Exhibit 10.3

AMENDED AND RESTATED

LIMITED PARTNERSHIP AGREEMENT

OF

RESOURCE REAL ESTATE OPPORTUNITY OP, LP

Resource Real Estate Opportunity OP, LP (the “Partnership”) was formed as a
limited partnership under the laws of the State of Delaware, pursuant to a
Certificate of Limited Partnership filed with the Office of the Secretary of
State of the State of Delaware on June 5, 2009. This Amended and Restated
Limited Partnership Agreement (“Agreement”) is entered into effective as of
September 8, 2020 among Resource Real Estate Opportunity REIT, Inc., a Maryland
corporation (the “General Partner”), the Limited Partners set forth on Exhibit
A hereto, and such additional Limited Partners party hereto from time to time.
Capitalized terms used herein but not otherwise defined shall have the meanings
given them in Article 1.

WHEREAS, the General Partner and RRE Opportunity Holdings, LLC, as the “Initial
Limited Partner,” entered into a Limited Partnership Agreement of Resource Real
Estate Opportunity OP, LP dated as of September 1, 2009, pursuant to which the
Partnership was formed (the “Original Agreement”);

WHEREAS, on September 8, 2020, pursuant to that certain Contribution and
Exchange Agreement (the “Contribution and Exchange Agreement”) by and among the
Partnership, Resource PM Holdings LLC (“PM Holdings”), Resource NewCo LLC
(“Advisor Holdings”), C-III Capital Partners LLC (“PM Contributor”), Resource
Real Estate, LLC (“Advisor Contributor”), and Resource America, Inc., PM
Contributor and Advisor Contributor contributed certain assets to the
Partnership, including all of PM Contributor’s right, title and interest in all
of the membership interests in PM Holdings and all of Advisor Contributor’s
right, title and interest in all of the membership interests in Advisor Holdings
in exchange for a total of 6,158,759 Common Units, 319,965 Series A Preferred
Units and other good and valuable consideration (the “Contribution
Transaction”);

WHEREAS, the General Partner now desires to amend and restate the Original
Agreement to reflect, among other things, the authorization of Preferred Units
and to set forth the rights, powers, privileges, restrictions, qualifications,
and limitations of the Series A Preferred Units, as specified
in Exhibit C hereto, the issuance of Common Units and Series A Preferred Units
pursuant to the Contribution Transaction, and to make other amendments deemed
necessary or desirable by the General Partner;

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

ARTICLE 1

DEFINED TERMS

The following defined terms used in this Agreement shall have the meanings
specified below:

Act means the Delaware Revised Uniform Limited Partnership Act, as it may be
amended from time to time.

Additional Funds has the meaning set forth in Section 4.3.

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Additional Limited Partner means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 10.1 hereof and who is shown as a Limited
Partner on Exhibit A hereto.

Additional Securities means any additional REIT Shares (other than REIT Shares
issued in connection with an exchange pursuant to Section 8.5 hereof) or other
interests in the General Partner, or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase REIT
Shares or other interests in the General Partner, as set forth in
Section 4.2(a)(iii).

Administrative Expenses means (i) all administrative and operating costs and
expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner or its Affiliates, including any salaries or
other payments to directors, officers or employees of the General Partner or its
Affiliates, and any accounting and legal expenses of the General Partner or its
Affiliates, which expenses, the Partners have agreed, are expenses of the
Partnership and not the General Partner or such Affiliates, and (iii) to the
extent not included in clause (ii) above, REIT Expenses.

Advisor Contributor has the meaning provided in the Recitals.

Advisor Holdings has the meaning provided in the Recitals.

Affiliate or Affiliated means, as to any Person, any of the following:

 

  (a)

any other Person directly or indirectly owning, controlling or holding, with
power to vote, 10% or more of the outstanding voting securities of such Person;

 

  (b)

any other Person 10% or more of whose outstanding voting securities are directly
or indirectly owned, controlled or held, with power to vote, by such Person;

 

  (c)

any other Person directly or indirectly controlling, controlled by or under
common control with such Person;

 

  (d)

any executive officer, director, manager, trustee or general partner of such
Person; and

 

  (e)

any legal entity for which such Person acts as an executive officer, director,
manager, trustee or general partner.

Agreed Value means the fair market value of a Partner’s non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner. The names and addresses of the General Partner and the
Additional Limited Partners, the number of Partnership Units issued to each of
them, and their respective Capital Contributions as of the date of contribution
is set forth on Exhibit A.

Agreement means this Amended and Restated Limited Partnership Agreement, as
amended, modified, supplemented or restated from time to time, as the context
requires.

Articles of Incorporation means the Amended and Restated Articles of
Incorporation of the General Partner filed with the Maryland State Department of
Assessments and Taxation, as amended, supplemented or restated from time to
time.

