share
of Net Losses and any items in the nature of expenses or losses that are
specially allocated pursuant to Section 6.3 hereof, and the amount of any
liabilities of such Partner assumed by the Partnership or that are secured by
any property contributed by such Partner to the Partnership (except to the
extent already reflected in the amount of such Partner’s Capital Contribution).

 

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(c) In the event any interest in the Partnership is Transferred in accordance
with the terms of this Agreement, the transferee shall succeed to the Partner’s
Capital Account of the transferor to the extent that it relates to the
Transferred interest.

(d) In determining the amount of any liability for purposes of subsections (a)
and (b) hereof, there shall be taken into account Code Section 752(c) and any
other applicable provisions of the Code and Regulations.

(e) The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations promulgated under Section 704
of the Code, and shall be interpreted and applied in a manner consistent with
such Regulations. The General Partner may modify the manner in which the Capital
Accounts are maintained in order to comply with such Regulations, provided that
the General Partner determines that such modification is not reasonably likely
to have a material effect on the amounts distributable to any Partner without
such Person’s consent. The General Partner also may (i) make any adjustments to
maintain equality between the Capital Accounts of the Partners and the amount of
Partnership capital reflected on the Partnership’s balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q),
and (ii) make any appropriate modifications in the event that unanticipated
events might otherwise cause this Agreement not to comply with Regulations
Section 1.704-1(b) or Section 1.704-2; provided, however, that the General
Partner determines that such changes are not reasonably likely to materially
reduce amounts otherwise distributable to the Partner as current cash
distributions or as distributions on termination of the Partnership.

“Capital Contribution” means, with respect to any Partner, the amount of money
and the initial Gross Asset Value of any Contributed Property that such Partner
contributes to the Partnership or is deemed to contribute pursuant to Article 4
hereof.

“Capital Share” means a share of any class or series of stock of the Special
Limited Partner now or hereafter authorized, other than a REIT Share.

“Cash Amount” means an amount of cash equal to the product of (i) the Value of a
REIT Share and (ii) the REIT Shares Amount determined as of the applicable
Valuation Date.

“CBI” means Cincinnati Bell Inc., an Ohio corporation.

“CBI Nominee” means (i) any person designated as a nominee to the Board of
Directors by CBI in accordance with Section 8.9.A, and (ii) any person
designated to fill a vacancy on the Board of Directors pursuant to
Section 8.9.C.

“Certificate” means the Certificate of Limited Partnership of the Partnership
filed with the SDAT, as amended from time to time in accordance with the terms
hereof and the Act.

“Charity” means an entity described in Section 501(c)(3) of the Code, or any
trust all the beneficiaries of which are such entities.

“Charter” means the charter of the Special Limited Partner, within the meaning
of Section 1-101(e) of the Maryland General Corporation Law.

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time or any successor statute thereto, as interpreted by the applicable
Regulations thereunder. Any reference herein to a specific Section or sections
of the Code shall be deemed to include a reference to any corresponding
provision of future law.

 

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“Consent” means the consent to, approval of, or vote in favor of a proposed
action by a Partner given in accordance with Article 14 hereof.

“Consent of the Limited Partners” means the Consent of a Majority in Interest of
the Limited Partners, which Consent shall be obtained before the taking of any
action for which it is required by this Agreement and, except as otherwise
provided in this Agreement, may be given or withheld by Partners in their
discretion.

“Consent of the Partners” means the Consent of a Majority in Interest of the
Partners, which Consent shall be obtained before the taking of any action for
which it is required by this Agreement and, except as otherwise provided in this
Agreement, may be given or withheld by Partners in their discretion.

“Contributed Property” means each Property or other asset, in such form as may
be permitted by the Act, but excluding cash, contributed or deemed contributed
to the Partnership (or deemed contributed by the Partnership to a “new”
partnership pursuant to Code Section 708).

“Controlled Entity” means, as to any Person, (a) any corporation more than fifty
percent (50%) of the outstanding voting stock of which is owned by such Person
or such Person’s Family Members or Affiliates, (b) any trust, whether or not
revocable, of which such Person or such Person’s Family Members or Affiliates
are the sole beneficiaries, (c) any partnership of which such Person or an
Affiliate of such Person is the managing partner and in which such Person or
such Person’s Family Members or Affiliates hold partnership interests
representing at least twenty-five percent (25%) of such partnership’s capital
and profits and (d) any limited liability company of which such Person or an
Affiliate of such Person is the manager or managing member and in which such
Person or such Person’s Family Members or Affiliates hold membership interests
representing at least twenty-five percent (25%) of such limited liability
company’s capital and profits.

“Cut-Off Date” means the fifth (5th) Business Day after the General Partner’s
receipt of a Notice of Redemption.

“Debt” means, as to any Person, as of any date of determination, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services; (ii) all amounts owed by such Person to banks or
other Persons in respect of reimbursement obligations under letters of credit,
surety bonds and other similar instruments guaranteeing payment or other
performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any
lien on any property owned by such Person, to the extent attributable to such
Person’s interest in such property, even though such Person has not assumed or
become liable for the payment thereof; and (iv) lease obligations of such Person
that, in accordance with generally accepted accounting principles, should be
capitalized.

“Declination” has the meaning set forth in Section 15.1.A hereof.

“Depreciation” means, for each Partnership Year or other applicable period, an
amount equal to the Federal income tax depreciation, amortization or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of an asset differs from its
adjusted basis for Federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such
beginning Gross Asset Value as the Federal income tax depreciation, amortization
or other cost recovery deduction for such year or other period bears to such
beginning adjusted tax basis; provided, however, that if the Federal income tax
depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.

“Designated Partners” means, collectively, (i) the Special Limited Partner and
each of its wholly-owned Subsidiaries that owns Partnership Common Units,
(ii) any Controlled Entities of CBI that own Partnership Common Units or
(iii) CBI if it acquires and owns Partnership Common Units.

 

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“Distributed Right” has the meaning set forth in the definition of “Adjustment
Factor.”

“Equity Plan” means any stock or equity purchase plan, restricted stock or
equity plan or other similar equity compensation plan now or hereafter adopted
by the Partnership, the General Partner or the Special Limited Partner.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and any
successor statute thereto, and the rules and regulations of the SEC promulgated
thereunder.

“Excess Units” means Tendered Units, the issuance of REIT Shares in exchange for
which would result in a violation of the Ownership Limit.

“Excluded Property” means any asset now or hereafter held directly by the
Special Limited Partner or any direct or indirect wholly-owned Subsidiary of the
Special Limited Partner (other than the equity of any direct or indirect
wholly-owned Subsidiary of the Partnership and interests in the Partnership).

“Family Members” means, as to a Person that is an individual, such Person’s
spouse, ancestors, descendants (whether by blood or by adoption), brothers and
sisters and inter vivos or testamentary trusts of which only such Person and his
spouse, ancestors, descendants (whether by blood or by adoption), brothers and
sisters are beneficiaries.

“Funding Debt” means any Debt incurred by or on behalf of the General Partner or
the Special Limited Partner for the purpose of providing funds to the
Partnership.

“General Partner” means the Initial General Partner or any other Person that is,
from time to time, admitted to the Partnership as a general partner pursuant to
the Act and this Agreement, and, in each case, that has not ceased to be a
general partner pursuant to the Act and this Agreement, in such Person’s
capacity as a general partner of the Partnership.

“General Partner Loan” has the meaning set forth in Section 4.3.D hereof.

“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis
for Federal income tax purposes, except as follows:

(i) The initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset as determined by
the General Partner using such reasonable method of valuation as it may adopt.

(ii) The Gross Asset Values of all Partnership assets immediately prior to the
occurrence of any event described below shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using
such reasonable method of valuation as it may adopt, as of the following times:

(1) the acquisition of an additional interest in the Partnership (other than in
connection with the execution of this Agreement but including, without
limitation, acquisitions pursuant to Section 4.2 hereof or contributions or
deemed contributions by the General Partner pursuant to Section 4.2 hereof) by a
new or existing Partner in exchange for more than a de minimis Capital
Contribution, if the General Partner reasonably determines that such adjustment
is necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;

(2) the distribution by the Partnership to a Partner of more than a de minimis
amount of Partnership property as consideration for an interest in the
Partnership if the General Partner reasonably determines that such adjustment is
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;

 

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(3) the liquidation of the Partnership within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g);

(4) upon the admission of a successor General Partner pursuant to Section 12.1
hereof; and

(5) at such other times as the General Partner shall reasonably determine
necessary or advisable in order to comply with Regulations Sections 1.704-1(b)
and 1.704-2.

(iii) The Gross Asset Value of any Partnership asset distributed to a Partner
shall be the gross fair market value of such asset on the date of distribution
as determined by the General Partner using such reasonable method of valuation
as it may adopt.

(iv) The Gross Asset Values of Partnership assets shall be increased (or
decreased) to reflect any adjustments to the adjusted basis of such assets
pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent
that such adjustments are taken into account in determining Capital Accounts
pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that
Gross Asset Values shall not be adjusted pursuant to this subsection (iv) to the
extent that the General Partner reasonably determines that an adjustment
pursuant to subsection (ii) above is necessary or appropriate in connection with
a transaction that would otherwise result in an adjustment pursuant to this
subsection (iv).

(v) If the Gross Asset Value of a Partnership asset has been determined or
adjusted pursuant to subsection (i), subsection (ii) or subsection (iv) above,
such Gross Asset Value shall thereafter be adjusted by the Depreciation taken
into account with respect to such asset for purposes of computing Net Income and
Net Losses.

“Holder” means either (a) a Partner or (b) an Assignee that owns a Partnership
Unit.

“Incapacity” or “Incapacitated” means, (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its charter; (iii) as to
any Partner that is a partnership, the dissolution and commencement of winding
up of the partnership; (iv) as to any Partner that is an estate, the
distribution by the fiduciary of the estate’s entire interest in the
Partnership; (v) as to any trustee of a trust that is a Partner, the termination
of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or liquidator for the
Partner or for all or any substantial part of the Partner’s properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment, or (h) an appointment referred to in clause (g)
above is not vacated within ninety (90) days after the expiration of any such
stay.

 

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“Indemnitee” means (i) any Person made, or threatened to be made, a party to a
proceeding by reason of its status as (A) the General Partner or the Special
Limited Partner or (B) a trustee, officer or employee of the General Partner, a
director, officer or employee of the Special Limited Partner or an employee of
the Partnership and (ii) such other Persons (including Affiliates, employees or
agents of the General Partner, the Special Limited Partner or the Partnership)
as the General Partner may designate from time to time (whether before or after
the event giving rise to potential liability).

“IRS” means the United States Internal Revenue Service.

“Lead Tendering Party” has the meaning set forth in Section 15.1.H hereof.

“Limited Partner” means the Special Limited Partner, Investments Holdco, South
Holdings, and any other Person that is, from time to time, admitted to the
Partnership as a limited partner pursuant to the Act and this Agreement, and any
Substituted Limited Partner or Additional Limited Partner, each shown as such in
the books and records of the Partnership, in each case, that has not ceased to
be a limited partner of the Partnership pursuant to the Act and this Agreement,
in such Person’s capacity as a limited partner of the Partnership.

“Liquidating Event” has the meaning set forth in Section 13.1 hereof.

“Liquidator” has the meaning set forth in Section 13.2.A hereof.

“Majority in Interest of the Limited Partners” means Partners (excluding the
General Partner, the Special Limited Partner and any Controlled Entity of either
of them) entitled to vote on or consent to any matter holding more than fifty
percent (50%) of all outstanding Partnership Units held by all Partners
(excluding the General Partner, the Special Limited Partner and any Controlled
Entity of either of them) entitled to vote on or consent to such matter.

“Majority in Interest of the Partners” means Partners (including the General
Partner, the Special Limited Partner and any Controlled Entity of either of
them) entitled to vote on or consent to any matter holding more than fifty
percent (50%) of all outstanding Partnership Units held by all Partners
(including the General Partner, the Special Limited Partner and any Controlled
Entity of either of them) entitled to vote on or consent to such matter.

“Net Income” or “Net Loss” means, for each Partnership Year of the Partnership,
an amount equal to the Partnership’s taxable income or loss for such year,
determined in accordance with Code Section 703(a) (for this purpose, all items
of income, gain, loss or deduction required to be stated separately pursuant to
Code Section 703(a)(1) shall be included in taxable income or loss), with the
following adjustments:

(i) Any income of the Partnership that is exempt from Federal income tax and not
otherwise taken into account in computing Net Income (or Net Loss) pursuant to
this definition of “Net Income” or “Net Loss” shall be added to (or subtracted
from, as the case may be) such taxable income (or loss);

(ii) Any expenditure of the Partnership described in Code Section 705(a)(2)(B)
or treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations
Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing
Net Income (or Net Loss) pursuant to this definition of “Net Income” or “Net
Loss,” shall be subtracted from (or added to, as the case may be) such taxable
income (or loss);

(iii) In the event the Gross Asset Value of any Partnership asset is adjusted
pursuant to subsection (ii) or subsection (iii) of the definition of “Gross
Asset Value,” the amount of such adjustment shall be taken into account as gain
or loss from the disposition of such asset for purposes of computing Net Income
or Net Loss;

 

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(iv) Gain or loss resulting from any disposition of property with respect to
which gain or loss is recognized for Federal income tax purposes shall be
computed by reference to the Gross Asset Value of the property disposed of,
notwithstanding that the adjusted tax basis of such property differs from its
Gross Asset Value;

(v) In lieu of the depreciation, amortization and other cost recovery deductions
that would otherwise be taken into account in computing such taxable income or
loss, there shall be taken into account Depreciation for such Partnership Year;

(vi) To the extent that an adjustment to the adjusted tax basis of any
Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken
into account in determining Capital Accounts as a result of a distribution other
than in liquidation of a Partner’s interest in the Partnership, the amount of
such adjustment shall be treated as an item of gain (if the adjustment increases
the basis of the asset) or loss (if the adjustment decreases the basis of the
asset) from the disposition of the asset and shall be taken into account for
purposes of computing Net Income or Net Loss; and

(vii) Notwithstanding any other provision of this definition of “Net Income” or
“Net Loss,” any item that is specially allocated pursuant to Section 6.3 hereof
shall not be taken into account in computing Net Income or Net Loss. The amounts
of the items of Partnership income, gain, loss or deduction available to be
specially allocated pursuant to Section 6.3 hereof shall be determined by
applying rules analogous to those set forth in this definition of “Net Income”
or “Net Loss.”

“Net Proceeds” has the meaning set forth in Section 15.1.H hereof.

“New Securities” means (i) any rights, options, warrants or convertible or
exchangeable securities that entitle the holder thereof to subscribe for or
purchase, convert such securities into or exchange such securities for, REIT
Shares or Preferred Shares, excluding Preferred Shares and grants under the
Stock Option Plans, or (ii) any Debt issued by the Special Limited Partner that
provides any of the rights described in clause (i).

“Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a
Partnership Year shall be determined in accordance with the rules of Regulations
Section 1.704-2(c).

“Nonrecourse Liability” has the meaning set forth in Regulations
Section 1.752-1(a)(2).

“Notice of Redemption” means the Notice of Redemption substantially in the form
of Exhibit B attached to this Agreement.

“Offered Shares” has the meaning set forth in Section 15.1.H hereof

“Offering Units” has the meaning set forth in Section 15.1.H hereof.

“Optionee” means a Person to whom a stock option is granted under any Stock
Option Plan.

“Original Limited Partner” means any Person that is a Limited Partner as of the
close of business on the date of the closing of the issuance of REIT Shares
pursuant to the initial public offering of REIT Shares, and does not include any
Assignee or other transferee, including, without limitation, any Substituted
Limited Partner succeeding to all or any part of the Partnership Interest of any
such Person.

“Ownership Limit” means the restrictions on ownership and transfer of stock of
the Special Limited Partner imposed under the Charter.

 

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“Partner” means the General Partner or a Limited Partner, and “Partners” means
the General Partner and the Limited Partners.

“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse
Debt, equal to the Partnership Minimum Gain that would result if such Partner
Nonrecourse Debt were treated as a Nonrecourse Liability, determined in
accordance with Regulations Section 1.704-2(i)(3).

“Partner Nonrecourse Debt” has the meaning set forth in Regulations
Section 1.704-2(b)(4).

“Partner Nonrecourse Deductions” has the meaning set forth in Regulations
Section 1.704-2(i)(1), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined
in accordance with the rules of Regulations Section 1.704-2(i)(1).

“Partnership” means CyrusOne, LP, the limited partnership formed and continued
under the Act and pursuant to this Agreement, and any successor thereto.

“Partnership Common Unit” means a fractional share of the Partnership Interests
of all Partners issued pursuant to Sections 4.1 and 4.2 hereof, but does not
include any Partnership Junior Unit, Partnership Preferred Unit or any other
Partnership Unit specified in a Partnership Unit Designation as being other than
a Partnership Common Unit.

“Partnership Employee” means an employee of the Partnership or an employee of a
Subsidiary of the Partnership, if any.

“Partnership Equivalent Units” means, with respect to any class or series of
Capital Shares, Partnership Units with preferences, conversion and other rights
(other than voting rights), restrictions, limitations as to dividends and other
distributions, qualifications and terms and conditions of redemption that are
substantially the same as (or correspond to) the preferences, conversion and
other rights, restrictions, limitations as to distributions, qualifications and
terms and conditions of redemption of such Capital Shares as appropriate to
reflect the relative rights and preferences of such Capital Shares as to the
REIT Shares and the other classes and series of Capital Shares as such
Partnership Equivalent Units would have as to Partnership Common Units and the
other classes and series of Partnership Units corresponding to the other classes
of Capital Shares, but not as to matters such as voting for members of the Board
of Directors that are not applicable to the Partnership. For the avoidance of
doubt, the voting rights, redemption rights and rights to Transfer Partnership
Equivalent Units need not be similar to the rights of the corresponding class or
series of Capital Shares, provided, however, with respect to redemption rights,
the terms of Partnership Equivalent Units must be such so that the Partnership
complies with Section 4.7.B of this Agreement.

“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. There may be one or more
classes or series of Partnership Interests; however, notwithstanding that the
General Partner, the Special Limited Partner and any other Limited Partner may
have different rights and privileges as specified in this Agreement (including
differences in rights and privileges with respect to their Partnership
Interests), the Partnership Interest held by the General Partner, the Special
Limited Partner or any other Partner and designated as being of a particular
class or series shall not be deemed to be a separate class or series of
Partnership Interest from a Partnership Interest having the same designation as
to class and series that is held by any other Partner solely because such
Partnership Interest is held by the General Partner, the Special Limited Partner
or any other Partner having different rights and privileges as specified under
this Agreement. A Partnership Interest may be expressed as a number of
Partnership Common Units, Partnership Preferred Units or other Partnership
Units.

“Partnership Junior Unit” means a fractional share of the Partnership Interests
of a particular class or series that the General Partner has authorized pursuant
to Section 4.2 hereof that has distribution rights, or rights upon liquidation,
winding up and dissolution, that are inferior or junior to the Partnership
Common Units.

 

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“Partnership Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in Partnership Minimum Gain, for a Partnership Year
shall be determined in accordance with the rules of Regulations
Section 1.704-2(d).

“Partnership Preferred Unit” means a fractional share of the Partnership
Interests of a particular class or series that the General Partner has
authorized pursuant to Section 4.1 or Section 4.2 or Section 4.3 hereof that has
distribution rights, or rights upon liquidation, winding up and dissolution,
that are superior or prior to the Partnership Common Units.

“Partnership Record Date” means the record date established by the General
Partner for the purpose of determining the Partners entitled to notice of or to
vote at any meeting of Partners or to consent to any matter, or to receive any
distribution or the allotment of any other rights, or in order to make a
determination of Partners for any other proper purpose, which, in the case of a
record date fixed for the determination of Partners entitled to receive any
distribution, shall (unless otherwise determined by the General Partner)
generally be the same as the record date established by the Special Limited
Partner for a distribution to its stockholders of some or all of its portion of
such distribution.

“Partnership Unit” means a Partnership Common Unit, a Partnership Preferred
Unit, a Partnership Junior Unit or any other fractional share of the Partnership
Interests that the General Partner has authorized pursuant to Section 4.1 or
Section 4.2 or Section 4.3 hereof.

“Partnership Unit Designation” has the meaning set forth in Section 4.2 hereof.

“Partnership Vote” has the meaning set forth in Section 11.7.B hereof.

“Partnership Year” means the fiscal year of the Partnership, which shall be the
calendar year.

“Percentage Interest” means, with respect to each Partner, as to any class or
series of Partnership Interests, the fraction, expressed as a percentage, the
numerator of which is the aggregate number of Partnership Units of such class or
series held by such Partner and the denominator of which is the total number of
Partnership Units of such class or series held by all Partners. If not otherwise
specified, “Percentage Interest” shall be deemed to refer to Partnership Common
Units.

“Permitted Lender Transferee” has the meaning set forth in the definition of
Permitted Transferee.

“Permitted Transfer” means (i) a Transfer by a Limited Partner of all or part of
its Partnership Interest to any Family Member, Controlled Entity or Affiliate of
such Partner, or to a Charity, or (ii) a Pledge and any Transfer of a
Partnership Interest to a Permitted Transferee pursuant to the exercise of
remedies under a Pledge.

“Permitted Transferee” means (i) any lender or lenders secured by a Pledge, or
agents acting on their behalf, to whom any Partnership Interest is transferred
pursuant to the exercise of remedies under a Pledge and any special purpose
entities owned and used by such lenders or agents for the purpose of holding any
such Partnership Interest (each a “Permitted Lender Transferee”) and (ii) any
Person, including any Third-Party Pledge Transferee designated by any lender or
lenders secured by a Pledge, or agents acting on their behalf, to whom a
Partnership Interest is transferred pursuant to the exercise of remedies under a
Pledge, whether before or after one or more Permitted Lender Transferees take
title to such Partnership Interest.

“Person” means an individual or a corporation, partnership, trust,
unincorporated organization, association, limited liability company or other
entity.

“Pledge” means a pledge by a Limited Partner of all or any portion of its
Partnership Interest to one or more banks or lending institutions, or agents
acting on their behalf, which are not Affiliates of such Limited Partner, as
collateral or security for a bona fide loan or other extension of credit.

 

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“Preferred Share” means a share of stock of the Special Limited Partner now or
hereafter authorized or reclassified that has dividend rights, or rights upon
liquidation, winding up and dissolution, that are superior or prior to the REIT
Shares.

“Pricing Agreements” has the meaning set forth in Section 15.1.H hereof.

“Properties” means any assets and property of the Partnership such as, but not
limited to, interests in real property and personal property, including, without
limitation, fee interests, interests in ground leases, easements and rights of
way, interests in limited liability companies, joint ventures or partnerships,
interests in mortgages, and Debt instruments as the Partnership may hold from
time to time and “Property” means any one such asset or property.

“Publicly Traded” means having common equity securities listed or admitted to
trading on any U.S. national securities exchange.

“Qualified DRIP” means a dividend reinvestment plan of the Special Limited
Partner that permits participants to acquire REIT Shares using the proceeds of
dividends paid by the Special Limited Partner; provided, however, that if such
shares are offered at a discount, such discount must (i) be designed to pass
along to the stockholders of the Special Limited Partner the savings enjoyed by
the Special Limited Partner in connection with the avoidance of stock issuance
costs, and (ii) not exceed 5% of the value of a REIT Share as computed under the
terms of such dividend reinvestment plan.

“Qualified Transferee” means an “accredited investor,” as defined in Rule 501
promulgated under the Securities Act.

“Qualifying Party” means (a) a Limited Partner, (b) an Additional Limited
Partner, (c) an Assignee who is the transferee of a Limited Partner’s
Partnership Interest in a Permitted Transfer, or (d) a Person, including a
lending institution as the pledgee of a Pledge, who is the transferee of a
Limited Partner’s Partnership Interest in a Permitted Transfer; provided,
however, that a Qualifying Party shall not include the General Partner or the
Special Limited Partner.

“Redemption” has the meaning set forth in Section 15.1.A hereof.

“Register” has the meaning set forth in Section 4.1 hereof.

“Regulations” means the income tax regulations under the Code, whether such
regulations are in proposed, temporary or final form, as such regulations may be
amended from time to time (including corresponding provisions of succeeding
regulations).

“Regulatory Allocations” has the meaning set forth in Section 6.3B(viii) hereof.

“REIT” means a real estate investment trust qualifying under Code Section 856.

“REIT Available Cash” means, as of any date of determination, all amounts which
would be available for distribution to the holders of REIT Shares (calculated in
a manner substantially similar to the manner in which the Partnership calculates
Available Cash and without regard to any distributions from the Partnership to
be made, or which have been made, to the General Partner and the Special Limited
Partner hereunder and without regard to any restriction on distribution imposed
on the General Partner by any third party).

“REIT Partner” means (a) the Special Limited Partner or any Affiliate of the
Special Limited Partner to the extent such Person has in place an election to
qualify as a REIT and (b) any “qualified REIT subsidiary” (within the meaning of
Code Section 856(i)(2)) of any such Person.

“REIT Payment” has the meaning set forth in Section 15.12 hereof.

