Exhibit 10.32

 

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AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.

 

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Dated as of June 30, 2004

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TABLE OF CONTENTS

 

ARTICLE I DEFINED TERMS    1 ARTICLE II ORGANIZATIONAL MATTERS    13    

Section 2.1

  Organization    13    

Section 2.2

  Name    14    

Section 2.3

  Registered Office And Agent; Principal Office    14    

Section 2.4

  Term    15 ARTICLE III PURPOSE    15    

Section 3.1

  Purpose And Business    15    

Section 3.2

  Powers    15 ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP
INTERESTS    16    

Section 4.1

  Capital Contributions Of The Partners    16    

Section 4.2

  Issuances Of Partnership Interests    16    

Section 4.3

  No Preemptive Rights    17    

Section 4.4

  Other Contribution Provisions    17    

Section 4.5

  No Interest On Capital    18 ARTICLE V DISTRIBUTIONS    18    

Section 5.1

  Requirement And Characterization Of Distributions    18    

Section 5.2

  Amounts Withheld    20    

Section 5.3

  Distributions Upon Liquidation    21    

Section 5.4

  Revisions To Reflect Issuance Of Partnership Interests    21 ARTICLE VI
ALLOCATIONS    21    

Section 6.1

  Allocations For Capital Account Purposes    21    

Section 6.2

  Revisions To Allocations To Reflect Issuance Of Partnership Interests    23
ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS    24    

Section 7.1

  Management    24    

Section 7.2

  Certificate of Limited Partnership    28    

Section 7.3

  Title to Partnership Assets    28    

Section 7.4

  Reimbursement of the General Partner    28    

Section 7.5

  Outside Activities of the General Partner; Relationship of Shares to
Partnership Units; Funding Debt    31    

Section 7.6

  Transactions With Affiliates    33    

Section 7.7

  Indemnification    34    

Section 7.8

  Liability of the General Partner    36    

Section 7.9

  Other Matters Concerning the General Partner    37    

Section 7.10

  Reliance By Third Parties    37    

Section 7.11

  Restrictions on General Partner’s Authority    38    

Section 7.12

  Loans by Third Parties    38

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ARTICLE VIII 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

  Redemption Right    41 ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS    44
   

Section 9.1

  Records and Accounting    44    

Section 9.2

  Fiscal Year    44    

Section 9.3

  Reports    45 ARTICLE X TAX MATTERS    45    

Section 10.1

  Preparation of Tax Returns    45    

Section 10.2

  Tax Elections    45    

Section 10.3

  Tax Matters Partner    45    

Section 10.4

  Organizational Expenses    47    

Section 10.5

  Withholding    47 ARTICLE XI TRANSFERS AND WITHDRAWALS    48    

Section 11.1

  Transfer    48    

Section 11.2

  Transfers of Partnership Interests of General Partner    48    

Section 11.3

  Limited Partners’ Rights to Transfer    49    

Section 11.4

  Substituted Limited Partners    51    

Section 11.5

  Assignees    51    

Section 11.6

  General Provisions    52 ARTICLE XII ADMISSION OF PARTNERS    54    

Section 12.1

  Admission of a Successor General Partner    54    

Section 12.2

  Admission of Additional Limited Partners    54    

Section 12.3

  Amendment of Agreement and Certificate of Limited Partnership    55 ARTICLE
XIII DISSOLUTION AND LIQUIDATION    55    

Section 13.1

  Dissolution    55    

Section 13.2

  Winding Up    56    

Section 13.3

  Compliance With Timing Requirements of Regulations; Restoration of Deficit
Capital Accounts    57    

Section 13.4

  Rights of Limited Partners    59    

Section 13.5

  Notice of Dissolution    59    

Section 13.6

  Cancellation of Certificate of Limited Partnership    59    

Section 13.7

  Reasonable Time for Winding Up    59    

Section 13.8

  Waiver of Partition    59    

Section 13.9

  Liability Of Liquidator    60

 

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ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS    60    

Section 14.1

  Amendments    60    

Section 14.2

  Meetings of the Partners    61 ARTICLE XV GENERAL PROVISIONS    62    

Section 15.1

  Addresses and Notice    62    

Section 15.2

  Titles and Captions    63    

Section 15.3

  Pronouns And Plurals    63    

Section 15.4

  Further Action    63    

Section 15.5

  Binding Effect    63    

Section 15.6

  Creditors    63    

Section 15.7

  Waiver    63    

Section 15.8

  Counterparts    63    

Section 15.9

  Applicable Law    64    

Section 15.10

  Invalidity Of Provisions    64    

Section 15.11

  Power Of Attorney    64    

Section 15.12

  Entire Agreement    65    

Section 15.13

  No Rights As Shareholders    65    

Section 15.14

  Limitation To Preserve REIT Status    65

 

EXHIBITS

 

EXHIBIT A

  FORM OF PARTNER REGISTRY

EXHIBIT B

  CAPITAL ACCOUNT MAINTENANCE

EXHIBIT C

  SPECIAL ALLOCATION RULES

EXHIBIT D

  NOTICE OF REDEMPTION

EXHIBIT E

  DRO PARTNERS AND DRO AMOUNTS

 

ATTACHMENTS

 

ATTACHMENT A

  SERIES E PREFERRED UNITS

ATTACHMENT B

  PERMITTED ASSETS

 

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AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF

CARRAMERICA REALTY OPERATING PARTNERSHIP, L.P.

 

THIS AGREEMENT OF LIMITED PARTNERSHIP, dated as of June 30, 2004, is entered
into by and among CarrAmerica Realty Corporation, a Maryland corporation, as the
General Partner, and the Persons whose names are set forth on the Partner
Registry (as hereinafter defined) as Limited Partners, together with any other
Persons who become Partners in the Partnership as provided herein.

 

WHEREAS, the General Partner and the Limited Partner entered into an Agreement
of Limited Partnership of CarrAmerica Realty Operating Partnership, L.P. dated
as of March 17, 2004, pursuant to which the Partnership was formed (the
“Original Agreement”);

 

WHEREAS, the General Partner and the Limited Partner desire to amend and restate
the Original Agreement in its entirety by entering into this Amended and
Restated Agreement of Limited Partnership;

 

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby amend and restate the
Original Agreement in its entirety and agree to continue the Partnership as a
limited partnership under the Delaware Revised Uniform Limited Partnership Act,
as amended from time to time, as follows:

 

ARTICLE I

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 Delaware Revised Uniform Limited Partnership Act, as it may be
amended from time to time, and any successor to such statute.

 

“Additional Limited Partner” means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 12.2 hereof and who is shown as a Limited
Partner on the Partnership Registry.

 

“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each Fiscal Year (i) increased by any amounts which such
Partner is obligated to restore pursuant to any provision of this Agreement or
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) and (ii) decreased by the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6). The foregoing definition of
Adjusted Capital Account is intended to comply with the provisions of
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

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“Adjusted Capital Account Deficit” means, with respect to any Partner, the
deficit balance, if any, in such Partner’s Adjusted Capital Account as of the
end of the relevant Fiscal Year.

 

“Adjusted Property” means any property the Carrying Value of which has been
adjusted pursuant to Exhibit B.

 

“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
(ii) any Person owning or controlling ten percent (10%) or more of the
outstanding voting interests of such Person, (iii) any Person of which such
Person owns or controls ten percent (10%) or more of the voting interests or
(iv) any officer, director, general partner or trustee of such Person or any
Person referred to in clauses (i), (ii), and (iii) above. For purposes of this
definition, “control,” when used with respect to any Person, means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.

 

“Aggregate DRO Amount” means the aggregate balances of the DRO Amounts, if any,
of all DRO Partners, if any, as determined on the date in question.

 

“Agreed Value” means (i) in the case of any Contributed Property, the Section
704(c) Value of such property as of the time of its contribution to the
Partnership, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is subject when contributed; and
(ii) in the case of any property distributed to a Partner by the Partnership,
the Partnership’s Carrying Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Section 752 of the Code and the regulations
thereunder.

 

“Agreement” means this Amended and Restated Agreement of Limited Partnership, as
it may be amended, supplemented or restated from time to time.

 

“Articles of Incorporation” means the Articles of Incorporation relating to the
General Partner filed in the State of Maryland, as amended or restated from time
to time.

 

“Assignee” means a Person to whom one or more Partnership Units have been
transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.5.

 

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

 

  (a) all cash revenues and funds received by the Partnership from whatever
source (excluding the proceeds of any Capital Contribution, unless otherwise
determined by the General Partner in its sole and absolute discretion) plus the
amount of any reduction (including, without limitation, a reduction resulting
because the General Partner determines such amounts are no longer necessary) in
reserves of the Partnership, which reserves are referred to in clause (b)(iv)
below;

 

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  (b) less the sum of the following (except to the extent made with the proceeds
of any Capital Contribution):

 

  (i) all interest, principal and other debt payments made during such period by
the Partnership,

 

  (ii) all cash expenditures (including capital expenditures) made by the
Partnership during such period,

 

  (iii) investments in any entity (including loans made thereto) to the extent
that such investments are permitted under this Agreement and are not otherwise
described in clauses (b)(i) or (ii), and

 

  (iv) the amount of any increase in reserves established during such period
which the General Partner determines is necessary or appropriate in its sole and
absolute discretion (including any reserves that may be necessary or appropriate
to account for distributions required with respect to Partnership Interests
having a preference over other classes of Partnership Interests).

 

Notwithstanding the foregoing, after commencement of the dissolution and
liquidation of the Partnership, Available Cash shall not include any cash
received or reductions in reserves and shall not take into account any
disbursements made or reserves established.

 

“Book-Tax Disparities” means, with respect to any item of Contributed Property
or Adjusted Property, as of the date of any determination, the difference
between the Carrying Value of such Contributed Property or Adjusted Property and
the adjusted basis thereof for federal income tax purposes as of such date. A
Partner’s share of the Partnership’s Book-Tax Disparities in all of its
Contributed Property and Adjusted Property will be reflected by the difference
between such Partner’s Capital Account balance as maintained pursuant to Exhibit
B and the hypothetical balance of such Partner’s Capital Account computed as if
it had been maintained strictly in accordance with federal income tax accounting
principles.

 

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

 

“Capital Account” means the Capital Account maintained for a Partner pursuant to
Exhibit B. The initial Capital Account balance for each Partner who is a Partner
on the date hereof shall be the amount set forth opposite such Partner’s name on
the Partner Registry.

 

“Capital Contribution” means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership.

 

“Carrying Value” means (i) with respect to a Contributed Property or Adjusted
Property, the Section 704(c) Value of such property reduced (but not below zero)
by all Depreciation with respect to such Contributed Property or Adjusted
Property, as the case may be, charged to the Partners’ Capital Accounts and (ii)
with respect to any other Partnership property, the adjusted

 

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basis of such property for federal income tax purposes, all as of the time of
determination. The Carrying Value of any property shall be adjusted from time to
time in accordance with Exhibit B, and to reflect changes, additions (including
capital improvements thereto) or other adjustments to the Carrying Value for
dispositions and acquisitions of Partnership properties, as deemed appropriate
by the General Partner.

 

“Cash Amount” means an amount of cash equal to the Value on the Valuation Date
of the Shares Amount.

 

“Certificate of Limited Partnership” means the Certificate of Limited
Partnership relating to the Partnership filed in the office of the Delaware
Secretary of State, as amended from time to time in accordance with the terms
hereof and the Act.

 

“Class A” has the meaning set forth in Section 5.1.C.

 

“Class A Share” has the meaning set forth in Section 5.1.C.

 

“Class A Unit” means any Partnership Unit that is not specifically designated by
the General Partner as being of another specified class of Partnership Units.

 

“Class B” has the meaning set forth in Section 5.1.C.

 

“Class B Share” has the meaning set forth in Section 5.1.C.

 

“Class B Unit” means a Partnership Unit that is specifically designated by the
General Partner as being a Class B Unit.

 

“Code” means the Internal Revenue Code of 1986, as amended and in effect from
time to time, 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.

 

“Consent” means the consent or approval of a proposed action by a Partner given
in accordance with Article XIV.

 

“Consent of the Outside Limited Partners” means the Consent of Limited Partners
(excluding for this purpose (i) any Limited Partnership Interests held by the
General Partner or the General Partner Entity, (ii) any Person of which the
General Partner or the General Partner Entity directly or indirectly owns or
controls more than fifty percent (50%) of the voting interests and (iii) any
Person directly or indirectly owning or controlling more than fifty percent
(50%) of the outstanding voting interests of the General Partner or the General
Partner Entity) holding Partnership Interests representing more than fifty
percent (50%) of the Percentage Interest of the Class A Units of all Limited
Partners who are not excluded for the purposes hereof.

 

“Contributed Property” means each property or other asset contributed to the
Partnership, in such form as may be permitted by the Act, but excluding cash
contributed or deemed contributed to the Partnership. Once the Carrying Value of
a Contributed Property is adjusted pursuant to Exhibit B, such property shall no
longer constitute a Contributed Property for purposes of Exhibit B, but shall be
deemed an Adjusted Property for such purposes.

 

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“Conversion Factor” means 1.0; provided that, if the General Partner Entity (i)
declares or pays a dividend on its outstanding Shares in Shares or makes a
distribution to all holders of its outstanding Shares in Shares, (ii) subdivides
its outstanding Shares or (iii) combines its outstanding Shares into a smaller
number of Shares, the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which shall be the number of
Shares issued and outstanding on the record date for such dividend,
distribution, subdivision or combination (assuming for such purposes that such
dividend, distribution, subdivision or combination has occurred as of such time)
and the denominator of which shall be the actual number of Shares (determined
without the above assumption) issued and outstanding on the record date for such
dividend, distribution, subdivision or combination; and provided further that if
an entity shall cease to be the General Partner Entity (the “Predecessor
Entity”) and another entity shall become the General Partner Entity (the
“Successor Entity”), the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which is the Value of one
Share of the Predecessor Entity, determined as of the date when the Successor
Entity becomes the General Partner Entity, and the denominator of which is the
Value of one Share of the Successor Entity, determined as of that same date.
(For purposes of the second proviso in the preceding sentence, if any
shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the fair
market value (as determined in good faith by the General Partner) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares).) Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if a
Specified Redemption Date shall fall between the record date and the effective
date of any event of the type described above, that the Conversion Factor
applicable to such redemption shall be adjusted to take into account such event.

 

“Convertible Funding Debt” has the meaning set forth in Section 7.5.F.

 

“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) obligations of such Person
incurred in connection with entering into a lease which, in accordance with
generally accepted accounting principles, should be capitalized.

 

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

 

“Distribution Period” has the meaning set forth in Section 5.1.C.

 

“DRO Amount” means the amount specified in the DRO Registry with respect to any
DRO Partner, as such DRO Registry may be amended from time to time.

 

“DRO Partner” means a Partner who has agreed in writing to be a DRO Partner and
has agreed and is obligated to make certain contributions, not in excess of such
DRO Partner’s DRO Amount, to the Partnership with respect to any deficit balance
in such Partner’s Capital Account upon the occurrence of certain events. A DRO
Partner who is obligated to make any such contribution only upon liquidation of
the Partnership shall be designated in the DRO Registry as a Part I DRO Partner
and a DRO Partner who is obligated to make any such contribution to the
Partnership either upon liquidation of the Partnership or upon liquidation of
such DRO Partner’s Partnership Interest shall be designated in the DRO Registry
as a Part II DRO Partner.

 

“DRO Registry” means the DRO Registry maintained by the General Partner in the
books and records of the Partnership containing substantially the same
information as would be necessary to complete the Form of DRO Registry attached
hereto as Exhibit E.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Fiscal Year” means the fiscal year of the Partnership, which shall be the
calendar year as provided in Section 9.2.

 

“Funding Debt” means the incurrence of any Debt for the purpose of providing
funds to the Partnership by or on behalf of the General Partner Entity, or any
wholly owned subsidiary of either the General Partner or the General Partner
Entity.

 

“General Partner” means CarrAmerica Realty Corporation, a Maryland corporation,
or its successor, or permitted assignee, as general partner of the Partnership.

 

“General Partner Entity” means the General Partner; provided, however, that if
(i) the common shares of beneficial interest (or other comparable equity
interests) of the General Partner are at any time not Publicly Traded and (ii)
the common shares of beneficial interest (or other comparable equity interests)
of an entity that owns, directly or indirectly, fifty percent

 

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(50%) or more of the common shares of beneficial interest (or other comparable
equity interests) of the General Partner are Publicly Traded, the term “General
Partner Entity” shall refer to such entity whose common shares of beneficial
interest (or other comparable equity securities) are Publicly Traded. If both
requirements set forth in clauses (i) and (ii) above are not satisfied, then the
term “General Partner Entity” shall mean the General Partner.

 

“General Partnership Interest” means a Partnership Interest held by the General
Partner that is a general partnership interest. A General Partnership Interest
may be expressed as a number of Partnership Units.

 

“General Partner Payment” has the meaning set forth in Section 15.14 hereof.

 

“IRS” means the Internal Revenue Service, which administers the internal revenue
laws of the United States.

 

“Immediate Family” means, with respect to any natural Person, such natural
Person’s spouse, parents, descendants, nephews, nieces, brothers, and sisters.

 

“Incapacity” or “Incapacitated” means, (i) as to any individual who is a
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her Person
or estate, (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter, (iii) as to any partnership or limited liability
company which is a Partner, the dissolution and commencement of winding up of
the partnership or limited liability company, (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate’s entire interest in
the Partnership, (v) as to any trustee of a trust which 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 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 of liquidator has not been
vacated or stayed within ninety (90) days of such appointment or (h) an
appointment referred to in clause (g) is not vacated within ninety (90) days
after the expiration of any such stay.

 

“Indemnitee” means (i) any Person made a party to a proceeding by reason of its
status as (A) the General Partner or the General Partner Entity, (B) a Limited
Partner, or (C) a trustee,

 

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director or officer of the Partnership the General Partner or the General
Partner Entity and (ii) such other Persons (including Affiliates of the General
Partner, or the General Partner Entity, a 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), in its sole and absolute discretion.

 

“Limited Partner” means any Person named as a Limited Partner in the Partner
Registry or any Substituted Limited Partner or Additional Limited Partner, in
such Person’s capacity as a Limited Partner in the Partnership.

 

“Limited Partnership Interest” means a Partnership Interest of a Limited Partner
in the Partnership representing a fractional part of the Partnership Interests
of all Limited Partners and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement. A Limited Partnership Interest may be expressed as
a number of Partnership Units.

 

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

 

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

 

“Net Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain for such taxable period over the
Partnership’s items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Income is subjected to the special allocation
rules in Exhibit C, Net Income or the resulting Net Loss, whichever the case may
be, shall be recomputed without regard to such item.

 

“Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction for such taxable period over the
Partnership’s items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C, Net Loss or the resulting Net Income, whichever the case may
be, shall be recomputed without regard to such item.

 

“New Securities” means (i) any rights, options, warrants or convertible or
exchangeable securities having the right to subscribe for or purchase Shares,
excluding grants under any Share Option Plan, or (ii) any Debt issued by the
General Partner Entity that provides any of the rights described in clause (i).

 

“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Section 2.B of Exhibit C if such properties were
disposed of in a taxable transaction in full satisfaction of such liabilities
and for no other consideration.

 

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“Nonrecourse Deductions” has the meaning set forth in Regulations Section
1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Fiscal 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 a Notice of Redemption substantially in the form of
Exhibit D.

 

“Organizational Limited Partner” means CarrAmerica OP, LLC, a Delaware limited
liability company.

 

“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), and the amount of Partner Nonrecourse Deductions with
respect to a Partner Nonrecourse Debt for a Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).

 

“Partner Registry” means the Partner Registry maintained by the General Partner
in the books and records of the Partnership in containing substantially the same
information as would be necessary to complete the form of the Partner Registry
attached hereto as Exhibit A.

 

“Partnership” means the limited partnership formed under the Act upon the terms
and conditions set forth in the Partnership Agreement and continued pursuant to
this Agreement, or any successor to such limited partnership.

 

“Partnership Interest” means a Limited Partnership Interest or a General
Partnership Interest and includes any and all benefits to which the holder of
such a Partnership Interest may be entitled as provided in this Agreement,
together with all obligations of such Person to comply with the terms and
provisions of this Agreement. A Partnership Interest may be expressed as a
number of Partnership Units.

 

“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 Fiscal Year shall be
determined in accordance with the rules of Regulations Section 1.704-2(d).

 

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“Partnership Record Date” means the record date established by the General
Partner either (i) for the distribution of Available Cash pursuant to Section
5.1 hereof, which record date shall be the same as the record date established
by the General Partner Entity for a distribution to its shareholders of some or
all of its portion of such distribution, or (ii) if applicable, for determining
the Partners entitled to vote on or consent to any proposed action for which the
consent or approval of the Partners is sought pursuant to Section 14.2 hereof.