 

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Book Value means with respect to any asset of the Partnership, the basis of such
asset to the Partnership for federal income tax purposes; provided that if an
asset is contributed to the Partnership or revalued in accordance with
Regulations Section 1.704-1(b)(2)(iv)(f), the Book Value of such asset shall be
its fair market value as subsequently adjusted in accordance with Regulations
Section 1.704-1(b)(2)(iv)(g).

Capital Account has the meaning provided in Section 4.4 hereof.

Capital Contribution means the total amount of cash, cash equivalents, and the
Agreed Value of any Property or other asset (other than cash), net of
liabilities assumed, contributed or agreed to be contributed, as the context
requires, to the Partnership by each Partner pursuant to the terms of this
Agreement. Any reference to the Capital Contribution of a Partner shall include
the Capital Contribution made by a predecessor holder of the Partnership
Interest of such Partner.

Cash Amount means an amount of cash equal to the product of the Value of one
REIT Share and the REIT Shares Amount on the date of receipt by the General
Partner of a Notice of Exchange.

Certificate means any instrument or document that is required under the laws of
the State of Delaware, or any other jurisdiction in which the Partnership
conducts business, to be signed and sworn to by the Partners of the Partnership
(either by themselves or pursuant to the power-of-attorney granted to the
General Partner in Section 8.2 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.

Code means the Internal Revenue Code of 1986, as amended, and as hereafter
amended from time to time. Reference to any particular provision of the Code
shall mean that provision in the Code as of the date hereof and any successor
provision thereto.

Common Unit means a Partnership Unit that is not a Preferred Unit.

Contribution Common Units means the Common Units issued in connection with the
Contribution Transaction.

Contribution and Exchange Agreement has the meaning provided in the Recitals.

Contribution Transaction has the meaning provided in the Recitals.

Conversion Factor means 1.0, provided that, subject to Section 4.2(a)(ii), in
the event that the General Partner (i) declares or pays a dividend on its
outstanding REIT Shares in REIT Shares or makes a Distribution to all holders of
its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT
Shares, or (iii) combines its outstanding REIT Shares into a smaller number of
REIT Shares, the Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which shall be the number of
REIT Shares issued and outstanding on the record date for such dividend,
distribution, subdivision or combination (assuming for such purpose that such
dividend, distribution, subdivision or combination has occurred as of such time)
and the denominator of which shall be the actual number of REIT Shares
(determined without the above assumption) issued and outstanding on such date
and, provided further, that in the event that an entity other than an Affiliate
of the General Partner shall

 

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become General Partner pursuant to any merger, consolidation or combination of
the General Partner with or into another entity (the “Successor Entity”), the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by the
number of shares of the Successor Entity into which one REIT Share is converted
pursuant to such merger, consolidation or combination, determined as of the date
of such merger, consolidation or combination. Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; provided, however, that
if the General Partner receives a Notice of Exchange after the record date, but
prior to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Exchange immediately prior to the record date for
such dividend, distribution, subdivision or combination.

Defaulting Limited Partner has the meaning provided in Section 5.2(b) hereof.

Distributions means any dividends or other distributions of money or other
property paid by the General Partner to the holders of its REIT Shares or
preferred stock, including distributions that may constitute a return of capital
for federal income tax purposes.

Event of Bankruptcy as to any Person means the filing of a petition for relief
as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978 or
similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; the
filing by such Person of a petition or application to accomplish the same or for
the appointment of a receiver or a trustee for such Person or a substantial part
of his assets; the commencement of any proceedings relating to such Person as a
debtor under any other reorganization, arrangement, insolvency, adjustment of
debt or liquidation law of any jurisdiction, whether now in existence or
hereinafter in effect, either by such Person or by another, provided that if
such proceeding is commenced by another, such Person indicates his approval of
such proceeding, consents thereto or acquiesces therein, or such proceeding is
contested by such Person and has not been finally dismissed within 90 days.

Exchange Right has the meaning provided in Section 8.5(a) hereof.

Exchanging Partner has the meaning provided in Section 8.5(a) hereof.

General Partner means Resource Real Estate Opportunity REIT, Inc., a Maryland
corporation, and any Person who becomes a substitute or additional General
Partner as provided herein, and any of their successors as General Partner.

General Partner Loan has the meaning provided in Section 5.2(b) hereof.

General Partnership Interest means a Partnership Interest held by the General
Partner that is a general partnership interest. The number of Common Units held
by the General Partner equal to one percent (1%) of all outstanding Common Units
from time to time is hereby designated as the General Partnership Interest.

Indemnitee means (i) the General Partner or a director, officer or employee of
the General Partner or Partnership, (ii) such other Persons (including
Affiliates of the General Partner or the Partnership) as the General Partner may
designate from time to time, in its sole and absolute discretion.

 

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Joint Venture or Joint Ventures means those joint venture, general partnership
or similar arrangements in which the Partnership is a co-venturer or general
partner, and which are established to acquire Properties.