 

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“REIT Requirements” means the requirements for qualifying as a REIT under the
Code and Regulations (the “REIT Requirements”).

“REIT Share” means a share of common stock of the Special Limited Partner, $0.01
par value per share (but shall not include any additional series or class of the
Special Limited Partner’s common stock created after the date of this
Agreement).

“REIT Shares Amount” means a number of REIT Shares equal to the product of
(a) the number of Tendered Units and (b) the Adjustment Factor; provided,
however, that, in the event that the Special Limited Partner issues to all
holders of REIT Shares as of a certain record date rights, options, warrants or
convertible or exchangeable securities entitling the Special Limited Partner’s
stockholders to subscribe for or purchase REIT Shares, or any other securities
or property (collectively, the “Rights”), with the record date for such Rights
issuance falling within the period starting on the date of the Notice of
Redemption and ending on the day immediately preceding the Specified Redemption
Date, which Rights will not be distributed before the relevant Specified
Redemption Date, then the REIT Shares Amount shall also include such Rights that
a holder of that number of REIT Shares would be entitled to receive, expressed,
where relevant hereunder, as a number of REIT Shares determined by the General
Partner.

“Related Party” means, with respect to any Person, any other Person to whom
ownership of shares of the Special Limited Partner’s stock would be attributed
by the first such Person under Code Section 544 (as modified by Code
Section 856(h)(1)(B)).

“Rights” has the meaning set forth in the definition of “REIT Shares Amount.”

“SDAT” means the State Department of Assessments and Taxation of Maryland.

“SEC” means the Securities and Exchange Commission.

“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the SEC promulgated thereunder.

“Single Funding Notice” has the meaning set forth in Section 15.1.H hereof.

“Special Redemption” has the meaning set forth in Section 15.1.A hereof.

“Specified Partnership Units” means with respect to each Excluded Property, the
amount of Partnership Common Units and/or Partnership Preferred Units (as the
case may be) which would have been issued to the Special Limited Partner,
pursuant to Section 4.3.B and 4.2 hereof, if the Special Limited Partner had
contributed such Excluded Property on the date that such asset was acquired by
the Special Limited Partner or a wholly-owned Subsidiary of the Special Limited
Partner, in exchange for Partnership Units equal in value to the fair market
value of such Excluded Property as of such date.

“Specified Redemption Date” means the tenth (10th) Business Day after the
receipt by the General Partner of a Notice of Redemption; provided, however,
that no Specified Redemption Date with respect to any Partnership Common Units
shall occur during the Twelve-Month Period applicable to such Partnership Common
Units (except pursuant to a Special Redemption); and provided, further, that, if
the General Partner and the Special Limited Partner elect a Stock Offering
Funding pursuant to Section 15.1.H, such Specified Redemption Date shall be
deferred until the next Business Day following the date of the closing of the
Stock Offering Funding.

“Stock Offering Funding” has the meaning set forth in Section 15.1.H hereof

“Stock Offering Funding Amount” has the meaning set forth in Section 15.1.H
hereof.

“Stock Option Plans” means any stock option plan now or hereafter adopted by the
Partnership or the Special Limited Partner.

 

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“Stockholder Vote” has the meaning set forth in Section 11.7.B hereof.

“Subsidiary” means, with respect to any Person, any corporation or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.

“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.4 hereof.

“Successor Shares Amount” has the meaning set forth in Section 11.7 hereof.

“Surviving Partnership” has the meaning set forth in Section 11.7 hereof.

“Tax Items” has the meaning set forth in Section 6.4.A hereof.

“Tendered Units” has the meaning set forth in Section 15.1.A hereof.

“Tendering Party” has the meaning set forth in Section 15.1.A hereof.

“Termination Transaction” means any direct or indirect Transfer of all or any
portion of the Special Limited Partner’s Partnership Interest or its interest in
the General Partner in connection with, or the other occurrence of, (a) a
merger, consolidation or other combination involving the Special Limited Partner
or the General Partner, on the one hand, and any other Person, on the other,
(b) a sale, lease, exchange or other transfer of all or substantially all of the
assets of the Special Limited Partner not in the ordinary course of its
business, whether in a single transaction or a series of related transactions,
(c) a reclassification, recapitalization or change of the outstanding REIT
Shares (other than a change in par value, or from par value to no par value, or
as a result of a stock split, stock dividend or similar subdivision), (d) the
adoption of any plan of liquidation or dissolution of the Special Limited
Partner or the General Partner, or (e) a direct or indirect Transfer of all or
any portion of the Special Limited Partner’s Partnership Interest or its
interest in the General Partner, other than a Transfer effected in accordance
with Section 11.2.B.

“Third-Party Pledge Transferee” means a Qualified Transferee, other than a
Permitted Lender Transferee, that acquires a Partnership Interest pursuant to
the exercise of remedies by Permitted Lender Transferees under a Pledge and that
agrees to be bound by the terms and conditions of this Agreement.

“Transaction Consideration” has the meaning set forth in Section 11.7 hereof.

“Transfer” means any sale, assignment, bequest, conveyance, devise, gift
(outright or in trust), Pledge, encumbrance, hypothecation, mortgage, exchange,
transfer or other disposition or act of alienation, whether voluntary or
involuntary or by operation of law; provided, however, that when the term is
used in Article 11 and Section 13.7 hereof, “Transfer” does not include (a) any
Redemption of Partnership Common Units by the Partnership, or acquisition of
Tendered Units by the Special Limited Partner, pursuant to Section 15.1 hereof
or (b) any redemption of Partnership Units pursuant to any Partnership Unit
Designation. The terms “Transferred” and “Transferring” have correlative
meanings.

“Twelve-Month Period” means (a) as to any Partnership Interest held by an
Original Limited Partner as of the close of business on the date of the closing
of the issuance of REIT Shares pursuant to the initial public offering of the
REIT Shares (or any successor-in-interest that is a Qualifying Party), a
twelve-month period ending on the day before the first (1st) anniversary of the
date of this Agreement and (b) as to any other Partnership Interest, a
twelve-month period ending on the day before the first (1st) anniversary of a
Qualifying Party’s first becoming a Holder of such Partnership Interest;
provided, however, that the General Partner may, by written agreement with a
Qualifying Party, shorten or lengthen the first Twelve-Month Period to a period
that is shorter or longer than twelve (12) months with respect to a Qualifying
Party other than an Original Limited Partner or successor-in-interest.

 

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“Valuation Date” means the date of receipt by the General Partner of a Notice of
Redemption pursuant to Section 15.1 herein, or such other date as specified
herein, or, if such date is not a Business Day, the immediately preceding
Business Day.

“Value” means, on any Valuation Date with respect to a REIT Share, the average
of the daily Market Prices for ten (10) consecutive trading days immediately
preceding the Valuation Date (except that the Market Price for the trading day
immediately preceding the date of exercise of a stock option under any Stock
Option Plans shall be substituted for such average of daily market prices for
purposes of Section 4.4 hereof). The term “Market Price” on any date means, with
respect to any class or series of outstanding REIT Shares, the last sale price
for such REIT Shares, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, for such REIT
Shares, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on The
NASDAQ Stock Market or, if such REIT Shares are not listed or admitted to
trading on The NASDAQ Stock Market, as reported on the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such REIT Shares are listed or admitted to
trading or, if such REIT Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price, or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the principal automated quotation system that may then be in use or,
if such REIT Shares are not quoted by any such system, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such REIT Shares selected by the General Partner or, in the event
that no trading price is available for such REIT Shares, the fair market value
of the REIT Shares, as determined in good faith by the General Partner. In the
event that the REIT Shares Amount includes Rights (as defined in the definition
of “REIT Shares Amount”) that a holder of REIT Shares would be entitled to
receive, 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. “Vesting
Date” has the meaning set forth in Section 4.4 hereof.

“Withdrawing Partners” has the meaning set forth in Section 15.1.H hereof.

ARTICLE 2

ORGANIZATIONAL MATTERS

Section 2.1 Formation . The Partnership is a limited partnership heretofore
formed and continued pursuant to the provisions of the Act and upon the terms
and subject to the conditions set forth in this Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration and termination of the Partnership shall be governed by the
Act. The Partnership Interest of each Partner shall be personal property for all
purposes.

Section 2.2 Name . The name of the Partnership is “CyrusOne LP.” The
Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words “Limited Partnership,” “LP,” “Ltd.” or similar
words or letters shall be included in the Partnership’s name where necessary for
the purposes of complying with the laws of any jurisdiction that so requires.
The General Partner may change the name of the Partnership at any time and from
time.

Section 2.3 Principal Office and Resident Agent . The address of the principal
office of the Partnership in the State of Maryland is located at c/o
CSC-Lawyer’s Incorporating Service Company, 7 St. Paul Street, Suite 1660,
Baltimore, Maryland 21202 and the name and address of the resident agent of the
Partnership in the State of Maryland are CSC-Lawyer’s Incorporating Service
Company, 7 St. Paul Street, Suite 1660, Baltimore, Maryland 21202, or such other
principal office and resident agent as the General Partner may from time to time
designate. The Partnership may maintain offices at such other place or places
within or outside the State of Maryland as the General Partner may approve.

 

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Section 2.4 Power of Attorney.

A. Each Limited Partner and Assignee hereby irrevocably constitutes and appoints
the General Partner, any Liquidator, and authorized officers and
attorneys-in-fact of each, and each of those acting singly, in each case with
full power of substitution, as its true and lawful agent and attorney-in-fact,
with full power and authority in its name, place and stead to:

(1) execute, swear to, seal, acknowledge, deliver, file and record in the
appropriate public offices (a) all certificates, documents and other instruments
(including, without limitation, this Agreement and the Certificate and all
amendments, supplements or restatements thereof) that the General Partner or the
Liquidator deems appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability to the extent
provided by applicable law) in the State of Delaware and in all other
jurisdictions in which the Partnership may conduct business or own property;
(b) all instruments that the General Partner or any Liquidator deems appropriate
or necessary to reflect any amendment, change, modification or restatement of
this Agreement in accordance with its terms; (c) all conveyances and other
instruments or documents that the General Partner or the Liquidator deems
appropriate or necessary to reflect the dissolution and liquidation of the
Partnership pursuant to the terms of this Agreement, including, without
limitation, a certificate of cancellation; (d) all conveyances and other
instruments or documents that the General Partner or the Liquidator deems
appropriate or necessary to reflect the distribution or exchange of assets of
the Partnership pursuant to the terms of this Agreement; (e) all instruments
relating to the admission, acceptance, withdrawal, removal or substitution of
any Partner pursuant to the terms of this Agreement or the Capital Contribution
of any Partner; and (f) all certificates, documents and other instruments
relating to the determination of the rights, preferences and privileges relating
to Partnership Interests; and

(2) execute, swear to, acknowledge and file all ballots, consents, approvals,
waivers, certificates and other instruments the General Partner or any
Liquidator determines are necessary or desirable to make, evidence, give,
confirm or ratify any vote, consent, approval, agreement or other action that is
made or given by the Partners hereunder or is consistent with the terms of this
Agreement.

Nothing contained herein shall be construed as authorizing the General Partner
or any Liquidator to amend this Agreement except in accordance with Section 14.2
hereof or as may be otherwise expressly provided for in this Agreement.

B. The foregoing power of attorney is hereby declared to be irrevocable and a
special power coupled with an interest, in recognition of the fact that each of
the Limited Partners and Assignees will be relying upon the power of the General
Partner or the Liquidator to act as contemplated by this Agreement in any filing
or other action by it on behalf of the Partnership, and it shall survive and not
be affected by the subsequent Incapacity of any Limited Partner or Assignee and
the Transfer of all or any portion of such Person’s Partnership Units or
Partnership Interest (as the case may be) and shall extend to such Person’s
heirs, successors, assigns and personal representatives. Each such Limited
Partner and Assignee hereby agrees to be bound by any representation made by the
General Partner or the Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner and Assignee hereby waives any and
all defenses that may be available to contest, negate or disaffirm the action of
the General Partner or the Liquidator, taken in good faith under such power of
attorney. Each Limited Partner and Assignee shall execute and deliver to the
General Partner or the Liquidator, within fifteen (15) days after receipt of the
General Partner’s or the Liquidator’s request therefor, such further
designation, powers of attorney and other instruments as the General Partner or
the Liquidator (as the case may be) deems necessary to effectuate this Agreement
and the purposes of the Partnership. Notwithstanding anything else set forth in
this Section 2.4.B, no Limited Partner shall incur any personal liability for
any action of the General Partner or the Liquidator taken under such power of
attorney.

Section 2.5 Term . The term of the Partnership commenced on July 31, 2012, the
date that the original Certificate was accepted for record by the SDAT in
accordance with the Act, and shall continue indefinitely unless the Partnership
is dissolved sooner pursuant to the provisions of Article 13 hereof or as
otherwise provided by law.

 

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ARTICLE 3

PURPOSE

Section 3.1 Purpose and Business. The purpose and nature of the Partnership is
to conduct any business, enterprise or activity permitted by or under the Act,
including, but not limited to, (i) to conduct the business of ownership,
construction, reconstruction, development, redevelopment, alteration,
improvement, maintenance, operation, sale, leasing, transfer, encumbrance,
conveyance and exchange of the Properties, (ii) to acquire and invest in any
securities and/or loans relating to the Properties, (iii) to enter into any
partnership, joint venture, business trust arrangement, limited liability
company or other similar arrangement to engage in any business permitted by or
under the Act, or to own interests in any entity engaged in any business
permitted by or under the Act, (iv) to conduct the business of providing
property and asset management and brokerage services, whether directly or
through one or more partnerships, joint ventures, Subsidiaries, business trusts,
limited liability companies or similar arrangements, and (v) to do anything
necessary or incidental to the foregoing. The Partnership shall have all powers
necessary or desirable to accomplish the purposes enumerated. In connection with
the foregoing, the Partnership shall have full power and authority to enter
into, perform and carry out contracts of any kind, to borrow and lend money and
to issue evidence of indebtedness, whether or not secured by mortgage, deed of
trust, pledge or other lien and, directly or indirectly, to acquire and
construct additional Properties necessary, useful or desirable in connection
with its business.

Section 3.2 Powers. The Partnership shall have the power to do any and all acts
and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership,
including, without limitation, full power and authority, directly or through its
ownership interest in other entities, to enter into, perform and carry out
contracts of any kind, to borrow and lend money and to issue evidence of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or other
lien, to acquire, own, manage, improve and develop real property and lease,
sell, transfer and dispose of real property.

Section 3.3 Partnership Only for Purposes Specified. The Partnership is a
limited partnership formed pursuant to the Act, and this Agreement shall not be
deemed to create a company, venture or partnership between or among the Partners
or any other Persons with respect to any activities whatsoever other than the
activities specified in Section 3.1 hereof; however, to the extent applicable,
the Partnership is a partnership “at will” (and is not a partnership formed for
a definite term or a particular undertaking) within the meaning of the Maryland
Revised Uniform Partnership Act. Except as otherwise provided in this Agreement,
no Partner shall have any authority to act for, bind, commit or assume any
obligation or responsibility on behalf of the Partnership, its properties or any
other Partner. No Partner, in its capacity as a Partner under this Agreement,
shall be responsible or liable for any indebtedness or obligation of another
Partner, nor shall the Partnership be responsible or liable for any indebtedness
or obligation of any Partner, incurred either before or after the execution and
delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities, indebtedness or obligations incurred pursuant to and as limited by
the terms of this Agreement and the Act.

Section 3.4 Representations and Warranties by the Partners.

A. Each Partner that is an individual (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner)
represents and warrants to, and covenants with, each other Partner that (i) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default under,
any material agreement by which such Partner or any of such Partner’s property
is bound, or any statute, regulation, order or other law to which such Partner
is subject, (ii) such Partner is neither a “foreign person” within the meaning
of Code Section 1445(f) nor a “foreign partner” within the meaning of Code
Section 1446(e), (iii) such Partner does not, and for so long as it is a Partner
will not, own, directly or indirectly, (a) five percent (5%) or more of the
total combined voting power of all classes of stock entitled to vote, or five
percent (5%) or more of the total number of shares of all classes of stock, of
any corporation that is a tenant of either (I) the Special Limited Partner or
any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)),
(II) the Partnership or (III) any partnership, venture or limited liability
company of which the Special Limited Partner, any “qualified REIT subsidiary”
(within the meaning of Code Section 856(i)(2)), with respect to the Special
Limited Partner, or the Partnership is a member or (b) an interest of five
percent (5%) or more in the assets or net profits of any tenant of either

 

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(I) the Special Limited Partner or any “qualified REIT subsidiary” (within the
meaning of Code Section 856(i)(2)), (II) the Partnership or (III) any
partnership, venture, or limited liability company of which the Special Limited
Partner, any “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)), with respect to the Special Limited Partner, or the
Partnership is a member and (iv) this Agreement is binding upon, and enforceable
against, such Partner in accordance with its terms. Notwithstanding the
foregoing, each Partner may exceed any of the five percent limits (5%) set forth
in clause (iii) of the immediately preceding sentence; provided that the Partner
obtains the written consent of the General Partner prior to exceeding any such
limits; provided, further, that in no event shall the Partner own, directly or
indirectly, more than ten percent (10%) of the stock described in
clause (iii)(a) of the immediately preceding sentence or more than ten percent
(10%) of the assets described in clause (iii)(b) of the immediately preceding
sentence.

B. Each Partner that is not an individual (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner)
represents and warrants to, and covenants with, each other Partner that (i) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including, without limitation, that of its
general partner(s), committee(s), trustee(s), beneficiaries, directors and/or
stockholder(s) (as the case may be) as required, (ii) the consummation of such
transactions shall not result in a breach or violation of, or a default under,
its partnership or operating agreement, trust agreement, charter or bylaws (as
the case may be) any material agreement by which such Partner or any of such
Partner’s properties or any of its partners, members, beneficiaries, trustees or
stockholders (as the case may be) is or are bound, or any statute, regulation,
order or other law to which such Partner or any of its partners, members,
trustees, beneficiaries or stockholders (as the case may be) is or are subject,
(iii) such Partner is neither a “foreign person” within the meaning of Code
Section 1445(f) nor a “foreign partner” within the meaning of Code
Section 1446(e), (iv) such Partner does not, and for so long as it is a Partner
will not, own, directly or indirectly, (a) five percent (5%) or more of the
total combined voting power of all classes of stock entitled to vote, or five
percent (5%) or more of the total number of shares of all classes of stock, of
any corporation that is a tenant of either (I) the Special Limited Partner or
any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)),
with respect to the Special Limited Partner, (II) the Partnership or (III) any
partnership, venture or limited liability company of which the Special Limited
Partner, any Special Limited Partner, any “qualified REIT subsidiary” (within
the meaning of Code Section 856(i)(2)), with respect to the Special Limited
Partner, or the Partnership is a member or (b) an interest of five percent
(5%) or more in the assets or net profits of any tenant of either (I) the
Special Limited Partner, or any “qualified REIT subsidiary” (within the meaning
of Code Section 856(i)(2)) with respect to the Special Limited Partner, (II) the
Partnership or (III) any partnership, venture or limited liability company for
which the Special Limited Partner, any Special Limited Partner, any “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)), with respect to
the Special Limited Partner, or the Partnership is a member and (v) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms. Notwithstanding the foregoing, each Partner may exceed any of
the five percent limits (5%) set forth in clause (iv) of the immediately
preceding sentence; provided that any Partner other than a Permitted Transferee
obtains the written consent of the General Partner prior to exceeding any such
limits; provided, further, that in no event shall any Partner (including any
Permitted Transferee) own, directly or indirectly, more than ten percent
(10%) of the stock described in clause (iv) (a) of the immediately preceding
sentence or more than ten percent (10%) of the assets described in clause (iv)
(b) of the immediately preceding sentence.

C. Each Partner (including, without limitation, each Substituted Limited
Partner, as a condition to becoming a Substituted Limited Partner) represents
and warrants that it is an “accredited investor” as defined in Rule 501
promulgated under the Securities Act and represents, warrants and agrees that it
has acquired and continues to hold its interest in the Partnership for its own
account for investment purposes only and not for the purpose of, or with a view
toward, the resale or distribution of all or any part thereof, and not with a
view toward selling or otherwise distributing such interest or any part thereof
at any particular time or under any predetermined circumstances. Each Partner
further represents and warrants that it is a sophisticated investor, able and
accustomed to handling sophisticated financial matters for itself, particularly
real estate investments, and that it has a sufficiently high net worth that it
does not anticipate a need for the funds that it has invested in the Partnership
in what it

 

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understands to be a highly speculative and illiquid investment. Notwithstanding
the foregoing, the representations and warranties contained in the first
sentence of this Section 3.4.C shall not apply to any Permitted Lender
Transferee, it being understood that a Permitted Lender Transferee may be
subject to a legal obligation to sell, distribute or otherwise dispose of any
Partnership Interest acquired pursuant to the exercise of remedies under a
Pledge; provided, however, that such Permitted Lender Transferee must be a
Qualified Transferee.

D. The representations and warranties contained in Sections 3.4.A, 3.4.B and
3.4.C hereof shall survive the execution and delivery of this Agreement by each
Partner (and, in the case of an Additional Limited Partner or a Substituted
Limited Partner, the admission of such Additional Limited Partner or Substituted
Limited Partner as a Limited Partner in the Partnership) and the dissolution,
liquidation and termination of the Partnership.

E. Each Partner (including, without limitation, each Substituted Limited Partner
as a condition to becoming a Substituted Limited Partner) hereby acknowledges
that no representations as to potential profit, cash flows, funds from
operations or yield, if any, in respect of the Partnership or the General
Partner have been made by any Partner or any employee or representative or
Affiliate of any Partner, and that projections and any other information,
including, without limitation, financial and descriptive information and
documentation, that may have been in any manner submitted to such Partner shall
not constitute any representation or warranty of any kind or nature, express or
implied.

F. Notwithstanding the foregoing, the General Partner may permit the
modification of any of the representations and warranties contained in
Sections 3.4.A, 3.4.B and 3.4.C above as applicable to any Partner (including,
without limitation any Additional Limited Partner or Substituted Limited Partner
or any transferee of either) provided that such representations and warranties,
as modified, shall be set forth in either (i) a Partnership Unit Designation
applicable to the Partnership Units held by such Partner or (ii) a separate
writing addressed to the Partnership and the General Partner.

ARTICLE 4

CAPITAL CONTRIBUTIONS

Section 4.1 Capital Contributions of the Partners . The Original Limited
Partners have heretofore made Capital Contributions to the Partnership. Except
as provided by law or in Section 4.2, 4.3, or 10.4 hereof, the Partners shall
have no obligation or, except with the prior written consent of the General
Partner, right to make any Capital Contributions or loans to the Partnership.
The General Partner shall cause to be maintained in the principal business
office of the Partnership, or such other place as may be determined by the
General Partner, the books and records of the Partnership, which shall include,
among other things, a register containing the name, address, and number of
Partnership Units of each Partner, and such other information as the General
Partner may deem necessary or desirable (the “Register”). The Register shall not
be deemed part of this Agreement. The General Partner shall from time to time
update the Register as necessary to accurately reflect the information therein,
including as a result of any sales, exchanges or other Transfers, or any
redemptions, issuances or similar events involving Partnership Units. Any
reference in this Agreement to the Register shall be deemed a reference to the
Register as in effect from time to time. Subject to the terms of this Agreement,
the General Partner may take any action authorized hereunder in respect of the
Register without any need to obtain the consent of any other Partner. No action
of any Limited Partner shall be required to amend or update the Register. Except
as required by law, no Limited Partner shall be entitled to receive a copy of
the information set forth in the Register relating to any Partner other than
itself.

Section 4.2 Issuances of Additional Partnership Interests . Subject to the
rights of any Holder of any Partnership Interest set forth in a Partnership Unit
Designation:

A. General. The General Partner is hereby authorized to cause the Partnership to
issue 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 Special Limited Partner) or to other
Persons, and to admit such Persons as Additional Limited Partners, for such
consideration and on such terms and conditions as shall be established by the
General Partner, all without the approval of any Limited Partner or any other
Person.

 

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Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units (i) upon the conversion,
redemption or exchange of any Debt, Partnership Units, or other securities
issued by the Partnership, (ii) for less than fair market value, (iii) for no
consideration, (iv) in connection with any merger of any other Person into the
Partnership, or (v) upon the contribution of property or assets to the
Partnership. Any additional Partnership Interests may be issued in one or more
classes, or one or more series of any of such classes, with such designations,
preferences, conversion or other rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption (including, without limitation, rights that may be senior or
otherwise entitled to preference over existing Partnership Interests) as shall
be determined by the General Partner, without the approval of any Limited
Partner or any other Person, and set forth in a written document thereafter
attached to and made an exhibit to this Agreement, which exhibit shall be an
amendment to this Agreement and shall be incorporated herein by this reference
(each, a “Partnership Unit Designation”). Without limiting the generality of the
foregoing, the General Partner shall have authority to specify the allocations
of items of Partnership income, gain, loss, deduction and credit to each such
class or series of Partnership Interests. Except to the extent specifically set
forth in any Partnership Unit Designation, a Partnership Interest of any class
or series other than a Partnership Common Unit shall not entitle the holder
thereof to vote on, or consent to, any matter. Upon the issuance of any
additional Partnership Interest, the General Partner shall amend the Register
and the books and records of the Partnership as appropriate to reflect such
issuance.