 

“Partnership Unit” means a fractional, undivided share of the Partnership
Interests of all Partners issued pursuant to Sections 4.1 and 4.2, and includes
Class A Units, Class B Units, Series E Preferred Units, and any other classes or
series of Partnership Units established after the date hereof. The number of
Partnership Units outstanding and the Percentage Interests in the Partnership
represented by such Partnership Units are set forth in the Partner Registry.

 

“Percentage Interest” means, as to a Partner holding a class of Partnership
Interests, its interest in such class, determined by dividing the Partnership
Units of such class owned by such Partner by the total number of Partnership
Units of such class then outstanding. For purposes of determining the Percentage
Interest of the Class A Units at any time when there are Class B Units
outstanding, all Class B Units shall be treated as Class A Units.

 

“Person” means a natural person, partnership (whether general or limited),
trust, estate, association, corporation, limited liability company,
unincorporated organization, custodian, nominee or any other individual or
entity in its own or any representative capacity.

 

“Predecessor Entity” has the meaning set forth in the definition of “Conversion
Factor” herein.

 

“Publicly Traded” means listed or admitted to trading on the New York Stock
Exchange, the American Stock Exchange or another national securities exchange or
designated for quotation on the NASDAQ National Market, or any successor to any
of the foregoing.

 

“Qualified Assets” means any of the following assets: (i) Interests, rights,
options, warrants or convertible or exchangeable securities of the Partnership;
(ii) Debt issued by the Partnership or any Subsidiary thereof in connection with
the incurrence of Funding Debt; (iii) equity interests in Qualified REIT
Subsidiaries and limited liability companies whose assets consist solely of
Qualified Assets; (iv) up to a one percent (1%) equity interest in any
partnership or limited liability company at least ninety-nine percent (99%) of
the equity of which is owned, directly or indirectly, by the Partnership; (v)
cash held for payment of administrative expenses or pending distribution to
security holders of the General Partner Entity or any wholly owned Subsidiary
thereof or pending contribution to the Partnership; and (vi) other tangible and
intangible assets that, taken as a whole, are de minimis in relation to the net
assets of the Partnership and its Subsidiaries.

 

“Qualified REIT Subsidiary” means any Subsidiary of the General Partner that is
a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.

 

“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized either as

 

10

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ordinary income or as “unrecaptured Section 1250 gain” (as defined in Section
1(h)(6) of the Code because it represents the recapture of deductions previously
taken with respect to such property or asset.

 

“Recourse Liabilities” means the amount of liabilities owed by the Partnership
(other than Nonrecourse Liabilities and liabilities to which Partner Nonrecourse
Deductions are attributable in accordance with Section 1.704-(2)(i) of the
Regulations).

 

“Redeeming Partner” has the meaning set forth in Section 8.6.A.

 

“Redemption Amount” means either the Cash Amount or the Shares Amount, as
determined by the General Partner, in its sole and absolute discretion; provided
that if the Shares are not Publicly Traded at the time a Redeeming Partner
exercises its Redemption Right, the Redemption Amount shall be paid only in the
form of the Cash Amount unless the Redeeming Partner, in its sole and absolute
discretion, consents to payment of the Redemption Amount in the form of the
Shares Amount. A Redeeming Partner shall have no right, without the General
Partner’s consent, in its sole and absolute discretion, to receive the
Redemption Amount in the form of the Shares Amount.

 

“Redemption Right” has the meaning set forth in Section 8.6.A.

 

“Regulations” means the Treasury Regulations promulgated under the Code, as such
regulations may be amended from time to time (including corresponding provisions
of succeeding regulations).

 

“REIT” means an entity that qualifies as a real estate investment trust under
the Code.

 

“REIT Requirements” has the meaning set forth in Section 5.1.A.

 

“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Partnership recognized for federal income tax purposes resulting
from a sale, exchange or other disposition of Contributed Property or Adjusted
Property, to the extent such item of gain or loss is not allocated pursuant to
Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate Book-Tax Disparities.

 

“Safe Harbor” has the meaning set forth in Section 11.6.F.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Section 704(c) Value” of any Contributed Property means the fair market value
of such property at the time of contribution as determined by the General
Partner using such reasonable method of valuation as they may adopt; provided,
however, subject to Exhibit B, the General Partner shall, in its sole and
absolute discretion, use such method as it deems reasonable and appropriate to
allocate the aggregate of the Section 704(c) Value of Contributed Properties in
a single or integrated transaction among each separate property on a basis
proportional to its fair market values.

 

11

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“Series E Preferred Units” means the series of Partnership Units representing
units of Limited Partnership Interest designated as the Series E Cumulative
Redeemable Preferred Units, with the designations, preferences and other rights
set forth in Attachment A hereto.

 

“Share” means a share of beneficial interest (or other comparable equity
interest) of the General Partner Entity. Shares may be issued in one or more
classes or series in accordance with the terms of the Articles of Incorporation
(or, if the General Partner is not the General Partner Entity, the
organizational documents of the General Partner Entity). If there is more than
one class or series of Shares, the term “Shares” shall, as the context requires,
be deemed to refer to the class or series of Shares that corresponds to the
class or series of Partnership Interests for which the reference to Shares is
made. When used with reference to Class A Units, the term “Shares” refers to
common shares of beneficial interest (or other comparable equity interest) of
the General Partner Entity.

 

“Share Option Plan” means any equity incentive plan of the General Partner, the
General Partner Entity, the Partnership and/or any Affiliate of the Partnership.

 

“Shares Amount” means a number of Shares equal to the product of the number of
Partnership Units offered for redemption by a Redeeming Partner times the
Conversion Factor; provided that, if the General Partner Entity issues to
holders of Shares securities, rights, options, warrants or convertible or
exchangeable securities entitling such holders to subscribe for or purchase
Shares or any other securities or property (collectively, the “rights”), then
the Shares Amount shall also include such rights that a holder of that number of
Shares would be entitled to receive unless the Partnership issues corresponding
rights to holders of Partnership Units.

 

“Specified Redemption Date” means the tenth Business Day after receipt by the
General Partner of a Notice of Redemption or such shorter period as the General
Partner, in its sole and absolute discretion, may determine; provided that, if
the Shares are not Publicly Traded, the Specified Redemption Date means the
thirtieth Business Day after receipt by the General Partner of a Notice of
Redemption.

 

“Subsidiary” means, with respect to any Person, any corporation, limited
liability company, trust, partnership or joint venture, 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 and who is shown as a
Limited Partner in the Partner Registry.

 

“Successor Entity” has the meaning set forth in the definition of “Conversion
Factor” herein.

 

“Termination Transaction” has the meaning set forth in Section 11.2.B.

 

“Unrealized Gain” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (i) the fair market value of
such property (as determined under Exhibit B) as of such date, over (ii) the
Carrying Value of such property (prior to any adjustment to be made pursuant to
Exhibit B) as of such date.

 

12

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“Unrealized Loss” attributable to any item of Partnership property means, as of
any date of determination, the excess, if any, of (i) the Carrying Value of such
property (prior to any adjustment to be made pursuant to Exhibit B) as of such
date, over (ii) the fair market value of such property (as determined under
Exhibit B) as of such date.

 

“Valuation Date” means the date of receipt by the General Partner of a Notice of
Redemption or, if such date is not a Business Day, the first Business Day
thereafter.

 

“Value” means, with respect to one Share of a class of outstanding Shares of the
General Partner Entity that are Publicly Traded, the average of the daily market
price for the ten consecutive trading days immediately preceding the date with
respect to which value must be determined. The market price for each such
trading day shall be the closing price, regular way, on such day, or if no such
sale takes place on such day, the average of the closing bid and asked prices on
such day. If the outstanding Shares of the General Partner Entity are Publicly
Traded and the Shares Amount includes, in addition to the Shares, rights or
interests that a holder of Shares has received or 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. If the Shares of the General
Partner Entity are not Publicly Traded, the Value of the Shares Amount per
Partnership Unit offered for redemption (which will be the Cash Amount per
Partnership Unit offered for redemption payable pursuant to Section 8.6.A) means
the amount that a holder of one Partnership Unit would receive if each of the
assets of the Partnership were to be sold for its fair market value on the
Specified Redemption Date, the Partnership were to pay all of its outstanding
liabilities, and the remaining proceeds were to be distributed to the Partners
in accordance with the terms of this Agreement. Such Value shall be determined
by the General Partner, acting in good faith and based upon a commercially
reasonable estimate of the amount that would be realized by the Partnership if
each asset of the Partnership (and each asset of each partnership, limited
liability company, trust, joint venture or other entity in which the Partnership
owns a direct or indirect interest) were sold to an unrelated purchaser in an
arms’ length transaction where neither the purchaser nor the seller were under
economic compulsion to enter into the transaction (without regard to any
discount in value as a result of the Partnership’s minority interest in any
property or any illiquidity of the Partnership’s interest in any property).

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.1 Organization

 

A. Organization, Status and Rights. The Partnership is a limited partnership
organized pursuant to the provisions of the Act and upon the terms and
conditions set forth in the Original Agreement, as amended by this Agreement.
The Partners hereby confirm and agree to their status as Members of the
Partnership and to continue the business of the Partnership on the terms set
forth in this Agreement. Except as expressly provided herein, 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.

 

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B. Qualification of Partnership. The Partners (i) agree that if the laws of any
jurisdiction in which the Partnership transacts business so require, the
appropriate officers or other authorized representatives of the Partnership
shall file, or shall cause to be filed, with the appropriate office in that
jurisdiction, any documents necessary for the Partnership to qualify to transact
business under such laws; and (ii) agree and obligate themselves to execute,
acknowledge and cause to be filed for record, in the place or places and manner
prescribed by law, any amendments to the Certificate of Limited Partnership as
may be required, either by the Act, by the laws of any jurisdiction in which the
Partnership transacts business, or by this Agreement, to reflect changes in the
information contained therein or otherwise to comply with the requirements of
law for the continuation, preservation and operation of the Partnership as a
limited partnership under the Act.

 

C. Representations. Each Partner represents and warrants that such Partner is
duly authorized to execute, deliver and perform its obligations under this
Agreement and that the Person, if any, executing this Agreement on behalf of
such Partner is duly authorized to do so and that this Agreement is binding on
and enforceable against such Partner in accordance with its terms.

 

Section 2.2 Name

 

The name of the Partnership is CarrAmerica Realty Operating Partnership, L.P.
The Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of any of the General
Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,”
“Ltd.” or similar words or letters shall be included in the Partnership’s name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.

 

Section 2.3 Registered Office And Agent; Principal Office

 

The address of the registered office of the Partnership in the State of Delaware
shall be located at Corporation Trust Center, 1209 Orange Street, Wilmington,
County of New Castle, Delaware 19801, and the registered agent for service of
process on the Partnership in the State of Delaware at such registered office
shall be Corporation Trust Company. The principal office of the Partnership
shall be 1850 K Street, N.W., Washington, D.C. 20006, or such other place as the
General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

 

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Section 2.4 Term

 

The term of the Partnership commenced on March 17, 2004, and shall continue
until dissolved pursuant to the provisions of Article XIII or as otherwise
provided by law.

 

ARTICLE III

PURPOSE

 

Section 3.1 Purpose And Business

 

The purpose and nature of the business to be conducted by the Partnership is (i)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Act; (ii) to enter into any corporation, partnership,
joint venture, trust, limited liability company or other similar arrangement to
engage in any of the foregoing or the ownership of interests in any entity
engaged, directly or indirectly, in any of the foregoing; and (iii) to do
anything necessary or incidental to the foregoing; provided, however, that any
business shall be limited to and conducted in such a manner as to permit the
General Partner and, if different, the General Partner Entity at all times to be
classified as a REIT, unless the General Partner or General Partner Entity, as
applicable, in its sole and absolute discretion has chosen to cease to qualify
as a REIT or has chosen not to attempt to qualify as a REIT for any reason or
reasons whether or not related to the business conducted by the Partnership. In
connection with the foregoing, and without limiting the General Partner or the
General Partner Entity’s right, in its sole and absolute self discretion, to
cease qualifying as a REIT, the Partners acknowledge that the status of the
General Partner Entity as a REIT inures to the benefit of all the Partners and
not solely to the General Partner, the General Partner Entity or their
Affiliates.

 

Section 3.2 Powers

 

The Partnership is empowered 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, borrow
money and issue evidences of indebtedness, whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property; provided,
however, that the Partnership shall not take, or shall refrain from taking, any
action which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner Entity
to continue to qualify as a REIT, (ii) could subject the General Partner Entity
to any taxes under Section 857 or Section 4981 of the Code or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over either the General Partner or the General Partner Entity or
its securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.

 

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ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

 

Section 4.1 Capital Contributions Of The Partners

 

Prior to the execution of this Agreement, the Partners have made the Capital
Contributions as set forth in the Partner Registry. On the dater hereof, the
Partners own Partnership Units in the amounts set forth in the Partner Registry
and have Percentage Interests in the Partnership as set forth in the Partner
Registry. The number of Partnership Units and Percentage Interest shall be
adjusted in the Partner Registry from time to time by the General Partner to the
extent necessary to reflect accurately exchanges, redemptions, Capital
Contributions, the issuance of additional Partnership Units or similar events
having an effect on a Partner’s Percentage Interest occurring after the date
hereof in accordance with the terms of this Agreement. To the extent the
Partnership acquires any property by the merger of any other Person into the
Partnership or any of its Subsidiaries, Persons who receive Partnership
Interests in exchange for their interests in the Person merging into the
Partnership or any Subsidiary shall become Partners and shall be deemed to have
made Capital Contributions as provided in the applicable merger agreement and as
set forth in the Partner Registry. One thousand (1,000) Partnership Units shall
be deemed to be the General Partner’s Partnership Units and shall be the General
Partnership Interest of the General Partner. All other Partnership Units held by
the General Partner shall be deemed to be Limited Partnership Interests and
shall be held by the General Partner in its capacity as a Limited Partner in the
Partnership. Except as provided in Sections 7.5, 10.5, and 13.3 hereof, the
Partners shall have no obligation to make any additional Capital Contributions
or provide any additional funding to the Partnership (whether in the form of
loans, repayments of loans or otherwise). Except as otherwise set forth in
Section 13.3 hereof, no Partner shall have any obligation to restore any deficit
that may exist in its Capital Account, either upon a liquidation of the
Partnership or otherwise.

 

Section 4.2 Issuances Of Partnership Interests

 

A. General. The General Partner is hereby authorized to cause the Partnership
from time to time to issue to Partners (including the General Partner and its
Affiliates) or other Persons (including, without limitation, in connection with
the contribution of property to the Partnership or any of its Subsidiaries)
Partnership Units or other Partnership Interests in one or more classes, or in
one or more series of any of such classes, with such designations, preferences
and relative, participating, optional or other special rights, powers and
duties, including rights, powers and duties senior to one or more other classes
of Partnership Interests, all as shall be determined, subject to applicable
Delaware law, by the General Partner in its sole and absolute discretion,
including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of
Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions (iii) the rights of
each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership, (iv) the rights, if any, of each such class to
vote on matters that require the vote or Consent of the Limited Partners, and
(v) the consideration, if any, to be received by the Partnership; provided that
no such Partnership Units or other Partnership Interests shall be issued to the
General Partner unless either (a) the Partnership Interests are issued in
connection with the

 

16

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grant, award or issuance of Shares or other equity interests in the General
Partner having designations, preferences and other rights such that the economic
interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner in
accordance with this Section 4.2.A or (b) the additional Partnership Interests
are issued to all Partners holding Partnership Interests in the same class in
proportion to their respective Percentage Interests in such class. If the
Partnership issues Partnership Interests pursuant to this Section 4.2.A, the
General Partner shall make such revisions to this Agreement (including but not
limited to the revisions described in Section 5.4, Section 6.2 and Section 8.6)
as it deems necessary to reflect the issuance of such Partnership Interests. The
designation of any newly issued class or series of Partnership Interests may
provide a formula for treating such Partnership Interests solely for purposes of
voting on or consenting to any matter that requires the vote or Consent of the
Limited Partners as set forth in one or more of Sections 7.5.A, 7.11.A., 7.11.B,
11.2.B, 13.1(i), 13.1(ii), 13.1(vi), 14.1.A, 14.1.C, 14.2.A, and 14.2.B of this
Agreement as the equivalent of a specified number (including any fraction
thereof) of Class A Units.

 

B. Classes of Partnership Units. From and after the date of the Agreement, the
Partnership shall have three classes of Partnership Units entitled “Class A
Units,” “Class B Units” and “Series E Preferred Units” and such additional
classes of Partnership Units as may be created by the General Partner pursuant
to Section 4.2.A. Class A Units, Class B Units, or a class of Partnership
Interests created pursuant to Section 4.2.A, at the election of the General
Partner, in its sole and absolute discretion, may be issued to newly admitted
Partners in exchange for the contribution by such Partners of cash, real estate
partnership interests, stock, notes or other assets or consideration; provided
that any Partnership Unit that is not specifically designated by the General
Partner as being of a particular class shall be deemed to be a Class A Unit.
Each Class B Unit shall be converted automatically into a Class A Unit on the
day immediately following the Partnership Record Date for the Distribution
Period (as defined in Section 5.1.C) in which such Class B Unit was issued,
without the requirement for any action by the General Partner, the Partnership
or the Partner holding the Class B Unit.

 

C. Preferred Units Outstanding. Pursuant to Section 4.2.A, the Partnership has
heretofore established and issued Series E Preferred Units. The terms and
conditions of the Series E Preferred Units are set forth in Attachment A
attached hereto and made part hereof.

 

Section 4.3 No Preemptive Rights

 

Except to the extent expressly granted by the Partnership pursuant to another
agreement, no Person shall have any preemptive, preferential or other similar
right with respect to (i) additional Capital Contributions or loans to the
Partnership or (ii) issuance or sale of any Partnership Units or other
Partnership Interests.

 

Section 4.4 Other Contribution Provisions

 

A. General. If 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 the Partner had made a
Capital Contribution of such cash to the capital of the Partnership.

 

17

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B. Mergers. To the extent the Partnership acquires any property (or an indirect
interest therein) by the merger of any other Person into the Partnership or with
or into a Subsidiary of the Partnership in a triangular merger, Persons who
receive Partnership Interests in exchange for their interest in the Person
merging into the Partnership or with or into a Subsidiary of the Partnership
shall become Partners and shall be deemed to have made Capital Contributions as
provided in the applicable merger agreement (or if not so provided, as
determined by the General Partner in its sole and absolute discretion) and as
set forth in the Partner Registry.

 

Section 4.5 No Interest On Capital

 

No Partner shall be entitled to interest on its Capital Contributions or its
Capital Account.

 

ARTICLE V

DISTRIBUTIONS

 

Section 5.1 Requirement And Characterization Of Distributions

 

A. General. The General Partner shall distribute at least quarterly an amount
equal to one hundred percent (100%) of the Available Cash of the Partnership
with respect to such quarter or shorter period to the Partners in accordance
with the terms established for the class or classes of Partnership Interests
held by such Partners who are Partners on the respective Partnership Record Date
with respect to such quarter or shorter period as provided in Sections 5.1.B,
5.1.C and 5.1.D and in accordance with the respective terms established for each
class of Partnership Interest. Notwithstanding anything to the contrary
contained herein, in no event may a Partner receive a distribution of Available
Cash with respect to a Partnership Unit for a quarter or shorter period if such
Partner is entitled to receive a distribution with respect to a Share for which
such Partnership Unit has been redeemed or exchanged. Unless otherwise expressly
provided for herein, in Attachment A hereto with respect to the Series E
Preferred Units, or in the terms established for a new class or series of
Partnership Interests created in accordance with Article IV hereof, no
Partnership Interest shall be entitled to a distribution in preference to any
other Partnership Interest. The General Partner shall make such reasonable
efforts, as determined by it in its sole and absolute discretion and consistent
with the qualification of the General Partner Entity as a REIT, to distribute
Available Cash (a) to Limited Partners so as to preclude any such distribution
or portion thereof from being treated as part of a sale of property to the
Partnership by a Limited Partner under Section 707 of the Code or the
Regulations thereunder; provided, that, the General Partner and the Partnership
shall not have liability to a Limited Partner under any circumstances as a
result of any distribution to a Limited Partner being so treated, and (b) to the
General Partner in an amount sufficient to enable the General Partner Entity to
make distributions to its shareholders that will enable the General Partner
Entity to (1) satisfy the requirements for qualification as a REIT under the
Code and the Regulations (the “REIT Requirements”), and (2) avoid any federal
income or excise tax liability.