Limited Partner means any Person named as a Limited Partner on Exhibit
A attached hereto, and any Person who becomes a Substitute Limited Partner or
Additional Limited Partner, in such Person’s capacity as a Limited Partner in
the Partnership. A Limited Partner may hold Common Units, Preferred Units, or
both.

Limited Partnership Interest means the ownership interest of a Limited Partner
in the Partnership at any particular time, including the right of such Limited
Partner to any and all benefits to which such Limited Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and the Act.

Liquidation Preference means, with respect to any Preferred Unit as of any date
of determination, the amount (including distributions accumulated, due, or
payable through the date of determination) payable with respect to such
Preferred Unit (as established by the instrument designating such Preferred
Unit) upon the voluntary or involuntary dissolution or winding up of the
Partnership as a preference over distributions to Partnership Units ranking
junior to such Preferred Unit.

Listing means the approval of the REIT Shares, issued by the General Partner
pursuant to an effective registration statement, on a National Securities
Exchange. Upon Listing, the shares shall be deemed Listed.

Loss has the meaning provided in Section 5.1(f) hereof.

National Securities Exchange means any securities exchange registered with the
SEC pursuant to Section 6 of the Securities Exchange Act of 1934, as amended.

Net Asset Value Per REIT Share means the most recently determined net asset
value per share of the REIT Shares as determined on a quarterly basis (or more
or less frequently) and published by the General Partner in a filing with the
SEC pursuant to the Securities Act of 1933, as amended, or the Securities
Exchange Act of 1934, as amended.

Notice of Exchange means the Notice of Exercise of Exchange Right substantially
in the form attached as Exhibit B hereto.

Offer has the meaning set forth in Section 7.1(b)(ii) hereof.

Offering means an offering of Stock that is either (a) registered with the SEC,
or (b) exempt from such registration, excluding Stock offered under any employee
benefit plan.

Opt-Out Election has the meaning set forth in Section 11.5(c) hereof.

Original Agreement has the meaning provided in the Recitals.

Partner means any General Partner or Limited Partner.

 

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Partner Nonrecourse Debt Minimum Gain has the meaning set forth in Regulations
Section 1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain
shall be determined in accordance with Regulations Section 1.704-2(i)(5).

Partnership means Resource Real Estate Opportunity OP, LP, a Delaware limited
partnership.

Partnership Interest means an ownership interest in the Partnership held by
either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.

Partnership Loan has the meaning provided in Section 5.2(b) hereof.

Partnership Minimum Gain has the meaning set forth in Regulations
Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the
amount of Partnership Minimum Gain is determined by first computing, for each
Partnership nonrecourse liability, any gain the Partnership would realize if it
disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately
computed gains. A Partner’s share of Partnership Minimum Gain shall be
determined in accordance with Regulations Section 1.704-2(g)(1).

Partnership Record Date means the record date established by the General Partner
for the distribution of cash pursuant to Section 5.2 hereof, which record date
shall be the same as the record date established by the General Partner for a
Distribution to the Stockholders of some or all of its portion of such
distribution.

Partnership Representative has the meaning set forth in Section 11.5(a) hereof.

Partnership Unit means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder. Without limitation on the authority
of the General Partner as set forth in Section 4.2 hereof, the General Partner
may designate any Partnership Units, when issued, as Common Units or Preferred
Units, may establish any other class of Partnership Units, and may designate one
or more series of any class of Partnership Units. The allocation of Partnership
Units among the Partners shall be as set forth on Exhibit A, as such Exhibit may
be amended from time to time.

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

Percentage Interest means, with respect to a Partner, (i) when referring to a
specific class or series of Partnership Units, such Partner’s interest in such
class or series of Partnership Units as determined by dividing the number of
Partnership Units in such class or series held by such Partner by the total
number of Partnership Units in such class or series then outstanding, (ii) when
not referring to a specific class of series of Partnership Units, (A) the
aggregate number of Common Units, Series A Preferred Units and any other
Partnership Units of any class or series having participation rights equivalent
to the rights of a Common Unit held by such Partner divided by (B) the total
aggregate number of Common Units, Series A Preferred Units and such other
Partnership Units of any class or series having participation rights equivalent
to the rights of a Common Unit held by such Partner then outstanding.

Person means any individual, partnership, limited liability company,
corporation, joint venture, trust or other entity.

 

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PM Contributor has the meaning provided in the Recitals.

PM Holdings has the meaning provided in the Recitals.

Preferred Unit means any Partnership Unit issued from time to time pursuant to
Section 4.2 hereof that is specifically designated by the General Partner at the
time of its issuance as a Preferred Unit. Each class or series of Preferred
Units shall have such designations, preferences, and relative, participating,
optional, or other special rights, powers, and duties, including rights, powers
and duties senior to the Common Units, all as determined by the General Partner,
subject to compliance with the requirements of Section 4.2 hereof.

Profit has the meaning provided in Section 5.1(f) hereof.