B. Issuances to the General Partner or Special Limited Partner. No additional
Partnership Units shall be issued to the General Partner or the Special Limited
Partner unless (i) the additional Partnership Units are issued to all Partners
holding Partnership Common Units in proportion to their respective Percentage
Interests in the Partnership Common Units, (ii) (a) the additional Partnership
Units are (x) Partnership Common Units issued in connection with an issuance of
REIT Shares, or (y) Partnership Equivalent Units (other than Partnership Common
Units) issued in connection with an issuance of Preferred Shares, New Securities
or other interests in the Special Limited Partner (other than REIT Shares), and
(b) the General Partner or the Special Limited Partner (as the case may be)
contributes to the Partnership the cash proceeds or other consideration received
in connection with the issuance of such REIT Shares, Preferred Shares, New
Securities or other interests in the Special Limited Partner, (iii) the
additional Partnership Units are issued upon the conversion, redemption or
exchange of Debt, Partnership Units or other securities issued by the
Partnership, or (iv) the additional Partnership Units are issued pursuant to
Section 4.3.B, Section 4.3.E, Section 4.4, Section 4.5 or Section 4.9.

C. No Preemptive Rights. Except as expressly provided in this Agreement or in
any Partnership Unit Designation, no Person, including, without limitation, any
Partner or Assignee, shall have any preemptive, preferential, participation or
similar right or rights to subscribe for or acquire any Partnership Interest.

Section 4.3 Additional Funds and Capital Contributions.

A. General. The General Partner may, at any time and from time to time,
determine that the Partnership requires additional funds (“Additional Funds”)
for the acquisition or development of additional Properties, for the redemption
of Partnership Units or for such other purposes as the General Partner may
determine. Additional Funds may be obtained by the Partnership, at the election
of the General Partner, in any manner provided in, and in accordance with, the
terms of this Section 4.3 without the approval of any Limited Partner or any
other Person.

B. Additional Capital Contributions. The General Partner, on behalf of the
Partnership, may obtain any Additional Funds by accepting Capital Contributions
from any Partners or other Persons. In connection with any such Capital
Contribution (of cash or property), the General Partner is hereby authorized to
cause the Partnership from time to time to issue additional Partnership Units
(as set forth in Section 4.2 above) in consideration therefor and the Percentage
Interests of the General Partner, the Limited Partners shall be adjusted to
reflect the issuance of such additional Partnership Units.

C. Loans by Third Parties. The General Partner, on behalf of the Partnership,
may obtain any Additional Funds by causing the Partnership to incur Debt to any
Person (other than, except as contemplated in, Section 4.3.D the General Partner
or the Special Limited Partner) upon such terms as the General Partner
determines appropriate, including making such Debt convertible, redeemable or
exchangeable for Partnership Units; provided, however, that the Partnership
shall not incur any such Debt if any Partner would be personally liable for the
repayment of such Debt (unless such Partner otherwise agrees).

 

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D. General Partner and Special Limited Partner Loans. The General Partner, on
behalf of the Partnership, may obtain any Additional Funds by causing the
Partnership to incur Debt with the General Partner and/or the Special Limited
Partner (each, a “General Partner Loan”) if (i) such Debt is, to the extent
permitted by law, on substantially the same terms and conditions (including
interest rate, repayment schedule, and conversion, redemption, repurchase and
exchange rights) as Funding Debt incurred by the General Partner or the Special
Limited Partner, as applicable, the net proceeds of which are loaned to the
Partnership to provide such Additional Funds, or (ii) such Debt is on terms and
conditions no less favorable to the Partnership than would be available to the
Partnership from any third party; provided, however, that the Partnership shall
not incur any such Debt if any Limited Partner would be personally liable for
the repayment of such Debt (unless such Partner otherwise agrees).

E. Issuance of Securities by the Special Limited Partner. The Special Limited
Partner shall not issue any additional REIT Shares, Preferred Shares or New
Securities unless the Special Limited Partner contributes the cash proceeds or
other consideration received from the issuance of such additional REIT Shares,
Preferred Shares or New Securities (as the case may be) and from the exercise of
the rights contained in any such additional New Securities to the Partnership in
exchange for (x) in the case of an issuance of REIT Shares, Partnership Common
Units, or (y) in the case of an issuance of Preferred Shares or New Securities,
Partnership Equivalent Units; provided, however, that notwithstanding the
foregoing, the Special Limited Partner may issue REIT Shares, Preferred Shares
or New Securities (a) pursuant to Section 4.4 or Section 15.1.B hereof,
(b) pursuant to a dividend or distribution (including any stock split) of REIT
Shares, Preferred Shares or New Securities to all of the holders of REIT Shares,
Preferred Shares or New Securities (as the case may be), (c) upon a conversion,
redemption or exchange of Preferred Shares, (d) upon a conversion, redemption,
exchange or exercise of New Securities, or (e) in connection with an acquisition
of Partnership Units or a property or other asset to be owned, directly or
indirectly, by the Special Limited Partner. In the event of any issuance of
additional REIT Shares, Preferred Shares or New Securities by the Special
Limited Partner, and the contribution to the Partnership, by the Special Limited
Partner, of the cash proceeds or other consideration received from such
issuance, the Partnership shall pay the Special Limited Partner’s expenses
associated with such issuance, including any underwriting discounts or
commissions. In the event that the Special Limited Partner issues any additional
REIT Shares, Capital Shares or New Securities and contributes the cash proceeds
or other consideration received from the issuance thereof to the Partnership,
the Partnership is authorized to issue a number of Partnership Common Units or
Partnership Equivalent Units to the Special Limited Partner equal to the number
of REIT Shares, Capital Shares or New Securities so issued, divided by the
Adjustment Factor then in effect, in accordance with this Section 4.3.E without
any further act, approval or vote of any Partner or any other Persons.

Section 4.4 Stock Option Plans.

A. Options Granted to Persons other than Partnership Employees. If at any time
or from time to time, in connection with any Stock Option Plan, an option to
purchase REIT Shares granted to a Person other than a Partnership Employee is
duly exercised:

(1) The Special Limited Partner, shall, as soon as practicable after such
exercise, make a Capital Contribution to the Partnership in an amount equal to
the exercise price paid to the Special Limited Partner by such exercising party
in connection with the exercise of such stock option.

(2) Notwithstanding the amount of the Capital Contribution actually made
pursuant to Section 4.4.A(1) hereof, the Special Limited Partner shall be deemed
to have contributed to the Partnership as a Capital Contribution an amount equal
to the Value of a REIT Share as of the date of exercise multiplied by the number
of REIT Shares then being issued in connection with the exercise of such stock
option. In exchange for such Capital Contribution, the Partnership shall issue a
number of Partnership Common Units to the Special Limited Partner equal to the
quotient of (a) the number of REIT Shares issued in connection with the exercise
of such stock option, divided by (b) the Adjustment Factor then in effect.

 

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B. Options Granted to Partnership Employees. If at any time or from time to
time, in connection with any Stock Option Plan, an option to purchase REIT
Shares granted to a Partnership Employee is duly exercised:

(1) The Special Limited Partner shall sell to the Partnership, and the
Partnership shall purchase from the Special Limited Partner, the number of REIT
Shares as to which such stock option is being exercised. The purchase price per
REIT Share for such sale of REIT Shares to the Partnership shall be the Value of
a REIT Share as of the date of exercise of such stock option.

(2) The Partnership shall sell to the Optionee (or if the Optionee is an
employee of a Partnership Subsidiary, the Partnership shall sell to such
Partnership Subsidiary, which in turn shall sell to the Optionee), for a cash
price per share equal to the Value of a REIT Share at the time of the exercise,
the number of REIT Shares equal to (a) the exercise price paid to the Special
Limited Partner by the exercising party in connection with the exercise of such
stock option divided by (b) the Value of a REIT Share at the time of such
exercise.

(3) The Partnership shall transfer to the Optionee (or if the Optionee is an
employee of a Partnership Subsidiary, the Partnership shall transfer to such
Partnership Subsidiary, which in turn shall transfer to the Optionee) at no
additional cost, as additional compensation, the number of REIT Shares equal to
the number of REIT Shares described in Section 4.4.B(1) hereof less the number
of REIT Shares described in Section 4.4.B(2) hereof.

(4) The Special Limited Partner shall, as soon as practicable after such
exercise, make a Capital Contribution to the Partnership of an amount equal to
all proceeds received (from whatever source, but excluding any payment in
respect of payroll taxes or other withholdings) by the Special Limited Partner
in connection with the exercise of such stock option. In exchange for such
Capital Contribution, the Partnership shall issue a number of Partnership Common
Units to the Special Limited Partner equal to the quotient of (a) the number of
REIT Shares issued in connection with the exercise of such stock option, divided
by (b) the Adjustment Factor then in effect.

C. Restricted Stock Granted to Partnership Employees. If at any time or from
time to time, in connection with any Equity Plan (other than a stock option
plan), any REIT Shares are issued to a Partnership Employee (including any REIT
Shares that are subject to forfeiture in the event such Partnership Employee
terminates his employment by the Partnership or a Partnership Subsidiary) in
consideration for services performed for the Partnership or a Partnership
Subsidiary:

(1) The Special Limited Partner shall issue such number of REIT Shares as are to
be issued to the Partnership Employee in accordance with the Equity Plan;

(2) The following events will be deemed to have occurred: (a) the Special
Limited Partner shall be deemed to have sold such shares to the Partnership (or
if the Partnership Employee is an employee or other service provider of a
Partnership Subsidiary, to such Partnership Subsidiary) for a purchase price
equal to the Value of such shares, (b) the Partnership (or such Partnership
Subsidiary) shall be deemed to have delivered the shares to the Partnership
Employee, (c) the Special Limited Partner shall be deemed to have contributed
the purchase price to the Partnership as a Capital Contribution, and (d) in the
case where the Partnership Employee is an employee of a Partnership Subsidiary,
the Partnership shall be deemed to have contributed such amount to the capital
of the Partnership Subsidiary; and

(3) The Partnership shall issue to the Special Limited Partner a number of
Partnership Common Units equal to the number of newly issued REIT Shares divided
by the Adjustment Factor then in effect in consideration for a deemed Capital
Contribution in an amount equal to (x) the number of newly issued Partnership
Common Units, multiplied by (y) a fraction the numerator of which is the Value
of a REIT Share, and the denominator of which is the Adjustment Factor then in
effect.

 

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D. Restricted Stock Granted to Persons other than Partnership Employees. If at
any time or from time to time, in connection with any Equity Plan (other than a
stock option plan), any REIT shares are issued to a Person other than a
Partnership Employee in consideration for services performed for the Special
Limited Partner, the General Partner, the Partnership or a Partnership
Subsidiary:

(1) The Special Limited Partner shall issue such number of REIT Shares as are to
be issued to such Person in accordance with the Equity Plan; and

(2) The Special Limited Partner shall be deemed to have contributed the Value of
such REIT Shares to the Partnership as a Capital Contribution, and the
Partnership shall issue to the Special Limited Partner a number of newly issued
Partnership Common Units equal to the number of newly issued REIT Shares divided
by the Adjustment Factor then in effect.

E. Future Stock Incentive Plans. Nothing in this Agreement shall be construed or
applied to preclude or restrain the General Partner or the Special Limited
Partner from adopting, modifying or terminating stock incentive plans for the
benefit of employees, directors or other business associates of the General
Partner, the Special Limited Partner, the Partnership or any of their
Affiliates. The Partners acknowledge and agree that, in the event that any such
plan is adopted, modified or terminated by the General Partner or the Special
Limited Partner, amendments to this Section 4.4 may become necessary or
advisable and that any approval or Consent to any such amendments requested by
the General Partner or the Special Limited Partner shall be deemed granted.

F. Issuance of Partnership Common Units. The Partnership is expressly authorized
to issue Partnership Common Units in the numbers specified in this Section 4.4
without any further act, approval or vote of any Partner or any other Persons.

Section 4.5 Dividend Reinvestment Plan, Stock Incentive Plan or Other Plan.
Except as may otherwise be provided in this Article 4, all amounts received by
the Special Limited Partner in respect of any dividend reinvestment plan, stock
incentive or other stock or subscription plan or agreement, either (a) shall be
utilized by the Special Limited Partner to effect open market purchases of REIT
Shares, or (b) if the Special Limited Partner elects instead to issue new REIT
Shares with respect to such amounts, shall be contributed by the Special Limited
Partner to the Partnership in exchange for additional Partnership Common Units.
Upon such contribution, the Partnership will issue to the Special Limited
Partner a number of Partnership Common Units equal to the number of newly issued
REIT Shares divided by the Adjustment Factor then in effect.

Section 4.6 No Interest; No Return. No Partner shall be entitled to interest on
its Capital Contribution or on such Partner’s Capital Account. Except as
provided herein or by law, no Partner shall have any right to demand or receive
the return of its Capital Contribution from the Partnership.

Section 4.7 Conversion or Redemption of Preferred Shares; Redemption of REIT
Shares.

A. Conversion of Preferred Shares. If, at any time, any Preferred Shares are
converted into REIT Shares, in whole or in part, then an equal number of
Partnership Equivalent Units held by the Special Limited Partner that correspond
to the class or series of Preferred Shares so converted shall automatically be
converted into a number of Partnership Common Units equal to the quotient of
(i) the number of REIT Shares issued upon such conversion divided by (ii) the
Adjustment Factor then in effect.

B. Redemption of Preferred Shares. If, at any time, any Preferred Shares are
redeemed, repurchased or otherwise acquired (whether by exercise of a put or
call, automatically or by means of another arrangement) by the Special Limited
Partner for cash, then, immediately prior to such redemption of Preferred
Shares, the Partnership shall redeem an equal number of Partnership Equivalent
Units held by the Special Limited Partner that correspond to the class or series
of Preferred Shares so redeemed, repurchased or acquired upon the same terms and
for the same price per Partnership Equivalent Unit, as such Preferred Shares are
redeemed, repurchased or acquired.

 

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C. Redemption, Repurchase or Forfeiture of REIT Shares. If, at any time, any
REIT Shares are redeemed, repurchased or otherwise acquired (whether by exercise
of a put or call, upon forfeiture of any award granted under any Equity Plan,
automatically or by means of another arrangement) by the Special Limited
Partner, then, immediately prior to such redemption, repurchase or acquisition
of REIT Shares, the Partnership shall redeem a number of Partnership Common
Units held by the Special Limited Partner equal to the quotient of (i) the
number of REIT Shares so redeemed, repurchased or acquired, divided by (ii) the
Adjustment Factor then in effect, such redemption, repurchase or acquisition to
be upon the same terms and for the same price per Partnership Common Unit (after
giving effect to application of the Adjustment Factor) as such REIT Shares are
redeemed, repurchased or acquired.

Section 4.8 Other Contribution Provisions. In the event that any Partner is
admitted to the Partnership and is given a Capital Account in exchange for
services rendered to the Partnership, such transaction shall be treated by the
Partnership and the affected Partner as if the Partnership had compensated such
Partner in cash and such Partner had contributed the cash to the capital of the
Partnership. In addition, with the consent of the General Partner, one or more
Partners (including the Special Limited Partner) may enter into contribution
agreements with the Partnership which have the effect of providing a guarantee
of certain obligations of the Partnership.

Section 4.9 Excluded Properties. The Special Limited Partner shall contribute
each Excluded Property (or, if applicable, the net proceeds (after payment of
all transfer taxes and other transaction costs) received by the Special Limited
Partner from the sale, transfer or other disposition of an Excluded Property to
a Person who is not a direct or indirect wholly-owned Subsidiary of the Special
Limited Partner) to the Partnership upon the earlier of (i) such time as it is
commercially practicable to contribute such property to the Partnership without
adverse tax or other economic consequence to the Special Limited Partner and
(ii) any sale, transfer or other disposition of an Excluded Property to a Person
who is not a direct or indirect wholly-owned Subsidiary of the Special Limited
Partner. Upon any such contribution of an Excluded Property or the proceeds
therefrom, the Special Limited Partner shall receive in exchange for such
contribution, notwithstanding the actual value of such Excluded Property or the
amount of such proceeds (as the case may be), the Specified Partnership Units
applicable to such Excluded Property. The Partnership is expressly authorized to
issue the Specified Partnership Units in the numbers specified in this
Section 4.9 without any further act, approval or vote of any Partner or any
other Persons.

ARTICLE 5

DISTRIBUTIONS

Section 5.1 Requirement and Characterization of Distributions. Subject to the
terms of any Partnership Unit Designation that provides for a class or series of
Partnership Preferred Units with a preference with respect to the payment of
distributions, the General Partner shall cause the Partnership to distribute
quarterly all, or such portion as the General Partner may determine, of the
Available Cash generated by the Partnership during such quarter to the Holders
of Partnership Common Units in accordance with their respective Percentage
Interests of Partnership Common Units on such Partnership Record Date.
Distributions payable with respect to any Partnership Units that were not
outstanding during the entire quarterly period in respect of which any
distribution is made (other than any Partnership Units issued to the Special
Limited Partner in connection with the issuance of REIT Shares or Capital Shares
by the Special Limited Partner) shall be prorated based on the portion of the
period that such Partnership Units were outstanding. Notwithstanding the
foregoing, the General Partner, in its sole and absolute discretion, may cause
the Partnership to distribute Available Cash to the Holders on a more or less
frequent basis than quarterly. The General Partner shall make reasonable efforts
to cause the Partnership to distribute sufficient amounts to enable the Special
Limited Partner, for so long as the Special Limited Partner has determined to
qualify as a REIT, to pay stockholder dividends that will (a) satisfy the REIT
Requirements and (b) eliminate any U.S. federal income or excise tax liability
of the Special Limited Partner.

 

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Notwithstanding the foregoing, in the event any Excluded Property (or the
proceeds therefrom) has not been contributed to the Partnership pursuant to
Section 4.9, the distributions provided for above shall be calculated, to the
extent possible, based on Adjusted Available Cash as if each Excluded Property
had been contributed to the Partnership in exchange for Partnership Common Units
pursuant to Section 4.9; provided, however, that in the event any Excluded
Property (or the proceeds therefrom) has not been contributed to the Partnership
pursuant to Section 4.9, any distributions to be made with respect to the
Special Limited Partner’s Partnership Units shall in the aggregate be reduced to
the extent of any REIT Available Cash.

Section 5.2 Distributions in Kind. No Holder may demand to receive property
other than cash as provided in this Agreement. The General Partner may cause the
Partnership to make a distribution in kind of Partnership assets to the Holders,
and such assets shall be distributed in such a fashion as to ensure that the
fair market value is distributed and allocated in accordance with Articles 5, 6
and 10 hereof.

Section 5.3 Amounts Withheld. All amounts withheld pursuant to the Code or any
provisions of any state or local tax law and Section 10.4 hereof with respect to
any allocation, payment or distribution to any Holder shall be treated as
amounts paid or distributed to such Holder pursuant to Section 5.1 hereof for
all purposes under this Agreement.

Section 5.4 Distributions upon Liquidation. Notwithstanding the other provisions
of this Article 5, upon the occurrence of a Liquidating Event, the assets of the
Partnership shall be distributed to the Holders in accordance with Section 13.2
hereof.

Section 5.5 Distributions to Reflect Additional Partnership Units. In the event
that the Partnership issues additional Partnership Units pursuant to the
provisions of Article 4 hereof, subject to the rights of any Holder of any
Partnership Interest set forth in a Partnership Unit Designation, the General
Partner is hereby authorized to make such revisions to this Article 5 and to
Article 6 as it determines are necessary or desirable to reflect the issuance of
such additional Partnership Units, including, without limitation, making
preferential distributions to certain classes of Partnership Units.

Section 5.6 Restricted Distributions. Notwithstanding any provision to the
contrary contained in this Agreement, neither the Partnership nor the General
Partner, on behalf of the Partnership, shall make a distribution to any Holder
if such distribution would violate the Act or other applicable law.

ARTICLE 6

ALLOCATIONS

Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss. Net
Income and Net Loss of the Partnership shall be determined and allocated with
respect to each Partnership Year as of the end of each such year. Except as
otherwise provided in this Article 6, and subject to Section 11.6.C hereof, an
allocation to a Holder of a share of Net Income or Net Loss shall be treated as
an allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.

Section 6.2 General Allocations.

A. In General. Subject to Section 11.6.C hereof, Net Income and Net Loss shall
be allocated to each of the Holders as follows:

(i) Net Income will be allocated to Holders of Partnership Preferred Units in
accordance with and subject to the terms of the Partnership Unit Designation
applicable to such Partnership Preferred Units;

(ii) remaining Net Income will be allocated to the Holders of Partnership Common
Units in accordance with their respective Percentage Interests at the end of
each Partnership Year;

 

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(iii) subject to the terms of any Partnership Unit Designation, Net Loss will be
allocated to the Holders of Partnership Common Units in accordance with their
respective Percentage Interests at the end of each Partnership Year; and

(iv) for purposes of this Section 6.2.A, the Percentage Interests of the Holders
of Partnership Common Units shall be calculated based on a denominator equal to
the aggregate Partnership Common Units outstanding as of the date of
determination.

Section 6.3 Additional Allocation Provisions. Notwithstanding the foregoing
provisions of this Article 6:

A. Special Allocations Regarding Partnership Preferred Units. If any Partnership
Preferred Units are redeemed pursuant to Section 4.7.B hereof (treating a full
liquidation of the General Partner’s Partnership Interest or of such Special
Limited Partner’s Partnership Interest for purposes of this Section 6.3.A as
including a redemption of any then outstanding Partnership Preferred Units
pursuant to Section 4.7.B hereof), for the Partnership Year that includes such
redemption (and, if necessary, for subsequent Partnership Years) (a) gross
income and gain (in such relative proportions as the General Partner shall
determine) shall be allocated to the holder(s) of such Partnership Preferred
Units to the extent that the Redemption Amounts paid or payable with respect to
the Partnership Preferred Units so redeemed (or treated as redeemed) exceeds the
aggregate Capital Account Balances (net of liabilities assumed or taken subject
to by the Partnership) per Partnership Preferred Unit allocable to the
Partnership Preferred Units so redeemed (or treated as redeemed) and
(b) deductions and losses (in such relative proportions as the General Partner
shall determine) shall be allocated to the holder(s) of such Partnership
Preferred Units to the extent that the aggregate Capital Account Balances (net
of liabilities assumed or taken subject to by the Partnership) per Partnership
Preferred Unit allocable to the Partnership Preferred Units so redeemed (or
treated as redeemed) exceeds the Redemption Amount paid or payable with respect
to the Partnership Preferred Units so redeemed (or treated as redeemed).

B. Regulatory Allocations.

(i) Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any
other provision of this Article 6, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Holder shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Holder’s share of the net decrease
in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Holder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(i) is intended to
qualify as a “minimum gain chargeback” within the meaning of Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.3.B(i) hereof, if there is a
net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any Partnership Year, each Holder who has a share of the Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Holder’s respective share of the net decrease in
Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations Section 1.704-2(i)(4). Allocations pursuant to
the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Holder pursuant thereto. The items to be so
allocated shall be determined in accordance with Regulations
Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.B(ii) is intended to
qualify as a “chargeback of partner nonrecourse debt minimum gain” within the
meaning of Regulations Section 1.704-2(i) and shall be interpreted consistently
therewith.

 

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(iii) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Holders
in accordance with their respective Percentage Interests. Any Partner
Nonrecourse Deductions for any Partnership Year shall be specially allocated to
the Holder(s) who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable,
in accordance with Regulations Section 1.704-2(i).

(iv) Qualified Income Offset. If any Holder unexpectedly receives an adjustment,
allocation or distribution described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and
gain shall be allocated, in accordance with Regulations
Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient
to eliminate, to the extent required by such Regulations, the Adjusted Capital
Account Deficit of such Holder as quickly as possible, provided that an
allocation pursuant to this Section 6.3.B(iv) shall be made if and only to the
extent that such Holder would have an Adjusted Capital Account Deficit after all
other allocations provided in this Article 6 have been tentatively made as if
this Section 6.3.B(iv) were not in the Agreement. It is intended that this
Section 6.3.B(iv) qualify and be construed as a “qualified income offset” within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

(v) Gross Income Allocation. In the event that any Holder has a deficit Capital
Account at the end of any Partnership Year that is in excess of the sum of
(1) the amount (if any) that such Holder is obligated to restore to the
Partnership upon complete liquidation of such Holder’s Partnership Interest
(including, the Holder’s interest in outstanding Partnership Preferred Units and
other Partnership Units) and (2) the amount that such Holder is deemed to be
obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Holder shall be specially
allocated items of Partnership income and gain in the amount of such excess to
eliminate such deficit as quickly as possible, provided that an allocation
pursuant to this Section 6.3.B(v) shall be made if and only to the extent that
such Holder would have a deficit Capital Account in excess of such sum after all
other allocations provided in this Article 6 have been tentatively made as if
this Section 6.3.B(v) and Section 6.3.B(iv) hereof were not in the Agreement.