 

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B. Method. (i) Each holder of Partnership Interests that is entitled to any
preference in distribution (including, without limitation, the preferences in
distribution set forth in Attachment A hereto with respect to Series E Preferred
Units) shall be entitled to a distribution in accordance with the rights of any
such class of Partnership Interests (and, within such class, pro rata in
proportion to the respective Percentage Interests on such Partnership Record
Date); and

 

(ii) To the extent there is Available Cash remaining after the payment of any
preference in distribution in accordance with the foregoing clause (i), with
respect to Partnership Interests that are not entitled to any preference in
distribution, pro rata to each such class in accordance with the terms of such
class (and, within each such class, pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date).

 

C. Distributions When Class B Units Are Outstanding. If for any quarter or
shorter period with respect to which a distribution is to be made (a
“Distribution Period”) Class B Units are outstanding on the Partnership Record
Date for such Distribution Period, the General Partner shall allocate the
Available Cash with respect to such Distribution Period available for
distribution with respect to the Class A Units and Class B Units collectively
between the Partners who are holders of Class A Units (“Class A”) and the
Partners who are holders of Class B Units (“Class B”) as follows:

 

  (1) Class A shall receive that portion of the Available Cash (the “Class A
Share”) determined by multiplying the amount of Available Cash by the following
fraction:

 

AxY

--------------------------------------------------------------------------------

(AxY)+(BxX)

 

  (2) Class B shall receive that portion of the Available Cash (the “Class B
Share”) determined by multiplying the amount of Available Cash by the following
fraction:

 

BxX

--------------------------------------------------------------------------------

(AxY)+(BxX)

 

  (3) For purposes of the foregoing formulas, (i) “A” equals the number of Class
A Units outstanding on the Partnership Record Date for such Distribution Period;
(ii) “B” equals the number of Class B Units outstanding on the Partnership
Record Date for such Distribution Period; (iii) “Y” equals the number of days in
the Distribution Period; and (iv) “X” equals the number of days in the
Distribution Period for which the Class B Units were issued and outstanding.

 

The Class A Share shall be distributed pro rata among Partners holding Class A
Units on the Partnership Record Date for the Distribution Period in accordance
with the number of Class A Units held by each Partner on such Partnership Record
Date; provided that in no event may a Partner receive a distribution of
Available Cash with respect to a Class A Unit if a Partner is entitled to
receive a distribution with respect to a Share for which such Class A Unit has
been

 

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redeemed or exchanged. If Class B Shares were issued on the same date, the Class
B Share shall be distributed pro rata among the Partners holding Class B Units
on the Partnership Record Date for the Distribution Period in accordance with
the number of Class B Units held by each Partner on such Partnership Record
Date. In no event shall any Class B Units be entitled to receive any
distribution of Available Cash for any Distribution Period ending prior to the
date on which such Class B Units are issued.

 

D. Distributions When Class B Units Have Been Issued on Different Dates. If
Class B Units which have been issued on different dates are outstanding on the
Partnership Record Date for any Distribution Period, then the Class B Units
issued on each particular date shall be treated as a separate series of
Partnership Units for purposes of making the allocation of Available Cash for
such Distribution Period among the holders of Partnership Units (and the formula
for making such allocation, and the definitions of variables used therein, shall
be modified accordingly). Thus, for example, if two series of Class B Units are
outstanding on the Partnership Record Date for any Distribution Period, the
allocation formula for each series, “Series B1” and “Series B2” would be as
follows:

 

  (1) Series B1 shall receive that portion of the Available Cash determined by
multiplying the amount of Available Cash by the following fraction:

 

B1xX1

--------------------------------------------------------------------------------

(AxY)+(B1xX1)+(B2xX2)

 

  (2) Series B2 shall receive that portion of the Available Cash determined by
multiplying the amount of Available Cash by the following fraction:

 

B2xX2

--------------------------------------------------------------------------------

(AxY)+(B1xX1)+(B2xX2)

 

  (3) For purposes of the foregoing formulas the definitions set forth in
Section 5.1.C.3 remain the same except that (i) “B1” equals the number of
Partnership Units in Series B1 outstanding on the Partnership Record Date for
such Distribution Period; (ii) “B2” equals the number of Partnership Units in
Series B2 outstanding on the Partnership Record Date for such Distribution
Period; (iii) “X1” equals the number of days in the Distribution Period for
which the Partnership Units in Series B1 were issued and outstanding; and (iv)
“X2” equals the number of days in the Distribution Period for which the
Partnership Units in Series B2 were issued and outstanding.

 

Section 5.2 Amounts Withheld

 

All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 10.5 with respect to any allocation, payment or
distribution to the General Partner, the Limited Partners or Assignees shall be
treated as amounts distributed to the General Partner, Limited Partners or
Assignees, as the case may be, pursuant to Section 5.1 for all purposes under
this Agreement.

 

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Section 5.3 Distributions Upon Liquidation

 

Proceeds from a Liquidating Event shall be distributed to the Partners in
accordance with Section 13.2.

 

Section 5.4 Revisions To Reflect Issuance Of Partnership Interests

 

If the Partnership issues Partnership Interests to the General Partner or any
Additional Limited Partner pursuant to Article IV hereof, the General Partner
shall make such revisions to this Article V and the Partner Registry in the
books and records of the Partnership as it deems necessary to reflect the
issuance of such additional Partnership Interests without the consent or
approval of any other Partner.

 

ARTICLE VI

ALLOCATIONS

 

Section 6.1 Allocations For Capital Account Purposes

 

For purposes of maintaining the Capital Accounts and in determining the rights
of the Partners among themselves, the Partnership’s items of income, gain, loss
and deduction (computed in accordance with Exhibit B) shall be allocated among
the Partners in each taxable year (or portion thereof) as provided herein below.

 

A. Net Income. After giving effect to the special allocations set forth in
Section 1 of Exhibit C of the Partnership Agreement, Net Income shall be
allocated:

 

  (1) first, to the General Partner to the extent that Net Losses previously
allocated the General Partner pursuant to Section 6.1.B(6) exceed Net Income
previously allocated to the General Partner pursuant to this clause (1);

 

  (2) second, to each DRO Partner until the cumulative Net Income allocated such
DRO Partner under this clause (2) equals the cumulative Net Losses allocated
such DRO Partner under Section 6.1.B(5) (and, among the DRO Partners, pro rata
in proportion to their respective percentages of the cumulative Net Losses
allocated to all DRO Partners pursuant to Section 6.1.B(5) hereof);

 

  (3) third, to the General Partner until the cumulative Net Income allocated
under this clause (3) equals the cumulative Net Losses allocated the General
Partner under Section 6.1.B(4);

 

  (4) fourth, to the holders of any Partnership Interests that are entitled to
any preference upon liquidation until the cumulative Net Income allocated under
this clause (4) equals the cumulative Net Losses allocated to such Partners
under Section 6.1.B(3);

 

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  (5) fifth, to the holders of any Partnership Interests that are entitled to
any preference in distribution in accordance with the rights of any other class
of Partnership Interests until each such Partnership Interest has been
allocated, on a cumulative basis pursuant to this clause (5), Net Income equal
to the amount of distributions payable that are attributable to the preference
of such class of Partnership Interests whether or not paid (and, within such
class, pro rata in proportion to the respective Percentage Interests as of the
last day of the period for which such allocation is being made); and

 

  (6) finally, with respect to Partnership Interests that are not entitled to
any preference in distribution or with respect to which distributions are not
limited to any preference in distribution, pro rata to each such class in
accordance with the terms of such class (and, within such class, pro rata in
proportion to the respective Percentage Interests as of the last day of the
period for which such allocation is being made).

 

B. Net Losses. After giving effect to the special allocations set forth in
Section 1 of Exhibit C, Net Losses shall be allocated:

 

  (1) first, to the holders of Partnership Interests, in proportion to, and to
the extent that, their share of the Net Income previously allocated pursuant to
Section 6.1.A(6) exceeds, on a cumulative basis, the sum of (a) distributions
with respect to such Partnership Interests pursuant to clause (ii) of Section
5.1.B and (b) Net Losses allocated under this clause (1);

 

  (2) second, with respect to classes of Partnership Interests that are not
entitled to any preference in distribution upon distribution, pro rata to each
such class in accordance with the terms of such class (and, within such class,
pro rata in proportion to the respective Percentage Interests as of the last day
of the period for which such allocation is being made); provided that Net Losses
shall not be allocated to any Partner pursuant to this Section 6.1.B(2) to the
extent that such allocation would cause such Partner to have an Adjusted Capital
Account Deficit (or increase any existing Adjusted Capital Account Deficit)
(determined in each case (i) by not including in the Partners’ Adjusted Capital
Accounts any amount that a Partner is obligated to contribute to the Partnership
with respect to any deficit in its Capital Account pursuant to Section 13.3 and
(ii) in the case of a Partner who also holds classes of Partnership Interests
that are entitled to any preferences in distribution upon liquidation, by
subtracting from such Partners’ Adjusted Capital Account the amount of such
preferred distribution to be made upon liquidation) at the end of such taxable
year (or portion thereof);

 

  (3)

third, with respect to classes of Partnership Interests that are entitled to any
preference in distribution upon liquidation, in reverse order of the priorities
of each such class (and within each such class, pro rata in proportion to their
respective Percentage Interests as of the last day of the period for which such
allocation is being made); provided that Net Losses shall not be allocated to
any Partner pursuant to this Section 6.1.B(3) to the extent that such allocation
would

 

22

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cause such Partner to have an Adjusted Capital Account Deficit (or increase any
existing Adjusted Capital Account Deficit) (determined in each case by not
including in the Partners’ Adjusted Capital Accounts any amount that a Partner
is obligated to contribute to the Partnership with respect to any deficit in its
Capital Account pursuant to Section 13.3) at the end of such taxable year (or
portion thereof);

 

  (4) fourth, to the General Partner in an amount equal to the excess of (a) the
amount of the Partnership Recourse Liabilities over (b) the Aggregate DRO
Amount;

 

  (5) fifth, to and among the DRO Partners, in proportion to their respective
DRO Amounts, until such time as the DRO Partners as a group have been allocated
cumulative Net Losses pursuant to this clause (5) equal to the Aggregate DRO
Amount; and

 

  (6) thereafter, to the General Partner.

 

C. Allocation of Nonrecourse Debt. For purposes of Regulation Section
1.752-3(a), the Partners agree that Nonrecourse Liabilities of the Partnership
in excess of the sum of (i) the amount of Partnership Minimum Gain and (ii) the
total amount of Nonrecourse Built-in Gain shall be allocated by the General
Partner by taking into account facts and circumstances relating to each
Partner’s respective interest in the profits of the Partnership. For this
purpose, the General Partner shall have the sole and absolute discretion in any
fiscal year to allocate such excess Nonrecourse Liabilities among the Partners
in any manner permitted under Code Section 752 and the Regulations thereunder.

 

D. Recapture Income. Any gain allocated to the Partners upon the sale or other
taxable disposition of any Partnership asset shall, to the extent possible after
taking into account other required allocations of gain pursuant to Exhibit C, be
characterized as Recapture Income in the same proportions and to the same extent
as such Partners have been allocated any deductions directly or indirectly
giving rise to the treatment of such gains as Recapture Income.

 

Section 6.2 Revisions To Allocations To Reflect Issuance Of Partnership
Interests

 

If the Partnership issues Partnership Interests to the General Partner or any
Additional Limited Partner pursuant to Article IV hereof, the General Partner
shall make such revisions to this Article VI and the Partner Registry in the
books and records of the Partnership as it deems necessary to reflect the terms
of the issuance of such Partnership Interests, including making preferential
allocations to classes of Partnership Interests that are entitled thereto. Such
revisions shall not require the consent or approval of any other Partner.

 

23

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ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1 Management

 

A. Powers of General Partner. Except as otherwise expressly provided in this
Agreement, 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. The General
Partner may not be removed by the Limited Partners with or without cause (unless
the Shares of the General Partner Entity corresponding to Partnership Units are
not Publicly Traded, in which case the General Partner may be removed with or
without cause by the Consent of the Partners holding Partnership Interests
representing more than fifty percent (50%) of the Percentage Interest of the
Class A Units). In addition to the powers now or hereafter granted a general
partner of a limited partnership under applicable law or which are granted to
the General Partner under any other provision of this Agreement, the General
Partner, subject to Section 7.11, shall have full power and authority to do all
things deemed necessary or desirable by it to conduct the business of the
Partnership, to exercise all powers set forth in Section 3.2 and to effectuate
the purposes set forth in Section 3.1, including, without limitation:

 

  (1) the making of any expenditures, the lending or borrowing of money
(including, without limitation, making prepayments on loans and borrowing money
to permit the Partnership to make distributions to its Partners in such amounts
as are required under Section 5.1.A or will permit the General Partner Entity
(so long as the General Partner Entity qualifies as a REIT) to avoid the payment
of any federal income tax (including, for this purpose, any excise tax pursuant
to Section 4981 of the Code) and to make distributions to its shareholders
sufficient to permit the General Partner Entity to maintain its REIT status),
the assumption or guarantee of, or other contracting for, indebtedness and other
liabilities including, without limitation, the assumption or guarantee of the
debt of the General Partner, its Subsidiaries or the Partnership’s Subsidiaries,
the issuance of evidences of indebtedness (including the securing of same by
mortgage, deed of trust or other lien or encumbrance on the Partnership’s
assets) and the incurring of any obligations the General Partner deems necessary
for the conduct of the activities of the Partnership;

 

  (2) the making of tax, regulatory and other filings, or rendering of periodic
or other reports to governmental or other agencies having jurisdiction over the
business or assets of the Partnership;

 

  (3) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation
or exchange of any or all of the assets of the Partnership (including
acquisition of any new assets, the exercise or grant of any conversion, option,
privilege or subscription right, or other right available in connection with any
assets at any time held by the Partnership) or the merger or other combination
of the Partnership or any Subsidiary with or into another entity on such terms
as the General Partner deems proper;

 

24

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  (4) the use of the assets of the Partnership (including, without limitation,
cash on hand) for any purpose consistent with the terms of this Agreement and on
any terms it sees fit, including, without limitation, the financing of the
conduct of the operations of the General Partner, the Partnership or any of the
Partnership’s Subsidiaries, the lending of funds to other Persons (including,
without limitation, the General Partner, its Subsidiaries and the Partnership’s
Subsidiaries) and the repayment of obligations of the Partnership and its
Subsidiaries and any other Person in which the Partnership has an equity
investment and the making of capital contributions to its Subsidiaries;

 

  (5) the management, operation, leasing, landscaping, repair, alteration,
demolition or improvement of any real property or improvements owned by the
Partnership or any Subsidiary of the Partnership or any Person in which the
Partnership has made a direct or indirect equity investment;

 

  (6) the negotiation, execution, and performance of any contracts, conveyances
or other instruments that the General Partner considers useful or necessary to
the conduct of the Partnership’s operations or the implementation of the General
Partner’s powers under this Agreement, including contracting with contractors,
developers, consultants, accountants, legal counsel, other professional advisors
and other agents and the payment of their expenses and compensation out of the
Partnership’s assets;

 

  (7) the mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership;

 

  (8) the distribution of Partnership cash or other Partnership assets in
accordance with this Agreement;

 

  (9) the holding, managing, investing and reinvesting of cash and other assets
of the Partnership;

 

  (10) the collection and receipt of revenues and income of the Partnership;

 

  (11) the selection, designation of powers, authority and duties and the
dismissal of employees of the Partnership (including, without limitation,
employees having titles such as “president,” “vice president,” “secretary” and
“treasurer”) and agents, outside attorneys, accountants, consultants and
contractors of the Partnership and the determination of their compensation and
other terms of employment or hiring;

 

  (12) the maintenance of such insurance for the benefit of the Partnership and
the Partners as it deems necessary or appropriate;

 

  (13)

the formation of, or acquisition of an interest (including non-voting interests
in entities controlled by Affiliates of the Partnership or third parties) in,
and the contribution of property to, any further limited or general
partnerships, joint ventures, limited liability companies or other relationships
that it deems desirable

 

25

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(including, without limitation, the acquisition of interests in, and the
contributions of funds or property to, or making of loans to, its Subsidiaries
and any other Person in which it has an equity investment from time to time, or
the incurrence of indebtedness on behalf of such Persons or the guarantee of the
obligations of such Persons); provided that, as long as the General Partner has
determined to continue to qualify as a REIT, the Partnership may not engage in
any such formation, acquisition or contribution that would cause the General
Partner to fail to qualify as a REIT;

 

  (14) the control of any matters affecting the rights and obligations of the
Partnership, including the settlement, compromise, submission to arbitration or
any other form of dispute resolution or abandonment of any claim, cause of
action, liability, debt or damages due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings, administrative proceedings,
arbitrations or other forms of dispute resolution, the representation of the
Partnership in all suits or legal proceedings, administrative proceedings,
arbitrations or other forms of dispute resolution, the incurring of legal
expense and the indemnification of any Person against liabilities and
contingencies to the extent permitted by law;

 

  (15) the determination of the fair market value of any Partnership property
distributed in kind, using such reasonable method of valuation as the General
Partner may adopt;

 

  (16) the exercise, directly or indirectly, through any attorney-in-fact acting
under a general or limited power of attorney, of any right, including the right
to vote, appurtenant to any assets or investment held by the Partnership;

 

  (17) the exercise of any of the powers of the General Partner enumerated in
this Agreement on behalf of or in connection with any Subsidiary of the
Partnership or any other Person in which the Partnership has a direct or
indirect interest, individually or jointly with any such Subsidiary or other
Person;

 

  (18) the exercise of any of the powers of the General Partner enumerated in
this Agreement on behalf of any Person in which the Partnership does not have
any interest pursuant to contractual or other arrangements with such Person;

 

  (19) the making, executing and delivering of any and all deeds, leases, notes,
deeds to secure debt, mortgages, deeds of trust, security agreements,
conveyances, contracts, guarantees, warranties, indemnities, waivers, releases
or other legal instruments or agreements in writing necessary or appropriate in
the judgment of the General Partner for the accomplishment of any of the powers
of the General Partner enumerated in this Agreement;

 

  (20) the distribution of cash to acquire Partnership Units held by a Limited
Partner in connection with a Limited Partner’s exercise of its Redemption Right
under Section 8.6;

 

26

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  (21) the determination regarding whether a payment to a Partner who exercises
its Redemption Right under Section 8.6 that is assumed by the General Partner
will be paid in the form of the Cash Amount or the Shares Amount, except as such
determination may be limited by Section 8.6.

 

  (22) the acquisition of Partnership Interests in exchange for cash, debt
instruments and other property;

 

  (23) the maintenance of the Partner Registry in the books and records of the
Partnership to reflect the Capital Contributions and Percentage Interests of the
Partners as the same are adjusted from time to time to the extent necessary to
reflect redemptions, Capital Contributions, the issuance of Partnership Units,
the admission of any Additional Limited Partner or any Substituted Limited
Partner or otherwise; and

 

  (24) the registration of any class of securities of the Partnership under the
Securities Act of 1933, as amended or the Securities Exchange Act of 1934, as
amended, and the listing of any debt securities of the Partnership on any
exchange.

 

B. No Approval by Limited Partners. Except as provided in Section 7.11, each of
the Limited Partners agrees that the General Partner is authorized to execute,
deliver and perform the above-mentioned agreements and transactions on behalf of
the Partnership without any further act, approval or vote of the Partners,
notwithstanding any other provision of this Agreement, the Act or any applicable
law, rule or regulation, to the full extent permitted under the Act or other
applicable law. The execution, delivery or performance by the General Partner or
the Partnership of any agreement authorized or permitted under this Agreement
shall be in the sole and absolute discretion of the General Partner without
consideration of any other obligation or duty, fiduciary or otherwise, of the
Partnership or the Limited Partners and shall not constitute a breach by the
General Partner of any duty that the General Partner may owe the Partnership or
the Limited Partners or any other Persons under this Agreement or of any duty
stated or implied by law or equity.

 

C. Insurance. At all times from and after the date hereof, the General Partner
may cause the Partnership to obtain and maintain (i) casualty, liability and
other insurance on the properties of the Partnership and (ii) liability
insurance for the Indemnitees hereunder and (iii) such other insurance as the
General Partner, in its sole and absolute discretion, determines to be
necessary.

 

D. Working Capital and Other Reserves. At all times from and after the date
hereof, the General Partner may cause the Partnership to establish and maintain
working capital reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time,
including upon liquidation of the Partnership under Section 13.

 

E. No Obligations to Consider Tax Consequences of Limited Partners. In
exercising their authority under this Agreement, the General Partner (which for
the purposes of this Section 7.1.E shall include, the board of directors of the
General Partner) may, but shall be under no obligation to, take into account the
tax consequences to any Partner (including the General

 

27

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Partner) of any action taken (or not taken) by the General Partner. The General
Partner and the Partnership shall not have liability to a Limited Partner for
monetary or other damages or otherwise for losses sustained, liabilities
incurred or benefits not derived by such Limited Partner in connection with such
decisions, provided that the General Partner has acted in good faith and
pursuant to its authority under this Agreement and any such decisions or actions
taken or not taken in accordance with the terms of this Agreement shall not
constitute a breach of any duty owed to the Partnership or the Limited Partners
by law or equity, fiduciary or otherwise.