Property or Properties means the real properties or real estate investments
which are acquired by the Partnership either directly or through Joint Ventures,
partnerships or other entities.

Push-out Election has the meaning set forth in Section 11.5(c) hereof.

Regulations means the federal income tax regulations promulgated under the Code,
as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations as of the date hereof and any successor provision of the
Regulations.

REIT means a real estate investment trust under Sections 856 through 860 of the
Code.

REIT Expenses means (i) costs and expenses relating to the formation and
continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included
within the definition of General Partner), including taxes, fees and assessments
associated therewith, any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses
relating to any Offering and registration of securities or exemption from
registration by the General Partner and all statements, reports, fees and
expenses incidental thereto, including, without limitation, underwriting
discounts and sales commissions applicable to any such Offering of securities,
and any costs and expenses associated with any claims made by any holders of
such securities or any underwriters or placement agents thereof, (iii) costs and
expenses associated with any repurchase of any securities by the General
Partner, (iv) costs and expenses associated with the preparation and filing of
any periodic or other reports and communications by the General Partner under
federal, state or local laws or regulations, including filings with the SEC,
(v) costs and expenses associated with compliance by the General Partner with
laws, rules and regulations promulgated by any regulatory body, including the
SEC and any National Securities Exchange, (vi) costs and expenses associated
with any 401(k) plan, incentive plan, bonus plan or other plan providing for
compensation for the employees of the General Partner, (vii) costs and expenses
incurred by the General Partner relating to any issuance or redemption of
Partnership Interests or securities of the General Partner, and (viii) all other
operating or administrative costs of the General Partner incurred in the
ordinary course of its business on behalf of or in connection with the
Partnership.

REIT Share means a share of common stock, par value $0.01 per share, in the
General Partner (or successor entity, as the case may be), the terms and
conditions of which are set forth in the Articles of Incorporation.

 

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REIT Shares Amount means a number of REIT Shares equal to the product of the
number of Partnership Units offered for exchange or redemption, multiplied by
the Conversion Factor as may be adjusted to and including the Specified Exchange
Date or other applicable redemption or exchange date; provided that in the event
the General Partner issues to all holders of REIT Shares rights, options,
warrants or convertible or exchangeable securities entitling the stockholders to
subscribe for or purchase REIT Shares, or any other securities or property
(collectively, the “rights”), and the rights have not expired at the Specified
Exchange Date or other applicable redemption or exchange date, then the REIT
Shares Amount shall also include the rights issuable to a holder of the REIT
Shares Amount of REIT Shares on the record date fixed for purposes of
determining the holders of REIT Shares entitled to rights.

SEC means the Securities and Exchange Commission.

Series A Preferred Units has the meaning set forth in Exhibit C hereto.

Service means the Internal Revenue Service.

Specified Exchange Date means the first business day of the month that is at
least 60 business days after the receipt by the General Partner of the Notice of
Exchange.

Stock means shares of stock of the General Partner of any class or series,
including REIT Shares, preferred stock or shares-in-trust.

Stockholders means the registered holders of the General Partner’s Stock.

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

Subsidiary Partnership means any partnership of which the partnership interests
therein are owned by the General Partner or a direct or indirect Subsidiary of
the General Partner.

Substitute Limited Partner means any Person admitted to the Partnership as a
Limited Partner pursuant to Section 9.3 hereof.

Successor Entity has the meaning set forth in Section 4.2(a)(ii) hereof.

Surviving General Partner has the meaning set forth in Section 7.1(c) hereof.

Transaction has the meaning set forth in Section 7.1(b) hereof.

Transfer has the meaning set forth in Section 9.2(a) hereof.

Value means, with respect to REIT Shares, the average of the daily market price
of such REIT Share for the ten (10) consecutive trading days immediately
preceding the date of such valuation. The market price for each such trading day
shall be: (i) if the REIT Shares are Listed, the sale price, regular way, on
such day, or if no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, on such day; (ii) if the REIT Shares are not
Listed, the Net Asset Value Per REIT Share on such day; provided that if there
are no bid and asked prices reported during the ten (10) days prior to the date
in question, the value of the REIT Shares shall be determined by the General
Partner acting in good

 

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faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate. In the event the REIT Shares Amount
includes rights that a holder of REIT Shares would be entitled to receive, then
the value of such rights shall be determined by the General Partner acting in
good faith on the basis of such quotations and other information as it
considers, in its reasonable judgment, appropriate.

ARTICLE 2

PARTNERSHIP FORMATION AND IDENTIFICATION

2.1 Formation. The Partnership was formed as a limited partnership pursuant to
the Act for the purposes and upon the terms and conditions set forth in this
Agreement.