(vi) Limitation on Allocation of Net Loss. To the extent that any allocation of
Net Loss would cause or increase an Adjusted Capital Account Deficit as to any
Holder, such allocation of Net Loss shall be reallocated (x) first, among the
other Holders of Partnership Common Units in accordance with their respective
Percentage Interests, and (y) thereafter, among the Holders of other Partnership
Units, as determined by the General Partner, subject to the limitations of this
Section 6.3.B(vi).

(vii) Section 754 Adjustment. To the extent that an adjustment to the adjusted
tax basis of any Partnership asset pursuant to Code Section 734(b) or Code
Section 743(b) is required, pursuant to Regulations
Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4),
to be taken into account in determining Capital Accounts as the result of a
distribution to a Holder of Partnership Common Units in complete liquidation of
its interest in the Partnership, the amount of such adjustment to the Capital
Accounts shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases such basis), and such
gain or loss shall be specially allocated to the Holders of Partnership Common
Units in accordance with their respective Percentage Interests in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holder(s) to whom
such distribution was made in the event that Regulations
Section 1.704-1(b)(2)(iv)(m)(4) applies.

(viii) Curative Allocations. The allocations set forth in Sections 6.3.B(i),
(ii), (iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory Allocations”) are
intended to comply with certain regulatory requirements, including the
requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Section 6.1 hereof, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among the

 

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Holders of Partnership Common Units so that to the extent possible without
violating the requirements giving rise to the Regulatory Allocations, the net
amount of such allocations of other items and the Regulatory Allocations to each
Holder of a Partnership Common Unit shall be equal to the net amount that would
have been allocated to each such Holder if the Regulatory Allocations had not
occurred.

C. Special Allocations Upon Liquidation. Notwithstanding any provision in this
Article 6 to the contrary, in the event that the Partnership disposes of all or
substantially all of its assets in a transaction that will lead to a liquidation
of the Partnership pursuant to Article 13 hereof, then any Net Income or Net
Loss realized in connection with such transaction and thereafter (and, if
necessary, constituent items of income, gain, loss and deduction) shall be
specially allocated for such Partnership Year (and to the extent permitted by
Section 761(c) of the Code, for the immediately preceding Partnership Year)
among the Holders as required so as to cause liquidating distributions pursuant
to Section 13.2.A(4) hereof to be made in the same amounts and proportions as
would have resulted had such distributions instead been made pursuant to
Article 5 hereof.

D. Allocation of Excess Nonrecourse Liabilities. For purposes of determining a
Holder’s proportional share of the “excess nonrecourse liabilities” of the
Partnership within the meaning of Regulations Section 1.752-3(a)(3), each
Holder’s respective interest in Partnership profits shall be equal to such
Holder’s Percentage Interest with respect to Partnership Common Units.

E. Special Allocation of Certain Employee Compensation Deductions. To the extent
the Partnership is entitled to an item of loss or deduction with respect to any
employee compensation funded by CBI or any of its Affiliates (including any
payments made pursuant to employee incentive plans of the Special Limited
Partner), such item shall be allocated only to Controlled Entities of CBI.

Section 6.4 Tax Allocations.

A. In General. Except as otherwise provided in this Section 6.4, for income tax
purposes under the Code and the Regulations each Partnership item of income,
gain, loss and deduction (collectively, “Tax Items”) shall be allocated among
the Holders in the same manner as its correlative item of “book” income, gain,
loss or deduction is allocated pursuant to Sections 6.2 and 6.3 hereof.

B. Section 704(c) Allocations. Notwithstanding Section 6.4.A hereof, Tax Items
with respect to Property that is contributed to the Partnership with a Gross
Asset Value that varies from its basis in the hands of the contributing Partner
immediately preceding the date of contribution shall be allocated among the
Holders for income tax purposes pursuant to Regulations promulgated under Code
Section 704(c) so as to take into account such variation. The Partnership shall
account for such variation under any method approved under Code Section 704(c)
and the applicable Regulations as chosen by the General Partner. In the event
that the Gross Asset Value of any partnership asset is adjusted pursuant to
subsection (b) of the definition of “Gross Asset Value” (provided in Article 1
hereof), subsequent allocations of Tax Items with respect to such asset shall
take account of the variation, if any, between the adjusted basis of such asset
and its Gross Asset Value in the same manner as under Code Section 704(c) and
the applicable Regulations and using the method chosen by the General Partner.

ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management.

A. Except as otherwise expressly provided in this Agreement, including any
Partnership Unit Designation, all management powers over the business and
affairs of the Partnership are and shall be exclusively vested in the General
Partner, and no Limited Partner shall have any right to participate in or
exercise control or management power over the business and affairs of the
Partnership. No General Partner may be removed by the Partners, with or without
cause, except with the consent of the General Partner. In addition to the powers
now or hereafter granted a general partner of a limited partnership under
applicable law or that are granted to the

 

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General Partner under any other provision of this Agreement, the General
Partner, subject to the other provisions hereof, including Section 7.3 and the
terms of any Partnership Unit Designation, shall have full and exclusive power
and authority, without the consent of any Limited Partner, to conduct or
authorize the conduct of the business of the Partnership, to exercise or direct
the exercise of all powers of the Partnership and the General Partner under the
Act and this Agreement and to effectuate the purposes of the Partnership,
including, without limitation, to cause the Partnership to enter into agreements
or engage in transactions with affiliates of the Partnership or the General
Partner, issue additional Partnership Interests, make distributions, sell,
pledge, lease, mortgage or otherwise dispose of its assets, form and conduct all
or any portion of its business and affairs through subsidiaries or joint
ventures of any form, incur or guarantee debt for any purpose and obtain and
maintain casualty, liability and other insurance on the Properties and liability
insurance for the Indemnitees hereunder.

B. Except as provided in Section 7.3 hereof and subject to the rights of any
Holder of any Partnership Interest set forth in a Partnership Unit Designation,
the General Partner is authorized to execute and deliver any affidavit,
agreement, certificate, consent, instrument, notice, power of attorney, waiver
or other writing or document in the name and on behalf of the Partnership and to
otherwise exercise any power of the General Partner under this Agreement and the
Act without any further act, approval or vote of the Partners or any other
Persons and, in the absence of any specific trust action on the part of the
General Partner to the contrary, the taking of any action or the execution of
any such document or writing by an officer or trustee of the General Partner, in
the name and on behalf of the General Partner, in its capacity as the general
partner of the Partnership, shall conclusively evidence (1) the approval thereof
by the General Partner, in its capacity as the general partner of the
Partnership, (2) the General Partner’s determination that such action, document
or writing is necessary or desirable to conduct the business and affairs of the
Partnership, exercise the powers of the Partnership under the Act and this
Agreement or effectuate the purposes of the Partnership, or any other
determination by the General Partner required by this Agreement in connection
with the taking of such action or execution of such document or writing, and
(3) the authority of such trustee or officer with respect thereto.

C. The determination as to any of the following matters, made by or at the
direction of the General Partner consistent with the Act and this Agreement,
shall be final and conclusive and shall be binding upon the Partnership and
every Limited Partner: the amount of assets at any time available for
distribution or the redemption of Common Units or Preferred Units; the amount
and timing of any distribution; any determination to redeem Tendered Units; the
amount, purpose, time of creation, increase or decrease, alteration or
cancellation of any reserves or charges and the propriety thereof (whether or
not any obligation or liability for which such reserves or charges shall have
been created shall have been paid or discharged); the fair value, or any sale,
bid or asked price to be applied in determining the fair value, of any asset
owned or held by the Partnership; any matter relating to the acquisition,
holding and disposition of any assets by the Partnership; or any other matter
relating to the business and affairs of the Partnership or required or permitted
by applicable law, this Agreement or otherwise to be determined by the General
Partner.

D. At all times from and after the date hereof, the General Partner may cause
the Partnership to establish and maintain working capital and other reserves in
such amounts as the General Partner, in its sole and absolute discretion, deems
appropriate and reasonable from time to time.

E. Notwithstanding any other provision 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 belief that such action or omission is necessary or advisable in order
(i) to protect the ability of the Special Limited Partner to continue to qualify
as a REIT, (ii) for the Special Limited Partner otherwise to satisfy the REIT
Requirements, (iii) for the Special Limited Partner to avoid incurring any taxes
under Code Section 857 or Code Section 4981, or (iv) for any wholly-owned
Subsidiary of the Special Limited Partner to continue to qualify as a “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)), is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.

Section 7.2 Certificate of Limited Partnership. To the extent that such action
is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Maryland and each other state, the
District of Columbia or any other jurisdiction, in which the Partnership may
elect to do business or

 

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own property. Subject to the terms of Section 8.5.A hereof, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner. The General Partner
shall use all reasonable efforts to cause to be filed such other certificates or
documents as may be reasonable and necessary or appropriate for the formation,
continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability to the extent
provided by applicable law) in the State of Maryland and any other state, or the
District of Columbia or other jurisdiction, in which the Partnership may elect
to do business or own property.

Section 7.3 Restrictions on General Partner’s Authority.

A. The General Partner may not take any action in contravention of this
Agreement, including, without limitation:

(1) any action that would make it impossible to carry on the ordinary business
of the Partnership, except as otherwise provided in this Agreement;

(2) admitting a Person as a Partner, except as otherwise provided in this
Agreement;

(3) performing any act that would subject a Limited Partner to liability, except
as provided herein or under the Act;

(4) entering into any contract, mortgage, loan or other agreement that expressly
prohibits or restricts (a) the Special Limited Partner or the Partnership from
performing its specific obligations under Section 15.1 hereof or (b) a Limited
Partner from exercising its rights under Section 15.1 hereof to effect a
Redemption, except, in either case, with the written consent of such Limited
Partner affected by the prohibition or restriction.

B. The General Partner shall not, without the Consent of the Partners, undertake
on behalf of the Partnership, or enter into any transaction that would have the
effect of, any of the following actions:

(1) except as provided in Section 7.3.C hereof, amend, modify or terminate this
Agreement;

(2) except as otherwise permitted by this Agreement, or in connection with a
Termination Transaction effected in accordance with Section 11.7, Transfer any
portion of the Partnership Interest of the General Partner or admit into the
Partnership any additional or successor General Partner;

(3) except as otherwise permitted by this Agreement, or in connection with a
Termination Transaction effected in accordance with Section 11.7, voluntarily
withdraw as a general partner of the Partnership;

(4) make a general assignment for the benefit of creditors or appoint or
acquiesce in the appointment of a custodian, receiver or trustee for all or any
part of the assets of the Partnership;

(5) institute any proceeding for bankruptcy on behalf of the Partnership;

(6) a merger or consolidation of the Partnership with or into any other Person,
or a conversion of the Partnership into any other entity, other than in
connection with a Termination Transaction effected in accordance with
Section 11.7; or

(7) a sale, lease, exchange or other transfer of all or substantially all of the
assets of the Partnership not in the ordinary course of business, whether in a
single transaction or a series of related transactions, other than in connection
with a Termination Transaction effected in accordance with Section 11.7;

 

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provided, however, with respect to items B(1), B(2), B(3), B(6) and B(7), for so
long as CBI, together with its Controlled Entities, holds at least 20% of the
outstanding Partnership Common Units held by all Partners, the Consent of CBI
shall also be required.

C. Notwithstanding Section 7.3.B hereof but subject to the rights of any Holder
of any Partnership Interest set forth in a Partnership Unit Designation and
Section 7.3.D, the General Partner shall have the power, without the Consent of
the Partners or the consent or approval of any Limited Partner, to amend this
Agreement as may be required to facilitate or implement any of the following
purposes:

(1) to add to the obligations of the General Partner or surrender any right or
power granted to the General Partner or any Affiliate of the General Partner for
the benefit of the Limited Partners;

(2) to reflect the admission, substitution or withdrawal of Partners, the
Transfer of any Partnership Interest or the termination of the Partnership in
accordance with this Agreement, and to amend the Register in connection with
such admission, substitution, withdrawal or Transfer;

(3) to reflect a change that is of an inconsequential nature or does not
adversely affect the Limited Partners in any material respect, or to cure any
ambiguity, correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions, or make other changes with
respect to matters arising under this Agreement that will not be inconsistent
with law or with the provisions of this Agreement;

(4) to satisfy any requirements, conditions or guidelines contained in any
order, directive, opinion, ruling or regulation of a Federal or state agency or
contained in Federal or state law;

(5) to reflect such changes as are reasonably necessary for the Special Limited
Partner to maintain its status as a REIT or to satisfy the REIT Requirements;

(6) to modify either or both of the manner in which items of Net Income or Net
Loss are allocated pursuant to Article 6 or the manner in which Capital Accounts
are adjusted, computed, or maintained (but in each case only to the extent set
forth in the definition of “Capital Account” or Section 5.5 or as contemplated
by the Code or the Regulations);

(7) to reflect the issuance of additional Partnership Interests in accordance
with Article 4;

(8) to set forth or amend the designations, preferences, conversion or other
rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of redemption of any additional
Partnership Units issued pursuant to Article 4;

(9) if the Partnership is the Surviving Partnership in any Termination
Transaction, to modify Section 15.1 or any related definitions to provide the
holders of interests in such Surviving Partnership rights that are consistent
with Section 11.7.A(ii)(v); and

(10) to reflect any other modification to this Agreement as is reasonably
necessary for the business or operations of the Partnership or the Special
Limited Partner and which does not violate Section 7.3.D.

 

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D. Notwithstanding Sections 7.3.B, 7.3.C and Article 14 hereof, this Agreement
shall not be amended, and no action may be taken by the General Partner, without
the consent of each Partner, if any, adversely affected thereby, if such
amendment or action would (i) convert a Limited Partner into a general partner
of the Partnership (except as a result of the Limited Partner becoming the
General Partner pursuant to Section 12.1 or 13.1.A of this Agreement),
(ii) modify the limited liability of a Limited Partner, (iii) adversely alter
the rights of any Partner to receive the distributions to which such Partner is
entitled pursuant to Article 5 or Section 13.2.A(4) hereof, or alter the
allocations specified in Article 6 hereof (except, in any case, as permitted
pursuant to Sections 4.2, 5.5 and 7.3.C hereof), (iv) alter or modify in a
manner that adversely affects any Partner the Redemption rights, Cash Amount or
REIT Shares Amount as set forth in Section 15.1 hereof, or amend or modify any
related definitions (except for amendments to this Agreement or other actions
that provide rights consistent with Section 11.7.A(ii)(v)), or (v) amend this
Section 7.3.D; provided, however, that the consent of any individual Partner
adversely affected shall not be required for any amendment or action that
affects all Partners holding the same class or series of Partnership Units on a
uniform or pro rata basis, if approved by a Majority in Interest of the Partners
of such class or series. Except as provided in Section 8.9.E, no amendment to
Section 8.9 of this Agreement, and no amendment to this Agreement that is
inconsistent with the provisions of Section 8.9, shall be made without the prior
written consent of CBI. Further, no amendment may alter the restrictions on the
General Partner’s authority set forth elsewhere in this Section 7.3 without the
consent specified therein. Any such amendment or action consented to by any
Partner shall be effective as to that Partner, notwithstanding the absence of
such consent by any other Partner.

E. Notwithstanding any provision in this Agreement to the contrary, for so long
as CBI or any of its Controlled Entities owns any Partnership Interest,
Section 8.8 of this Agreement shall not be amended or waived without the prior
written consent of CBI, nor shall this Agreement be modified in any manner that
would have the effect of eliminating the consent rights of this Section 7.3E.

Section 7.4 Reimbursement of the General Partner and the Special Limited
Partner.

A. The General Partner shall not be compensated for its services as general
partner of the Partnership except as provided in this Agreement (including the
provisions of Articles 5 and 6 hereof regarding distributions, payments and
allocations to which it may be entitled in its capacity as the General Partner).

B. Subject to Section 7.4.C and Section 15.12, the Partnership shall be liable
for, and shall reimburse the General Partner and the Special Limited Partner, as
applicable, on a monthly basis, or such other basis as the General Partner may
determine, for all sums expended in connection with the Partnership’s business,
including, without limitation, (i) expenses relating to the ownership of
interests in and management and operation of, or for the benefit of, the
Partnership, (ii) compensation of officers and employees, including, without
limitation, payments under future compensation plans of the Special Limited
Partner, the General Partner, or the Partnership that may provide for stock
units, or phantom stock, pursuant to which employees of the Special Limited
Partner, the General Partner, or the Partnership will receive payments based
upon dividends on or the value of REIT Shares, (iii) director fees and expenses
and (iv) all costs and expenses of the Special Limited Partner being a public
company, including costs of filings with the SEC, reports and other
distributions to its stockholders; provided, however, that the amount of any
reimbursement shall be reduced by any interest earned by the General Partner or
the Special Limited Partner with respect to bank accounts or other instruments
or accounts held by it on behalf of the Partnership as permitted pursuant to
Section 7.5. Such reimbursements shall be in addition to any reimbursement of
the General Partner and the Special Limited Partner as a result of
indemnification pursuant to Section 7.7 hereof.

C. To the extent practicable, Partnership expenses shall be billed directly to
and paid by the Partnership and, subject to Section 15.12 hereof, reimbursements
to the General Partner, the Special Limited Partner or any of their respective
Affiliates by the Partnership pursuant to this Section 7.4 shall be treated as
“guaranteed payments” within the meaning of Code Section 707(c) (unless
otherwise required by the Code and the Regulations).

Section 7.5 Outside Activities of the General Partner and the Special Limited
Partner. Neither the General Partner nor the Special Limited Partner shall
directly or indirectly enter into or conduct any business, other than in
connection with, (a) with respect to the General Partner, the ownership,
acquisition and disposition of Partnership Interests, (b) with respect to the
General Partner, the management of the business of the Partnership, (c) with
respect to the Special Limited Partner, its operation as a reporting company
with a class (or

 

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classes) of securities registered under the Exchange Act, (d) with respect to
the Special Limited Partner, its operations as a REIT, (e) with respect to the
Special Limited Partner, the offering, sale, syndication, private placement or
public offering of stock, bonds, securities or other interests, (f) financing or
refinancing of any type related to the Partnership or its assets or activities,
and (g) such activities as are incidental thereto; provided, however, that each
of the General Partner and the Special Limited Partner may from time to time
hold or acquire assets in its own name or otherwise other than through the
Partnership so long as each of the General Partner and the Special Limited
Partner takes commercially reasonable measures to insure that the economic
benefits and burdens of such Property are otherwise vested in the Partnership,
whether by electing to treat such asset as an “Excluded Property” hereunder,
through assignment, mortgage loan or otherwise or, if it is not commercially
reasonable to vest such economic interests in the Partnership, the Partners
shall negotiate in good faith to amend this Agreement, including, without
limitation, the definition of “Adjustment Factor,” to reflect such activities
and the direct ownership of assets by the General Partner or the Special Limited
Partner, as applicable. Nothing contained herein shall be deemed to prohibit the
General Partner from executing guarantees of Partnership debt for which it would
otherwise be liable in its capacity as General Partner. Subject to Section 7.3.B
hereof, the General Partner, the Special Limited Partner and all “qualified REIT
subsidiaries” (within the meaning of Code Section 856(i)(2)), taken as a group,
shall not own any assets or take title to assets (other than temporarily in
connection with an acquisition prior to contributing such assets to the
Partnership) other than (i) Excluded Properties, (ii) interests in “qualified
REIT subsidiaries” (within the meaning of Code Section 856(i)(2)),
(iii) Partnership Interests as the General Partner or Special Limited Partner
and (iv) such cash and cash equivalents, bank accounts or similar instruments or
accounts as such group deems reasonably necessary, taking into account
Section 7.1.D hereof and the requirements necessary for the Special Limited
Partner to qualify as a REIT and for the General Partner and the Special Limited
Partner to carry out their respective responsibilities contemplated under this
Agreement and the Charter. The General Partner and any Affiliates of the General
Partner may acquire Partnership Interests and shall be entitled to exercise all
rights of a Limited Partner relating to such Partnership Interests.

Section 7.6 Transactions with Affiliates.

A. The Partnership may lend or contribute funds or other assets to the Special
Limited Partner and its Subsidiaries or other Persons in which the Special
Limited Partner has an equity investment, and such Persons may borrow funds from
the Partnership, on terms and conditions no less favorable to the Partnership in
the aggregate than would be available from unaffiliated third parties as
determined by the General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person. It is expressly
acknowledged and agreed by each Partner that the Special Limited Partner may
(i) borrow funds from the Partnership in order to redeem, at any time or from
time to time, options or warrants previously or hereafter issued by the Special
Limited Partner, (ii) put to the Partnership, for cash, any rights, options,
warrants or convertible or exchangeable securities that the Special Limited
Partner may desire or be required to purchase or redeem or (iii) borrow funds
from the Partnership to acquire assets that become Excluded Properties or will
be contributed to the Partnership for Partnership Units. If the Special Limited
Partner acquires a corporation in which the Partnership does not hold an
interest, in whole or in part, with the proceeds (whether comprised of cash or
other assets) of a loan from the Partnership to the Special Limited Partner, the
Partnership shall issue to such corporation an interest in the Partnership that
(i) entitles the holder thereof to receive distributions in amounts and at the
same times as interest payments on such loan (with appropriate reductions in
such distributions if any portion of the loan is repaid), (ii) entitles the
holder thereof to receive, if and to the extent that any portion of such loan is
repaid, a number of Partnership Units equal to the quotient obtained by dividing
the principal amount of the loan repaid by the Value of REIT Shares at the date
of repayment (it being understood and agreed that if the loan is repaid with
funds contributed to such corporation by the Special Limited Partner from the
proceeds of a sale of REIT Shares, the Value of REIT Shares at the date of
repayment shall be deemed to be the net price per share at which such shares
were sold), and (iii) is automatically redeemed for no consideration upon the
repayment in full of such loan.

B. Except as provided in Section 7.5 hereof and subject to Section 3.1 hereof,
the Partnership may transfer assets to joint ventures, limited liability
companies, partnerships, corporations, business trusts or other business
entities in which it is or thereby becomes a participant upon such terms and
subject to such conditions consistent with this Agreement and applicable law.

C. The General Partner, the Special Limited Partner and their respective
Affiliates may sell, transfer or convey any property to the Partnership,
directly or indirectly, on terms and conditions no less favorable to the
Partnership in the aggregate than would be available from unaffiliated third
parties as determined by the General Partner.

 

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D. The General Partner or the Special Limited Partner, without the approval of
the Partners or any of them or any other Persons, may propose and adopt on
behalf of the Partnership employee benefit plans funded by the Partnership for
the benefit of employees of the General Partner, the Partnership, the Special
Limited Partner, Subsidiaries of the Partnership or any Affiliate of any of them
in respect of services performed, directly or indirectly, for the benefit of the
General Partner, the Special Limited Partner, the Partnership or any of the
Partnership’s Subsidiaries.

Section 7.7 Indemnification.

A. To the fullest extent permitted by applicable law, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorney’s fees and other 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 (“Actions”) as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) arising from actions or omissions by the
Indemnitee that are material to the matter giving rise to the action and are
established by a final judgment of a court of competent jurisdiction to
constitute fraud, intentional harm or gross negligence on the part of the
Indemnitee, (ii) arising from an action or proceeding initiated by the
Indemnitee (other than an action to enforce such Indemnitee’s rights to
indemnification or advance of expenses under this Section 7.7) or (iii) with
respect to any claim as to which the Indemnitee is established by a final
judgment of a court of competent jurisdiction to be liable to the Partnership.
Without limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of
the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.7 in
favor of any Indemnitee having or potentially having liability for any such
indebtedness. It is the intention of this Section 7.7.A that the Partnership
indemnify each Indemnitee to the fullest extent permitted by law. 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 7.7.A. The termination of any proceeding by conviction
of an Indemnitee or upon a plea of nolo contendere or its equivalent by an
Indemnitee, or an entry of an order of probation against an Indemnitee prior to
judgment, does not create a presumption that such Indemnitee acted in a manner
contrary to that specified in this Section 7.7.A with respect to the subject
matter of such proceeding. Any indemnification pursuant to this Section 7.7
shall be made only out of the assets of the Partnership, and neither the General
Partner nor any other Holder 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 7.7.

B. To the fullest extent permitted by law, expenses incurred by an Indemnitee
who is a party to a proceeding or otherwise subject to or the focus of or is
involved in any Action shall be paid or reimbursed by the Partnership as
incurred by the Indemnitee in advance of the final disposition of the Action
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 Section 7.7.A has been met,
and (ii) a written undertaking by or on behalf of the Indemnitee to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met, provided that such undertaking need not be secured and shall be
without reference to the financial ability for repayment.

C. The indemnification provided by this Section 7.7 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 and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.

 

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D. The Partnership may, but shall not be obligated to, purchase and maintain
insurance, on behalf of any 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. Any liabilities which an Indemnitee incurs as a result of acting on behalf of
the Partnership, the General Partner or the Special Limited Partner (whether as
a fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes assessed by
the IRS, penalties assessed by the Department of Labor, restitutions to such a
plan or trust or other funding mechanism or to a participant or beneficiary of
such plan, trust or other funding mechanism, or otherwise) shall be treated as
liabilities or judgments or fines under this Section 7.7, unless such
liabilities arise as a result of such Indemnitee’s fraud, intentional harm or
gross negligence on the part of the Indemnitee.