 

Section 7.2 Certificate of Limited Partnership

 

The General Partner has previously filed the Certificate of Limited Partnership
with the Secretary of State of Delaware. 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
of Limited Partnership 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 Delaware and each other state, the
District of Columbia or other jurisdiction in which the Partnership may elect to
do business or own property. Subject to the terms of Section 8.5.A(4), the
General Partner shall not be required, before or after filing, to deliver or
mail a copy of the Certificate of Limited Partnership 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) in the State of Delaware and any other state,
the District of Columbia or other jurisdiction in which the Partnership may
elect to do business or own property.

 

Section 7.3 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 Partners, individually or collectively, shall have any ownership
interest in such Partnership assets or any portion thereof. Title to any or all
of the Partnership assets may be held in the name of the Partnership, the
General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares
and warrants that any Partnership assets for which legal title is held in the
name of the General Partner or any nominee or Affiliate of the General Partner
shall be held by the General Partner for the use and benefit of the Partnership
in accordance with the provisions of this Agreement. 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 7.4 Reimbursement of the General Partner

 

A. No Compensation. Except as provided in this Section 7.4 and elsewhere in this
Agreement (including the provisions of Articles V and VI regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not receive payments from the Partnership or otherwise be
compensated for its services as the general partner of the Partnership.

 

28

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B. Responsibility for Partnership and General Partner and General Partner Entity
Expenses. The Partnership shall be responsible for and shall pay all expenses
relating to the Partnership’s organization, the ownership of its assets and its
operations. The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to or resulting from the
ownership and operation of, or for the benefit of, the Partnership (including,
without limitation, expenses related to the operations of the General Partner
and the General Partner Entity and to the management and administration of any
Subsidiaries of the General Partner, the General Partner Entity or the
Partnership or Affiliates of the Partnership, such as auditing expenses and
filing fees); provided that (i) the amount of any such reimbursement shall be
reduced by (x) any interest earned by the General Partner with respect to bank
accounts or other instruments or accounts held by it on behalf of the
Partnership as permitted in Section 7.5.A (which interest is considered to
belong to the Partnership and shall be paid over to the Partnership to the
extent not applied to reimburse the General Partner for expenses hereunder); and
(y) any amount derived by the General Partner from any investments permitted in
Section 7.5.A; (ii) the Partnership shall not be responsible for any taxes that
the General Partner or General Partner Entity would not have been required to
pay if that entity qualified as a REIT for federal income tax purposes or any
taxes imposed on the General Partner or General Partner Entity by reason of that
entity’s failure to distribute to its shareholders an amount equal to its
taxable income; (iii) the Partnership shall not be responsible for expenses or
liabilities incurred by the General Partner in connection with any business or
assets of the General Partner other than its ownership of Partnership Interests
or operation of the business of the Partnership or ownership of interests in
Qualified Assets and such other assets permitted in Section 7.5.A; and (iv) the
Partnership shall not be responsible for any expenses or liabilities of the
General Partner that are excluded from the scope of the indemnification
provisions of Section 7.7.A by reason of the provisions of clause (i), (ii) or
(iii) thereof. The General Partner shall determine in good faith the amount of
expenses incurred by it or the General Partner Entity related to the ownership
of Partnership Interests or operation of, or for the benefit of, the
Partnership. If certain expenses are incurred that are related both to the
ownership of Partnership Interests or operation of, or for the benefit of, the
Partnership and to the ownership of other assets (other than Qualified Assets
and such other assets permitted under Section 7.5.A) or the operation of other
businesses, such expenses will be allocated to the Partnership and such other
entities (including the General Partner and General Partner Entity) owning such
other assets or businesses in such a manner as the General Partner in its sole
and absolute discretion deems fair and reasonable. Such reimbursements shall be
in addition to any reimbursement to the General Partner and the General Partner
Entity pursuant to Section 10.3.C and as a result of indemnification pursuant to
Section 7.7. All payments and reimbursements hereunder shall be characterized
for federal income tax purposes as expenses of the Partnership incurred on its
behalf, and not as expenses of the General Partner or General Partner Entity.

 

C. Partnership Interest Issuance Expenses. The General Partner shall also be
reimbursed for all expenses it incurs relating to any issuance of Partnership
Interests, Shares, Debt of the Partnership, Funding Debt of the General Partner
or rights, options, warrants or convertible or exchangeable securities pursuant
to Article IV (including, without limitation, all costs, expenses, damages and
other payments resulting from or arising in connection with litigation related
to any of the foregoing), all of which expenses are considered by the Partners
to constitute expenses of, and for the benefit of, the Partnership.

 

29

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D. Purchases of Shares by the General Partner Entity. If the General Partner
Entity exercises its rights under the Articles of Incorporation to purchase
Shares or otherwise elects to purchase from its shareholders Shares in
connection with a share repurchase or similar program or for the purpose of
delivering such Shares to satisfy an obligation under any dividend reinvestment
or equity purchase program adopted by the General Partner Entity, any employee
equity purchase plan adopted by the General Partner Entity or any similar
obligation or arrangement undertaken by the General Partner Entity in the
future, the purchase price paid by the General Partner Entity for those Shares
and any other expenses incurred by the General Partner Entity in connection with
such purchase shall be considered expenses of the Partnership and shall be
reimbursable to the General Partner Entity, subject to the conditions that: (i)
if those Shares subsequently are to be sold by the General Partner Entity, the
General Partner Entity shall pay to the Partnership any proceeds received by the
General Partner Entity for those Shares (provided that a transfer of Shares for
Partnership Units pursuant to Section 8.6 would not be considered a sale for
such purposes); and (ii) if such Shares are not retransferred by the General
Partner Entity within thirty (30) days after the purchase thereof, the General
Partner Entity shall cause the Partnership to cancel a number of Partnership
Units (rounded to the nearest whole Partnership Unit) held by the General
Partner Entity equal to the product attained by multiplying the number of those
Shares by a fraction, the numerator of which is one and the denominator of which
is the Conversion Factor.

 

E. Reimbursement not a Distribution. Except as set forth in the succeeding
sentence, if and to the extent any reimbursement made pursuant to this Section
7.4 is determined for federal income tax purposes not to constitute a payment of
expenses of the Partnership, the amount so determined shall constitute a
guaranteed payment with respect to capital within the meaning of Section 707(c)
of the Code, shall be treated consistently therewith by the Partnership and all
Partners and shall not be treated as a distribution for purposes of computing
the Partners’ Capital Accounts. Amounts deemed paid by the Partnership to the
General Partner in connection with redemption of Partnership Units pursuant to
clause (ii) of subparagraph (D) above shall be treated as a distribution for
purposes of computing the Partner’s Capital Accounts.

 

F. Funding for Certain Capital Transactions. In the event that the General
Partner Entity shall undertake to acquire (whether by merger, consolidation,
purchase, or otherwise) the assets or equity interests of another Person and
such acquisition shall require the payment of cash by the General Partner Entity
(whether to such Person or to any other selling party or parties in such
transaction or to one or more creditors, if any, of such Person or such selling
party or parties), (i) the Partnership shall advance to the General Partner
Entity the cash required to consummate such acquisition if, and to the extent
that, such cash is not to be obtained by the General Partner Entity through an
issuance of Shares described in Section 4.2 or pursuant to a transaction
described in Section 7.5.B, (ii) the General Partner Entity shall immediately,
upon consummation of such acquisition, transfer to the Partnership (or cause to
be transferred to the Partnership), in full and complete satisfaction of such
advance and as required by Section 7.5, the assets or equity interests of such
Person acquired by the General Partner Entity in such acquisition, and (iii)
pursuant to and in accordance with Section 4.2 and Section 7.5.B, the
Partnership shall issue to the General Partner Partnership Interests and/or
rights, options, warrants or convertible or exchangeable securities of the
Partnership having designations, preferences and other rights that are
substantially the same as those of any additional Shares, other equity
securities, New Securities and/or Convertible Funding Debt, as the case may be,

 

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issued by the General Partner Entity in connection with such acquisition
(whether issued directly to participants in the acquisition transaction or to
third parties in order to obtain cash to complete the acquisition). In addition
to, and without limiting the foregoing, in the event that the General Partner
Entity engages in a transaction in which (x) the General Partner Entity (or a
wholly owned direct or indirect Subsidiary of the General Partner Entity) merges
with another entity (referred to as the “Parent Entity”) that is organized in
the “UPREIT format” (i.e., where the Parent Entity holds substantially all of
its assets and conducts substantially all of its operations through a
partnership, limited liability company or other entity (referred to as an
“Operating Entity”)) and the General Partner Entity survives such merger, (y)
such Operating Entity merges with or is otherwise acquired by the Partnership in
exchange in whole or in part for Partnership Interests, and (z) the General
Partner Entity is required or elects to pay part of the consideration in
connection with such merger involving the Parent Entity in the form of cash and
part of the consideration in the form of Shares, the Partnership shall
distribute to the General Partner with respect to its existing Partnership
Interest an amount of cash sufficient to complete such transaction and the
General Partner shall cause the Partnership to cancel a number of Partnership
Units (rounded to the nearest whole number) held by the General Partner equal to
the product attained by multiplying the number of additional Shares of the
General Partner Entity that the General Partner Entity would have issued to the
Parent Entity or the owners of the Parent Entity in such transaction if the
entire consideration therefor were to have been paid in Shares by a fraction,
the numerator of which is one and the denominator of which is the Conversion
Factor.

 

Section 7.5 Outside Activities of the General Partner; Relationship of Shares to
Partnership Units; Funding Debt

 

A. General. Without the Consent of the Outside Limited Partners, the General
Partner shall not, directly or indirectly, enter into or conduct any business
other than in connection with the ownership, acquisition and disposition of
Partnership Interests as General Partner or Limited Partner and the management
of the business of the Partnership and such activities as are incidental
thereto. Without the Consent of the Outside Limited Partners, the assets of the
General Partner shall be limited to Partnership Interests and permitted debt
obligations of the Partnership (as contemplated by Section 7.5.F), so that
Shares and Partnership Units are completely fungible except as otherwise
specifically provided herein; provided that (i) the General Partner shall be
permitted to hold such bank accounts or similar instruments or accounts in its
name as it deems necessary to carry out its responsibilities and purposes as
contemplated under this Agreement and its organizational documents (provided
that accounts held on behalf of the Partnership to permit the General Partner to
carry out its responsibilities under this Agreement shall be considered to
belong to the Partnership and the interest earned thereon shall, subject to
Section 7.4.B, be applied for the benefit of the Partnership); (ii) the General
Partner shall be permitted to acquire Qualified Assets; (iii) the General
Partner shall be permitted to acquire and/or own 100% of a captive insurance
company; and provided further that (iv) the General Partner shall be permitted
to hold such assets as described on Attachment B attached hereto.

 

B. Repurchase of Shares and Other Securities. If the General Partner Entity
exercises its rights under the Articles of Incorporation to purchase Shares or
otherwise elects to purchase from the holders thereof Shares, other equity
securities of the General Partner Entity, New

 

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Securities or Convertible Funding Debt, then the General Partner shall cause the
Partnership to purchase from the General Partner (i) in the case of a purchase
of Shares, that number of Partnership Units of the appropriate class equal to
the product obtained by multiplying the number of Shares purchased by the
General Partner Entity times a fraction, the numerator of which is one and the
denominator of which is the Conversion Factor, or (ii) in the case of the
purchase of any other securities on the same terms and for the same aggregate
price that the General Partner Entity purchased such securities.

 

C. Forfeiture of Shares. If the Partnership or the General Partner acquires
Shares as a result of the forfeiture of such Shares under a restricted or
similar share, share bonus or similar share plan, then the General Partner shall
cause the Partnership to cancel, without payment of any consideration to the
General Partner, that number of Partnership Units of the appropriate class equal
to the number of Shares so acquired, and, if the Partnership acquired such
Shares, it shall transfer such Shares to the General Partner for cancellation.

 

D. Issuances of Shares and Other Securities. The General Partner shall not
grant, award, or issue any additional Shares (other than Shares issued pursuant
to Section 8.6 hereof or pursuant to a dividend or distribution (including any
share split) of Shares to all of its shareholders that results in an adjustment
to the Conversion Factor pursuant to clause (i), (ii) or (iii) of the definition
thereof), other equity securities of the General Partner, New Securities or
Convertible Funding Debt unless (i) the General Partner shall cause, pursuant to
Section 4.2.A hereof, the Partnership to issue to the General Partner,
Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and
other rights, all such that the economic interests are substantially the same as
those of such additional Shares, other equity securities, New Securities or
Convertible Funding Debt, as the case may be, and (ii) the General Partner
transfers to the Partnership, as an additional Capital Contribution, the
proceeds from the grant, award, or issuance of such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be, or from the exercise of rights contained in such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be. Without limiting the foregoing, the General Partner is expressly authorized
to issue additional Shares, other equity securities, New Securities or
Convertible Funding Debt, as the case may be, for less than fair market value,
and the General Partner is expressly authorized, pursuant to Section 4.2.A
hereof, to cause the Partnership to issue to the General Partner corresponding
Partnership Interests, (for example, and not by way of limitation, the issuance
of Shares and corresponding Partnership Units pursuant to a share purchase plan
providing for purchases of Shares, either by employees or shareholders, at a
discount from fair market value or pursuant to employee share options that have
an exercise price that is less than the fair market value of the Shares, either
at the time of issuance or at the time of exercise) as long as (a) the General
Partner concludes in good faith that such issuance is in the interests of the
General Partner and the Partnership and (b) the General Partner transfers all
proceeds from any such issuance or exercise to the Partnership as an additional
Capital Contribution.

 

E. Share Option Plan. If at any time or from time to time, the General Partner
sells or otherwise issues Shares pursuant to any Share Option Plan, the General
Partner shall transfer the proceeds of the sale of such Shares, if any, to the
Partnership as an additional Capital Contribution in exchange for an amount of
additional Partnership Units equal to the number of Shares so sold divided by
the Conversion Factor.

 

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F. Funding Debt. The General Partner or the General Partner Entity or any wholly
owned Subsidiary of either of them may incur a Funding Debt, including, without
limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities (“Convertible Funding Debt”), subject to
the condition that the General Partner, the General Partner Entity or such
Subsidiary, as the case may be, lend to the Partnership the net proceeds of such
Funding Debt; provided that Convertible Funding Debt shall be issued in
accordance with the provisions of Section 7.5.D above; and, provided further
that the General Partner, the General Partner Entity or such Subsidiary shall
not be obligated to lend the net proceeds of any Funding Debt to the Partnership
in a manner that would be inconsistent with the General Partner’s or General
Partner Entity’s ability to remain qualified as a REIT. If the General Partner,
General Partner Entity or such Subsidiary enters into any Funding Debt, the loan
to the Partnership shall be on comparable terms and conditions, including
interest rate, repayment schedule, costs and expenses and other financial terms,
as are applicable with respect to or incurred in connection with such Funding
Debt.

 

G. Capital Contributions of the General Partner. The Capital Contributions by
the General Partner pursuant to Sections 7.5.D and 7.5.E will be deemed to equal
the cash contributed by the General Partner plus (a) in the case of cash
contributions funded by an offering of any equity interests in or other
securities of the General Partner, the offering costs attributable to the cash
contributed to the Partnership, and (b) in the case of Partnership Units issued
pursuant to Section 7.5.E, an amount equal to the difference between the Value
of the Shares sold pursuant to any Share Option Plan and the net proceeds of
such sale.

 

H. Tax Loans. The General Partner or the General Partner Entity may in its sole
and absolute discretion, cause the Partnership to make an interest free loan to
the General Partner or the General Partner Entity, as applicable, provided that
the proceeds of such loans are used to satisfy any tax liabilities of the
General Partner or the General Partner Entity, as applicable.

 

Section 7.6 Transactions With Affiliates

 

A. Transactions with Certain Affiliates. Except as expressly permitted by this
Agreement with respect to any non-arms’ length transaction with an Affiliate,
the Partnership shall not, directly or indirectly, sell, transfer or convey any
property to, or purchase any property from, or borrow funds from, or lend funds
to, any Partner or any Affiliate of the Partnership that is not also a
Subsidiary of the Partnership, except pursuant to transactions that are
determined in good faith by the General Partner to be on terms that are fair and
reasonable and no less favorable to the Partnership than would be obtained from
an unaffiliated third party.

 

B. Conflict Avoidance. The General Partner is expressly authorized to enter
into, in the name and on behalf of the Partnership, a non-competition
arrangement and other conflict avoidance agreements with various Affiliates of
the Partnership and General Partner on such terms as the General Partner, in its
sole and absolute discretion, believes are advisable.

 

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C. Benefit Plans Sponsored by the Partnership. The General Partner in its sole
and absolute discretion and without the approval of the Limited Partners, 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, Subsidiaries of the Partnership or any Affiliate of any of them.

 

Section 7.7 Indemnification

 

A. General. The Partnership shall indemnify each Indemnitee to the fullest
extent provided by the Act from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines, settlements
and other amounts arising from or in connection with any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative, incurred by the Indemnitee and relating to the Partnership or the
General Partner or the General Partner Entity or the operation of, or the
ownership of property by, the Indemnitee, Partnership or the General Partner or
the General Partner Entity as set forth in this Agreement in which any such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established by a final determination of a court of
competent jurisdiction that: (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceeding and either was committed in
bad faith or was the result of active and deliberate dishonesty, (ii) the
Indemnitee actually received an improper personal benefit in money, property or
services or (iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guarantee, contractual obligation for any
indebtedness or other obligation 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. 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
or upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the
Indemnitee acted in a manner contrary to that specified in this Section 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 any insurance proceeds from the liability policy covering the
General Partner and any Indemnitee, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.

 

B. Reimbursement of Expenses. Reasonable expenses expected to be incurred by an
Indemnitee shall be paid or reimbursed by the Partnership in advance of the
final disposition of any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative made or threatened against an
Indemnitee upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the standard of

 

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conduct necessary for indemnification by the Partnership as authorized in this
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.

 

C. No Limitation of Rights. 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 unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.

 

D. Insurance. The Partnership may purchase and maintain insurance on behalf of
the Indemnitees and such other Persons as the General Partner shall determine
against any liability that may be asserted against or expenses that may be
incurred by such Person in connection with the Partnership’s activities,
regardless of whether the Partnership would have the power to indemnify such
Indemnitee or Person against such liability under the provisions of this
Agreement.

 

E. No Personal Liability for Limited Partners. In no event may an Indemnitee
subject any of the Partners to personal liability by reason of the
indemnification provisions set forth in this Agreement.

 

F. Interested Transactions. 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.

 

G. Benefit. The provisions of this Section 7.7 are for the benefit of the
Indemnitees, their employees, officers, directors, trustees, 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 limitation 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 related 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.

 

H. Indemnification Payments Not Distributions. If and to the extent any payments
to the General Partner pursuant to this Section 7.7 constitute gross income to
the General Partner (as opposed to the repayment of advances made on behalf of
the Partnership), such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners’ Capital Accounts.

 

I. Exception to Indemnification. Notwithstanding anything to the contrary in
this Agreement, the General Partner shall not be entitled to indemnification
hereunder for any loss, claim, damage, liability or expense for which the
General Partner is obligated to indemnify the Partnership under any other
agreement between the General Partner and the Partnership.

 

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Section 7.8 Liability of the General Partner

 

A. General. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner (which, for the purposes of this Section 7.8
shall include the directors and officers of the General Partner) shall not be
liable for monetary or other damages to the Partnership, any Partners or any
Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or
omission unless the General Partner acted in bad faith and the act or omission
was material to the matter giving rise to the loss, liability or benefit not
derived.

 

B. Obligation to Consider Interests of General Partner Entity. The Limited
Partners expressly acknowledge that the General Partner, in considering whether
to dispose of any of the Partnership assets, shall take into account the tax
consequences to the General Partner Entity of any such disposition and shall
have no liability whatsoever to the Partnership or any Limited Partner for
decisions that are based upon or influenced by such tax consequences.

 

C. No Obligation to Consider Separate Interests of Limited Partners or
Shareholders. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the shareholders of the
General Partner Entity, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or Assignees) in deciding
whether to cause the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable for monetary or other damages for
losses sustained, liabilities incurred or benefits not derived by Limited
Partners in connection with any decisions or actions made or taken or declined
to be made or taken, provided that the General Partner has acted pursuant to its
authority under this Agreement.

 

D. Actions of Agents. Subject to its obligations and duties as General Partner
set forth in Section 7.1.A, 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 agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by the General Partner in good faith.