2.2 Name, Office and Registered Agent. The name of the Partnership is Resource
Real Estate Opportunity OP, LP. The specified office and place of business of
the Partnership shall be 1845 Walnut Street, 17th Floor, Philadelphia,
Pennsylvania 19103 (telephone number (215) 231-7050). The General Partner may at
any time change the location of such office, provided the General Partner gives
notice to the Partners of any such change. The name and address of the
Partnership’s registered agent is The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington, Delaware 19801. The sole duty of
the registered agent as such is to forward to the Partnership any notice that is
served on him as registered agent.

2.3 Partners.

(a) The General Partner of the Partnership is Resource Real Estate Opportunity
REIT, Inc., a Maryland corporation. Its principal place of business is the same
as that of the Partnership.

(b) The Limited Partners are those Persons identified as Limited Partners
on Exhibit A hereto, as amended from time to time. The parties agree that
Exhibit A will be confidential and maintained in the offices of the General
Partner.

2.4 Term and Dissolution.

(a) The Partnership shall have perpetual duration, except that the Partnership
shall be dissolved upon the first to occur of any of the following events:

(i) The occurrence of an Event of Bankruptcy as to a General Partner or the
dissolution, death, removal or withdrawal of a General Partner unless the
business of the Partnership is continued pursuant to Section 7.3(b) hereof;
provided that if a General Partner is on the date of such occurrence a
partnership, the dissolution of such General Partner as a result of the
dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in
such partnership shall not be an event of dissolution of the Partnership if the
business of such General Partner is continued by the remaining partner or
partners, either alone or with additional partners, and such General Partner and
such partners comply with any other applicable requirements of this Agreement;

(ii) The passage of 90 days after the sale or other disposition of all or
substantially all of the assets of the Partnership (provided that if the
Partnership receives an installment obligation as consideration for such sale or
other disposition, the Partnership shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such note or notes are paid
in full);

 

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(iii) The exchange of all Limited Partnership Interests (other than any of such
interests held by the General Partner or Affiliates of the General Partner) for
REIT Shares or the securities of any other entity; or

(iv) The election by the General Partner that the Partnership should be
dissolved.

(b) Upon dissolution of the Partnership (unless the business of the Partnership
is continued pursuant to Section 7.3(b) hereof), the General Partner (or its
trustee, receiver, successor or legal representative) shall amend or cancel the
Certificate and liquidate the Partnership’s assets and apply and distribute the
proceeds thereof in accordance with Section 5.6 hereof. Notwithstanding the
foregoing, the General Partner (or such trustee, receiver, successor or legal
representative) may either (i) defer liquidation of, or withhold from
distribution for a reasonable time, any assets of the Partnership (including
those necessary to satisfy the Partnership’s debts and obligations), or
(ii) distribute the assets of the Partnership to the Partners in kind.

2.5 Filing of Certificate and Perfection of Limited Partnership. The General
Partner shall execute, acknowledge, record and file at the expense of the
Partnership, the Certificate any and all amendments thereto and all requisite
fictitious name statements and notices in such places and jurisdictions as may
be necessary to cause the Partnership to be treated as a limited partnership
under, and otherwise to comply with, the laws of each state or other
jurisdiction in which the Partnership conducts business.

2.6 Certificates Describing Partnership Units. At the request of a Limited
Partner, the General Partner, at its option, may issue a certificate summarizing
the terms of such Limited Partner’s interest in the Partnership, including the
number and class or series of Partnership Units owned and the Percentage
Interest represented by such Partnership Units as of the date of such
certificate. Any such certificate (i) shall be in form and substance as approved
by the General Partner, (ii) shall not be negotiable and (iii) shall bear a
legend to the following effect:

THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH THE
PROVISIONS OF THE AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT OF RESOURCE
REAL ESTATE OPPORTUNITY OP, LP, AS AMENDED FROM TIME TO TIME.

ARTICLE 3

BUSINESS OF THE PARTNERSHIP

3.1 Purpose. The purpose and nature of the business to be conducted by the
Partnership is (i) to conduct any business that may be lawfully conducted by a
limited partnership organized pursuant to the Act, provided, however, that such
business shall be limited to and conducted in such a manner as to permit the
General Partner at all times to qualify as a REIT and in a manner such that the
General Partner will not be subject to any taxes under Sections 856, 857 or 4981
of the Code to the greatest extent commercially reasonably possible, unless the
General Partner otherwise ceases to qualify as a REIT, (ii) to enter into any
partnership, joint venture or other similar arrangement to engage in any of the
foregoing or

 

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to own interests in any entity engaged in any of the foregoing, and (iii) to do
anything necessary or incidental to the foregoing. In connection with the
foregoing, and without limiting the General Partner’s right in its sole and
absolute discretion to cease qualifying as a REIT, the Partners acknowledge that
the General Partner’s current status as a REIT and the avoidance of income and
excise taxes on the General Partner inures to the benefit of all the Partners
and not solely to the General Partner. Notwithstanding the foregoing, the
Limited Partners agree that the General Partner may terminate its status as a
REIT under the Code at any time to the full extent permitted under the Articles
of Incorporation. The General Partner shall also be empowered to do any and all
acts and things necessary or prudent to ensure that the Partnership will not be
classified as a “publicly traded partnership” for purposes of Section 7704 of
the Code.