F. In no event may an Indemnitee subject any of the Holders 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 7.7 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 7.7 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons. Any amendment,
modification or repeal of this Section 7.7 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the
Partnership’s liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

I. It is the intent of the parties that any amounts paid by the Partnership to
the General Partner pursuant to this Section 7.7 shall be treated as “guaranteed
payments” within the meaning of Code Section 707(c).

Section 7.8 Liability of the General Partner and the Special Limited Partner.

A. To the maximum extent permitted under the Act, the only duties that the
General Partner owes to the Partnership, any Partner or any other Person
(including any creditor of any Partner or assignee of any Partnership Interest),
fiduciary or otherwise, are to perform its contractual obligations as expressly
set forth in this Agreement consistently with the implied contractual covenant
of good faith and fair dealing, and to act with the fiduciary duties of care and
loyalty which have been, in accordance with the Act, modified as set forth in
this Section 7.8. The General Partner, in its capacity as such, shall have no
other duty, fiduciary or otherwise, to the Partnership, any Partner or any other
Person (including any creditor of any Partner or any assignee of Partnership
Interest). The provisions of this Agreement other than this Section 7.8 shall
create contractual obligations of the General Partner only, and no such
provision shall be interpreted to expand or modify the fiduciary duties of the
General Partner under the Act.

B. The Limited Partners agree that: (i) the General Partner (and the Special
Limited Partner, as the trustee of the General Partner) is acting for the
benefit of the Partnership, the Limited Partners and the Special Limited
Partner’s stockholders collectively; and (ii) in the event of a conflict between
the interests of the Partnership or any Partner, on the one hand, and the
separate interests of the Special Limited Partner or its stockholders, on the
other hand, the General Partner may give priority to the separate interests of
the Special Limited Partner and its stockholders (including, without limitation,
with respect to the tax consequences to Limited Partners, Assignees or the
Special Limited Partner’s stockholders) and, in the event of such a conflict,
any action or failure to act on the part of the General Partner (or the Special
Limited Partner, in its capacity as the sole trustee of the General Partner, or
the Special Limited Partner’s directors, officers and agents) that gives
priority to the separate interests of the

 

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Special Limited Partner or its stockholders that does not result in a violation
of the contract rights of the Limited Partners under this Agreement does not
violate the duty of loyalty or any other duty owed by the General Partner to the
Partnership and the Partners or any duty of the Special Limited Partner.

C. In exercising its authority under this Agreement, the General Partner may,
but shall be under no obligation to take into account the tax consequences to
any Partner of any action taken (or not taken) by it. Except as otherwise agreed
by the Partnership, the General Partner and the Partnership shall not have
liability to a Limited Partner under any circumstances as a result of any income
tax liability incurred by such Limited Partner as a result of an action (or
inaction) by the General Partner or the Partnership pursuant to the General
Partner’s authority under this Agreement.

D. Subject to its obligations and duties as General Partner set forth in this
Agreement and applicable law, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its employees or agents, including
through the Special Limited Partner and its employees and agents. The General
Partner shall not be responsible to the Partnership or any Partner for any
misconduct or negligence on the part of any such employee or agent appointed by
it in good faith.

E. In performing its duties under this Agreement and the Act, the General
Partner shall be entitled to rely on the provisions of this Agreement and on any
information, opinion, report or statement, including any financial statement or
other financial data or the records or books of account of the Partnership or
any subsidiary of the Partnership, prepared or presented by an officer, employee
or agent of the General Partner or the Special Limited Partner, or any agent of
the Partnership or any such subsidiary, or by a lawyer, certified public
accountant, appraiser or other person engaged by the Partnership as to any
matter within such person’s professional or expert competence, and any act taken
or omitted to be taken in reliance upon any such information, opinion, report or
statement as to matters that the General Partner reasonably believes to be
within such Person’s professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion. The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture or other paper
or document believed by it in good faith to be genuine and to have been signed
or presented by the proper party or parties.

F. Notwithstanding any other provision 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 Special Limited Partner to continue
to qualify as a REIT, (ii) for the Special Limited Partner otherwise to satisfy
the REIT Requirements, (iii) to avoid the Special Limited Partner incurring any
taxes under Code Section 857 or Code Section 4981 or (iv) for any wholly-owned
Subsidiary of the Special Limited Partner to continue to qualify as a “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)), is expressly
authorized under this Agreement, is deemed approved by all of the Limited
Partners and does not violate any duty, fiduciary or otherwise, of the General
Partner to the Partnership or any other Partner.

G. Notwithstanding anything herein to the contrary, except for fraud, willful
misconduct or gross negligence, or pursuant to any express indemnities given to
the Partnership by the General Partner pursuant to any other written instrument,
the General Partner shall not have any personal liability whatsoever, to the
Partnership or to the other Partners, for any action or omission taken in its
capacity as the General Partner or for the debts or liabilities of the
Partnership or the Partnership’s obligations hereunder except pursuant to
Section 15.1 hereof. Without limitation of the foregoing, and except for fraud,
willful misconduct or gross negligence, or pursuant Section 15.1 hereof or any
such express indemnity, no property or assets of the General Partner, other than
its interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement.

H. No trustee, officer or agent of the General Partner (including the Special
Limited Partner, in its capacity as the trustee of the General Partner), and no
director, officer or agent of the Special Limited Partner shall have any duties
directly to the Partnership or any Partner. No officer, trustee or agent of the
General Partner or any officer, director, stockholder or agent of the Special
Limited Partner shall be directly liable to the Partnership for money damages by
reason of their service as such.

 

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I. Any amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the General Partner’s, the Special Limited Partner’s and their respective
trustees’, directors’ officers’ and agents’, liability to the Partnership and
the Limited Partners under this Section 7.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

Section 7.9 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 with other Partners or Persons, 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, the Special Limited Partner or one or more nominees, as the General
Partner or the Special Limited Partner may determine, including Affiliates of
the General Partner or the Special Limited Partner. The General Partner and the
Special Limited Partner hereby declare and warrant that any Partnership assets
for which legal title is held in the name of the General Partner or the Special
Limited Partner, as applicable, or any nominee or Affiliate of the General
Partner or the Special Limited Partner shall be held by the General Partner or
the Special Limited Partner, as applicable, for the use and benefit of the
Partnership in accordance with the provisions of this Agreement. 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.

Section 7.10 Reliance by Third Parties. Notwithstanding anything to the contrary
in this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority, without the
consent or approval of any other Partner, or Person, to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter
into any contracts on behalf of the Partnership, and take any and all actions on
behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership’s sole party in interest, both
legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner in connection with any
such dealing. In no event shall any Person dealing with the General Partner or
its representatives be obligated to ascertain that the terms of this Agreement
have been complied with or to inquire into the necessity or expediency of any
act or action of the General Partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (i) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1 Limitation of Liability. No Limited Partner, in its capacity as
such, shall have any duties or liability under this Agreement except as
expressly provided in this Agreement (including, without limitation,
Section 10.4 hereof) or under the Act. To the maximum extent permitted by law,
no Limited Partner, including the Special Limited Partner, in its capacity as
such, shall have any personal liability whatsoever, to the Partnership or to the
other Partners, for any action or omission taken in its capacity as a limited
partner or for the debts or liabilities of the Partnership or the Partnership’s
obligations hereunder except pursuant to any express indemnities given to the
Partnership by such Limited Partner pursuant to any other written instrument and
except for liabilities of the Special Limited Partner pursuant to Section 15.1
hereof. Without limitation of the foregoing, and except pursuant to any such
express indemnity (and, in the case of the Special Limited Partner, pursuant to
Section 15.1 hereof), no property or assets of a Limited Partner, other than its
interest in the Partnership, shall be subject to levy, execution or other
enforcement procedures for the satisfaction of any judgment (or other judicial
process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement.

 

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Section 8.2 Management of Business. No Limited Partner or Assignee (other than
in its separate capacity as the General Partner, any of its Affiliates or any
officer, director, member, employee, partner, agent or trustee of the General
Partner, the Partnership or any of their Affiliates, in their capacity as such)
shall take part in the operations, management or control (within the meaning of
the Act) of the Partnership’s business, transact any business in the
Partnership’s name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, member, employee, partner, agent,
representative, or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Limited Partners or Assignees
under this Agreement.

Section 8.3 Outside Activities of Limited Partners. Subject to any agreements
entered into pursuant to Section 7.6 hereof and any other agreements entered
into by a Limited Partner or any of its Affiliates with the General Partner, the
Partnership or a Subsidiary (including, without limitation, any employment
agreement), any Limited Partner and any Assignee, officer, director, employee,
agent, trustee, Affiliate, member or stockholder of any Limited Partner shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and
activities that are in direct or indirect competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner or the Special Limited Partner, to the extent expressly provided
herein), and such Person shall have no obligation pursuant to this Agreement,
subject to Section 7.6 hereof and any other agreements entered into by a Limited
Partner or its Affiliates with the General Partner, the Partnership or a
Subsidiary, to offer any interest in any such business ventures to the
Partnership, any Limited Partner, or any such other Person, even if such
opportunity is of a character that, if presented to the Partnership, any Limited
Partner or such other Person, could be taken by such Person.

Section 8.4 Return of Capital. Except pursuant to the rights of Redemption set
forth in Section 15.1 hereof or in any Partnership Unit Designation, no Limited
Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon dissolution of the Partnership as provided herein. Except to
the extent provided in Article 5 or Article 6 hereof or otherwise expressly
provided in this Agreement or in any Partnership Unit Designation, no Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions or as to profits,
losses or distributions.

Section 8.5 Rights of Limited Partners Relating to the Partnership.

A. In addition to other rights provided by this Agreement or by the Act, the
General Partner shall deliver to each Limited Partner a copy of any information
mailed to all of the common stockholders of the Special Limited Partner as soon
as practicable after such mailing.

B. The Partnership shall notify any Limited Partner that is a Qualifying Party,
on request, of the then current Adjustment Factor or any change made to the
Adjustment Factor.

C. Notwithstanding any other provision of this Section 8.5, the General Partner
may keep confidential from the Limited Partners (or any of them), for such
period of time as the General Partner determines to be reasonable, any
information that (i) the General Partner believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or the Special
Limited Partner or (ii) the Partnership or the General Partner is required by
law or by agreement to keep confidential.

 

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Section 8.6 Partnership Right to Call Partnership Interests. Notwithstanding any
other provision of this Agreement, on and after the date on which the aggregate
Percentage Interests of the Limited Partners (other than the Special Limited
Partner) are less than one percent (1%), the Partnership shall have the right,
but not the obligation, from time to time and at any time to redeem any and all
outstanding Partnership Common Units (other than Partnership Common Units held
by the General Partner or the Special Limited Partner) by treating any Limited
Partner as a Tendering Party who has delivered a Notice of Redemption pursuant
to Section 15.1 hereof for the amount of Partnership Common Units to be
specified by the General Partner by notice to such Limited Partner that the
Partnership has elected to exercise its rights under this Section 8.6. Such
notice given by the General Partner to a Limited Partner pursuant to this
Section 8.6 shall be treated as if it were a Notice of Redemption delivered to
the General Partner by such Limited Partner. For purposes of this Section 8.6,
(a) any Limited Partner (whether or not otherwise a Qualifying Party) may be
treated as a Qualifying Party that is a Tendering Party and (b) the provisions
of Sections 15.1.D(1), 15.1.F(1) and 15.1.F(2) hereof shall not apply, but the
remainder of Section 15.1 hereof shall apply, mutatis mutandis.

Section 8.7 No Rights as Objecting Partner. No Limited Partner and no Holder of
a Partnership Interest shall be entitled to exercise any of the rights of an
objecting stockholder provided for under Title 3, Subtitle 2 of the Maryland
General Corporation Law or any successor statute in connection with a merger,
consolidation or conversion of the Partnership.

Section 8.8 No Right to Certificate Evidencing Units; Article 8 Securities.
Partnership Units shall not be certificated. No Limited Partner shall be
entitled to a certificate evidencing the Partnership Units held by such Limited
Partner. Any certificate evidencing Partnership Units issued prior to the date
hereof shall no longer evidence Partnership Units. The Partnership shall not
elect to treat any Partnership Unit as a “security” governed by (x) Title 8 of
the Maryland Uniform Commercial Code or (y) Article 8 of the Uniform Commercial
Code of any other applicable jurisdiction.

Section 8.9 Board Nomination Rights.

A. Board Nominees.

(1) It shall be a qualification of such number of the members of the board of
directors of the Special Limited Partner (the “REIT Directors”), calculated as
contemplated in this Section 8.9.A, that they be nominated by CBI. So long as
CBI, together with its Controlled Entities, owns (a) fifty percent (50%) or more
of the outstanding REIT Shares (assuming all outstanding Partnership Common
Units not held by the General Partner or the Special Limited Partner or any of
their Controlled Entities are tendered for Redemption and exchanged for REIT
Shares, regardless of whether such Partnership Common Units are then eligible
for Redemption), such number of directors to which CBI is entitled to nominate
shall equal (i) if there is an even number of REIT directors, 50% of the number
of REIT Directors minus one; or (ii) if there is an odd number of REIT
Directors, 50% of the number of REIT Directors minus 0.5, provided that in
either case, at least one director must meet the Independence Standard (as
defined below); or (b) less than fifty percent (50%) but at least ten percent
(10%) of the outstanding REIT Shares (assuming all outstanding Partnership
Common Units not held by the General Partner or the Special Limited Partner or
any of their Controlled Entities are tendered for Redemption and exchanged for
REIT Shares, regardless of whether such Partnership Common Units are then
eligible for Redemption), such number of directors to which CBI is entitled to
nominate shall equal 20% of the number of REIT Directors (rounded down, if
necessary, to the nearest whole number); provided, however, in either the case
of (a) or (b), such number of directors shall not be less than one. If CBI,
together with its Controlled Entities, owns less than ten percent (10%) of the
outstanding REIT Shares (assuming all outstanding Partnership Common Units not
held by the General Partner or the Special Limited Partner or any of their
Controlled Entities are tendered for Redemption and exchanged for REIT Shares,
regardless of whether such Partnership Common Units are then eligible for
Redemption), it shall not be a qualification of any REIT Director that he or she
be nominated by CBI. The Special Limited Partner, acting through its Board of
Directors, will recommend and use all reasonable efforts to cause the election
of each CBI Nominee nominated in accordance with the foregoing. The Special
Limited Partner agrees to use all reasonable efforts to solicit proxies for such
CBI Nominees from all holders of REIT Shares and/or other voting stock entitled
to vote thereon.

 

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(2) To facilitate the nomination rights set forth above, the Special Limited
Partner will notify CBI in writing a reasonable period of time in advance of any
action to be taken by the Special Limited Partner or the Board of Directors for
the purpose of nominating, electing or designating directors, which, in the case
of a proxy statement, information statement or registration statement in which
nominees for director would be named, shall be delivered by the Special Limited
Partner to CBI no later than 30 days prior to the anticipated mailing or filing
date, as applicable. Such notice shall set forth in reasonable detail the nature
of the action to be taken by the Special Limited Partner or the Board of
Directors, and the anticipated date thereof. Upon receipt of such notice, CBI
will designate any CBI Nominees by written consent (in accordance with
Article 14) of CBI as soon as reasonably practicable thereafter; provided,
however, that if CBI shall have failed to designate CBI Nominees in a timely
manner, CBI shall be deemed to have designated any incumbent CBI Nominees in a
timely manner unless there are no remaining incumbent CBI Nominees or the
incumbent CBI Nominee declines to serve, in which case the Special Limited
Partner or the Board of Directors may nominate another Person.

(3) CBI will provide the Special Limited Partner with such information about
each CBI Nominee as is reasonably requested by the Special Limited Partner in
order to comply with applicable disclosure rules, including without limitation,
any information that a stockholder of the Special Limited Partner must provide
to the Special Limited Partner in order to nominate a director under the Bylaws.

(4) To the extent required by law or the rules of the principal securities
exchange on which the REIT Shares are listed or admitted to trading, the Special
Limited Partner will take such actions as necessary to ensure that a sufficient
number of those members of the Board of Directors that are not CBI Nominees or
members of the Special Limited Partner’s senior management shall at all times
satisfy the standard of independence necessary for a director to qualify as an
“Independent Director,” as such term (or any replacement term) is used under the
rules and listing standards of such principal securities exchange, as such rules
and listing standards may be amended from time to time (the “Independence
Standard”) in order to maintain such listing.

B. Committee Membership. Unless prohibited by law or the rules of the principal
securities exchange on which the REIT Shares are listed or admitted to trading
and so long as CBI is entitled to nominate at least one member of the Board of
Directors under Section 8.9.A(1), at least one CBI Nominee then serving as a
director shall be appointed to each committee of the Board of Directors
(provided that such CBI Nominee meets the rules or listing standards of such
securities exchange, as such rules and listing standards may be amended from
time to time, for service on such committee), other than any committee formed
for the purpose of evaluating or negotiating any transaction with CBI.

C. Vacancies; Removal. If a vacancy on the Board of Directors arises as a result
of the death, disability or retirement, resignation or removal (with or without
cause) of a CBI Nominee and such vacancy results in the number of CBI Nominees
then serving on the Board of Directors being less than the number that CBI is
then entitled to nominate to the Board of Directors, it will be a qualification
of a director that fills such a vacancy that he or she was approved by a
majority of the votes of the CBI Nominees then serving on the Board of
Directors.

D. Charter and Bylaws to Be Consistent. The Special Limited Partner, acting
through the Board of Directors, shall take or cause to be taken all lawful
action necessary or appropriate to ensure that none of the Charter or Bylaws
contain any provisions inconsistent with this Agreement or which would in any
way nullify or impair the terms of this Agreement or the rights of CBI
hereunder.

E. Termination of Nomination Rights. The nomination and other rights of CBI set
forth in this Section 8.9 shall automatically terminate at such time as CBI,
together with its Controlled Entities, ceases to own Partnership Units that
represent a Percentage Interest of at least 10%. Upon any such termination, and
notwithstanding anything to the contrary in this Agreement, the Special Limited
Partner shall be entitled to amend this Agreement to delete this Section 8.9 and
correlative provisions elsewhere in this Agreement in their entirety.

 

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F. Amendment. Except as provided in Section 8.9.E, this Section 8.9 may not be
amended without the prior written Consent of CBI.

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1 Records and Accounting.

A. The General Partner shall keep or cause to be kept at the principal business
office of the Partnership those records and documents, if any, required to be
maintained by the Act and other books and records deemed by the General Partner
to be appropriate with respect to the Partnership’s business, including, without
limitation, all books and records necessary to provide to the Limited Partners
any information, lists and copies of documents required to be provided pursuant
to Section 8.5.A, Section 9.3 or Article 13 hereof. Any records maintained by or
on behalf of the Partnership in the regular course of its business may be kept
on any information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.

B. The books of the Partnership shall be maintained, for financial and tax
reporting purposes, on an accrual basis in accordance with generally accepted
accounting principles, or on such other basis as the General Partner determines
to be necessary or appropriate. To the extent permitted by sound accounting
practices and principles, the Partnership and the General Partner may operate
with integrated or consolidated accounting records, operations and principles.

Section 9.2 Partnership Year. The Partnership Year of the Partnership shall be
the calendar year.

Section 9.3 Reports.

A. As soon as practicable, but in no event later than one hundred five
(105) days after the close of each Partnership Year, the General Partner shall
cause to be mailed to each Limited Partner of record as of the close of the
Partnership Year, financial statements of the Partnership, or of the Special
Limited Partner if such statements are prepared solely on a consolidated basis
with the Special Limited Partner, for such Partnership Year, presented in
accordance with generally accepted accounting principles, such statements to be
audited by a nationally recognized firm of independent public accountants
selected by the General Partner.

B. As soon as practicable, but in no event later than sixty (60) days after the
close of each calendar quarter (except the last calendar quarter of each year),
the General Partner shall cause to be mailed to each Limited Partner of record
as of the last day of the calendar quarter, a report containing unaudited
financial statements of the Partnership, or of the Special Limited Partner if
such statements are prepared solely on a consolidated basis with the Special
Limited Partner, for such calendar quarter, and such other information as may be
required by applicable law or regulation or as the General Partner determines to
be appropriate.

C. The General Partner may satisfy its obligations under Section 9.3.A and
Section 9.3.B by posting or making available the reports specified in such
sections on a website maintained by the General Partner or the Special Limited
Partner.

ARTICLE 10

TAX MATTERS

Section 10.1 Preparation of Tax Returns. The General Partner shall arrange for
the preparation and timely filing of all returns with respect to Partnership
income, gains, deductions, losses and other items required of the Partnership
for Federal and state income tax purposes and shall use all reasonable effort to
furnish, within ninety (90) days of the close of each taxable year, the tax
information reasonably required by Limited Partners and for Federal and state
income tax and any other tax reporting purposes. The Limited Partners shall
promptly provide the General Partner with such information relating to the
Contributed Properties, including tax basis and other relevant information, as
may be reasonably requested by the General Partner from time to time.

 

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Section 10.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall determine whether to make any available election pursuant to the
Code, including, but not limited to, the election under Code Section 754 and the
election to use the “recurring item” method of accounting provided under Code
Section 461(h) with respect to property taxes imposed on the Partnership’s
Properties; provided, however, that, if the “recurring item” method of
accounting is elected with respect to such property taxes, the Partnership shall
pay the applicable property taxes prior to the date provided in Code
Section 461(h) for purposes of determining economic performance. The General
Partner shall have the right to seek to revoke any such election (including,
without limitation, any election under Code Sections 461(h) and 754).

Section 10.3 Tax Matters Partner.

A. The General Partner shall be the “tax matters partner” of the Partnership for
Federal income tax purposes. The tax matters partner shall receive no
compensation for its services. All third-party costs and expenses incurred by
the tax matters partner in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Partnership in addition to
any reimbursement pursuant to Section 7.4 hereof. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to assist
the tax matters partner in discharging its duties hereunder. At the request of
any Limited Partner, the General Partner agrees to inform such Limited Partner
regarding the preparation and filing of any returns and with respect to any
subsequent audit or litigation relating to such returns; provided, however, that
the General Partner shall have the exclusive power to determine whether to file,
and the content of, such returns.

B. The tax matters partner is authorized, but not required:

(1) to enter into any settlement with the IRS with respect to any administrative
or judicial proceedings for the adjustment of Partnership items required to be
taken into account by a Partner for income tax purposes (such administrative
proceedings being referred to as a “tax audit” and such judicial proceedings
being referred to as “judicial review”), and in the settlement agreement the tax
matters partner may expressly state that such agreement shall bind all Partners,
except that such settlement agreement shall not bind any Partner (i) who (within
the time prescribed pursuant to the Code and Regulations) files a statement with
the IRS providing that the tax matters partner shall not have the authority to
enter into a settlement agreement on behalf of such Partner (as the case may be)
or (ii) who is a “notice partner” (as defined in Code Section 6231) or a member
of a “notice group” (as defined in Code Section 6223(b)(2));

(2) in the event that a notice of a final administrative adjustment at the
Partnership level of any item required to be taken into account by a Partner for
tax purposes (a “final adjustment”) is mailed to the tax matters partner, to
seek judicial review of such final adjustment, including the filing of a
petition for readjustment with the United States Tax Court or the United States
Claims Court, or the filing of a complaint for refund with the District Court of
the United States for the district in which the Partnership’s principal place of
business is located;

(3) to intervene in any action brought by any other Partner for judicial review
of a final adjustment;

(4) to file a request for an administrative adjustment with the IRS at any time
and, if any part of such request is not allowed by the IRS, to file an
appropriate pleading (petition or complaint) for judicial review with respect to
such request;

(5) to enter into an agreement with the IRS to extend the period for assessing
any tax that is attributable to any item required to be taken into account by a
Partner for tax purposes, or an item affected by such item; and

 

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(6) to take any other action on behalf of the Partners or any of them in
connection with any tax audit or judicial review proceeding to the extent
permitted by applicable law or regulations.

The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General Partner set forth
in Section 7.7 hereof shall be fully applicable to the tax matters partner in
its capacity as such.

Section 10.4 Withholding. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of Federal, state, local or foreign taxes that the General Partner
determines that the Partnership is required to withhold or pay with respect to
any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or
paid by the Partnership pursuant to Code Section 1441, Code Section 1442, Code
Section 1445 or Code Section 1446. Any amount paid on behalf of or with respect
to a Limited Partner shall constitute a loan by the Partnership to such Limited
Partner, which loan shall be repaid by such Limited Partner within fifteen
(15) days after notice from the General Partner that such payment must be made
unless (i) the Partnership withholds such payment from a distribution that would
otherwise be made to the Limited Partner or (ii) the General Partner determines
that such payment may be satisfied out of the Available Cash of the Partnership
that would, but for such payment, be distributed to the Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner’s Partnership Interest to secure
such Limited Partner’s obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.4. In the event that a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.4
when due, the General Partner may elect to make the payment to the Partnership
on behalf of such defaulting Limited Partner, and in such event shall be deemed
to have loaned such amount to such defaulting Limited Partner and shall succeed
to all rights and remedies of the Partnership as against such defaulting Limited
Partner (including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at 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, plus four (4) percentage
points (but not higher than the maximum lawful rate) from the date such amount
is due (i.e., fifteen (15) days after demand) until such amount is paid in full.
Each Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest
created hereunder.