 

E. Effect of Amendment. Notwithstanding any other provision contained herein,
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 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.

 

F. Limitations of Fiduciary Duty. Sections 7.1.B, 7.1.E and this Section 7.8 and
any other Section of this Agreement limiting the liability of the General
Partner and/or its directors and officers shall constitute an express limitation
of any duties, fiduciary or otherwise, that they would owe the Partnership or
the Limited Partners if such duty would be imposed by any law, in equity or
otherwise.

 

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Section 7.9 Other Matters Concerning the General Partner

 

A. Reliance on Documents. 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.

 

B. Reliance on Advisors. The General Partner may consult with legal counsel,
accountants, appraisers, management consultants, investment bankers and other
consultants and advisers selected by it, and any act taken or omitted to be
taken in reliance upon the opinion of such Persons as to matters which 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.

 

C. Action Through Agents. The General Partner shall have the right, in respect
of any of its powers or obligations hereunder, to act through any of its duly
authorized officers and a duly appointed attorney or attorneys-in-fact. Each
such attorney shall, to the extent provided by the General Partner in the power
of attorney, have full power and authority to do and perform all and every act
and duty that is permitted or required to be done by the General Partner
hereunder.

 

D. Actions to Maintain REIT Status or Avoid Taxation of the General Partner
Entity. Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner Entity to
qualify as a REIT or (ii) to allow the General Partner Entity to avoid incurring
any liability for taxes under Section 857 or 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners.

 

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 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, to enter into any contracts on behalf of the Partnership and to
take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if the General Partner 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 each case except to the
extent that such action imposes, or purports to impose, liability on the Limited
Partner. 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 expedience 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

 

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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.

 

Section 7.11 Restrictions on General Partner’s Authority

 

A. Consent Required. The General Partner may not take any action in
contravention of an express prohibition or limitation of this Agreement without
the written Consent of (i) all Partners adversely affected or (ii) such lower
percentage of the Partnership Interests held by Limited Partners as may be
specifically provided for under a provision of this Agreement or the Act. The
preceding sentence shall not apply to any limitation or prohibition in this
Agreement that expressly authorizes the General Partner to take action (either
in its discretion or in specified circumstances) so long as the General Partner
acts within the scope of such authority.

 

B. Sale of All Assets of the Partnership. Except as provided in Article XIII,
the General Partner may not, directly or indirectly, cause the Partnership to
sell, exchange, transfer or otherwise dispose of all or substantially all of the
Partnership’s assets in a single transaction or a series of related transactions
(including by way of merger (including a triangular merger), consolidation or
other combination with any other Persons) without the Consent of the Partners
holding Partnership Interests representing more than fifty percent (50%) of the
Percentage Interest of the Class A Units, provided, however, that the foregoing
limitation shall not apply to any leases of all or substantially all of the
Partnership’s assets entered into by the Partnership in order to satisfy any
REIT Requirements.

 

Section 7.12 Loans by Third Parties

 

The Partnership may incur Debt, or enter into similar credit, guarantee,
financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any acquisition of property and any borrowings
from, or guarantees of Debt of the General Partner or any of its Affiliates)
with any Person upon such terms as the General Partner determines appropriate.

 

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1 Limitation of Liability

 

The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement, including Section 10.5, or under the Act.

 

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Section 8.2 Management of Business

 

No Limited Partner or Assignee (other than the General Partner, any of its
Affiliates, or any officer, director, 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 operation, 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, employee, partner, agent 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 Section 7.5 hereof, and subject to any agreements entered into
pursuant to Section 7.6.B hereof and to any other agreements entered into by a
Limited Partner or its Affiliates with the Partnership or a Subsidiary, any
Limited Partner (other than the General Partner) and any officer, director,
employee, agent, trustee, Affiliate or shareholder 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 in direct or indirect competition with the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners (other than the General Partner) or 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 to the extent expressly provided herein), and no Person (other
than the General Partner) shall have any obligation pursuant to this Agreement
to offer any interest in any such business venture to the Partnership, any
Limited Partner or any such other Person, even if such opportunity is of a
character which, 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 right of redemption set forth in Section 8.6, 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 termination of the Partnership as provided herein. No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.2.A) or, except to the extent provided by Exhibit C or as permitted
by Sections 4.2.A, 5.1.B(i), 6.1.A and 6.1.B, or otherwise expressly provided in
this Agreement, as to profits, losses, distributions or credits.

 

Section 8.5 Rights of Limited Partners Relating to the Partnership

 

A. General. In addition to other rights provided by this Agreement or by the
Act, and except as limited by Section 8.5.D, each Limited Partner shall have the
right, for a purpose

 

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reasonably related to such Limited Partner’s interest as a limited partner in
the Partnership, upon written demand with a statement of the purpose of such
demand and at such Limited Partner’s own expense:

 

  (1) to obtain a copy of the most recent annual and quarterly reports filed
with the Securities and Exchange Commission by either the General Partner Entity
or the Partnership, if any, pursuant to the Exchange Act;

 

  (2) to obtain a copy of the Partnership’s federal, state and local income tax
returns for each Fiscal Year;

 

  (3) to obtain a current list of the name and last known business, residence or
mailing address of each Partner;

 

  (4) to obtain a copy of this Agreement and the Certificate of Limited
Partnership and all amendments thereto, together with executed copies of all
powers of attorney pursuant to which this Agreement, the Certificate of Limited
Partnership and all amendments thereto have been executed;

 

  (5) to obtain true and full information regarding the amount of cash and a
description and statement of the agreed value of any other property or services
contributed by each Partner and which each Partner has agreed to contribute in
the future, and the date on which each Partner became a Partner; and

 

  (6) other information regarding the affairs of the Partnership as is just and
reasonable.

 

B. Notice of Conversion Factor. The Partnership shall notify each Limited
Partner upon request (i) of the then current Conversion Factor and (ii) of any
changes to the Conversion Factor.

 

C. Notice of Extraordinary Transaction of the General Partner Entity. The
General Partner Entity shall not make any extraordinary distributions of cash or
property to its shareholders or effect a merger (including, without limitation,
a triangular merger), consolidation or other combination with or into another
Person, a sale of all or substantially all of its assets or any other similar
extraordinary transaction without providing written notice to the Limited
Partners of its intention to make such distribution or effect such merger,
consolidation, combination, sale or other extraordinary transaction at least
twenty (20) Business Days prior to the record date to determine shareholders
eligible to receive such distribution or to vote upon the approval of such
merger, sale or other extraordinary transaction (or, if no such record date is
applicable, at least twenty (20) Business Days before consummation of such
merger, sale or other extraordinary transaction) which notice shall describe in
reasonable detail the action to be taken; provided, however, that the General
Partner, in its sole and absolute discretion, may shorten the required notice
period of not less than twenty (20) Business Days prior to the record date to
determine the shareholders eligible to vote upon a merger transaction (but not
any of the other transactions covered by this Section 8.5.C.) to a period of not
less than ten (10) calendar days (thereby continuing to afford the holders of
Partnership Units the opportunity to redeem Partnership Units under Section 8.6
on or prior to the record date for the shareholder vote on the merger
transaction) so long as (i) the General Partner Entity will be the surviving
entity in such

 

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merger transaction, (ii) immediately following the merger transaction, Persons
who held voting securities of the General Partner Entity immediately prior to
such merger transaction will hold, solely by reason of the ownership of voting
securities of the General Partner Entity immediately prior to the merger
transaction, voting securities of the General Partner Entity representing not
less than fifty-one percent (51%) of the total combined voting power of all
outstanding voting securities of the General Partner Entity after such merger,
and (iii) in the event that in connection with such merger transaction the
Partnership will merge with another entity, the Partnership will be the
surviving entity in such merger. This provision for such notice shall not be
deemed (i) to permit any transaction that otherwise is prohibited by this
Agreement or requires a Consent of the Partners or (ii) to require a Consent on
the part of any one or more of the Limited Partners to a transaction that does
not otherwise require Consent under this Agreement. Each Limited Partner agrees,
as a condition to the receipt of the notice pursuant hereto, to keep
confidential the information set forth therein until such time as the General
Partner Entity has made public disclosure thereof and to use such information
during such period of confidentiality solely for purposes of determining whether
to exercise the Redemption Right; provided, however, that a Limited Partner may
disclose such information to its attorney, accountant and/or financial advisor
for purposes of obtaining advice with respect to such exercise so long as such
attorney, accountant and/or financial advisor agrees to receive and hold such
information subject to this confidentiality requirement.

 

D. Confidentiality. Notwithstanding any other provision of this Section 8.5, the
General Partner may keep confidential from the Limited Partners, for such period
of time as the General Partner determines in its sole and absolute discretion,
any information that (i) the General Partner reasonably 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 could damage the Partnership or its business or (ii) the Partnership is
required by law or by agreements with unaffiliated third parties to keep
confidential, provided that this Section 8.5.D shall not affect the notice
requirements set forth in Section 8.5.C above.

 

Section 8.6 Redemption Right

 

A. General. (i) Subject to Section 8.6.C, at any time on or after one year
following the date of the initial issuance thereof (which, in the event of the
transfer of a Class A Unit or Class B Unit, shall be deemed to be the date that
the Class A Unit (or corresponding Class B Unit) or such Class B Unit, as the
case may be, was issued to the original recipient thereof for purposes of this
Section 8.6), the holder of a Partnership Unit (if other than the General
Partner or the General Partner Entity or any Subsidiary of either the General
Partner or the General Partner Entity) shall have the right (the “Redemption
Right”) to require the Partnership to redeem such Partnership Unit, with such
redemption to occur on the Specified Redemption Date and at a redemption price
equal to and in the form of the Cash Amount to be paid by the Partnership. Any
such Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the holder
of the Partnership Units who is exercising the Redemption Right (the “Redeeming
Partner”). A Limited Partner may exercise the Redemption Right from time to
time, without limitation as to frequency, with respect to part or all of the
Partnership Units that it owns, as selected by the Limited Partner, provided
that a Limited Partner may not exercise the Redemption Right for less than one

 

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thousand (1,000) Partnership Units of a particular class unless such Redeeming
Partner then holds less than one thousand (1,000) Partnership Units in that
class, in which event the Redeeming Partner must exercise the Redemption Right
for all of the Partnership Units held by such Redeeming Partner in that class,
and provided further that, with respect to a Limited Partner which is an entity,
such Limited Partner may exercise the Redemption Right for less than one
thousand (1,000) Partnership Units without regard to whether or not such Limited
Partner is exercising the Redemption Right for all of the Partnership Units held
by such Limited Partner as long as such Limited Partner is exercising the
Redemption Right on behalf of one or more of its equity owners in respect of one
hundred percent (100%) of such equity owners’ interests in such Limited Partner.
For purposes hereof, a Class A Unit issued upon conversion of a Class B Unit
shall be deemed to have been issued when the Class B Unit was issued.

 

(ii) The Redeeming Partner shall have no right with respect to any Partnership
Units so redeemed to receive any distributions paid in respect of a Partnership
Record Date for distributions in respect of Partnership Units after the
Specified Redemption Date with respect to such Partnership Units.

 

(iii) The Assignee of any Limited Partner may exercise the rights of such
Limited Partner pursuant to this Section 8.6, and such Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Limited Partner’s Assignee. In connection with
any exercise of such rights by such Assignee on behalf of such Limited Partner,
the Cash Amount shall be paid by the Partnership directly to such Assignee and
not to such Limited Partner.

 

(iv) If the General Partner Entity provides notice to the Limited Partners,
pursuant to Section 8.5.C hereof, the Redemption Right shall be exercisable,
without regard to whether the Partnership Units have been outstanding for any
specified period, during the period commencing on the date on which the General
Partner Entity provides such notice and ending on the record date to determine
shareholders eligible to receive such distribution or to vote upon the approval
of such merger, sale or other extraordinary transaction (or, if no such record
date is applicable, at least twenty (20) Business Days before the consummation
of such merger, sale or other extraordinary transaction). If this subparagraph
(iv) applies, the Specified Redemption Date is the date on which the Partnership
and the General Partner Entity receive notice of exercise of the Redemption
Right, rather than ten (10) Business Days after receipt of the notice of
redemption.

 

B. General Partner Assumption of Right. (i) If a Limited Partner has delivered a
Notice of Redemption, the General Partner Entity may, in its sole and absolute
discretion (subject to the limitations on ownership and transfer of Shares set
forth in the Articles of Incorporation), elect to assume directly and satisfy a
Redemption Right. If such election is made by the General Partner Entity, the
Partnership shall determine whether the General Partner Entity shall pay the
Redemption Amount in the form of the Cash Amount or the Shares Amount. The
Partnership’s decision regarding whether such payment shall be made in the form
of the Cash Amount or the Shares Amount shall be made by the General Partner, in
its capacity as the general partner of the Partnership and in its sole and
absolute discretion. Payment of the Redemption Amount in the form of Shares
shall be in Shares registered for resale under Section 12 of the Exchange Act
and listed for trading on the exchange or national market on which the

 

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Shares are Publicly Traded and the issuance of Shares upon redemption shall be
registered under the Securities Act or, at the election of the General Partner
Entity resale of the Shares issued upon redemption shall be registered (so long
as the Redeeming Partner provides all information required for such
registration), and, provided further that, if the Shares are not Publicly Traded
at the time a Redeeming Partner exercises its Redemption Right, the Redemption
Amount shall be paid only in the form of the Cash Amount unless the Redeeming
Partner, in its sole and absolute discretion, consents to payment of the
Redemption Amount in the form of the Shares Amount), on the Specified Redemption
Date, upon such payment the General Partner Entity shall acquire the Partnership
Units offered for redemption by the Redeeming Partner and shall be treated for
all purposes of this Agreement as the owner of such Partnership Units. Unless
the General Partner Entity, in its sole and absolute discretion, shall exercise
its right to assume directly and satisfy the Redemption Right, the General
Partner Entity shall not have any obligation to the Redeeming Partner or to the
Partnership with respect to the Redeeming Partner’s exercise of the Redemption
Right. If the General Partner Entity shall exercise its right to assume directly
and satisfy the Redemption Right in the manner described in the first sentence
of this Section 8.6B and shall fully perform its obligations in connection
therewith, the Partnership shall have no right or obligation to pay any amount
to the Redeeming Partner with respect to such Redeeming Partner’s exercise of
the Redemption Right, and each of the Redeeming Partner, the Partnership and the
General Partner Entity shall, for federal income tax purposes, treat the
transaction between the General Partner Entity and the Redeeming Partner as a
sale of the Redeeming Partner’s Partnership Units to the General Partner Entity.
Nothing contained in this Section 8.6.B shall imply any right of the General
Partner Entity to require any Limited Partner to exercise the Redemption Right
afforded to such Limited Partner pursuant to Section 8.6.A.

 

(ii) If the General Partner Entity determines to pay the Redeeming Partner the
Redemption Amount in the form of Shares, the total number of Shares to be paid
to the Redeeming Partner in exchange for the Redeeming Partner’s Partnership
Units shall be the applicable Shares Amount. If this amount is not a whole
number of Shares, the Redeeming Partner shall be paid (i) that number of Shares
which equals the nearest whole number less than such amount plus (ii) an amount
of cash which the General Partner Entity determines, in its reasonable
discretion, to represent the fair value of the remaining fractional Share which
would otherwise be payable to the Redeeming Partner.

 

(iii) Each Redeeming Partner agrees to execute such documents as the General
Partner Entity may reasonably require in connection with the issuance of Shares
upon exercise of the Redemption Right.

 

C. Exceptions to Exercise of Redemption Right. Notwithstanding the provisions of
Sections 8.6.A and 8.6.B, a Partner shall not be entitled to exercise the
Redemption Right pursuant to Section 8.6.A if (but only as long as) the delivery
of Shares to such Partner on the Specified Redemption Date would be (i)
prohibited under the restrictions on the ownership or transfer of Shares in the
Articles of Incorporation (or, if the General Partner is not the General Partner
Entity, the organizational documents of the General Partner Entity) or (ii)
prohibited under applicable federal or state securities laws or regulations (in
each case regardless of whether the General Partner Entity would in fact assume
and satisfy the Redemption Right).

 

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D. No Liens on Partnership Units Delivered for Redemption. Each Limited Partner
covenants and agrees with the General Partner that all Partnership Units
delivered for redemption shall be delivered to the Partnership or the General
Partner Entity, as the case may be, free and clear of all liens; and,
notwithstanding anything contained herein to the contrary, neither the General
Partner Entity nor the Partnership shall be under any obligation to acquire
Partnership Units which are or may be subject to any liens. Each Limited Partner
further agrees that, if any state or local property transfer tax is payable as a
result of the transfer of its Partnership Units to the Partnership or the
General Partner Entity, such Limited Partner shall assume and pay such transfer
tax.

 

E. Additional Partnership Interests; Modification of Holding Period. If the
Partnership issues Partnership Interests to any Additional Limited Partner
pursuant to Article IV, the General Partner shall make such revisions to this
Section 8.6 as it determines are necessary to reflect the issuance of such
Partnership Interests (including setting forth any restrictions on the exercise
of the Redemption Right with respect to such Partnership Interests) which differ
from those set forth in this Agreement), provided that no such revisions shall
materially adversely affect the rights of any other Limited Partner to exercise
its Redemption Right without that Limited Partner’s prior written consent. In
addition, the General Partner may, with respect to any holder or holders of
Partnership Units, at any time and from time to time, as it shall determine in
its sole and absolute discretion, (i) reduce or waive the length of the period
prior to which such holder or holders may not exercise the Redemption Right or
(ii) reduce or waive the length of the period between the exercise of the
Redemption Right and the Specified Redemption Date.

 

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1 Records and Accounting

 

The General Partner shall keep or cause to be kept at the principal office of
the Partnership appropriate books and records 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 9.3. Any records maintained by or on
behalf of the Partnership in the regular course of its business may be kept on,
or be in the form of, punch cards, magnetic tape, photographs, micrographics or
any other information storage device, provided that the records so maintained
are convertible into clearly legible written form within a reasonable period of
time. 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.

 

Section 9.2 Fiscal Year

 

The fiscal year of the Partnership shall be the calendar year.

 

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Section 9.3 Reports

 

A. Annual Reports. As soon as practicable, but in no event later than the date
on which the General Partner Entity mails its annual report to its shareholders,
the General Partner Entity shall cause to be mailed to each Limited Partner an
annual report, as of the close of the most recently ended Fiscal Year,
containing financial statements of the Partnership, or of the General Partner
Entity if such statements are prepared on a consolidated basis with the
Partnership, for such Fiscal 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 Entity.

 

B. Quarterly Reports. If and to the extent that the General Partner Entity mails
quarterly reports to its shareholders, as soon as practicable, but in no event
later than the date on such reports are mailed, the General Partner Entity shall
cause to be mailed to each Limited Partner a report containing unaudited
financial statements, as of the last day of such fiscal quarter, of the
Partnership, or of the General Partner Entity if such statements are prepared on
a consolidated basis with the Partnership, and such other information as may be
required by applicable law or regulation, or as the General Partner determines
to be appropriate.

 

ARTICLE X

TAX MATTERS

 

Section 10.1 Preparation of Tax Returns

 

The General Partner shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for federal and state income tax purposes and shall
use all reasonable efforts to furnish, within ninety (90) days of the close of
each taxable year, the tax information reasonably required by Limited Partners
for federal and state income tax reporting purposes.

 

Section 10.2 Tax Elections

 

Except as otherwise provided herein, the General Partner shall, in its sole and
absolute discretion, determine whether to make any available election pursuant
to the Code (including the election under Section 754 of the Code). The General
Partner shall have the right to seek to revoke any such election upon the
General Partner’s determination in its sole and absolute discretion that such
revocation is in the best interests of the Partners.

 

Section 10.3 Tax Matters Partner

 

A. General. The General Partner shall be the “tax matters partner” of the
Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of
the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, taxpayer identification
number and profit interest of each of the Limited Partners and any Assignees;
provided, however, that such information is provided to the Partnership by the
Limited Partners.

 

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B. Powers. 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 or (ii) who is a “notice partner” (as defined in Section
6231(a)(8) of the Code) or a member of a “notice group” (as defined in Section
6223(b)(2) of the Code);

 

  (2) if a notice of a final administrative adjustment at the Partnership level
of any item required to be taken into account by a Partner for tax purposes (a
“final adjustment”) is mailed to the tax matters partner, to seek judicial
review of such final adjustment, including the filing of a petition for
readjustment with the Tax Court or the filing of a complaint for refund with the
United States Claims Court or 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 which is attributable to any item required to be taken into account by a
Partner for tax purposes, or an item affected by such item; and

 

  (6) to take any other action on behalf of the Partners of the Partnership 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 shall be fully applicable to the tax matters partner in its
capacity as such.