3.2 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 Estate
Related Assets or other ownership interests; provided, however that nothing in
this Section 3.2 is intended to eliminate or limit the rights of the Limited
Partners included elsewhere in this Agreement.

3.3 Relationship with Partners. It is expressly acknowledged and agreed by the
Partners that the General Partner may, in its sole and absolute discretion,
waive or otherwise modify the application with respect to any Partner or
assignee of any provision herein restricting, prohibiting or otherwise relating
to (i) the transfer of a Limited Partner Interest or the Partnership Units
evidencing the same, (ii) the admission of any Limited Partners and (iii) the
redemption rights of such Partners, and that such waivers or modifications may
be made by the General Partner at any time or from time to time, including,
without limitation, concurrently with the issuance of any Partnership Units
pursuant to the terms of this Agreement; provided, however that nothing in this
Section 3.3 is intended to eliminate or limit the rights of the Limited Partners
included elsewhere in this Agreement.

ARTICLE 4

CAPITAL CONTRIBUTIONS AND ACCOUNTS

4.1 Capital Contributions. The General Partner and each Limited Partner has made
a Capital Contribution to the Partnership in exchange for the Partnership Units
set forth opposite such Partner’s name on Exhibit A, as amended from time to
time by the General Partner to the extent necessary to accurately reflect sales,
exchanges or other Transfers, redemptions, Capital Contributions, the issuance
of additional Partnership Units or similar events having an effect on a
Partner’s ownership of Partnership Units.

4.2 Additional Capital Contributions and Issuances of Additional Partnership
Units. Except as provided in this Section 4.2 or in Section 4.3, the Partners
shall have no right or obligation to make any additional Capital Contributions
or loans to the Partnership. The General Partner may contribute additional
capital to the Partnership, from time to time, and receive additional
Partnership Interests, in the form of Partnership Units, in respect thereof, in
the manner contemplated in this Section 4.2.

(a) Issuances of Additional Partnership Units.

 

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(i) General. The General Partner is hereby authorized to cause the Partnership
to issue such additional Partnership Interests, in the form of Partnership
Units, for any Partnership purpose at any time or from time to time, to the
Partners (including the General Partner) or to other Persons for such
consideration and on such terms and conditions as shall be established by the
General Partner in its sole and absolute discretion, all without the approval of
any Limited Partner, including but not limited to, Partnership Units issued in
connection with the issuance of REIT Shares or of other interests in the General
Partner, Any additional Partnership Interests issued thereby may be issued in
one or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to any
Common Units, all as shall be determined by the General Partner in its sole and
absolute discretion and without the approval of any Limited Partner (subject to
any consent rights expressly provided to holders of Preferred Units), subject to
Delaware law, including, without limitation: (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Units; (ii) the right of each such class or series of
Partnership Units to share in Partnership distributions; (iii) the rights of
each such class or series of Partnership Units upon dissolution and liquidation
of the Partnership; (iv) the voting rights, if any, of each such class or series
of Partnership Units and (v) the conversion, redemption or exchange rights
applicable to each such class or series of Partnership Units; provided, however,
that no additional Partnership Units shall be issued to the General Partner
unless:

(1) (A) the additional Partnership Units are issued in connection with an
issuance of REIT Shares of, or other interests in, the General Partner, which
shares or interests have designations, preferences and other rights, all such
that the economic interests are substantially similar to the designations,
preferences and other rights of the additional Partnership Units issued to the
General Partner by the Partnership in accordance with this Section 4.2 and
(B) the General Partner shall make a Capital Contribution to the Partnership in
an amount equal to the net proceeds raised in connection with the issuance of
such shares of stock of or other interests in the General Partner;

(2) the additional Partnership Units are issued in exchange for property owned
by the General Partner with a fair market value, as determined by the General
Partner, in good faith, equal to the value of the Partnership Units; or

(3) with respect to the class or series of Partnership Units so issued,
additional Partnership Units are issued to all Partners holding Partnership
Units in proportion to their respective Percentage Interests.

In addition, the General Partner may acquire Partnership Units from other
Partners pursuant to this Agreement. In the event that the Partnership issues
Partnership Units pursuant to this Section 4.2(a), the General Partner shall
make such revisions to this Agreement, including amending Exhibit A, as are
necessary to reflect the issuance of such additional Partnership Units and any
special rights, powers, and duties associated therewith.

Without limiting the foregoing, the General Partner is expressly authorized to
cause the Partnership to issue Partnership Units (i) upon the conversion,
redemption or exchange of any debt or other securities issued by the
Partnership, (ii) for less than fair market value, so long as the General
Partner concludes in good faith that such issuance is

 

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in the best interests of the General Partner and the Partnership and (iii) in
connection with any merger of any other entity into the Partnership or any
Subsidiary of the Partnership if the applicable merger agreement provides that
entity or its owners are to receive Partnership Units in exchange for their
interests in the entity merging into the Partnership or any Subsidiary of the
Partnership.