Section 10.5 Organizational Expenses. The General Partner may cause the
Partnership to elect to deduct expenses, if any, incurred by it in organizing
the Partnership ratably over a 180-month period as provided in Section 709 of
the Code.

ARTICLE 11

PARTNER TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer.

A. No part of the interest of a Partner shall be subject to the claims of any
creditor, to any spouse for alimony or support, or to legal process, and may not
be voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.

B. No Partnership Interest shall be Transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article 11. Any
Transfer or purported Transfer of a Partnership Interest not made in accordance
with this Article 11 shall be null and void ab initio.

C. No Transfer of any Partnership Interest may be made to a lender to the
Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose
loan constitutes a Nonrecourse Liability, without the consent of the General
Partner; provided that as a condition to such consent, the lender will be
required to enter into an arrangement with the Partnership and the

 

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General Partner to redeem or exchange for the REIT Shares Amount any Partnership
Units in which a security interest is held by such lender simultaneously with
the time at which such lender would be deemed to be a partner in the Partnership
for purposes of allocating liabilities to such lender under Section 752 of the
Code.

Section 11.2 Transfer of General Partner’s Partnership Interest.

A. Except as provided in Section 11.2.B, and subject to the rights of any Holder
of any Partnership Interest set forth in a Partnership Unit Designation, the
General Partner may not Transfer all or any portion of its Partnership Interest
without the Consent of the Partners and, for so long as CBI, together with its
Controlled Entities, holds more than 20% of the outstanding Partnership Common
Units held by all Partners, the Consent of CBI.

B. Subject to compliance with the other provisions of this Article 11, the
General Partner may Transfer all of its Partnership Interest at any time to the
Special Limited Partner or any Person that is, at the time of such Transfer, a
direct or indirect wholly-owned Subsidiary of the Special Limited Partner,
including any “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)), without the Consent of any Partner, and may designate the
transferee to become the new General Partner under Section 12.1.

C. The General Partner may not voluntarily withdraw as a general partner of the
Partnership without the Consent of the Limited Partners, except in connection
with a Transfer of the General Partner’s entire Partnership Interest permitted
in this Article 11 and the admission of the Transferee as a successor General
Partner of the Partnership pursuant to the Act and this Agreement.

D. It is a condition to any Transfer of the entire Partnership Interest of a
sole General Partner otherwise permitted hereunder that (i) coincident or prior
to such Transfer, the transferee is admitted as a General Partner pursuant to
the Act and this Agreement; (ii) the transferee assumes by operation of law or
express agreement all of the obligations of the transferor General Partner under
this Agreement with respect to such Transferred Partnership Interest; and
(iii) the transferee has executed such instruments are may be necessary to
effectuate such admission and to confirm the agreement of such transferee to be
bound by all the terms and provisions of this Agreement applicable to the
General Partner and the admission of such transferee as a General Partner.

Section 11.3 Limited Partners’ Rights to Transfer.

A. General. Prior to the end of the Twelve-Month Period applicable to any
Partnership Interest and except as provided below and in Section 11.1.C hereof,
no Limited Partner shall Transfer all or any portion of such Partnership
Interest to any transferee without the consent of the General Partner. After the
expiration of the Twelve-Month Period applicable to any Partnership Interest,
each Limited Partner, and each transferee of such Partnership Interest or
Assignee pursuant to a Permitted Transfer, shall have the right to Transfer all
or any portion of such Partnership Interest to any Person. Notwithstanding the
foregoing, any Limited Partner may, at any time, without the consent of the
General Partner, Transfer all or any portion of its Partnership Interest
pursuant to a Permitted Transfer (including, in the case of a Limited Partner
that is a Permitted Lender Transferee, any Transfer of a Partnership Interest to
a Third-Party Pledge Transferee). Any Transfer of a Partnership Interest by a
Limited Partner or an Assignee is subject to Section 11.4 and to satisfaction of
the following conditions:

(1) Special Limited Partner Right of First Refusal. The transferring Partner (or
the Partner’s estate in the event of the Partner’s death) shall give written
notice of the proposed Transfer to the General Partner and the Special Limited
Partner, which notice shall state (i) the identity and address of the proposed
transferee and (ii) the amount and type of consideration proposed to be received
for the Transferred Partnership Units. The Special Limited Partner shall have
ten (10) Business Days upon which to give the Transferring Partner notice of its
election to acquire the Partnership Units on the terms set forth in such notice.
If it so elects, it shall purchase the Partnership Units on such terms within
ten (10) Business Days after giving notice of such election; provided, however,
that in the event that the proposed terms involve a purchase for cash, the
Special Limited Partner may at its election deliver in lieu of all or any
portion of such cash a note from the Special Limited Partner payable to the
Transferring Partner at a date as soon as reasonably practicable, but in no
event later than one hundred eighty (180) days after such

 

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purchase, and bearing interest at an annual rate equal to the total dividends
declared with respect to one (1) REIT Share for the four (4) preceding fiscal
quarters of the Special Limited Partner, divided by the Value as of the closing
of such purchase; provided, further, that such closing may be deferred to the
extent necessary to effect compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, if applicable, and any other applicable requirements
of law. If it does not so elect, the Transferring Partner may Transfer such
Partnership Units to a third party, on terms no more favorable to the transferee
than the proposed terms, subject to the other conditions of this Section 11.3.

(2) Qualified Transferee. Any Transfer of a Partnership Interest shall be made
only to a single Qualified Transferee; provided, however, that, for such
purposes, all Qualified Transferees that are Affiliates, or that comprise
investment accounts or funds managed by a single Qualified Transferee and its
Affiliates, shall be considered together to be a single Qualified Transferee;
provided, further, that each Transfer meeting the minimum Transfer restriction
of Section 11.3A(4) hereof may be to a separate Qualified Transferee.

(3) Opinion of Counsel. The Transferor shall deliver or cause to be delivered to
the General Partner an opinion of counsel reasonably satisfactory to it to the
effect that the proposed Transfer may be effected without registration under the
Securities Act and will not otherwise violate the registration provisions of the
Securities Act and the regulations promulgated thereunder or violate any state
securities laws or regulations applicable to the Partnership or the Partnership
Interests Transferred; provided, however, that the General Partner may waive
this condition upon the request of the Transferor. If, in the opinion of such
counsel, such Transfer would require the filing of a registration statement
under the Securities Act or would otherwise violate any Federal or state
securities laws or regulations applicable to the Partnership or the Partnership
Units, the General Partner may prohibit any Transfer otherwise permitted under
this Section 11.3 by a Limited Partner of Partnership Interests.

(4) Minimum Transfer Restriction. Any Transferring Partner must Transfer not
less than the lesser of (i) five hundred (500) Partnership Units or (ii) all of
the remaining Partnership Units owned by such Transferring Partner; provided,
however, that, for purposes of determining compliance with the foregoing
restriction, all Partnership Units owned by Affiliates of a Limited Partner
shall be considered to be owned by such Limited Partner.

(5) No Further Transfers. The transferee shall not be permitted to effect any
further Transfer of the Partnership Units, other than to the Special Limited
Partner.

(6) Exception for Permitted Transfers. The conditions of Section 11.3A(1) and
Section 11.3A(3) through Section 11.3A(5) hereof shall not apply in the case of
a Permitted Transfer.

It is a condition to any Transfer otherwise permitted hereunder (whether or not
such Transfer is effected during or after the applicable Twelve-Month Period)
that the transferee assumes by operation of law or express agreement all of the
obligations of the transferor Limited Partner under this Agreement with respect
to such Transferred Partnership Interest, and no such Transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under
this Agreement without the approval of the General Partner. Notwithstanding the
foregoing, any transferee of any Transferred Partnership Interest shall be
subject to any and all ownership limitations (including, without limitation, the
Ownership Limit) contained in the Charter that may limit or restrict such
transferee’s ability to exercise its Redemption rights, including, without
limitation, the Ownership Limit. Any transferee, whether or not admitted as a
Substituted Limited Partner, shall take subject to the obligations of the
transferor hereunder. Unless admitted as a Substituted Limited Partner, no
transferee, whether by a voluntary Transfer, by operation of law or otherwise,
shall have any rights hereunder, other than the rights of an Assignee as
provided in Section 11.5 hereof.

 

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B. Incapacity. If a Limited Partner is subject to Incapacity, the executor,
administrator, trustee, committee, guardian, conservator or receiver of such
Limited Partner’s estate shall have all the rights of a Limited Partner, but not
more rights than those enjoyed by other Limited Partners, for the purpose of
settling or managing the estate, and such power as the Incapacitated Limited
Partner possessed to Transfer all or any part of its interest in the
Partnership. The Incapacity of a Limited Partner, in and of itself, shall not
dissolve or terminate the Partnership.

C. Adverse Tax Consequences. No Transfer by a Limited Partner of its Partnership
Interests (including any Redemption, any other acquisition of Partnership Units
by the General Partner or any acquisition of Partnership Units by the
Partnership and including any Permitted Transfer) may be made to or by any
Person if in the opinion of legal counsel for the Partnership, (i) such Transfer
would create a material risk of the Partnership being treated as an association
taxable as a corporation or would result in a termination of the Partnership
under Code Section 708, or (ii) there would be a material risk that such
Transfer would be treated as effectuated through an “established securities
market” or a “secondary market (or the substantial equivalent thereof)” within
the meaning of Code Section 7704.

Section 11.4 Substituted Limited Partners.

A. No Limited Partner shall have the right to substitute a transferee other than
a Permitted Transferee as a Limited Partner in its place. A transferee of the
interest of a Limited Partner may be admitted as a Substituted Limited Partner
only with the consent of the General Partner; provided, however, that a
Permitted Transferee may be admitted as a Substituted Limited Partner pursuant
to a Permitted Transfer without the consent of the General Partner. The failure
or refusal by the General Partner to permit a transferee of any such interests
to become a Substituted Limited Partner shall not give rise to any cause of
action against the Partnership or the General Partner. Subject to the foregoing,
an Assignee shall not be admitted as a Substituted Limited Partner until and
unless it furnishes to the General Partner (i) evidence of acceptance, in form
and substance satisfactory to the General Partner, of all the terms, conditions
and applicable obligations of this Agreement, (ii) a counterpart signature page
to this Agreement executed by such Assignee and (iii) such other documents and
instruments as the General Partner may require to effect such Assignee’s
admission as a Substituted Limited Partner.

B. Concurrently with, and as evidence of, the admission of a Substituted Limited
Partner, the General Partner shall amend the Register and the books and records
of the Partnership to reflect the name, address and number of Partnership Units
of such Substituted Limited Partner and to eliminate or adjust, if necessary,
the name, address and number of Partnership Units of the predecessor of such
Substituted Limited Partner.

C. A transferee who has been admitted as a Substituted Limited Partner in
accordance with this Article 11 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.

Section 11.5 Assignees. If the General Partner’s consent is required for the
admission of any transferee under Section 11.3 hereof as a Substituted Limited
Partner, as described in Section 11.4 hereof, and the General Partner withholds
such consent, such transferee shall be considered an Assignee for purposes of
this Agreement. An Assignee shall be entitled to all the rights of an assignee
of a limited partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses and
other items of income, gain, loss, deduction and credit of the Partnership
attributable to the Partnership Units assigned to such transferee and the rights
to Transfer the Partnership Units provided in this Article 11, but shall not be
deemed to be a holder of Partnership Units for any other purpose under this
Agreement (other than as expressly provided in Section 15.1 hereof with respect
to a Qualifying Party that becomes a Tendering Party), and shall not be entitled
to effect a Consent or vote with respect to such Partnership Units on any matter
presented to the Limited Partners for approval (such right to Consent or vote,
to the extent provided in this Agreement or under the Act, fully remaining with
the transferor Limited Partner). In the event that any such transferee desires
to make a further assignment of any such Partnership Units, such transferee
shall be subject to all the provisions of this Article 11 to the same extent and
in the same manner as any Limited Partner desiring to make an assignment of
Partnership Units.

 

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Section 11.6 General Provisions.

A. No Limited Partner may withdraw from the Partnership other than: (i) as a
result of a permitted Transfer of all of such Limited Partner’s Partnership
Interest in accordance with this Article 11 with respect to which the transferee
becomes a Substituted Limited Partner; (ii) pursuant to a redemption (or
acquisition by the General Partner or the Special Limited Partner) of all of its
Partnership Interest pursuant to a Redemption under Section 15.1 hereof and/or
pursuant to any Partnership Unit Designation; or (iii) as a result of the
acquisition by the General Partner or the Special Limited Partner of all of such
Limited Partner’s Partnership Interest, whether or not pursuant to
Section 15.1.B hereof.

B. Any Limited Partner who shall Transfer all of its Partnership Units in a
Transfer (i) permitted pursuant to this Article 11 where such transferee was
admitted as a Substituted Limited Partner, (ii) pursuant to the exercise of its
rights to effect a redemption of all of its Partnership Units pursuant to a
Redemption under Section 15.1 hereof and/or pursuant to any Partnership Unit
Designation or (iii) to the Special Limited Partner, whether or not pursuant to
Section 15.1.B hereof, shall cease to be a Limited Partner.

C. If any Partnership Unit is Transferred in compliance with the provisions of
this Article 11, or is redeemed by the Partnership, or acquired by the Special
Limited Partner pursuant to Section 15.1 hereof, on any day other than the first
day of a Partnership Year, then Net Income, Net Losses, each item thereof and
all other items of income, gain, loss, deduction and credit attributable to such
Partnership Unit for such Partnership Year shall be allocated to the transferor
Partner or the Tendering Party (as the case may be) and, in the case of a
Transfer or assignment other than a Redemption, to the transferee Partner, by
taking into account their varying interests during the Partnership Year in
accordance with Code Section 706(d), using the “interim closing of the books”
method or another permissible method selected by the General Partner. Solely for
purposes of making such allocations, each of such items for the calendar month
in which a Transfer occurs shall be allocated to the transferee Partner and none
of such items for the calendar month in which a Transfer or a Redemption occurs
shall be allocated to the transferor Partner, or the Tendering Party (as the
case may be) if such Transfer occurs on or before the fifteenth (15th) day of
the month, otherwise such items shall be allocated to the transferor. All
distributions of Available Cash attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
Transfer, assignment or Redemption shall be made to the transferor Partner or
the Tendering Party (as the case may be) and, in the case of a Transfer other
than a Redemption, all distributions of Available Cash thereafter attributable
to such Partnership Unit shall be made to the transferee Partner.

D. In addition to any other restrictions on Transfer herein contained, in no
event may any Transfer or assignment of a Partnership Interest by any Partner
(including any Redemption, any acquisition of Partnership Units by the Special
Limited Partner or any other acquisition of Partnership Units by the
Partnership) be made (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of applicable
law; (iii) of any component portion of a Partnership Interest, such as the
Capital Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest; (iv) in the event that such Transfer would
cause either the Special Limited Partner to cease to comply with the REIT
Requirements or any wholly-owned Subsidiary of the Special Limited Partner to
cease to qualify as a “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)); (v) if such Transfer would, in the opinion of counsel to the
Partnership or the General Partner, cause a termination of the Partnership for
Federal or state income tax purposes (except as a result of the Redemption (or
acquisition by the Special Limited Partner) of all Partnership Units held by all
Limited Partners); (vi) if such Transfer would, in the opinion of legal counsel
to the Partnership, cause the Partnership to cease to be classified as a
partnership for Federal income tax purposes (except as a result of the
Redemption (or acquisition by the Special Limited Partner) of all Partnership
Units held by all Limited Partners (other than the Special Limited Partner));
(vii) if such Transfer would cause the Partnership to become, with respect to
any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as
defined in ERISA Section 3(14)) or a “disqualified person” (as defined in Code
Section 4975(c)); (viii) if such Transfer would, in the opinion of legal counsel
to the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.2-101; (ix) if such Transfer requires the registration
of such Partnership Interest pursuant to any applicable Federal or state
securities laws; (x) if such Transfer would create a material risk that the
Partnership would become a “publicly traded partnership,” as such term is
defined in Code Section 469(k)(2) or Code 7704(b); (xi) if such Transfer would
cause the Partnership to have more than one hundred (100) partners for tax
purposes (including as partners those persons indirectly owning an

 

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interest in the Partnership through a partnership, limited liability company,
subchapter S corporation or grantor trust); (xii) if such Transfer causes the
Partnership to become a reporting company under the Exchange Act; or (xiii) if
such Transfer subjects the Partnership to regulation under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as
amended.

E. Transfers pursuant to this Article 11, other than a Permitted Transfer to a
Permitted Transferee pursuant to the exercise of remedies under a Pledge, may
only be made on the first day of a fiscal quarter of the Partnership, unless the
General Partner otherwise agrees.

Section 11.7 Restrictions on Termination Transactions.

A. Neither the Special Limited Partner nor the General Partner shall engage in,
or cause or permit, a Termination Transaction, other than (i) with the Consent
of the Limited Partners, or (ii) (a) if the requirements of Section 11.7.B or
11.7.C are satisfied, if and as applicable, and (b) either:

(i) in connection with any such Termination Transaction, each holder of
Partnership Common Units (other than the Special Limited Partner and its wholly
owned Subsidiaries) will receive, or will have the right to elect to receive,
for each Partnership Common Unit an amount of cash, securities or other property
equal to the product of the Adjustment Factor and the greatest amount of cash,
securities or other property paid to a holder of one REIT Share in consideration
of one REIT Share pursuant to the terms of such Termination Transaction;
provided, that if, in connection with such Termination Transaction, a purchase,
tender or exchange offer shall have been made to and accepted by the holders of
a majority of the outstanding REIT Shares, each holder of Partnership Common
Units (other than the Special Limited Partner and its wholly owned subsidiaries)
will receive, or will have the right to elect to receive, the greatest amount of
cash, securities or other property which such holder of Partnership Common Units
would have received had it exercised its right to Redemption pursuant to
Article 15 hereof and received REIT Shares in exchange for its Partnership
Common Units immediately prior to the expiration of such purchase, tender or
exchange offer and had thereupon accepted such purchase, tender or exchange
offer and then such Termination Transaction shall have been consummated (the
fair market value, at the time of the Termination Transaction, of the amount
specified herein with respect to each Partnership Common Unit is referred to as
the “Transaction Consideration”); or

(ii) all of the following conditions are met: (i) substantially all of the
assets directly or indirectly owned by the Partnership prior to the announcement
of the Termination Transaction are, immediately after the Termination
Transaction, owned directly or indirectly by the Partnership or another limited
partnership or limited liability company which is the survivor of a merger,
consolidation or combination of assets with the Partnership (in each case, the
“Surviving Partnership”); (ii) the Surviving Partnership is classified as a
partnership for U.S. Federal income tax purposes; (iii) the Limited Partners
(other than the Special Limited Partner) that held Partnership Common Units
immediately prior to the consummation of such Termination Transaction own a
percentage interest of the Surviving Partnership based on the relative fair
market value of the net assets of the Partnership and the other net assets of
the Surviving Partnership immediately prior to the consummation of such
transaction; (iv) the rights of such Limited Partners with respect to the
Surviving Partnership are at least as favorable as those of Limited Partners
holding Partnership Common Units immediately prior to the consummation of such
transaction(except to the extent that any such rights are consistent with clause
(v) below) and as those applicable to any other limited partners or non-managing
members of the Surviving Partnership; and (v) such rights include: (a) if the
Special Limited Partner or its successor is a REIT with a single class of
Publicly Traded common equity securities, the right to redeem their interests in
the Surviving Partnership at any time for either: (1) a number of such REIT’s
Publicly Traded common equity securities with a fair market value, as of the
date of consummation of such Termination Transaction, equal to the Transaction
Consideration, subject to antidilution adjustments comparable to those set forth
in the definition of “Adjustment Factor” herein (the “Successor Shares Amount”);
or (2) cash in an amount equal to the fair market value of the Successor Shares
Amount at the time of such redemption, determined in a manner consistent with

 

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the definition of “Value” herein; or (b) if the Special Limited Partner or its
successor is not a REIT with a single class of Publicly Traded common equity
securities, the right to redeem their interests in the Surviving Partnership at
any time for cash in an amount equal to the fair market value of such interest
at the time of redemption, as determined at least once every calendar quarter by
an independent appraisal firm of recognized national standing retained by the
Surviving Partnership.

B. If the Consent of the Limited Partners has not been obtained, and CBI,
together with its Controlled Entities, holds at least 20% of the outstanding
Partnership Common Units held by all Partners, then neither the Special Limited
Partner nor the General Partner may engage in, or cause or permit, a Termination
Transaction in connection with which the Special Limited Partner has or will
seek the approval of its common stockholders (a “Stockholder Vote”) unless
(i) the General Partner first provides the Designated Partners with advance
notice at least equal in time to the advance notice given in the case of the
Stockholder Vote, (ii) in connection with such advance notice, the General
Partner provides the Designated Partners (other than the Special Limited Partner
and its wholly-owned Subsidiaries) with written materials describing the
proposed Termination Transaction as well as the tax effect of the consummation
thereof on such Designated Partners and (iii) such Termination Transaction is
approved (the “Partnership Vote”) by a number of affirmative votes cast, or
deemed to have been cast, by the Designated Partners as would be sufficient
(measured as a percentage of the total number of votes cast or entitled to be
cast (or deemed to be cast)) to approve the Termination Transaction if such
approval was to be given by the holders of REIT Shares. For purposes of the
Partnership Vote, each Designated Partner holding Partnership Common Units shall
be entitled to cast a number of votes equal to the total votes such Designated
Partner would have been entitled to cast at the Stockholder Meeting had such
Designated Partner presented its Partnership Common Units for redemption and
such Partnership Common Units had been acquired by the Special Limited Partner
for the REIT Shares Amount as of the record date for the Stockholder Meeting;
provided, however, that the Special Limited Partner, the General Partner and all
of their Subsidiaries shall not be entitled to vote with respect to any
Partnership Vote and shall instead be deemed to have cast all votes that would
otherwise have been entitled to be cast by them, in the aggregate, in proportion
to the manner in which all outstanding REIT Shares were voted in the Stockholder
Vote (such votes to be “For,” “Against,” “Abstain” and “Not Present”).

C. As long as CBI, together with its Controlled Entities, holds at least 20% of
the outstanding Partnership Common Units held by all Partners, the Special
Limited Partner shall not engage in a Termination Transaction effected as a
short-form merger without a Stockholder Vote pursuant to Section 3-106 of the
Maryland General Corporation Law, unless the Special Limited Partner has
previously obtained either the consent of CBI or the Consent of Limited Partners
with respect to such transaction.

ARTICLE 12

ADMISSION OF PARTNERS

Section 12.1 Admission of Successor General Partner. A successor to all or a
portion of the General Partner’s Partnership Interest pursuant to Section 11.2.B
hereof who the General Partner has designated to become a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
immediately upon the Transfer of such Partnership Interest to it. Upon any such
Transfer and the admission of any such transferee as a successor General Partner
in accordance with this Section 12.1, the transferor General Partner shall be
relieved of its obligations under this Agreement and shall cease to be a general
partner of the Partnership without any separate Consent of the Partners or the
consent or approval of any Partner. Any such successor shall carry on the
business of the Partnership without dissolution. In each case, the admission
shall be subject to the successor General Partner executing and delivering to
the Partnership an acceptance of all of the terms and conditions of this
Agreement and such other documents or instruments as may be required to effect
the admission. In the event that the General Partner withdraws from the
Partnership, or transfers its entire Partnership Interest, in violation of this
Agreement, or otherwise dissolves or terminates or ceases to be the general
partner of the Partnership, a Majority in Interest of the Partners may elect to
continue the Partnership by selecting a successor General Partner in accordance
with Section 13.1.A hereof.

 

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Section 12.2 Admission of Additional Limited Partners.

A. After the admission to the Partnership of an Original Limited Partner, a
Person (other than an existing Partner) who makes a Capital Contribution to the
Partnership in exchange for Partnership Units and in accordance with this
Agreement shall be admitted to the Partnership as an Additional Limited Partner
only upon furnishing to the General Partner (i) evidence of acceptance, in form
and substance satisfactory to the General Partner, of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to
this Agreement executed by such Person and (iii) such other documents or
instruments as may be required by the General Partner in order to effect such
Person’s admission as an Additional Limited Partner. Concurrently with, and as
evidence of, the admission of an Additional Limited Partner, the General Partner
shall amend the Register and the books and records of the Partnership to reflect
the name, address, number and type of Partnership Units of such Additional
Limited Partner.

B. Notwithstanding anything to the contrary in this Section 12.2, no Person
shall be admitted as an Additional Limited Partner without the consent of the
General Partner. The admission of any Person as an Additional Limited Partner
shall become effective on the date upon which the name of such Person is
recorded on the books and records of the Partnership, following the consent of
the General Partner to such admission and the satisfaction of all the conditions
set forth in Section 12.2.A.