 

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C. Reimbursement. 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. Nothing herein shall be construed
to restrict the Partnership from engaging an accounting firm and/or law firm to
assist the tax matters partner in discharging its duties hereunder, so long as
the compensation paid by the Partnership for such services is reasonable.

 

Section 10.4 Organizational Expenses

 

The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a sixty (60) month period as provided in
Section 709 of the Code.

 

Section 10.5 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 Section 1441, 1442, 1445, or 1446 of the Code. 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 which would otherwise be made to the Limited Partner
or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the available funds of the Partnership
which would, but for such payment, be distributed to the Limited Partner. Any
amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed to such 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 10.5. If a Limited Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.5 when due, the General Partner may, in
its sole and absolute discretion, 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 that may be charged under
the law) 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 to perfect or enforce
the security interest created hereunder.

 

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ARTICLE XI

TRANSFERS AND WITHDRAWALS

 

Section 11.1 Transfer

 

A. Definition. The term “transfer,” when used in this Article XI with respect to
a Partnership Interest or a Partnership Unit, shall be deemed to refer to a
transaction by which the General Partner purports to assign all or any part of
its General Partnership Interest to another Person or by which a Limited Partner
purports to assign all or any part of its Limited Partnership Interest to
another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term “transfer” when used in this Article XI does not include any redemption
or repurchase of Partnership Units by the Partnership from a Partner or
acquisition of Partnership Units from a Limited Partner by the General Partner
Entity pursuant to Section 8.6 or otherwise. No part of the interest of a
Limited Partner shall be subject to the claims of any creditor, 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. General. No Partnership Interest shall be transferred, in whole or in part,
except in accordance with the terms and conditions set forth in this Article XI.
Any transfer or purported transfer of a Partnership Interest not made in
accordance with this Article XI shall be null and void.

 

Section 11.2 Transfers of Partnership Interests of General Partner

 

A. General. The General Partner may not transfer any of its Partnership
Interests except in connection with (i) a transaction permitted under Section
11.2.B, (ii) any merger (including a triangular merger), consolidation or other
combination with or into another Person following the consummation of which the
equity holders of the surviving entity are substantially identical to the
shareholders of the General Partner Entity, or (iii) as otherwise expressly
permitted under this Agreement, nor shall the General Partner withdraw as
General Partner except in connection with a transaction permitted under Section
11.2.B or any merger, consolidation, or other combination permitted under clause
(ii) of this Section 11.2.A.

 

B. Specific Transactions Prohibited. The General Partner Entity shall not engage
in any merger (including a triangular merger), consolidation or other
combination with or into another Person (other than any transaction permitted by
Section 11.2.A), sale of all or substantially all of its assets or any
reclassification, recapitalization or change of outstanding Shares (other than a
change in par value, or from par value to no par value, or as a result of a
subdivision or combination as described in the definition of “Conversion
Factor”) (“Termination Transaction”), unless (i) the Termination Transaction has
been approved by the Consent of Partners holding Partnership Interests
representing more than fifty percent (50%) of the Percentage Interest of the
Class A Units, (ii) following such merger or other consolidation, substantially
all of the assets of the surviving entity consist of Partnership Units and (iii)
in connection with which all Partners either will receive, or will have the
right to receive, for each Unit an amount of cash, securities, or other property
equal to the product of the Conversion

 

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Factor and the greatest amount of cash, securities or other property paid to a
holder of Shares, if any, corresponding to such Unit in consideration of one
such Share at any time during the period from and after the date on which the
Termination Transaction is consummated; provided that, if, in connection with
the Termination Transaction, a purchase, tender or exchange offer shall have
been made to and accepted by the holders of the percentage required for the
approval of mergers under the charter documents of the General Partner Entity,
each holder of Partnership Units shall receive, or shall have the right to
receive without any right of Consent set forth above in this subsection B, the
greatest amount of cash, securities, or other property which such holder would
have received had it exercised the Redemption Right and received Shares in
exchange for its Partnership Units immediately prior to the expiration of such
purchase, tender or exchange offer and had thereupon accepted such purchase,
tender or exchange offer. The General Partner shall not enter into an agreement
or other arrangement providing for or facilitating the creation of a General
Partner Entity other than the General Partner, unless the successor General
Partner Entity executes and delivers a counterpart to this Agreement in which
such General Partner Entity agrees to be fully bound by all of the terms and
conditions contained herein that are applicable to a General Partner Entity.

 

Section 11.3 Limited Partners’ Rights to Transfer

 

A. General. Except to the extent expressly permitted in Sections 11.3.B and
11.3.C or in connection with the exercise of a Redemption Right pursuant to
Section 8.6, a Limited Partner may not transfer all or portion of its
Partnership Interest, or any of such Limited Partner’s rights as a Limited
Partner, without the prior written consent of the General Partner, which consent
may be withheld in the General Partner’s sole and absolute discretion. Any
transfer otherwise permitted under Sections 11.3.B and 11.3.C shall be subject
to the conditions set forth in Section 11.3.D, 11.3.E and 11.3.F, and all
permitted transfers shall be subject to Section 11.5.

 

B. Incapacitated Limited Partner. 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 Partner, 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. Permitted Transfers. A Limited Partner may transfer, with or without the
consent of the General Partner, all or a portion of its Partnership Interest (i)
in the case of a Limited Partner who is an individual, to a member of his
Immediate Family, any trust formed for the benefit of himself and/or members of
his Immediate Family, or any partnership, limited liability company, joint
venture, corporation or other business entity comprised only of himself and/or
members of his Immediate Family and entities the ownership interests in which
are owned by or for the benefit of himself and/or members of his Immediate
Family, (ii) in the case of a Limited Partner which is a trust, to the
beneficiaries of such trust, (iii) in the case of a Limited Partner which is a
partnership, limited liability company, joint venture, corporation or other
business entity to which Units were transferred pursuant to clause (i) above, to
its partners, owners or stockholders, as the case may be, who are members of the
Immediate Family of or are actually the Person(s) who transferred Partnership
Units to it pursuant to clause (i) above, (iv) in the case

 

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of a Limited Partner which acquired Partnership Units as of the date hereof and
which is a partnership, limited liability company, joint venture, corporation or
other business entity, to its partners, owners, stockholders or Affiliates
thereof, as the case may be, or the Persons owning the beneficial interests in
any of its partners, owners or stockholders or Affiliates thereof (it being
understood that this clause (iv) will apply to all of each Person’s Interests
whether the Partnership Units relating thereto were acquired on the date hereof
or hereafter), (v) in the case of a Limited Partner which is a partnership,
limited liability company, joint venture, corporation or other business entity
other than any of the foregoing described in clause (iii) or (iv), in accordance
with the terms of any agreement between such Limited Partner and the Partnership
pursuant to which such Partnership Interest was issued, (vi) pursuant to a gift
or other transfer without consideration, (vii) pursuant to applicable laws of
descent or distribution, (viii) to another Limited Partner and (ix) pursuant to
a grant of security interest or other encumbrance effectuated in a bona fide
transaction or as a result of the exercise of remedies related thereto, subject
to the provisions of Section 11.3.F hereof. A trust or other entity will be
considered formed “for the benefit” of a Partner’s Immediate Family even though
some other Person has a remainder interest under or with respect to such trust
or other entity.

 

D. No Transfers Violating Securities Laws. The General Partner may prohibit any
transfer of Partnership Units by a Limited Partner unless it receives a written
opinion of legal counsel (which opinion and counsel shall be reasonably
satisfactory to the Partnership) to such Limited Partner to the effect that such
transfer would not require filing of a registration statement under the
Securities Act or would not otherwise violate any federal or state securities
laws or regulations applicable to the Partnership or the Partnership Unit or, at
the option of the Partnership, an opinion of legal counsel to the Partnership to
the same effect.

 

E. No Transfers Affecting Tax Status of Partnership. No transfer of Partnership
Units by a Limited Partner (including a redemption or exchange pursuant to
Section 8.6) may be made to any Person if (i) in the opinion of legal counsel
for the Partnership, it would result in the Partnership being treated as an
association taxable as a corporation for federal income tax purposes or would
result in a termination of the Partnership for federal income tax purposes
(except as a result of the redemption or exchange for Shares of all Partnership
Units held by all Limited Partners other than the General Partner or the General
Partner Entity or any Subsidiary of the General Partner or the General Partner
Entity or pursuant to a transaction expressly permitted under Section 7.11.B or
Section 11.2), (ii) in the opinion of legal counsel for the Partnership, it
would adversely affect the ability of the General Partner Entity to continue to
qualify as a REIT or would subject the General Partner Entity to any additional
taxes under Section 857 or Section 4981 of the Code or (iii) such transfer is
effectuated through an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Section 7704 of
the Code (provided that this clause (iii) shall not be the basis for limiting or
restricting in any manner the exercise of the Redemption Right under Section 8.6
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a “publicly traded partnership” and, by reason thereof, taxable as a
corporation).

 

F. No Transfers to Holders of Nonrecourse Liabilities. No pledge or transfer of
any Partnership Units may be made to a lender to the Partnership or any Person
who is related

 

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(within the meaning of Section 1.752-4(b) of the Regulations) to any lender to
the Partnership whose loan constitutes a Nonrecourse Liability unless (i) the
General Partner is provided prior written notice thereof and (ii) the lender
enters into an arrangement with the Partnership and the General Partner to
exchange or redeem for the Redemption Amount any Partnership Units in which a
security interest is held simultaneously with the time at which such lender
would be deemed to be a partner in the Partnership for purposes of allocating
liabilities to such lender under Section 752 of the Code.

 

Section 11.4 Substituted Limited Partners

 

A. Consent of General Partner. No Limited Partners shall have the right to
substitute a transferee as a Limited Partner in its place. The General Partner
shall, however, have the right to consent to the admission of a transferee of
the interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion. The General Partner’s failure or refusal 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
any Partner. The General Partner hereby grants its consent to the admission as a
Substituted Limited Partner to any bona fide financial institution that loans
money or otherwise extends credit to a holder of Partnership Units and
thereafter becomes the owner of such Partnership Units pursuant to the exercise
by such financial institution of its rights under a pledge of such Partnership
Units granted in connection with such loan or extension of credit.

 

B. Rights of Substituted Limited Partner. A transferee who has been admitted as
a Substituted Limited Partner in accordance with this Article XI shall have all
the rights and powers and be subject to all the restrictions and liabilities of
a Limited Partner under this Agreement. The admission of any transferee as a
Substituted Limited Partner shall be conditioned upon the transferee executing
and delivering to the Partnership an acceptance of all the terms and conditions
of this Agreement (including, without limitation, the provisions of Section
15.11) and such other documents or instruments as may be required to effect the
admission.

 

C. Partner Registry. Upon the admission of a Substituted Limited Partner, the
General Partner shall update the Partner Registry in the books and records of
the Partnership as it deems necessary to reflect such admission in the Partner
Registry.

 

Section 11.5 Assignees

 

If the General Partner, in its sole and absolute discretion, does not consent to
the admission of any permitted transferee under Section 11.3 as a Substituted
Limited Partner, as described in Section 11.4, 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, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, and shall
have the rights granted to the Limited Partners under Section 8.6, but shall not
be deemed to be a holder of Partnership Units for any other purpose

 

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under this Agreement, and shall not be entitled to vote such Partnership Units
in any matter presented to the Limited Partners for a vote (such Partnership
Units being deemed to have been voted on such matter in the same proportion as
all other Partnership Units held by Limited Partners are voted). If 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 XI to the
same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.

 

Section 11.6 General Provisions

 

A. Withdrawal of Limited Partner. No Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Limited Partner’s Partnership Units in accordance with this Article XI or
pursuant to redemption of all of its Partnership Units under Section 8.6.

 

B. Termination of Status as Limited Partner. Any Limited Partner who shall
transfer all of its Partnership Units in a transfer permitted pursuant to this
Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.6 shall cease to be a Limited Partner.

 

C. Timing of Transfers. Transfers pursuant to this Article XI may only be made
upon three (3) Business Days prior notice, unless the General Partner otherwise
agrees.

 

D. Allocations. If any Partnership Interest is transferred during any quarterly
segment of the Partnership’s fiscal year in compliance with the provisions of
this Article XI or redeemed or transferred pursuant to Section 8.6, Net Income,
Net Losses, each item thereof and all other items attributable to such interest
for such fiscal year shall be divided and allocated between the transferor
Partner and the transferee Partner by taking into account their varying
interests during the fiscal year in accordance with Section 706(d) of the Code,
using the interim closing of the books method (unless the General Partner, in
its sole and absolute discretion, elects to adopt a daily, weekly, or a monthly
proration period, in which event Net Income, Net Losses, each item thereof and
all other items attributable to such interest for such fiscal year shall be
prorated based upon the applicable method selected by the General Partner).
Solely for purposes of making such allocations, each of such items for the
calendar month in which the transfer or redemption occurs shall be allocated to
the Person who is a Partner as of midnight on the last day of said month. All
distributions of Available Cash attributable to any 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 Redeeming Partner, as the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Available Cash
thereafter attributable to such Partnership Unit shall be made to the transferee
Partner.

 

E. Additional Restrictions. In addition to any other restrictions on transfer
herein contained, including without limitation the provisions of this Article XI
and Article VII, in no event may any transfer or assignment of a Partnership
Interest by any Partner (including pursuant to Section 8.6) be made without the
express consent of the General Partner, in its sole and absolute discretion, (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

 

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Partnership Interest, such as the Capital Account, or rights to distributions,
separate and apart from all other components of a Partnership Interest; (iv) if
in the opinion of legal counsel to the Partnership such transfer would cause a
termination of the Partnership for federal or state income tax purposes (except
as a result of the redemption or exchange for Shares of all Partnership Units
held by all Limited Partners other than the General Partner, the General Partner
Entity, or any Subsidiary of either, or pursuant to a transaction expressly
permitted under Section 7.11.B or Section 11.2); (v) if in the opinion of
counsel to the Partnership, such transfer would cause the Partnership to cease
to be classified as a partnership for federal income tax purposes (except as a
result of the redemption or exchange for Shares of all Units held by all Limited
Partners other than the General Partner, the General Partner Entity, or any
Subsidiary of either, or pursuant to a transaction expressly permitted under
Section 7.11.B or Section 11.2); (vi) if such transfer requires the registration
of such Partnership Interest pursuant to any applicable federal or state
securities laws; (vii) if such transfer is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Section 7704 of the Code or such transfer causes
the Partnership to become a “publicly traded partnership,” as such term is
defined in Section 469(k)(2) or Section 7704(b) of the Code (provided that, this
clause (vii) shall not be the basis for limiting or restricting in any manner
the exercise of the Redemption Right under Section 8.6 unless, and only to the
extent that, outside tax counsel provides to the General Partner an opinion to
the effect that, in the absence of such limitation or restriction, there is a
significant risk that the Partnership will be treated as a “publicly traded
partnership” and, by reason thereof, taxable as a corporation); (viii) if such
transfer subjects the Partnership or the activities of the Partnership to
regulation under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or ERISA, each as amended; (ix) if such transfer could adversely affect
the ability of the General Partner Entity to fail to remain qualified as a REIT;
or (x) if in the opinion of legal counsel for the transferring Partner (which
opinion and counsel shall be reasonably satisfactory to the Partnership) or
legal counsel for the Partnership, such transfer would cause the General Partner
Entity to fail to continue to qualify as a REIT or subject the General Partner
Entity to any additional taxes under Section 857 or Section 4981 of the Code.

 

F. Avoidance of “Publicly Traded Partnership” Status. The General Partner shall
monitor the transfers of interests in the Partnership to determine (i) if such
interests are being traded on an “established securities market” or a “secondary
market (or the substantial equivalent thereof)” within the meaning of Section
7704 of the Code and (ii) whether additional transfers of interests would result
in the Partnership being unable to qualify for at least one of the “safe
harbors” set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors under which
interests will not be treated as “readily tradable on a secondary market (or the
substantial equivalent thereof)” within the meaning of Section 7704 of the Code)
(the “Safe Harbors”). The General Partner shall take all steps reasonably
necessary or appropriate to prevent any trading of interests or any recognition
by the Partnership of transfers made on such markets and, except as otherwise
provided herein, to insure that at least one of the Safe Harbors is met;
provided, however, that the foregoing shall not authorize the General Partner to
limit or restrict in any manner the right of any holder of a Partnership Unit to
exercise the Redemption Right in accordance with the terms of Section 8.6
unless, and only to the extent that, outside tax counsel provides to the General
Partner an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Partnership will be treated as
a “publicly traded partnership” and, by reason thereof, taxable as a
corporation.

 

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ARTICLE XII

ADMISSION OF PARTNERS

 

Section 12.1 Admission of a Successor General Partner

 

A successor to all of the General Partner’s General Partnership Interest
pursuant to Section 11.2 who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
upon such transfer. Any such successor shall carry on the business of the
Partnership without dissolution. In such case, the admission shall be subject to
such 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.

 

Section 12.2 Admission of Additional Limited Partners

 

A. General. No Person shall be admitted as an Additional Limited Partner without
the consent of the General Partner, which consent shall be given or withheld in
the General Partner’s sole and absolute discretion. A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement or who
exercises an option to receive Partnership Units shall be admitted to the
Partnership as an Additional Limited Partner only with the consent of the
General Partner and only upon furnishing to the General Partner (i) evidence of
acceptance in form 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 15.11 and (ii) such other documents or instruments
as may be required in the discretion of the General Partner to effect such
Person’s admission as an Additional Limited 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.

 

B. Allocations to Additional Limited Partners. If any Additional Limited Partner
is admitted to the Partnership on any day other than the first day of a Fiscal
Year, then Net Income, Net Losses, each item thereof and all other items
allocable among Partners and Assignees for such Fiscal Year shall be allocated
among such Additional Limited Partner and all other Partners and Assignees by
taking into account their varying interests during the Fiscal Year in accordance
with Section 706(d) of the Code, using the interim closing of the books method
(unless the General Partner, in its sole and absolute discretion, elects to
adopt a daily, weekly or monthly proration method, in which event Net Income,
Net Losses, and each item thereof would be prorated based upon the applicable
period 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 Partners
and Assignees including such Additional Limited Partner. 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.

 

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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 records of
the Partnership and, if necessary, to prepare as soon as practical an amendment
of this Agreement (including an amendment to the Partner Registry) and, if
required by law, shall prepare and file an amendment to the Certificate of
Limited Partnership and may for this purpose exercise the power of attorney
granted pursuant to Section 15.11 hereof.

 

ARTICLE XIII

DISSOLUTION AND LIQUIDATION

 

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. The Partnership shall dissolve, and its affairs
shall be wound up, upon the first to occur of any of the following (“Liquidating
Events”):

 

  (i) an event of withdrawal of the General Partner (other than an event of
bankruptcy), unless within ninety (90) days after the withdrawal, the written
Consent of the Outside Limited Partners to continue the business of the
Partnership and to the appointment, effective as of the date of withdrawal, of a
substitute General Partner is obtained;

 

  (ii) through December 31, 2054, an election to dissolve the Partnership made
by the General Partner with the Consent of Partners holding Partnership
Interests representing ninety percent (90%) of the Percentage Interest of the
Class A Units;

 

  (iii) an election to dissolve the Partnership made by the General Partner, in
its sole and absolute discretion after December 31, 2054;

 

  (iv) entry of a decree of judicial dissolution of the Partnership pursuant to
the provisions of the Act;

 

  (v) the sale of all or substantially all of the assets and properties of the
Partnership for cash or for marketable securities; or

 

  (vi)

a final and non-appealable judgment is entered by a court of competent
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
final and non-appealable order for relief is entered by a court with appropriate
jurisdiction

 

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against the General Partner, in each case under any federal or state bankruptcy
or insolvency laws as now or hereafter in effect, unless prior to or at the time
of the entry of such order or judgment, the written Consent of the Outside
Limited Partners is obtained to continue the business of the Partnership and to
the appointment, effective as of a date prior to the date of such order or
judgment, of a substitute General Partner.

 

Section 13.2 Winding Up

 

A. General. 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 Partners.
No Partner 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, if there is no remaining General Partner, any Person
elected by a majority in interest of the Limited Partners (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 equity or
other securities of the General Partner or any other entity) shall be applied
and distributed in the following order:

 

  (1) First, to the payment and discharge of all of the Partnership’s debts and
liabilities to creditors other than the Partners;

 

  (2) Second, to the payment and discharge of all of the Partnership’s debts and
liabilities to the General Partner;

 

  (3) Third, to the payment and discharge of all of the Partnership’s debts and
liabilities to the Limited Partners;

 

  (4) Fourth, to the holders of Partnership Interests that are entitled to any
preference in distribution upon liquidation (including, without limitation, the
Series E Preferred Units) in accordance with the rights of any such class or
series of Partnership Interests (and, within each such class or series, to each
holder thereof pro rata based on its Percentage Interest in such class); and

 

  (5) The balance, if any, to the Partners in accordance with their Capital
Accounts, after giving effect to all contributions, distributions, and
allocations for all periods.