(ii) Adjustment Events. In the event the General Partner (i) declares or pays a
dividend on outstanding REIT Shares in REIT Shares or makes a distribution to
all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its
outstanding REIT Shares, or (iii) combines its outstanding REIT Shares into a
smaller number of REIT Shares, then a corresponding adjustment to the number of
outstanding Common Units necessary to maintain the proportionate relationship
between the number of outstanding Common Units to the number of outstanding REIT
Shares shall automatically be made. Additionally, in the event that any other
entity shall become General Partner pursuant to any merger, consolidation, or
combination of the General Partner with or into another entity (the “Successor
Entity”), the number of outstanding Common Units shall be adjusted by
multiplying such number by the number of shares of the Successor Entity into
which one REIT Share is converted pursuant to such merger, consolidation, or
combination, determined as of the date of such merger, consolidation, or
combination. Any adjustment to the number of outstanding Common Units shall
become effective immediately after the effective date of such event retroactive
to the record date, if any, for such event; provided, however, that if the
General Partner receives a Notice of Exchange after the record date, but prior
to the effective date of such dividend, distribution, subdivision, or
combination, or such merger, consolidation, or combination, the number of
outstanding Common Units shall be determined as if the General Partner had
received the Notice of Exchange immediately prior to the record date for such
dividend, distribution, subdivision, or combination or such merger,
consolidation, or combination. If the General Partner takes any other action
affecting the REIT Shares other than actions specifically described above and,
in the opinion of the General Partner such action would require an adjustment to
the number of Common Units to maintain the proportionate relationship between
the number of outstanding Partnership Units and the number of outstanding REIT
Shares, the General Partner shall have the right to make such adjustment to the
number of Common Units, to the extent permitted by law, in such manner and at
such time as the General Partner, in its sole discretion, may determine to be
appropriate under the circumstances. For the avoidance of doubt, to the extent
any such adjustment is made pursuant to this Section 4.2(a)(ii), the “Conversion
Factor” shall not be adjusted with respect to such Common Units in any manner
that would result in a duplicative adjustment with respect to the relevant
event.

(iii) Upon Issuance of Additional Securities. The General Partner shall not
issue any Additional Securities other than to all holders of REIT Shares, unless
(A) the General Partner shall cause the Partnership to issue to the General
Partner, as the General Partner may designate, Partnership Units or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such that the economic
interests are substantially similar to those of the Additional Securities, and
(B) the General Partner contributes the net proceeds from the issuance of such
Additional Securities and from any exercise of rights contained in such
Additional Securities, directly and through the General Partner, to the
Partnership; provided, however, that the General Partner is allowed to issue
Additional Securities in

 

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connection with an acquisition of Property to be held directly by the General
Partner, but if and only if, such direct acquisition and issuance of Additional
Securities have been approved and determined to be in the best interests of the
General Partner and the Partnership by a majority of the board of directors of
the General Partner. Without limiting the foregoing, the General Partner is
expressly authorized to issue Additional Securities for less than fair market
value, and to cause the Partnership to issue to the General Partner
corresponding Partnership Units, so long as (x) the General Partner concludes in
good faith that such issuance is in the best interests of the General Partner
and the Partnership, including without limitation, the issuance of REIT Shares,
stock options, incentive awards and corresponding Partnership Units pursuant to
an employee share purchase plan providing for employee purchases of REIT Shares
at a discount from fair market value or employee stock options that have an
exercise price that is less than the fair market value of the REIT Shares,
either at the time of issuance or at the time of exercise, and (y) the General
Partner contributes all proceeds from such issuance to the Partnership. For
example, and without limiting the foregoing, in the event the General Partner
issues REIT Shares for a cash purchase price and contributes all of the net
proceeds of such issuance to the Partnership as required hereunder, the General
Partner shall be issued a number of additional Partnership Units equal to the
product of (A) the number of such REIT Shares issued by the General Partner, the
proceeds of which were so contributed, multiplied by (B) a fraction, the
numerator of which is 100%, and the denominator of which is the Conversion
Factor in effect on the date of such contribution.

(b) Certain Deemed Contributions of Proceeds of Issuance of Interests in the
General Partner. In connection with any and all issuances of REIT Shares, or
other interests in the General Partner, the General Partner shall make Capital
Contributions to the Partnership of the proceeds therefrom, provided that if the
proceeds actually received and contributed by the General Partner are less than
the gross proceeds of such issuance as a result of any underwriter’s discount or
other expenses paid or incurred in connection with such issuance, then the
General Partner shall be deemed to have made Capital Contributions to the
Partnership in the aggregate amount of the gross proceeds of such issuance and
the Partnership shall be deemed simultaneously to have paid such offering
expenses in accordance with Section 6.5 hereof and in connection with the
required issuance of additional Partnership Units to the General Partner for
such Capital Contributions pursuant to Section 4.2(a) hereof. In connection with
any and all issuances of REIT Shares pursuant to the General Partner’s
distribution reinvestment plan, the General Partner shall be deemed to have made
Capital Contributions to the Partnership in the aggregate amount of the
distributions that have been reinvested in respect of the REIT Shares issued by
the General Partner in return for an equal number of Common Units as the issued
REIT Shares.