C. If any Additional Limited Partner is admitted to the Partnership on any day
other than the first day of a Partnership Year, then Net Income, Net Losses,
each item thereof and all other items of income, gain, loss, deduction and
credit allocable among Holders for such Partnership Year shall be allocated
among such Additional Limited Partner and all other Holders by taking into
account their varying interests during the Partnership Year in accordance with
Code Section 706(d), using the “interim closing of the books” method or another
permissible method selected by the General Partner. Solely for purposes of
making such allocations, each of such items for the calendar month in which an
admission of any Additional Limited Partner occurs shall be allocated among all
the Holders including such Additional Limited Partner, in accordance with the
principles described in Section 11.6.C hereof. All distributions of Available
Cash with respect to which the Partnership Record Date is before the date of
such admission shall be made solely to Partners and Assignees other than the
Additional Limited Partner, and all distributions of Available Cash thereafter
shall be made to all the Partners and Assignees including such Additional
Limited Partner.

Section 12.3 Amendment of Agreement and Certificate of Limited Partnership. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Act to amend the Register and the
books and records of the Partnership and, if necessary, to prepare as soon as
practical an amendment of this Agreement and, if required by law, shall prepare
and file an amendment to the Certificate and may for this purpose exercise the
power of attorney granted pursuant to Section 2.4 hereof.

Section 12.4 Limit on Number of Partners. Unless otherwise permitted by the
General Partner, no Person shall be admitted to the Partnership as an Additional
Limited Partner if the effect of such admission would be to cause the
Partnership to have a number of Partners (including as Partners for this purpose
those Persons indirectly owning an interest in the Partnership through another
partnership, a limited liability company, a subchapter S corporation or a
grantor trust) that would cause the Partnership to become a reporting company
under the Exchange Act.

Section 12.5 Admission. A Person shall be admitted to the Partnership as a
limited partner of the Partnership or a general partner of the Partnership only
upon strict compliance, and not upon substantial compliance, with the
requirements set forth in this Agreement for admission to the Partnership as a
Limited Partner or a General Partner.

 

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ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 13.1 Dissolution. The Partnership shall not be dissolved by the
admission of Substituted Limited Partners or Additional Limited Partners, or by
the admission of a successor General Partner in accordance with the terms of
this Agreement. Upon the withdrawal of the General Partner, any successor
General Partner shall continue the business of the Partnership without
dissolution. However, the Partnership shall dissolve, and its affairs shall be
wound up, upon the first to occur of any of the following (each a “Liquidating
Event”):

A. an event of withdrawal, as defined in Section 10-402(2) – (9) of the Act
(including, without limitation, bankruptcy), or the withdrawal in violation of
this Agreement of the last remaining General Partner unless, within ninety
(90) days after the withdrawal, a Majority in Interest of the Partners agree in
writing to continue the Partnership and to the appointment, effective as of the
date of withdrawal, of a successor General Partner;

B. an election to dissolve the Partnership made by the General Partner, with or
without the Consent of the Partners, and, if CBI, together with its Controlled
Entities, holds at least 20% of the outstanding Partnership Common Units held by
all Partners, the Consent of CBI; or

C. entry of a decree of judicial dissolution of the Partnership pursuant to the
provisions of the Act.

Section 13.2 Winding Up.

A. Upon the occurrence of a Liquidating Event, the Partnership shall continue
solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets and satisfying the claims of its creditors and the
Holders. After the occurrence of a Liquidating Event, no Holder shall take any
action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership’s business and affairs. The General Partner (or,
in the event that there is no remaining General Partner or the General Partner
has dissolved, become bankrupt within the meaning of the Act or ceased to
operate, any Person elected by a Majority in Interest of the Partners (the
General Partner or such other Person being referred to herein as the
“Liquidator”)) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership’s
liabilities and property, and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include shares of stock in the Special Limited Partner) shall be applied and
distributed in the following order:

(1) First, to the satisfaction of all of the Partnership’s debts and liabilities
to creditors other than the Holders (whether by payment or the making of
reasonable provision for payment thereof);

(2) Second, to the satisfaction of all of the Partnership’s debts and
liabilities to the General Partner and the Special Limited Partner (whether by
payment or the making of reasonable provision for payment thereof), including,
but not limited to, amounts due as reimbursements under Section 7.4 hereof;

(3) Third, to the satisfaction of all of the Partnership’s debts and liabilities
to the other Holders (whether by payment or the making of reasonable provision
for payment thereof); and

(4) Subject to the terms of any Partnership Unit Designation, the balance, if
any, to the Holders in accordance with and in proportion to their positive
Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods.

 

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The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13.

B. Notwithstanding the provisions of Section 13.2.A hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the
Partnership, the Liquidator determines that an immediate sale of part or all of
the Partnership’s assets would be impractical or would cause undue loss to the
Holders, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Holders as creditors) and/or
distribute to the Holders, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Holders, and shall be subject to such conditions relating to the disposition and
management of such properties as the Liquidator deems reasonable and equitable
and to any agreements governing the operation of such properties at such time.
The Liquidator shall determine the fair market value of any property distributed
in kind using such reasonable method of valuation as it may adopt.

C. In the event that the Partnership is “liquidated,” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article 13 to the Holders that have positive Capital Accounts in
compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to the extent of,
and in proportion to, positive Capital Account balances. If any Holder has a
deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all taxable years, including
the year during which such liquidation occurs), such Holder shall have no
obligation to make any contribution to the capital of the Partnership with
respect to such deficit, and such deficit shall not be considered a debt owed to
the Partnership or to any other Person for any purpose whatsoever. In the sole
and absolute discretion of the General Partner or the Liquidator, a pro rata
portion of the distributions that would otherwise be made to the Holders
pursuant to this Article 13 may be:

(1) distributed to a trust established for the benefit of the General Partner
and the Holders for the purpose of liquidating Partnership assets, collecting
amounts owed to the Partnership, and paying any contingent or unforeseen
liabilities or obligations of the Partnership or of the General Partner arising
out of or in connection with the Partnership and/or Partnership activities. The
assets of any such trust shall be distributed to the Holders, from time to time,
in the reasonable discretion of the General Partner, in the same proportions and
amounts as would otherwise have been distributed to the Holders pursuant to this
Agreement; or

(2) withheld or escrowed to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such withheld
or escrowed amounts shall be distributed to the Holders in the manner and order
of priority set forth in Section 13.2.A hereof as soon as practicable.

Section 13.3 Deemed Contribution and Distribution. Notwithstanding any other
provision of this Article 13, in the event that the Partnership is liquidated
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), but no
Liquidating Event has occurred, the Partnership’s Property shall not be
liquidated, the Partnership’s liabilities shall not be paid or discharged and
the Partnership’s affairs shall not be wound up. Instead, for Federal income tax
purposes the Partnership shall be deemed to have contributed all of its assets
and liabilities to a new partnership in exchange for an interest in the new
partnership; and immediately thereafter, distributed Partnership Units to the
Partners in the new partnership in accordance with their respective Capital
Accounts in liquidation of the Partnership, and the new partnership is deemed to
continue the business of the Partnership. Nothing in this Section 13.3 shall be
deemed to have constituted any Assignee as a Substituted Limited Partner without
compliance with the provisions of Section 11.4 hereof.

Section 13.4 Rights of Holders. Except as otherwise provided in this Agreement
and subject to the rights of any Holder of any Partnership Interest set forth in
a Partnership Unit Designation, (a) each Holder shall look solely to the assets
of the Partnership for the return of its Capital Contribution, (b) no Holder
shall have the right or power to demand or receive property other than cash from
the Partnership and (c) no Holder shall have priority over any other Holder as
to the return of its Capital Contributions, distributions or allocations.

 

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Section 13.5 Notice of Dissolution. In the event that a Liquidating Event occurs
or an event occurs that would, but for an election or objection by one or more
Partners pursuant to Section 13.1 hereof, result in a dissolution of the
Partnership, the General Partner or Liquidator shall, within thirty (30) days
thereafter, provide written notice thereof to each of the Holders and, in the
sole and absolute discretion of the General Partner or the Liquidator, or as
required by the Act, to all other parties with whom the Partnership regularly
conducts business (as determined in the sole and absolute discretion of the
General Partner or Liquidator), and the General Partner or Liquidator may, or,
if required by the Act, shall, publish notice thereof in a newspaper of general
circulation in each place in which the Partnership regularly conducts business
(as determined in the sole and absolute discretion of the General Partner or
Liquidator).

Section 13.6 Cancellation of Certificate of Limited Partnership. Upon the
completion of the liquidation of the Partnership cash and property as provided
in Section 13.2 hereof, the Partnership shall be terminated, a certificate of
cancellation shall be filed with the State of Maryland, all qualifications of
the Partnership as a foreign limited partnership or association in jurisdictions
other than the State of Maryland shall be cancelled, and such other actions as
may be necessary to terminate the Partnership shall be taken.

Section 13.7 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between and among the Partners during
the period of liquidation.

ARTICLE 14

PROCEDURES FOR ACTIONS AND CONSENTS

OF PARTNERS; AMENDMENTS; MEETINGS

Section 14.1 Actions and Consents of Partners. The actions requiring Consent of
any Partner pursuant to this Agreement, including Section 7.3 hereof, or
otherwise pursuant to applicable law, are subject to the procedures set forth in
this Article 14.

Section 14.2 Amendments. Except as otherwise required or permitted by this
Agreement (including Section 7.3), amendments to this Agreement must be approved
by the Consent of the General Partner and the Consent of the Partners, and may
be proposed only by (a) the General Partner, or (b) Limited Partners holding a
majority of the Partnership Common Units then held by Limited Partners
(excluding the Special Limited Partner and any Controlled Entity of the Special
Limited Partner). Following such proposal, the General Partner shall submit to
the Partners any proposed amendment that, pursuant to the terms of this
Agreement, requires the Consent of the Partners. The General Partner shall seek
the Consent of the Partners entitled to vote thereon on any such proposed
amendment in accordance with Section 14.3 hereof. Upon obtaining any such
Consent, or any other Consent required by this Agreement, and without further
action or execution by any other Person, including any Limited Partner, (i) any
amendment to this Agreement may be implemented and reflected in a writing
executed solely by the General Partner, and (ii) the Limited Partners shall be
deemed a party to and bound by such amendment of this Agreement. Within thirty
days after the effectiveness of any amendment to this Agreement that does not
receive the Consent of all Partners, the General Partner shall deliver a copy of
such amendment to all Partners that did not Consent to such amendment. For the
avoidance of doubt, notwithstanding anything to the contrary in this Agreement,
this Agreement may not be amended without the Consent of the General Partner.

Section 14.3 Procedures for Meetings and Actions of the Partners.

A. Meetings of the Partners may be called only by the General Partner. The call
shall state the nature of the business to be transacted. Notice of any such
meeting shall be given to all Partners entitled to act at the meeting not less
than ten (10) days nor more than ninety (90) days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Unless
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Partners is required by this Agreement, or any Partnership Unit Designation, the
affirmative vote of a Majority in Interest of the Partners shall be sufficient
to approve such proposal at a meeting of the Partners. Whenever the Consent of
any Partners is permitted or required under this Agreement, such Consent may be
given at a meeting of Partners or in accordance with the procedure prescribed in
Section 14.3.B hereof.

B. Any action requiring the Consent of any Partner or a group of Partners
pursuant to this Agreement, or that is required or permitted to be taken at a
meeting of the Partners may be taken without a meeting if a Consent in writing
or by electronic transmission setting forth the action so taken or consented to
is given by Partners whose affirmative vote would be sufficient to approve such
action or provide such Consent at a meeting of the Partners. Such Consent may be
in one instrument or in several instruments, and shall have the same force and
effect as the affirmative vote of such Partners at a meeting of the Partners.
Such Consent shall be filed with the General Partner. An action so taken shall
be deemed to have been taken at a meeting held on the effective date so
certified. For purposes of obtaining a Consent in writing or by electronic
transmission, the General Partner may require a response within a reasonable
specified time, but not less than fifteen (15) days, and failure to respond in
such time period shall constitute a Consent that is consistent with the General
Partner’s recommendation with respect to the proposal; provided, however, that
an action shall become effective at such time as requisite Consents are received
even if prior to such specified time.

C. Each Partner entitled to act at a meeting of Partners may authorize any
Person or Persons to act for it by proxy on all matters in which a Partner is
entitled to participate, including waiving notice of any meeting, or voting or
participating at a meeting. Each proxy must be signed by the Partner or its
attorney-in-fact. No proxy shall be valid after the expiration of eleven
(11) months from the date thereof unless otherwise provided in the proxy (or
there is receipt of a proxy authorizing a later date). Every proxy shall be
revocable at the pleasure of the Partner executing it, such revocation to be
effective upon the Partnership’s receipt of written notice of such revocation
from the Partner executing such proxy, unless such proxy states that it is
irrevocable and is coupled with an interest.

D. The General Partner may set, in advance, a record date for the purpose of
determining the Partners (i) entitled to Consent to any action, (ii) entitled to
receive notice of or vote at any meeting of the Partners or (iii) in order to
make a determination of Partners for any other proper purpose. Such date, in any
case, shall not be prior to the close of business on the day the record date is
fixed and shall be not more than ninety (90) days and, in the case of a meeting
of the Partners, not less than ten (10) days, before the date on which the
meeting is to be held. If no record date is fixed, the record date for the
determination of Partners entitled to notice of or to vote at a meeting of the
Partners shall be at the close of business on the day on which the notice of the
meeting is sent, and the record date for any other determination of Partners
shall be the effective date of such Partner action, distribution or other event.
When a determination of the Partners entitled to vote at any meeting of the
Partners has been made as provided in this section, such determination shall
apply to any adjournment thereof.

E. Each meeting of Partners shall be conducted by the General Partner or such
other Person as the General Partner may appoint pursuant to such rules for the
conduct of the meeting as the General Partner or such other Person deems
appropriate in its sole and absolute discretion. Without limitation, meetings of
Partners may be conducted in the same manner as meetings of the Special Limited
Partner’s stockholders and may be held at the same time as, and as part of, the
meetings of the Special Limited Partner’s stockholders.

ARTICLE 15

GENERAL PROVISIONS

Section 15.1 Redemption Rights of Qualifying Parties.

A. After the Twelve-Month Period applicable to such Partnership Common Units, a
Qualifying Party shall have the right (subject to the terms and conditions set
forth herein) to require the Partnership to redeem all or a portion of the
Partnership Common Units held by such Tendering Party (Partnership Common Units
that have in fact been tendered for redemption being hereafter referred to as
“Tendered Units”) in exchange (a “Redemption”) for the Cash Amount payable on
the Specified Redemption Date. The Partnership may, in the General Partner’s
sole and absolute discretion, redeem Tendered Units at the request of the Holder
thereof prior to

 

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the end of the applicable Twelve-Month Period (subject to the terms and
conditions set forth herein) (a “Special Redemption”); provided that, unless
waived by the Special Limited Partner, the General Partner first receives a
legal opinion to the same effect as the legal opinion described in
Section 15.1G(4) of this Agreement. Any Redemption shall be exercised pursuant
to a Notice of Redemption delivered to the General Partner by the Qualifying
Party when exercising the Redemption right (the “Tendering Party”). The
Partnership’s obligation to effect a Redemption, however, shall not arise or be
binding against the Partnership (i) until and unless the Special Limited Partner
declines or fails to exercise its purchase rights pursuant to Section 15.1.B
hereof following receipt of a Notice of Redemption (a “Declination”) and
(ii) until the Business Day following the Cut-Off Date. In the event of a
Redemption, the Cash Amount shall be delivered as a certified or bank check
payable to the Tendering Party or, in the General Partner’s sole and absolute
discretion, in immediately available funds on or before the Specified Redemption
Date.

B. Notwithstanding the provisions of Section 15.1.A hereof, on or before the
close of business on the Cut-Off Date, the Special Limited Partner may, in its
sole and absolute discretion, elect to acquire some or all (such percentage
being referred to as the “Applicable Percentage”) of the Tendered Units from the
Tendering Party in exchange for the REIT Shares Amount calculated based on the
portion of Tendered Units it elects to acquire in exchange for REIT Shares. If
the Special Limited Partner so elects, on the Specified Redemption Date the
Tendering Party shall sell such number of the Tendered Units to the Special
Limited Partner in exchange for a number of REIT Shares equal to the product of
the REIT Shares Amount and the Applicable Percentage. The Tendering Party shall
submit (i) such information, certification or affidavit as the Special Limited
Partner may reasonably require in connection with the application of the
Ownership Limit to any such acquisition and (ii) such written representations,
investment letters, legal opinions or other instruments necessary, in the
Special Limited Partner’s view, to effect compliance with the Securities Act. In
the event of a purchase of the Tendered Units by the Special Limited Partner
pursuant to this Section 15.1.B, the Tendering Party shall no longer have the
right to cause the Partnership to effect a Redemption of such Tendered Units,
and, upon notice to the Tendering Party by the Special Limited Partner, given on
or before the close of business on the Cut-Off Date, that the Special Limited
Partner has elected to acquire some or all of the Tendered Units pursuant to
this Section 15.1.B, the obligation of the Partnership to effect a Redemption of
the Tendered Units as to which the Special Limited Partner’s notice relates
shall not accrue or arise. A number of REIT Shares equal to the product of the
Applicable Percentage and the REIT Shares Amount, if applicable, shall be
delivered by the Special Limited Partner as duly authorized, validly issued,
fully paid and non-assessable REIT Shares and, if applicable, Rights, free of
any pledge, lien, encumbrance or restriction, other than the Ownership Limit and
other restrictions provided in the Charter, the Securities Act and relevant
state securities or “blue sky” laws. Neither any Tendering Party whose Tendered
Units are acquired by the Special Limited Partner pursuant to this
Section 15.1.B, any Partner, any Assignee nor any other interested Person shall
have any right to require or cause the Special Limited Partner to register,
qualify or list any REIT Shares owned or held by such Person, whether or not
such REIT Shares are issued pursuant to this Section 15.1.B, with the SEC, with
any state securities commissioner, department or agency, under the Securities
Act or the Exchange Act or with any stock exchange; provided, however, that this
limitation shall not be in derogation of any registration or similar rights
granted pursuant to any other written agreement between the Special Limited
Partner and any such Person. Notwithstanding any delay in such delivery, the
Tendering Party shall be deemed the owner of such REIT Shares and Rights for all
purposes, including, without limitation, rights to vote or consent, receive
dividends, and exercise rights, as of the Specified Redemption Date. REIT Shares
issued upon an acquisition of the Tendered Units by the Special Limited Partner
pursuant to this Section 15.1.B may contain such legends regarding restrictions
under the Securities Act and applicable state securities laws as the Special
Limited Partner in good faith determines to be necessary or advisable in order
to ensure compliance with such laws.

C. Notwithstanding the provisions of Sections 15.1.A, 15.1.B and 15.1.H hereof,
(i) no Person shall be entitled to effect a Redemption for cash or an exchange
for REIT Shares to the extent the ownership or right to acquire REIT Shares
pursuant to such exchange on the Specified Redemption Date could cause such
Person (or any other Person) to violate the restrictions on ownership and
transfer of REIT Shares set forth in the Charter, after giving effect to any
waivers or modifications of such restrictions by the Board of Directors, and
(ii) no Person shall have any rights under this Agreement to acquire REIT Shares
which would otherwise be prohibited under the Charter, after giving effect to
any waivers or modifications of such restrictions by the Board of Directors. To
the extent that any attempted Redemption or acquisition of the Tendered Units by
the Special Limited Partner pursuant to Section 15.1.B hereof would be in
violation of this Section 15.1.C, it shall be null and void ab initio, and the
Tendering Party shall not acquire any rights or economic interests in the Cash
Amount otherwise payable upon such Redemption or the REIT Shares otherwise
issuable by the Special Limited Partner under Section 15.1.B hereof.

 

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D. In the event of a Declination:

(1) The Special Limited Partner shall give notice of such Declination to the
Tendering Party on or before the close of business on the Cut-Off Date. The
failure of the Special Limited Partner to give notice of such Declination by the
close of business on the Cut-Off Date shall be deemed to be an election by the
Special Limited Partner to acquire the Tendered Units in exchange for REIT
Shares.

(2) The Partnership may elect to raise funds for the payment of the Cash Amount
either (a) by requiring that the Special Limited Partner contribute to the
Partnership funds from the proceeds of a registered public offering by the
Special Limited Partner of REIT Shares sufficient to purchase the Tendered Units
or (b) from any other sources (including, but not limited to, the sale of any
Property and the incurrence of additional Debt) available to the Partnership.

(3) If the Cash Amount is not paid on or before the Specified Redemption Date,
interest shall accrue with respect to the Cash Amount from the day after the
Specified Redemption Date to and including the date on which the Cash Amount is
paid at a rate equal to the Applicable Federal Short-Term Rate as published
monthly by the IRS.

E. Notwithstanding the provisions of Section 15.1.B hereof or Section 15.1.H
hereof, if the Special Limited Partner’s acquisition of Tendered Units in
exchange for the REIT Shares Amount would be prohibited under the Charter, then
(i) the Special Limited Partner shall not elect to acquire such Tendered Units,
and (ii) the Partnership shall not be obligated to effect a Redemption of such
Tendered Units.

F. Notwithstanding anything herein to the contrary (but subject to
Section 15.1.C hereof), with respect to any Redemption (or any tender of
Partnership Common Units for Redemption if the Tendered Units are acquired by
the Special Limited Partner pursuant to Section 15.1.B hereof) pursuant to this
Section 15.1:

(1) Without the consent of the General Partner, no Tendering Party may effect a
Redemption for less than two thousand (2,000) Partnership Common Units or, if
such Tendering Party holds less than two thousand (2,000) Partnership Common
Units, all of the Partnership Common Units held by such Tendering Party.

(2) If (i) a Tendering Party surrenders Tendered Units during the period after
the Partnership Record Date with respect to a distribution payable to Holders of
Partnership Common Units, and before the record date established by the Special
Limited Partner for a dividend to its stockholders of some or all of its portion
of such Partnership distribution, and (ii) the Special Limited Partner elects to
acquire any of such Tendered Units in exchange for REIT Shares pursuant to
Section 15.1.B, then such Tendering Party shall pay to the Special Limited
Partner on the Specified Redemption Date an amount in cash equal to the
Partnership distribution paid or payable in respect of such Tendered Units.

(3) The consummation of such Redemption (or an acquisition of Tendered Units by
the Special Limited Partner pursuant to Section 15.1.B hereof, as the case may
be) shall be subject to the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

(4) The Tendering Party shall continue to own (subject, in the case of an
Assignee, to the provisions of Section 11.5 hereof) all Partnership Common Units
subject to any Redemption, and be treated as a Limited Partner or an Assignee,
as applicable, with respect to such Partnership Common Units for all purposes of
this Agreement, until the Specified Redemption Date and until such Tendered
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Section 15.1.A hereof or transferred to the Special Limited Partner and paid
for, by the issuance of REIT Shares, pursuant to Section 15.1.B. Until a
Specified Redemption Date and an acquisition of the Tendered Units by the
Special Limited Partner pursuant to Section 15.1.B hereof, the Tendering Party
shall have no rights as a stockholder of the Special Limited Partner with
respect to the REIT Shares issuable in connection with such acquisition.

G. In connection with an exercise of Redemption rights pursuant to this
Section 15.1, unless waived by the Special Limited Partner, the Tendering Party
shall submit the following to the Special Limited Partner, in addition to the
Notice of Redemption:

(1) A written affidavit, dated the same date as the Notice of Redemption,
(a) disclosing the actual and constructive ownership, as determined for purposes
of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering
Party and (ii) to the best of such Tendering Party’s knowledge, any Related
Party, and (b) representing that, after giving effect to an acquisition of the
Tendered Units by the Special Limited Partner pursuant to Section 15.1.B hereof,
neither the Tendering Party nor, to the best of such Tendering Party’s
knowledge, any Related Party, will own REIT Shares in excess of the Ownership
Limit;

(2) A written representation that neither the Tendering Party nor, to the best
of such Tendering Party’s knowledge, any Related Party, has any intention to
acquire any additional REIT Shares prior to the Specified Redemption Date; and

(3) An undertaking to certify, at and as a condition to the closing of (i) the
Redemption or (ii) the acquisition of the Tendered Units by the Special Limited
Partner pursuant to Section 15.1.B hereof on the Specified Redemption Date, that
either (a) the actual and constructive ownership of REIT Shares by the Tendering
Party and, to the best of such Tendering Party’s knowledge, any Related Party,
remain unchanged from that disclosed in the affidavit required by
Section 15.1G(1), or (b) after giving effect to the Redemption or an acquisition
of the Tendered Units by the Special Limited Partner pursuant to Section 15.1.B
hereof, neither the Tendering Party nor, to the best of such Tendering Party’s
knowledge, any Related Party, shall own REIT Shares in violation of the
Ownership Limit.

(4) In connection with any Special Redemption, the Special Limited Partner shall
have the right to receive an opinion of counsel reasonably satisfactory to it to
the effect that the proposed Special Redemption will not cause the Partnership,
the General Partner or the Special Limited Partner to violate any Federal or
state securities laws or regulations applicable to the Special Redemption or the
issuance and sale of REIT Shares to the Tendering Party pursuant to
Section 15.1.B of this Agreement.