 

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

 

B. Deferred Liquidation. Notwithstanding the provisions of Section 13.2.A which
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

 

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immediate sale of part or all of the Partnership’s assets would be impractical
or would cause undue loss to the Partners, 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 Partners as creditors) or distribute to the Partners, in lieu of cash, as
tenants in common and in accordance with the provisions of Section 13.2.A,
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 Partners, 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.

 

Section 13.3 Compliance With Timing Requirements of Regulations; Restoration of
Deficit Capital Accounts

 

A. Timing of Distributions. If the Partnership is “liquidated” within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made
under this Article XIII to the General Partner and Limited Partners who have
positive Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). In the discretion of the General Partner, a pro rata
portion of the distributions that would otherwise be made to the General Partner
and Limited Partners pursuant to this Article XIII may be: (A) distributed to a
trust established for the benefit of the General Partner and Limited Partners
for the purposes 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 (in which case the assets of any such trust
shall be distributed to the General Partner and Limited Partners from time to
time, in the reasonable discretion of the General Partner, in the same
proportions as the amount distributed to such trust by the Partnership would
otherwise have been distributed to the General Partner and Limited Partners
pursuant to this Agreement); or (B) withheld 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 amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.

 

B. Restoration of Deficit Capital Accounts Upon Liquidation of the Partnership.
If any Partner 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 Partner 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,
except as otherwise set forth in this Section 13.3.B, or as otherwise expressly
agreed in writing by the affected Partner and the Partnership after the date
hereof. Notwithstanding the foregoing, (i) if the General Partner has a deficit
balance in its Capital Account (after giving effect to all contributions,
distributions, and allocations for all Partnership Years or portions thereof,
including the year during which such liquidation occurs), the General Partner
shall contribute to the capital of the Partnership the amount necessary to
restore such deficit balance to zero in

 

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compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a DRO
Partner has a deficit balance in its Capital Account (after giving effect to all
contributions, distributions, and allocations for all Partnership Years or
portions thereof, including the year during which such liquidation occurs), such
DRO Partner shall be obligated to make a contribution to the Partnership with
respect to any such deficit balance in such DRO Partner’s Capital Account upon a
liquidation of the Partnership in an amount equal to the lesser of such deficit
balance or such DRO Partner’s DRO Amount; and (iii) the first sentence of this
Section 13.3.B shall not apply with respect to any other Partner to the extent,
but only to such extent, that such Partner previously has agreed in writing,
with the consent of the General Partner, to undertake an express obligation to
restore all or any portion of a deficit that may exist in its Capital Account
upon a liquidation of the Partnership. No Limited Partner shall have any right
to become a DRO Partner, to increase its DRO Amount, or otherwise agree to
restore any portion of any deficit that may exist in its Capital Account without
the express written consent of the General Partner, in its sole and absolute
discretion. Any contribution required of a Partner under this Section 13.3.B.
shall be made on or before the later of (i) the end of the Partnership Year in
which the interest is liquidated or (ii) the ninetieth (90th) day following the
date of such liquidation. The proceeds of any contribution to the Partnership
made by a DRO Partner with respect to a deficit in such DRO Partner’s Capital
Account balance shall be treated as a Capital Contribution by such DRO Partner
and the proceeds thereof shall be treated as assets of the Partnership to be
applied as set forth in Section 13.2.A.

 

C. Restoration of Deficit Capital Accounts Upon a Liquidation of a Partner’s
Interest by Transfer. If a DRO Partner’s interest in the Partnership is
“liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)
(other than in connection with a liquidation of the Partnership) which term
shall include a redemption by the Partnership of such DRO Partner’s interest
upon exercise of the Redemption Right, and such DRO Partner is designated on
Exhibit E as Part II DRO Partner, such DRO Partner shall be required to
contribute cash to the Partnership equal to the lesser of (i) the amount
required to increase its Capital Account balance as of such date to zero, or
(ii) such DRO Partner’s DRO Amount. For this purpose, (i) the DRO Partner’s
deficit Capital Account balance shall be determined by taking into account all
contributions, distributions, and allocations for the portion of the Fiscal Year
ending on the date of the liquidation or redemption, and (ii) solely for
purposes of determining such DRO Partner’s Capital Account balance, the General
Partner shall redetermine the Carrying Value of the Partnership’s assets on such
date based upon the principles set forth in Sections 1.D.(3) and (4) of Exhibit
B hereto, and shall take into account the DRO Partner’s allocable share of any
Unrealized Gain or Unrealized Loss resulting from such redetermination in
determining the balance of its Capital Account. The amount of any payment
required hereunder shall be due and payable within the time period specified in
the second to last sentence of Section 13.3.B.

 

D. Effect of the Death of a DRO Partner. After the death of a DRO Partner who is
an individual, the executor of the estate of such DRO Partner may elect to
reduce (or eliminate) the DRO Amount of such DRO Partner. Such elections may be
made by such executor by delivering to the General Partner within two hundred
and seventy (270) days of the death of such Limited Partner, a written notice
setting forth the maximum deficit balance in its Capital Account that such
executor agrees to restore under this Section 13.3, if any. If such executor
does not make a timely election pursuant to this Section 13.3 (whether or not
the balance in the applicable Capital Account is negative at such time), then
the DRO Partner’s estate (and the beneficiaries thereof

 

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who receive distributions of Partnership Interests therefrom) shall be deemed a
DRO Partner with a DRO Amount in the same amount as the deceased DRO Partner.
Any DRO Partner which itself is a partnership for federal income tax purposes
may likewise elect, after the date of its partner’s death to reduce (or
eliminate) its DRO Amount by delivering a similar notice to the General Partner
within the time period specified above, and in the absence of any such notice
the DRO Amount of such DRO Partner shall not be reduced to reflect the death of
any of its partners.

 

Section 13.4 Rights of Limited Partners

 

Except as otherwise provided in this Agreement, each Limited Partner shall look
solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to demand or receive property
other than cash from the Partnership. Except as otherwise expressly provided in
this Agreement, no Limited Partner shall have priority over any other Limited
Partner as to the return of its Capital Contributions, distributions, or
allocations.

 

Section 13.5 Notice of Dissolution

 

If a Liquidating Event occurs or an event occurs that would, but for provisions
of an election or objection by one or more Partners pursuant to Section 13.1,
result in a dissolution of the Partnership, the General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each of the
Partners and to all other parties with whom the Partnership regularly conducts
business (as determined in the discretion of the General Partner).

 

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, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled 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, to minimize any losses otherwise attendant upon such winding-up,
and the provisions of this Agreement shall remain in effect among the Partners
during the period of liquidation.

 

Section 13.8 Waiver of Partition

 

Each Partner hereby waives any right to partition of the Partnership property.

 

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Section 13.9 Liability Of Liquidator

 

The Liquidator shall be indemnified and held harmless by the Partnership in the
same manner and to the same degree as an Indemnitee may be indemnified pursuant
to Section 7.7.

 

ARTICLE XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

 

Section 14.1 Amendments

 

A. General. Amendments to this Agreement may be proposed by the General Partner
or by any Limited Partner holding Partnership Interests representing twenty-five
percent (25%) or more of the Percentage Interest of the Class A Units. Following
such proposal (except an amendment governed by Section 14.1.B), the General
Partner shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written Consent of the Partners as set forth in this
Section 14.1 on the proposed amendment or shall call a meeting to vote thereon
and to transact any other business that it may deem appropriate. For purposes of
obtaining a written Consent, 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 vote in favor of the
recommendation of the General Partner. A proposed amendment shall be adopted and
be effective as an amendment hereto if it is approved by the General Partner
and, except as provided in Section 14.1.B, 14.1.C or 14.1.D, it receives the
Consent of the Partners holding Partnership Interests representing more than
fifty percent (50%) of the Percentage Interest of the Class A Units.

 

B. Amendments Not Requiring Limited Partner Approval. Notwithstanding Section
14.1.A but subject to Section 14.1.C, the General Partner shall have the power,
without the consent of the Limited Partners, 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, termination, or withdrawal of
Partners in accordance with this Agreement (which may be affected through the
replacement of the Partner Registry with an amended Partner Registry);

 

  (3) to set forth the designations, rights, powers, duties, and preferences of
the holders of any additional Partnership Interests issued pursuant to Article
IV;

 

  (4) to reflect a change that 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
of this Agreement, 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; and

 

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  (5) to satisfy any requirements, conditions, or guidelines contained in any
order, directive, opinion, ruling or regulation of a federal, state or local
agency or contained in federal, state or local law.

 

The General Partner shall notify the Limited Partners in writing when any action
under this Section 14.1.B is taken in the next regular communication to the
Limited Partners or within 90 days of the date thereof, whichever is earlier.

 

C. Amendments Requiring Limited Partner Approval (Excluding the General
Partner). Notwithstanding Section 14.1.A, without the Consent of the Outside
Limited Partners, the General Partner shall not amend Section 4.2.A, Section
7.1.A (second sentence only), Section 7.5, Section 7.6, Section 7.8, Section
7.11.B, Section 11.2, Section 13.1 (other than Section 13.1(ii) which can be
amended only with a Consent of Partners holding Partnership Interests
representing 90% or more of the Percentage Interest of the Class A Units
(including Partnership Units held by the General Partner)), the last sentence of
Section 11.4.A (provided that no such amendment shall in any event adversely
affect the rights of any lender who made a loan or who extended credit and
received in connection therewith a pledge of Partnership Units prior to the date
such amendment is adopted unless, and only to the extent such lender consents
thereto), this Section 14.1.C or Section 14.2.

 

D. Other Amendments Requiring Certain Limited Partner Approval. Notwithstanding
anything in this Section 14.1 to the contrary, this Agreement shall not be
amended with respect to any Partner adversely affected without the Consent of
such Partner adversely affected, or any Assignee who is a bona fide financial
institution that loans money or otherwise extends credit to a holder of
Partnership Units, adversely affected if such amendment would (i) convert such
Limited Partner’s interest in the Partnership into a general partner’s interest,
(ii) modify the limited liability of such Limited Partner, (iii) amend Section
7.11.A, (iv) amend Article V or Article VI (except as permitted pursuant to
Sections 4.2, 5.4, 6.2 and 14.1(B)(3)), (v) amend Section 8.6 or any defined
terms set forth in Article I that relate to the Redemption Right (except as
permitted in Section 8.6.E), or (vi) amend Sections 11.3 or 11.5, or add any
additional restrictions to Section 11.6.E or amend Section 14.1.B(4) or this
Section 14.1.D.

 

E. Amendment and Restatement of Partner Registry Not an Amendment.
Notwithstanding anything in this Article XIV or elsewhere in this Agreement to
the contrary, any amendment and restatement of the Partner Registry by the
General Partner to reflect events or changes otherwise authorized or permitted
by this Agreement shall not be deemed an amendment of this Agreement and may be
done at any time and from time to time, as determined by the General Partner
without the Consent of the Limited Partners and without any notice requirement.

 

Section 14.2 Meetings of the Partners

 

A. General. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners

 

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holding Partnership Interests representing twenty-five percent (25%) or more of
the Percentage Interest of the Class A Units. The call shall state the nature of
the business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven (7) days nor more than thirty (30) days prior to
the date of such meeting. Partners may vote in person or by proxy at such
meeting. Whenever the vote or Consent of Partners is permitted or required under
this Agreement, such vote or Consent may be given at a meeting of Partners or
may be given in accordance with the procedure prescribed in Section 14.1.A.
Except as otherwise expressly provided in this Agreement, the Consent of holders
of Partnership Interests representing a majority of the Percentage Interests of
the Class A Units shall control.

 

B. Actions Without a Meeting. Except as otherwise expressly provided by this
Agreement, any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Partners holding Partnership Interests representing
more than fifty percent (50%) (or such other percentage as is expressly required
by this Agreement) of the Percentage Interest of the Class A Units. Such consent
may be in one instrument or in several instruments, and shall have the same
force and effect as a vote of 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 date on which written consents from the Partners holding the
required Percentage Interest of the Class A Units have been filed with the
General Partner.

 

C. Proxy. Each Limited Partner may authorize any Person or Persons to act for
him by proxy on all matters in which a Limited Partner is entitled to
participate, including waiving notice of any meeting, or voting or participating
at a meeting. Every proxy must be signed by the Limited 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. Every proxy
shall be revocable at the pleasure of the Limited Partner executing it, such
revocation to be effective upon the Partnership’s receipt of written notice
thereof.

 

D. Conduct of Meeting. 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 deem appropriate.

 

ARTICLE XV

GENERAL PROVISIONS

 

Section 15.1 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 communication to the Partner or
Assignee at the address set forth in the Partner Registry or such other address
as the Partners shall notify the General Partner in writing.

 

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Section 15.2 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” “Sections” and
“Exhibits” are to Articles, Sections and Exhibits of this Agreement.

 

Section 15.3 Pronouns And Plurals

 

Whenever the context may require, any pronoun 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 15.4 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 15.5 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 15.6 Creditors

 

Other than as expressly set forth herein with regard to any Indemnitee, none of
the provisions of this Agreement shall be for the benefit of, or shall be
enforceable by, any creditor of the Partnership.

 

Section 15.7 Waiver

 

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.

 

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

 

This Agreement shall be construed and enforced in accordance with and governed
by the laws of the State of Delaware, without regard to the principles of
conflicts of law.

 

Section 15.10 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 15.11 Power Of Attorney

 

A. General. Each Limited Partner and each Assignee who accepts Partnership Units
(or any rights, benefits or privileges associated therewith) is deemed to
irrevocably constitute and appoint 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, 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 of Limited
Partnership and all amendments or restatements thereof) that the General Partner
or any 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) 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 deem 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
any 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
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article XI, XII or XIII
hereof or the Capital Contribution of any Partner and (e) all certificates,
documents and other instruments relating to the determination of the rights,
preferences and privileges of Partnership Interests; and

 

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

 

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Nothing contained in this Section 15.11 shall be construed as authorizing the
General Partner or any Liquidator to amend this Agreement except in accordance
with Article XIV hereof or as may be otherwise expressly provided for in this
Agreement.

 

B. Irrevocable Nature. The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
or any 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 Limited Partner’s or Assignee’s
Partnership Units and shall extend to such Limited Partner’s or Assignee’s
heirs, successors, assigns and personal representatives. Each such Limited
Partner or Assignee hereby agrees to be bound by any representation made by the
General Partner or any Liquidator, acting in good faith pursuant to such power
of attorney; and each such Limited Partner or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the General Partner or any Liquidator, taken in good faith under such power of
attorney. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within fifteen (15) days after receipt of the
General Partner’s or 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.

 

Section 15.12 Entire Agreement

 

This Agreement contains the entire understanding and agreement among the
Partners with respect to the subject matter hereof and supersedes any prior
written oral understandings or agreements among them with respect thereto.

 

Section 15.13 No Rights As Shareholders

 

Nothing contained in this Agreement shall be construed as conferring upon the
holders of the Partnership Units any rights whatsoever as shareholders of the
General Partner, including, without limitation, any right to receive dividends
or other distributions made to shareholders of the General Partner or to vote or
to consent or receive notice as shareholders in respect to any meeting of
shareholders for the election of trustees of the General Partner or any other
matter.

 

Section 15.14 Limitation To Preserve REIT Status

 

To the extent that any amount paid or credited to the General Partner or any of
its officers, trustees, employees or agents pursuant to Section 7.4 or Section
7.7 would constitute gross income to the General Partner for purposes of Section
856(c)(2) or 856(c)(3) of the Code (a “General Partner Payment”) then,
notwithstanding any other provision of this Agreement, the amount of such
General Partner Payment for any fiscal year shall not exceed the lesser of:

 

(i) an amount equal to the excess, if any, of (a) 4% of the General Partner’s
total gross income (within the meaning of Section 856(c)(3) of the Code but not
including the amount of any General Partner Payments) for the fiscal year which
is described in subsections (A) though (H) of Section 856(c)(2) of the Code over
(b) the amount of gross income (within the meaning of Section 856(c)(2) of the
Code) derived by the General Partner from sources other than those described in
subsections (A) through (H) of Section 856(c)(2) of the Code (but not including
the amount of any General Partner Payments); or

 

65

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(ii) an amount equal to the excess, if any of (a) 24% of the General Partner’s
total gross income (but not including the amount of any General Partner
Payments) for the fiscal year which is described in subsections (A) through (I)
of Section 856(c)(3) of the Code over (b) the amount of gross income (within the
meaning of Section 856(c)(3) of the Code but not including the amount of any
General Partner Payments) derived by the General Partner from sources other than
those described in subsections (A) through (I) of Section 856(c)(3) of the Code;
provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (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 would not adversely affect the General Partner’s ability to
qualify as a REIT. To the extent General Partner Payments may not be made in a
year due to the foregoing limitations, such General Partner Payments shall carry
over and be treated as arising in the following year, provided, however, that
such amounts shall not carry over for more than five years, and if not paid
within such five year period, shall expire; provided further, that (i) as
General Partner Payments are made, such payments shall be applied first to carry
over amounts outstanding, if any, and (ii) with respect to carry over amounts
for more than one Fiscal Year, such payments shall be applied to the earliest
Fiscal Year first.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.

 

GENERAL PARTNER: CARRAMERICA REALTY CORPORATION By:  

/s/ Stephen E. Riffee

--------------------------------------------------------------------------------

Name:   Stephen E. Riffee Title:   Chief Financial Officer and Treasurer LIMITED
PARTNERS: By:   CarrAmerica Realty Corporation,     as Attorney-in-Fact for the
    Limited Partners By:  

/s/ Stephen E. Riffee

--------------------------------------------------------------------------------

Name:   Stephen E. Riffee Title:   Chief Financial Officer and Treasurer For
purposes of Section 8.6 hereof: CARRAMERICA REALTY CORPORATION By:  

/s/ Stephen E. Riffee

--------------------------------------------------------------------------------

Name:   Stephen E. Riffee Title:   Chief Financial Officer and Treasurer

--------------------------------------------------------------------------------

EXHIBIT A

 

FORM OF PARTNER REGISTRY

 

     CLASS A AND CLASS B UNITS

--------------------------------------------------------------------------------

 

Name And Address Of Partner

--------------------------------------------------------------------------------

   Partnership
Units

--------------------------------------------------------------------------------

   Initial Capital
Account

--------------------------------------------------------------------------------

   Percentage
Interest (1)

--------------------------------------------------------------------------------

 

GENERAL PARTNER:

                

CarrAmerica Realty Corporation

                

LIMITED PARTNERS

                

TOTAL CLASS A AND CLASS B UNITS

             100.00000 %               

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

     Series E Preferred Units

--------------------------------------------------------------------------------

 

Name and Address of Partner

--------------------------------------------------------------------------------

   Partnership
Units

--------------------------------------------------------------------------------

   Initial Capital
Account

--------------------------------------------------------------------------------

  

Percentage

Interest

--------------------------------------------------------------------------------

 

CarrAmerica Realty Corporation

             100 %

Total Series E Preferred Units

             100 %               

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

NOTES:

 

(1) For purposes of this calculation, the Class A Units and Class B Units are
treated as one class.

 

A-1

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EXHIBIT B

 

CAPITAL ACCOUNT MAINTENANCE

 

1. Capital Accounts of the Partners

 

A. The Partnership shall maintain for each Partner a separate Capital Account in
accordance with the rules of Regulations Section l.704-l(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions and
any other deemed contributions made by such Partner to the Partnership pursuant
to this Agreement and (ii) all items of Partnership income and gain (including
income and gain exempt from tax) computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1 of the Agreement and
Exhibit C thereof, and decreased by (x) the amount of cash or Agreed Value of
all actual and deemed distributions of cash or property made to such Partner
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 1.B hereof and allocated to such Partner
pursuant to Section 6.1 of the Agreement and Exhibit C thereof.

 

B. For purposes of computing the amount of any item of income, gain, deduction
or loss to be reflected in the Partners’ Capital Accounts, unless otherwise
specified in this Agreement, the determination, recognition and classification
of any such item shall be the same as its determination, recognition and
classification for federal income tax purposes determined in accordance with
Section 703(a) of the Code (for this purpose all items of income, gain, loss or
deduction required to be stated separately pursuant to Section 703(a) (1) of the
Code shall be included in taxable income or loss), with the following
adjustments:

 

(1) Except as otherwise provided in Regulations Section 1.704-1(b)(2)(iv)(m),
the computation of all items of income, gain, loss and deduction shall be made
without regard to any election under Section 754 of the Code which may be made
by the Partnership, provided that the amounts of any adjustments to the adjusted
bases of the assets of the Partnership made pursuant to Section 734 of the Code
as a result of the distribution of property by the Partnership to a Partner (to
the extent that such adjustments have not previously been reflected in the
Partners’ Capital Accounts) shall be reflected in the Capital Accounts of the
Partners in the manner and subject to the limitations prescribed in Regulations
Section l.704-1(b)(2)(iv)(m)(4).