H. Stock Offering Funding Option

(1) (a) Notwithstanding Sections 15.1.A or 15.1.B hereof (but subject to
Sections 15.1.C and 15.1.E hereof), if (i) a Limited Partner has delivered to
the General Partner a Notice of Redemption with respect to a number of Excess
Units that, together with any other Tendered Units that such Limited Partner
agrees to treat as Excess Units (collectively, the “Offering Units”), exceeds
$50,000,000 gross value, based on a Partnership Common Unit price equal to the
Value of a REIT Share, and (ii) the Special Limited Partner is eligible to file
a registration statement under Form S-3 (or any successor form similar thereto),
then either: (x) the General Partner and the Special Limited Partner may cause
the Partnership to redeem the Offering Units with the proceeds of an offering,
whether registered under the Securities Act or exempt from such registration,
underwritten, offered and sold directly to investors or through agents or other
intermediaries, or otherwise distributed (a “Stock Offering Funding”) of a
number of REIT Shares (“Offered Shares”) equal to the REIT Shares Amount with
respect to the Offering Units pursuant to the terms of this Section 15.1.H;
(y) the Partnership shall pay the Cash Amount with respect to the Excess Units
pursuant to the terms of Section 15.1.A; or (z) the Special Limited Partner
shall acquire the Excess Units in exchange for the REIT Shares Amount pursuant
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Section 15.1.B, but only if the Tendering Party provides the General Partner
with any representations or undertakings which the Special Limited Partner has
determined, in its sole and absolute discretion, are sufficient to prevent a
violation of the Charter. The General Partner and the Special Limited Partner
must provide notice of their exercise of the election described in clause (x)
above to purchase the Tendered Units through a Stock Offering Funding on or
before the Cut-Off Date.

(b) If the General Partner and the Special Limited Partner elect a Stock
Offering Funding with respect to a Notice of Redemption, the General Partner may
give notice (a “Single Funding Notice”) of such election to all Limited Partners
and require that all Limited Partners elect whether or not to effect a
Redemption to be funded through such Stock Offering Funding. If a Limited
Partner elects to effect such a Redemption, it shall give notice thereof and of
the number of Common Units to be made subject thereto in writing to the General
Partner within 10 Business Days after receipt of the Single Funding Notice, and
such Limited Partner shall be treated as a Tendering Party for all purposes of
this Section 15.1.H.

(2) If the General Partner and the Special Limited Partner elect a Stock
Offering Funding, on the Specified Redemption Date, the Partnership shall redeem
each Offering Unit that is still a Tendered Unit on such date for cash in
immediately available funds in an amount (the “Stock Offering Funding Amount”)
equal to the net proceeds per Offered Share received by the Special Limited
Partner from the Stock Offering Funding, determined after deduction of
underwriting discounts and commissions but no other expenses of the Special
Limited Partner or any other Limited Partner related thereto, including without
limitation, legal and accounting fees and expenses, Securities and Exchange
Commission registration fees, state blue sky and securities laws fees and
expenses, printing expenses, FINRA filing fees, exchange listing fees and other
out of pocket expenses (the “Net Proceeds”).

(3) If the General Partner and the Special Limited Partner elect a Stock
Offering Funding, the following additional terms and conditions shall apply:

(a) As soon as practicable after the General Partner and the Special Limited
Partner elect to effect a Stock Offering Funding, the Special Limited Partner
shall use its reasonable efforts to effect as promptly as possible a
registration, qualification or compliance (including, without limitation, the
execution of an undertaking to file post-effective amendments, appropriate
qualifications under applicable blue sky or other state securities laws and
appropriate compliance with applicable regulations issued under the Securities
Act and any other governmental requirements or regulations) as would permit or
facilitate the sale and distribution of the Offered Shares; provided, that, if
the Special Limited Partner shall deliver a certificate to the Tendering Party
stating that the Special Limited Partner has determined in the good faith
judgment of the Board of Directors of the Special Limited Partner that such
filing, registration or qualification would require disclosure of material
non-public information, the disclosure of which would have a material adverse
effect on the Special Limited Partner, then the Special Limited Partner may
delay making any filing or delay the effectiveness of any registration or
qualification for the shorter of (a) the period ending on the date upon which
such information is disclosed to the public or ceases to be material or (b) an
aggregate period of ninety (90) days in connection with any Stock Offering
Funding.

(b) The Special Limited Partner shall advise each Tendering Party, regularly and
promptly upon any request, of the status of the Stock Offering Funding process,
including the timing of all filings, the selection of and understandings with
underwriters, agents, dealers and brokers, the nature and contents of all
communications with the Securities and Exchange Commission and other
governmental bodies, the expenses related to the Stock Offering Funding as they
are being incurred, the nature of marketing activities, and any other matters
reasonably related to the timing, price and expenses relating to the Stock
Offering Funding and the compliance by the Special Limited Partner with its
obligations with respect thereto. The Special Limited Partner will have
reasonable procedures whereby the Tendering Party with the largest

 

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number of Offered Units (the “Lead Tendering Party”) may represent all the
Tendering Parties in connection with the Stock Offering Funding by allowing it
to participate in meetings with the underwriters of the Stock Offering Funding.
In addition, the Special Limited Partner and each Tendering Party may, but shall
be under no obligation to, enter into understandings in writing (“Pricing
Agreements”) whereby the Tendering Party will agree in advance as to the
acceptability of a Net Proceeds amount at or below a specified amount.
Furthermore, the Special Limited Partner shall establish pricing notification
procedures with each such Tendering Party, such that the Tendering Partner will
have the maximum opportunity practicable to determine whether to become a
Withdrawing Partner pursuant to Section 15.1.H(3)(c) below.

(c) The Special Limited Partner will permit the Lead Tendering Party to
participate in the pricing discussions for the Stock Offering Funding and, upon
notification of the price per REIT Share in the Stock Offering Funding from the
managing underwriter(s), in the case of a registered public offering, or lead
placement agent(s), in the event of an unregistered offering, engaged by the
Special Limited Party in order to sell the Offered Shares, shall immediately use
its reasonable efforts to notify each Tendering Party of the price per REIT
Share in the Stock Offering Funding and resulting Net Proceeds. Each Tendering
Party shall have one hour from the receipt of such written notice (as such time
may be extended by the Special Limited Partner) to elect to withdraw its
Redemption (a Tendering Party making such an election being a “Withdrawing
Partner”), and Partnership Common Units with a REIT Shares Amount equal to such
excluded Offered Shares shall be considered to be withdrawn from the related
Redemption; provided, however, that the Special Limited Partner shall keep each
of the Tendering Parties reasonably informed as to the likely timing of delivery
of its notice. If a Tendering Party, within such time period, does not notify
the Special Limited Partner of such Tendering Party’s election not to become a
Withdrawing Partner, then such Tendering Party shall, except as otherwise
provided in a Pricing Agreement, be deemed not to have withdrawn from the
Redemption, without liability to the Special Limited Partner. To the extent that
the Special Limited Partner is unable to notify any Tendering Party, such
unnotified Tendering Party shall, except as otherwise provided in any Pricing
Agreement, be deemed not to have elected to become a Withdrawing Partner. Each
Tendering Party whose Redemption is being funded through the Stock Offering
Funding who does not become a Withdrawing Partner shall have the right, subject
to the approval of the managing underwriter(s) or placement agent(s) and
restrictions of any applicable securities laws, to submit for Redemption
additional Partnership Common Units in a number no greater than the number of
Partnership Common Units withdrawn. If more than one Tendering Party so elects
to redeem additional Partnership Common Units, then such Partnership Common
Units shall be redeemed on a pro rata basis, based on the number of additional
Partnership Common Units sought to be so redeemed.

(d) The Special Limited Partner shall take all reasonable action in order to
effectuate the sale of the Offered Shares including, but not limited to, the
entering into of an underwriting or placement agreement in customary form with
the managing underwriter(s) or placement agent(s) selected for such
underwriting. Notwithstanding any other provision of this Agreement, if the
managing underwriter(s) or placement agent(s) advises the Special Limited
Partner in writing that marketing factors require a limitation of the number of
shares to be offered, then the Special Limited Partner shall so advise all
Tendering Parties and the number of Partnership Common Units to be sold to the
Special Limited Partner pursuant to the Redemption shall be allocated among all
Tendering Parties in proportion, as nearly as practicable, to the respective
number of Partnership Common Units as to which each Tendering Party elected to
effect a Redemption. Notwithstanding anything to the contrary in this Agreement,
if the Special Limited Partner is also offering to sell shares for purposes
other than to fund the redemption of Offering Units and to pay related expenses,
then those other shares may in the Special Limited Partner’s sole discretion be
given priority over any shares to be sold in the Stock Offering Funding, and any
shares to be sold in the Stock Offering Funding shall be removed from the
offering prior to removing shares the proceeds of which would be used for other
purposes of the Special Limited Partners. No Offered Shares excluded from the
underwriting by reason of the managing underwriter’s or placement agent’s
marketing limitation shall be included in such offering.

 

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Section 15.2 Addresses and Notice. Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written or electronic communication (including by telecopy, facsimile,
electronic mail or commercial courier service) to the Partner, or Assignee at
the address for such Partner set forth in the Register, or such other address of
which the Partner shall notify the General Partner in accordance with this
Section 15.2.

Section 15.3 Titles and Captions. All article or Section titles or captions in
this Agreement are for convenience only. They shall not be deemed part of this
Agreement and in no way define, limit, extend or describe the scope or intent of
any provisions hereof. Except as specifically provided otherwise, references to
“Articles” or “Sections” are to Articles and Sections of this Agreement.

Section 15.4 Pronouns and Plurals. Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.

Section 15.5 Further Action. The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as may
be necessary or appropriate to achieve the purposes of this Agreement.

Section 15.6 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their heirs, executors, administrators,
successors, legal representatives and permitted assigns.

Section 15.7 Waiver.

A. No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

B. The restrictions, conditions and other limitations on the rights and benefits
of the Limited Partners contained in this Agreement, and the duties, covenants
and other requirements of performance or notice by the Limited Partners, are for
the benefit of the Partnership and, except for an obligation to pay money to the
Partnership, may be waived or relinquished by the General Partner, in its sole
and absolute discretion, on behalf of the Partnership in one or more instances
from time to time and at any time; provided, however, that any such waiver or
relinquishment may not be made if it would have the effect of (i) creating
liability for any other Limited Partner, (ii) causing the Partnership to cease
to qualify as a limited partnership, (iii) reducing the amount of cash otherwise
distributable to the Limited Partners (other than any such reduction that
affects all of the Limited Partners holding the same class or series of
Partnership Units on a uniform or pro rata basis, if approved by a Majority in
Interest of the Limited Partners holding such class or series of Partnership
Units), (iv) resulting in the classification of the Partnership as an
association or publicly traded partnership taxable as a corporation or
(v) violating the Securities Act, the Exchange Act or any state “blue sky” or
other securities laws; provided, further, that any waiver relating to compliance
with the Ownership Limit or other restrictions in the Charter shall be made and
shall be effective only as provided in the Charter.

Section 15.8 Counterparts. This Agreement may be executed in counterparts, all
of which together shall constitute one agreement binding on all the parties
hereto, notwithstanding that all such parties are not signatories to the
original or the same counterpart. Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.

 

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Section 15.9 Applicable Law; Consent to Jurisdiction; Jury Trial.

A. This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Maryland, without regard to the principles
of conflicts of law. In the event of a conflict between any provision of this
Agreement and any non-mandatory provision of the Act, the provisions of this
Agreement shall control and take precedence.

B. Each Partner hereby (i) submits to the non-exclusive jurisdiction of any
state or federal court sitting in the State of Maryland (collectively, the
“Maryland Courts”), with respect to any dispute arising out of this Agreement or
any transaction contemplated hereby to the extent such courts would have subject
matter jurisdiction with respect to such dispute, (ii) irrevocably waives, and
agrees not to assert by way of motion, defense, or otherwise, in any such
action, any claim that it is not subject personally to the jurisdiction of any
of the Maryland Courts, that its property is exempt or immune from attachment or
execution, that the action is brought in an inconvenient forum, or that the
venue of the action is improper, (iii) agrees that notice or the service of
process in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be properly served or
delivered if delivered to such Partner at such Partner’s last known address as
set forth in the Partnership’s books and records, and (iv) IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section 15.10 Entire Agreement. This Agreement contains all of the
understandings and agreements between and among the Partners with respect to the
subject matter of this Agreement and the rights, interests and obligations of
the Partners with respect to the Partnership. Notwithstanding any provision in
this Agreement or any Partnership Unit Designation to the contrary, including
any provisions relating to amending this Agreement, the Partners hereby
acknowledge and agree that the General Partner, without the approval of any
Limited Partner, may enter into side letters or similar written agreements with
Limited Partners that are not Affiliates of the General Partner or the Special
Limited Partner, executed contemporaneously with the admission of such Limited
Partner to the Partnership, which may have the effect of establishing rights
under, or altering or supplementing the terms of, this Agreement or any
Partnership Unit Designation, as negotiated with such Limited Partner and which
the General Partner in its sole discretion deems necessary, desirable or
appropriate. The parties hereto agree that any terms, conditions or provisions
contained in such side letters or similar written agreements with a Limited
Partner shall govern with respect to such Limited Partner notwithstanding the
provisions of this Agreement.

Section 15.11 Invalidity of Provisions. If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein shall not be
affected thereby.

Section 15.12 Limitation to Preserve REIT Status. Notwithstanding anything else
in this Agreement, with respect to any period in which the Special Limited
Partner has elected to be treated as a REIT for Federal income tax purposes, to
the extent that the amount paid, credited, distributed or reimbursed by the
Partnership to any REIT Partner or its officers, directors, employees or agents,
whether as a reimbursement, fee, expense or indemnity (a “REIT Payment”), would
constitute gross income to the REIT Partner for purposes of Code
Section 856(c)(2) or Code Section 856(c)(3), then, notwithstanding any other
provision of this Agreement, the amount of such REIT Payments, as selected by
the General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced
for any Partnership Year so that the REIT Payments, as so reduced, for or with
respect to such REIT Partner shall not exceed the lesser of:

(i) an amount equal to the excess, if any, of (a) four and nine-tenths percent
(4.9%) of the REIT Partner’s total gross income (but excluding the amount of any
REIT Payments) for the Partnership Year that is described in subsections (A)
through (I) of Code Section 856(c)(2) over (b) the amount of gross income
(within the meaning of Code Section 856(c)(2)) derived by the REIT Partner from
sources other than those described in subsections (A) through (I) of Code
Section 856(c)(2) (but not including the amount of any REIT Payments); or

 

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(ii) an amount equal to the excess, if any, of (a) twenty-four percent (24%) of
the REIT Partner’s total gross income (but excluding the amount of any REIT
Payments) for the Partnership Year that is described in subsections (A) through
(I) of Code Section 856(c)(3) over (b) the amount of gross income (within the
meaning of Code Section 856(c)(3)) derived by the REIT Partner from sources
other than those described in subsections (A) through (I) of Code
Section 856(c)(3) (but not including the amount of any REIT Payments);

provided, however, that REIT Payments in excess of the amounts set forth in
clauses (i) and (ii) above may be made if the General Partner, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts should not adversely affect the REIT Partner’s ability to qualify as a
REIT. To the extent that REIT Payments may not be made in a Partnership Year as
a consequence of the limitations set forth in this Section 15.12, such REIT
Payments shall carry over and shall be treated as arising in the following
Partnership Year if such carry over does not adversely affect the REIT Partner’s
ability to qualify as a REIT, provided, however, that any such REIT Payment
shall not be carried over more than three Partnership Years, and any such
remaining payments shall no longer be due and payable. The purpose of the
limitations contained in this Section 15.12 is to prevent any REIT Partner from
failing to qualify as a REIT under the Code by reason of such REIT Partner’s
share of items, including distributions, reimbursements, fees, expenses or
indemnities, receivable directly or indirectly from the Partnership, and this
Section 15.12 shall be interpreted and applied to effectuate such purpose.

Section 15.13 REIT Restrictions. Each Affiliated REIT is a REIT and is subject
to the provisions of Sections 856 through and including 860 of the Code. So long
as an Affiliated REIT owns, directly or indirectly, any interest in the
Partnership, then notwithstanding any other provision of this Agreement:

(i) any services that would otherwise cause any rents from a lease to be
excluded from treatment as rents from real property pursuant to
Section 856(d)(2)(C) of the Code shall be provided by either (1) an independent
contractor (as described in Section 856(d)(3) of the Code) with respect to such
Affiliated REIT and from whom neither the Partnership nor such Affiliated REIT
derives or receives any income or (2) a taxable REIT subsidiary of such
Affiliated REIT as described in Section 856(l) of the Code;

(ii) except for a taxable REIT subsidiary of an Affiliated REIT, the Partnership
shall not own, directly or indirectly or by attribution (in accordance with
attribution rules referred to in Section 856(d)(5) of the Code), in the
aggregate more than 10% of the total value of all classes of stock or more than
10% of the total voting power (or, with respect to any such person which is not
a corporation, an interest of 10% or more in the assets or net profits of such
person) of a lessee or sublessee of all or any part of the Property or of any
other assets of the Partnership except in each case with the specific written
approval of each Affiliated REIT;

(iii) except for securities of a taxable REIT subsidiary of an Affiliated REIT,
the Partnership shall not own or acquire, directly or indirectly or by
attribution, more than 10% of the total value or the total voting power of the
outstanding securities of any issuer or own any other asset (including a
security) which would cause the Affiliated REIT to fail the asset test of
Section 856(c)(4)(B) of the Code; and

(iv) leases entered into by the Partnership or any of its Subsidiary
partnerships, limited partnerships, and limited liability companies shall
provide for rents that qualify as “rents from real property” within the meaning
of Section 856(d) of the Code with respect to each Affiliated REIT.

Section 15.14 No Partition. No Partner nor any successor-in-interest to a
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership
partitioned, and each Partner, on behalf of itself and its successors and
assigns hereby waives any such right. It is the intention of the Partners that
the rights of the parties hereto and their successors-in-interest to Partnership
property, as among themselves, shall be governed by the terms of this Agreement,
and that the rights of the Partners and their respective successors-in-interest
shall be subject to the limitations and restrictions as set forth in this
Agreement.

 

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Section 15.15 No Third-Party Rights Created Hereby. The provisions of this
Agreement are solely for the purpose of defining the interests of the Holders,
inter se; and no other person, firm or entity (i.e., a party who is not a
signatory hereto or a permitted successor to such signatory hereto) shall have
any right, power, title or interest by way of subrogation or otherwise, in and
to the rights, powers, title and provisions of this Agreement. For clarity, CBI,
although not a Partner as of the date hereof, is a party to this Agreement and
shall have the right, power, title and interest in and to all rights, powers,
title and provisions of this Agreement. No creditor or other third party having
dealings with the Partnership (other than as expressly set forth herein with
respect to Indemnitees) shall have the right to enforce the right or obligation
of any Partner to make Capital Contributions or loans to the Partnership or to
pursue any other right or remedy hereunder or at law or in equity. 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 any
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 any of the Partners.

Section 15.16 No Rights as Stockholders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders of Partnership Units any
rights whatsoever as stockholders of the Special Limited Partner, including
without limitation any right to receive dividends or other distributions made to
stockholders of the Special Limited Partner or to vote or to consent or receive
notice as stockholders in respect of any meeting of stockholders for the
election of directors of the Special Limited Partner or any other matter.

 

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IN WITNESS WHEREOF, this Agreement has been executed as of the date first
written above.

 

GENERAL PARTNER:

 

CYRUSONE GP

By:   CYRUSONE INC., trustee

 

By:   /S/ KIMBERLY H. SHEEHY  

Name:    Kimberly H. Sheehy

Title:      Chief Financial Officer and Treasurer

 

SPECIAL LIMITED PARTNER:

 

CYRUSONE INC.

 

By:   /S/ KIMBERLY H. SHEEHY   Name:    Kimberly H. Sheehy   Title:      Chief
Financial Officer and Treasurer

 

CBI:

 

Cincinnati Bell Inc.,

an Ohio corporation

By:   /S/ KURT A. FREYBERGER   Name:    Kurt A. Freyberger   Title:      Chief
Financial Officer

 

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LIMITED PARTNERS:

 

Data Center Investments Holdco LLC,

a Delaware limited liability company

By:   /S/ KIMBERLY H. SHEEHY   Name:    Kimberly H. Sheehy   Title:      Chief
Financial Officer and Treasurer

 

Data Center South Holdings LLC,

a Delaware limited liability company

By:   /S/ KIMBERLY H. SHEEHY   Name:    Kimberly H. Sheehy   Title:      Chief
Financial Officer and Treasurer

 

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EXHIBIT A: EXAMPLES REGARDING ADJUSTMENT FACTOR

For purposes of the following examples, it is assumed that (a) the Adjustment
Factor in effect on December 31, 2012 is 1.0 and (b) on January 1, 2013 (the
“Partnership Record Date” for purposes of these examples), prior to the events
described in the examples, there are 100 REIT Shares issued and outstanding.

Example 1

On the Partnership Record Date, the Special Limited Partner declares a dividend
on its outstanding REIT Shares in REIT Shares. The amount of the dividend is one
REIT Share paid in respect of each REIT Share owned. Pursuant to Paragraph
(i) of the definition of “Adjustment Factor,” the Adjustment Factor shall be
adjusted on the Partnership Record Date, effective immediately after the stock
dividend is declared, as follows:

1.0 * 200/100 = 2.0                                                         

Accordingly, the Adjustment Factor after the stock dividend is declared is 2.0.

Example 2

On the Partnership Record Date, the Special Limited Partner distributes options
to purchase REIT Shares to all holders of its REIT Shares. The amount of the
distribution is one option to acquire one REIT Share in respect of each REIT
Share owned. The strike price is $4.00 a share. The Value of a REIT Share on the
Partnership Record Date is $5.00 per share. Pursuant to Paragraph (ii) of the
definition of “Adjustment Factor,” the Adjustment Factor shall be adjusted on
the Partnership Record Date, effective immediately after the options are
distributed, as follows:

1.0 * (100 + 100)/(100 + [100 * $4.00/$5.00]) = 1.1111

Accordingly, the Adjustment Factor after the options are distributed is 1.1111.
If the options expire or become no longer exercisable, then the retroactive
adjustment specified in Paragraph (ii) of the definition of “Adjustment Factor”
shall apply.

Example 3

On the Partnership Record Date, the Special Limited Partner distributes assets
to all holders of its REIT Shares. The amount of the distribution is one asset
with a fair market value (as determined by the General Partner) of $1.00 in
respect of each REIT Share owned. It is also assumed that the assets do not
relate to assets received by the General Partner pursuant to a pro rata
distribution by the Partnership. The Value of a REIT Share on the Partnership
Record Date is $5.00 a share. Pursuant to Paragraph (iii) of the definition of
“Adjustment Factor,” the Adjustment Factor shall be adjusted on the Partnership
Record Date, effective immediately after the assets are distributed, as follows:

1.0 * $5.00/($5.00 - $1.00) = 1.25

Accordingly, the Adjustment Factor after the assets are distributed is 1.25.

 

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EXHIBIT B: NOTICE OF REDEMPTION

CyrusOne GP

1649 West Frankford Road

Carrollton, Texas 75007

The undersigned Limited Partner or Assignee hereby irrevocably tenders for
Redemption Partnership Common Units in CyrusOne, LP in accordance with the terms
of the Amended and Restated Agreement of Limited Partnership of CyrusOne, LP,
dated as of January 24, 2013, as amended (the “Agreement”), and the Redemption
rights referred to therein. All capitalized terms used and not otherwise defined
herein shall have the respective meanings ascribed to them in the Agreement. The
undersigned Limited Partner or Assignee:

(a) undertakes (i) to surrender such Partnership Common Units at the closing of
the Redemption and (ii) to furnish to the Special Limited Partner, prior to the
Specified Redemption Date, the documentation, instruments and information
required under Section 15.1.G of the Agreement;

(b) directs that the certified check representing the Cash Amount, or the REIT
Shares Amount, as applicable, deliverable upon the closing of such Redemption be
delivered to the address specified below;

(c) represents, warrants, certifies and agrees that: (i) the undersigned Limited
Partner or Assignee is a Qualifying Party; (ii) the undersigned Limited Partner
or Assignee has, and at the closing of the Redemption will have, good,
marketable and unencumbered title to such Partnership Common Units, free and
clear of the rights or interests of any other person or entity; (iii) the
undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and
surrender such Common Units as provided herein; (iv) the undersigned Limited
Partner or Assignee, and the tender and surrender of such Common Units for
Redemption as provided herein complies with all conditions and requirements for
redemption of Partnership Common Units set forth in the Agreement; and (v) the
undersigned Limited Partner or Assignee has obtained the consent or approval of
all persons and entities, if any, having the right to consent to or approve such
tender and surrender; and

(d) acknowledges that the undersigned will continue to own such Partnership
Common Units unless and until either (1) such Partnership Common Units are
acquired by the Special Limited Partner pursuant to Section 15.1.B of the
Agreement or (2) such redemption transaction closes.

 

 

Dated:                                     

 

      Name of Limited Partner or Assignee:      

 

      Signature of Limited Partner or Assignee      

 

      Street Address      

 

      City, State and Zip Code      

 

      Social security or identifying number             Signature Medallion
Guaranteed by:      

 

      Issue Check Payable to (or shares in the name of):      

 

 

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