 

(2) The computation of all items of income, gain, and deduction shall be made
without regard to the fact that items described in Sections 705(a)(l)(B) or
705(a)(2)(B) of the Code are not includible in gross income or are neither
currently deductible nor capitalized for federal income tax purposes.

 

(3) Any income, gain or loss attributable to the taxable disposition of any
Partnership property shall be determined as if the adjusted basis of such
property as of such date of disposition were equal in amount to the
Partnership’s Carrying Value with respect to such property as of such date.

 

B-1

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(4) In lieu of the depreciation, amortization, and other cost recovery
deductions taken into account in computing such taxable income or loss, there
shall be taken into account Depreciation for such fiscal year.

 

(5) In the event the Carrying Value of any Partnership Asset is adjusted
pursuant to Section 1.D hereof, the amount of any such adjustment shall be taken
into account as gain or loss from the disposition of such asset.

 

(6) Any items specially allocated under Section 2 of Exhibit C to the Agreement
hereof shall not be taken into account.

 

C. A transferee (including any Assignee) of a Partnership Unit shall succeed to
a pro rata portion of the Capital Account of the transferor.

 

D. (1) Consistent with the provisions of Regulations Section
1.704-1(b)(2)(iv)(f), and as provided in Section 1.D(2), the Carrying Values of
all Partnership assets shall be adjusted upward or downward to reflect any
Unrealized Gain or Unrealized Loss attributable to such Partnership property, as
of the times of the adjustments provided in Section 1.D(2) hereof, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of each
such property and allocated pursuant to Section 6.1 of the Agreement.

 

(2) Such adjustments shall be made as of the following times: (a) immediately
prior to the acquisition of an additional interest in the Partnership by any new
or existing Partner in exchange for more than a de minimis Capital Contribution;
(b) immediately prior to the distribution by the Partnership to a Partner of
more than a de minimis amount of property as consideration for an interest in
the Partnership; and (c) immediately prior to the liquidation of the Partnership
within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g), provided,
however, that adjustments pursuant to clauses (a) and (b) above shall be made
only if the General Partner determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership.

 

(3) In accordance with Regulations Section 1.704- l(b)(2)(iv)(e), the Carrying
Value of Partnership assets distributed in kind shall be adjusted upward or
downward to reflect any Unrealized Gain or Unrealized Loss attributable to such
Partnership property, as of the time any such asset is distributed.

 

(4) In determining Unrealized Gain or Unrealized Loss for purposes of this
Exhibit B, the aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) shall be determined by the General
Partner using such reasonable method of valuation as it may adopt, or in the
case of a liquidating distribution pursuant to Article XIII of the Agreement,
shall be determined and allocated by the Liquidator using such reasonable
methods of valuation as it may adopt. The General Partner, or the Liquidator, as
the case may be, shall allocate such aggregate fair market value among the
assets of the Partnership in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual properties.

 

E. The provisions of the Agreement (including this Exhibit B and the other
Exhibits to the Agreement) relating to the maintenance of Capital Accounts are
intended to comply with

 

B-2

--------------------------------------------------------------------------------

Regulations Section 1.704-1(b), and shall be interpreted and applied in a manner
consistent with such Regulations. In the event the General Partner shall
determine that it is prudent to modify the manner in which the Capital Accounts,
or any debits or credits thereto (including, without limitation, debits or
credits relating to liabilities which are secured by contributed or distributed
property or which are assumed by the Partnership, the General Partner, or the
Limited Partners) are computed in order to comply with such Regulations, the
General Partner may make such modification without regard to Article XIV of the
Agreement, provided that it is not likely to have a material effect on the
amounts distributable to any Person pursuant to Article XIII of the Agreement
upon the dissolution of the Partnership. The General Partner also shall (i) make
any adjustments that are necessary or appropriate 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 l.704-l(b)(2)(iv)(q), and (ii) make any
appropriate modifications in the event unanticipated events might otherwise
cause this Agreement not to comply with Regulations Section l.704-1(b).

 

2. No Interest

 

No interest shall be paid by the Partnership on Capital Contributions or on
balances in Partners’ Capital Accounts.

 

3. No Withdrawal

 

No Partner shall be entitled to withdraw any part of its Capital Contribution or
Capital Account or to receive any distribution from the Partnership, except as
provided in Articles IV, V, VII and XIII of the Agreement.

 

B-3

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EXHIBIT C

 

SPECIAL ALLOCATION RULES

 

1. Special Allocation Rules.

 

Notwithstanding any other provision of the Agreement or this Exhibit C, the
following special allocations shall be made in the following order:

 

A. Minimum Gain Chargeback. Notwithstanding the provisions of Section 6.1 of the
Agreement or any other provisions of this Exhibit C, if there is a net decrease
in Partnership Minimum Gain during any Fiscal Year, each Partner shall be
specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Partner’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 Partner
pursuant thereto. The items to be so allocated shall be determined in accordance
with Regulations Section 1.704-2(f)(6). This Section 1.A is intended to comply
with the minimum gain chargeback requirements in Regulations Section 1.704-2(f)
and for purposes of this Section 1.A only, each Partner’s Adjusted Capital
Account Deficit shall be determined prior to any other allocations pursuant to
Section 6.1 of this Agreement with respect to such Fiscal Year and without
regard to any decrease in Partner Minimum Gain during such Fiscal Year.

 

B. Partner Minimum Gain Chargeback. Notwithstanding any other provision of
Section 6.1 of this Agreement or any other provisions of this Exhibit C (except
Section 1.A hereof), if there is a net decrease in Partner Minimum Gain
attributable to a Partner Nonrecourse Debt during any Fiscal Year, each Partner
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
Partner’s 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)(5). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each General
Partner and Limited Partner pursuant thereto. The items to be so allocated shall
be determined in accordance with Regulations Section 1.704-2(i)(4). This Section
1.B is intended to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently therewith.
Solely for purposes of this Section 1.B, each Partner’s Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of the Agreement or this Exhibit with respect to such Fiscal Year, other
than allocations pursuant to Section 1.A hereof.

 

C. Qualified Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6),
and after giving effect to the allocations required under Sections 1.A and 1.B
hereof with respect to such Fiscal Year, such Partner has an Adjusted Capital
Account Deficit, items of Partnership income and gain (consisting of a pro rata
portion of each item of Partnership income, including gross income and gain for
the Fiscal Year)

 

C-1

--------------------------------------------------------------------------------

shall be specifically allocated to such Partner in an amount and manner
sufficient to eliminate, to the extent required by the Regulations, its Adjusted
Capital Account Deficit created by such adjustments, allocations or
distributions as quickly as possible. This Section 1.C is intended to constitute
a “qualified income offset” under Regulations Section 1.704-1(b)(2)(ii)(d) and
shall be interpreted consistently therewith.

 

D. Gross Income Allocation. In the event that any Partner has an Adjusted
Capital Account Deficit at the end of any Fiscal Year (after taking into account
allocations to be made under the preceding paragraphs hereof with respect to
such Fiscal Year), each such Partner shall be specially allocated items of
Partnership income and gain (consisting of a pro rata portion of each item of
Partnership income, including gross income and gain for the Fiscal Year) in an
amount and manner sufficient to eliminate, to the extent required by the
Regulations, its Adjusted Capital Account Deficit.

 

E. Nonrecourse Deductions. Except as may otherwise be expressly provided by the
General Partner pursuant to Section 4.2 with respect to other classes of
Partnership Units, Nonrecourse Deductions for any Fiscal Year shall be allocated
only to the Partners holding Class A Units and Class B Units in accordance with
their respective Percentage Interests. If the General Partner determines in its
good faith discretion that the Partnership’s Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner is
authorized, upon notice to the Limited Partners, to revise the prescribed ratio
for such Fiscal Year to the numerically closest ratio which would satisfy such
requirements.

 

F. Partner Nonrecourse Deductions. Any Partner Nonrecourse Deductions for any
Fiscal Year shall be specially allocated to the Partner 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 Sections
1.704-2(b)(4) and 1.704-2(i).

 

G. Code Section 754 Adjustments. To the extent an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Section 734(b) or 743(b) of the Code
is required, pursuant to Regulations Section 1.704-l(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, 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 item of gain or loss shall be specially allocated to the
Partners in a manner consistent with the manner in which their Capital Accounts
are required to be adjusted pursuant to such Section of the Regulations.

 

2. Allocations for Tax Purposes

 

A. Except as otherwise provided in this Section 2, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the Partners in the same manner as its correlative item of “book” income, gain,
loss or deduction is allocated pursuant to Section 6.1 of the Agreement and
Section 1 of this Exhibit C.

 

C-2

--------------------------------------------------------------------------------

B. In an attempt to eliminate Book-Tax Disparities attributable to a Contributed
Property or Adjusted Property, items of income, gain, loss, and deduction shall
be allocated for federal income tax purposes among the Partners as follows:

 

(1) (a) In the case of a Contributed Property, such items attributable thereto
shall be allocated among the Partners consistent with the principles of Section
704(c) of the Code to take into account the variation between the Section 704(c)
Value of such property and its adjusted basis at the time of contribution
(taking into account Section 2.C of this Exhibit C); and

 

(b) any item of Residual Gain or Residual Loss attributable to a Contributed
Property shall be allocated among the Partners in the same manner as its
correlative item of “book” gain or loss is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.

 

(2) (a) In the case of an Adjusted Property, such items shall

 

(i) first, be allocated among the Partners in a manner consistent with the
principles of Section 704(c) of the Code to take into account the Unrealized
Gain or Unrealized Loss attributable to such property and the allocations
thereof pursuant to Exhibit B;

 

(ii) second, in the event such property was originally a Contributed Property,
be allocated among the Partners in a manner consistent with Section 2.B(1) of
this Exhibit C; and

 

(b) any item of Residual Gain or Residual Loss attributable to an Adjusted
Property shall be allocated among the Partners in the same manner its
correlative item of “book” gain or loss is allocated pursuant to Section 6.1 of
the Agreement and Section 1 of this Exhibit C.

 

(3) all other items of income, gain, loss and deduction shall be allocated among
the Partners the same manner as their correlative item of “book” gain or loss is
allocated pursuant to Section 6.1 of the Agreement and Section 1 of this Exhibit
C.

 

C. To the extent Regulations promulgated pursuant to Section 704(c) of the Code
permit a Partnership to utilize alternative methods to eliminate the disparities
between the Carrying Value of property and its adjusted basis, the General
Partner shall, subject to any agreements between the Partnership and a Partner,
have the authority to elect the method to be used by the Partnership and such
election shall be binding on all Partners.

 

C-3

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EXHIBIT D

 

NOTICE OF REDEMPTION

 

The undersigned hereby irrevocably (i) redeems              Partnership Units in
CarrAmerica Realty Operating Partnership, L.P. in accordance with the terms of
the Agreement of Limited Partnership of CarrAmerica Realty Operating
Partnership, L.P., as amended, and the Redemption Right referred to therein,
(ii) surrenders such Partnership Units and all right, title and interest therein
and (iii) directs that the Cash Amount or Shares Amount (as determined by the
General Partner) deliverable upon exercise of the Redemption Right be delivered
to the address specified below, and if Shares are to be delivered, such Shares
be registered or placed in the name(s) and at the address(es) specified below.
The undersigned hereby represents, warrants, and certifies that the undersigned
(a) has marketable and unencumbered title to such Partnership Units, free and
clear of the rights of or interests of any other person or entity, (b) has the
full right, power and authority to redeem and surrender such Partnership Units
as provided herein and (c) has obtained the consent or approval of all persons
or entities, if any, having the right to consult or approve such redemption and
surrender.

 

Dated:                      

Name of Limited Partner:

 

 

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(Signature of Limited Partner)

 

 

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(Street Address)

 

 

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    (City)                                (State)     
                           (Zip Code)    

Signature Guaranteed by:

 

 

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IF SHARES ARE TO BE ISSUED, ISSUE TO:

 

Name:                                     
                                                

 

Social Security or tax identifying
number:                                       
                                                          

 

D-1

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EXHIBIT E

 

FORM OF DRO REGISTRY

 

PART I DRO PARTNERS

  DRO AMOUNT

PART II DRO PARTNERS

   

 

E-1

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ATTACHMENT A

 

(SERIES E PREFERRED UNITS)

 

In accordance with Sections 4.2.A and 4.2.D of the Agreement, set forth below
are the terms and conditions of the Series E Preferred Units hereby established
that will be issued by the Partnership to the General Partner. All capitalized
terms used in this Attachment A and not otherwise defined shall have the
meanings assigned in the Agreement.

 

A. Designation and Number. A series of Partnership Units, designated as Series E
Cumulative Redeemable Preferred Units (the “Series E Preferred Units”), is
hereby established. The number of Series E Preferred Units shall be 8,050,000.

 

B. Rank. The Series E Preferred Units shall, with respect to distribution rights
and rights upon voluntary or involuntary liquidation, dissolution or winding up
of the Partnership, rank (a) senior to the Class A Units, Class B Units and all
Partnership Interests ranking junior to the Series E Preferred Units; (b) on a
parity with all Partnership Interests issued by the Partnership the terms of
which specifically provide that such Partnership Interests rank on a parity with
the Series E Preferred Units (each referred to as “Parity Preferred Units”); and
(c) junior to all Partnership Interests issued by the Partnership the terms of
which specifically provide that such Partnership Interests rank senior to the
Series E Preferred Units.

 

C. Distributions.

 

(i) Pursuant to Section 5.1 of the Agreement, holders of Series E Preferred
Units shall be entitled to receive, out of Available Cash, cumulative
preferential distributions of Available Cash at the rate of 7.50% of the $25.00
liquidation preference per annum (equivalent to a fixed annual amount of $1.8750
per Series E Preferred Unit). Such distributions shall accrue and be cumulative
from and including the first day of the “Dividend Period” of the Series E
Preferred Stock of the General Partner and shall be payable quarterly in arrears
on the last calendar day (or, if such day is not a business day, the next
business day thereafter) of each February, May, August, and November (each a
“Series E Preferred Unit Distribution Payment Date”), commencing after June 30,
2004. Any distribution payable on the Series E Preferred Units for any partial
distribution period shall be computed on the basis of a 360-day year consisting
of twelve 30-day months.

 

(ii) No distributions on Series E Preferred Units shall be authorized or paid or
set apart for payment at such time as the terms and provisions of any agreement
of the Partnership, including any agreement relating to its indebtedness,
prohibits such authorization, payment or setting apart for payment or provides
that such authorization, payment or setting apart for payment would constitute a
breach thereof, or a default thereunder, or if such authorization or payment
shall be restricted or prohibited by law.

 

(iii) Notwithstanding the foregoing, distributions with respect to the Series E
Preferred Units will accumulate whether or not the terms and provisions set
forth in Section

 

A-1

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C.(ii) of this Attachment A at any time prohibit the current payment of
distributions, whether or not there is sufficient Available Cash for such
distributions and whether or not such distributions are authorized. Accumulated
but unpaid distributions on the Series E Preferred Units will accumulate as of
the Series E Preferred Unit Distribution Payment Date on which they first become
payable.

 

(iv) When distributions are not paid in full (or a sum sufficient for such full
payment is not so set apart) upon the Series E Preferred Units and any other
Partnership Interests ranking on a parity as to distributions with the Series E
Preferred Units, all distributions authorized upon the Series E Preferred Units
and any other Partnership Interests ranking on a parity as to distributions with
the Series E Preferred Units shall be authorized pro rata so that the amount of
distributions authorized per Partnership Unit of Series E Preferred Units and
such other Partnership Interests shall in all cases bear to each other the same
ratio that accumulated distributions per Partnership Unit on the Series E
Preferred Units and such other Partnership Interests (which shall not include
any accumulation in respect of unpaid distributions for prior distribution
periods if such other Partnership Interests do not have a cumulative
distribution) bear to each other. No interest, or sum of money in lieu of
interest, shall be payable in respect of any distribution payment or payments on
Series E Preferred Units which may be in arrears.

 

(v) Except as provided in Section C.(iv) of this Attachment A, unless full
cumulative distributions on the Series E Preferred Units have been or
contemporaneously are authorized and paid or authorized and a sum sufficient for
the payment thereof is set apart for payment for all past distribution periods
and the then current distribution period, no distributions (other than in
Partnership Interests ranking junior to the Series E Preferred Units as to
distributions and upon liquidation) shall be authorized or paid or set aside for
payment nor shall any other distribution be authorized or made upon the Class A
Units, the Class B Units, or any other Partnership Interests ranking junior to
or on a parity with the Series E Preferred Units as to distributions or upon
liquidation, nor shall any Class A Units, Class B Units, or any other
Partnership Interests ranking junior to or on a parity with the Series E
Preferred Shares as to distributions or upon liquidation be redeemed, purchased
or otherwise acquired for any consideration (or any moneys be paid to or made
available for a sinking fund for the redemption of any such units or other
Partnership Interests) by the Partnership (except by conversion into or exchange
for Partnership Interests ranking junior to the Series E Preferred Units as to
distributions and upon liquidation).

 

(vi) Holders of the Series E Preferred Units shall not be entitled to any
distribution, whether payable in cash, property or Partnership Units in excess
of full cumulative distributions on the Series E Preferred Units as described
above. Any distribution payment made on the Series E Preferred Units shall first
be credited against the earliest accumulated but unpaid distribution due with
respect to such Series E Preferred Units which remains payable.

 

D. Allocations.

 

Allocations of the Partnership’s items of income, gain, loss and deduction shall
be allocated among holders of Series E Preferred Units in accordance with
Article VI of the Agreement.

 

A-2

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E. Liquidation Preference.

 

(i) Upon any voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Partnership, the holders of Series E Preferred Units then
outstanding are entitled to be paid out of the assets of the Partnership
available for distribution to the Partners pursuant to Section 13.2.A of the
Agreement a liquidation preference of $25.00 per Series E Preferred Unit, plus
an amount equal to any accumulated and unpaid distributions to the date of
payment, before any distribution of assets is made to holders of Class A Units,
Class B Units or any other Partnership Interests that rank junior to the Series
E Preferred Units as to liquidation rights.

 

(ii) In the event that, upon any such voluntary or involuntary liquidation,
dissolution or winding up, the available assets of the Partnership are
insufficient to pay the amount of the liquidating distributions on all
outstanding Series E Preferred Units and the corresponding amounts payable on
all other Partnership Interests ranking on a parity with the Series E Preferred
Units in the distribution of assets, then such assets shall be allocated among
the Series E Preferred Units, as a class, and each class or series of such other
such Partnership Interests, as a class, in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled.

 

(iii) After payment of the full amount of the liquidating distributions to which
they are entitled, the holders of Series E Preferred Units will have no right or
claim to any of the remaining assets of the Partnership.

 

(iv) The consolidation or merger of the Partnership with or into any other
partnership, corporation, trust or entity or of any other partnership,
corporation, trust or other entity with or into the Partnership or the sale,
lease or conveyance of all or substantially all of, the property or business of
the Partnership, shall not be deemed to constitute a liquidation, dissolution or
winding up of the Partnership for purposes of this Section E.

 

F. Redemption.

 

In connection with a redemption by the General Partner of any or all of its
7.50% Series E Cumulative Redeemable Preferred Stock (as defined in the Articles
Supplementary, dated September 4, 2003, of the General Partner) the Partnership
shall provide cash to the General Partner for such purpose which shall be equal
to redemption price of the shares of Series E Preferred Stock to be redeemed and
one Series E Preferred Unit shall be canceled with respect to each share of
Series E Preferred Stock so redeemed. From and after the date in which the
shares of Series E Preferred Stock are redeemed, the Series E Preferred Units so
canceled shall no longer be outstanding and all rights hereunder, to
distributions or otherwise, with respect to such Series E Preferred Units shall
cease.

 

G. Voting Rights.

 

The holders of Series E Preferred Units shall have no voting rights whatsoever,
except for any voting rights to which the holders may be entitled under the laws
of the State of Delaware.

 

A-3

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ATTACHMENT B

 

PERMITTED ASSETS

 

In accordance with Sections 7.5.A(iv) of the Agreement, the General Partner
shall be permitted to retain legal title, as nominee, to the following office
properties located in the Atlanta, Georgia metropolitan area:

 

1. Glenridge

2. Holcomb Place

3. Midori

4. Parkwood

5. Summit

6. Spalding Ridge

7. 2400 Lake Park

8. 680 Engineering Drive Building

9. Embassy Row Office (300)

10. Waterford Centre

 

B-1