4.3 Additional Funding. If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds
(“Additional Funds”) for any Partnership purpose, the General Partner may
(i) cause the Partnership to obtain such funds from outside borrowings, or
(ii) elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise.

4.4 Capital Accounts. A separate capital account (a “Capital Account”) shall be
established and maintained for each Partner in accordance with Regulations
Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an
additional Partnership Interest in exchange for more than a de minimis Capital
Contribution, (ii) the Partnership distributes to a Partner more than a de
minimis amount of Partnership property as consideration for a Partnership
Interest, (iii) the Partnership is liquidated within the meaning of

 

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Regulations Section 1.704-1(b)(2)(ii)(g) or (iv) a Partnership Interest (other
than a de minimis interest) is granted as consideration for the provision of
services to or for the benefit of the Partnership by an existing Partner acting
in a partner capacity, or by a new Partner acting in a partner capacity in
anticipation of being a Partner, the General Partner shall revalue the property
of the Partnership to its fair market value (as determined by the General
Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) in accordance with Regulations
Section 1.704-1(b)(2)(iv)(f). When the Partnership’s property is revalued by the
General Partner, the Capital Accounts of the Partners shall be adjusted in
accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which
generally require such Capital Accounts to be adjusted to reflect the manner in
which the unrealized gain or loss inherent in such property (that has not been
reflected in the Capital Accounts previously) would be allocated among the
Partners pursuant to Section 5.1 if there were a taxable disposition of such
property for its fair market value (as determined by the General Partner, in its
sole and absolute discretion, and taking into account Section 7701(g) of the
Code) on the date of the revaluation.

4.5 Percentage Interests. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner’s Percentage Interest
shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to give effect to such increase or decrease. If
the Partners’ Percentage Interests are adjusted pursuant to this Section 4.5,
the Profits and Losses for the taxable year in which the adjustment occurs shall
be allocated between the part of the year ending on the day when the
Partnership’s property is revalued by the General Partner and the part of the
year beginning on the following day either (i) as if the taxable year had ended
on the date of the adjustment or (ii) based on the number of days in each part.
The General Partner, in its sole and absolute discretion, shall determine which
method shall be used to allocate Profits and Losses for the taxable year in
which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before
adjustment, and the allocation of Profits and Losses for the later part of the
year shall be based on the adjusted Percentage Interests.

4.6 No Interest on Contributions. No Partner shall be entitled to interest on
its Capital Contributions.

4.7 Return of Capital Contributions. No Partner shall be entitled to withdraw
any part of its Capital Contribution or its Capital Account or to receive any
distribution from the Partnership, except as specifically provided in this
Agreement. Except as otherwise provided herein, there shall be no obligation to
return to any Partner or withdrawn Partner any part of such Partner’s Capital
Contribution for so long as the Partnership continues in existence.

4.8 No Third Party Beneficiary. No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of
any Partner to make Capital Contributions or loans or to pursue any other right
or remedy hereunder or at law or in equity, it being understood and agreed that
the provisions of this Agreement shall be solely for the benefit of, and may be
enforced solely by, the parties hereto and their respective successors and
assigns. None of the rights or obligations of the Partners herein set forth to
make Capital Contributions or loans to the Partnership shall be deemed an asset
of the Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the Partnership
or pledged or encumbered by the Partnership to secure any debt or other
obligation of the Partnership or of any of the Partners. In addition, it is the
intent of the parties hereto that no distribution to any Limited Partner shall
be deemed a return of money or other property in violation of the Act. However,
if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Limited Partner is obligated to return such
money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner.

 

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Without limiting the generality of the foregoing, unless otherwise provided in a
written agreement between the Partner and the Partnership, a deficit Capital
Account of a Partner shall not be deemed to be a liability of such Partner nor
an asset or property of the Partnership and upon a liquidation within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(g), if any Partner has a
deficit Capital Account (after giving effect to all contributions,
distributions, allocations and other Capital Account adjustments for all taxable
years, including the year during which such liquidation occurs), such Partner
shall have no obligation to make any Capital Contribution to reduce or eliminate
the negative balance of such Partner’s Capital Account.

ARTICLE 5

PROFITS AND LOSSES; DISTRIBUTIONS

5.1 Allocation of Profit and Loss.

(a) General Allocations.

(i) Profits. After making the special allocations set forth in Sections 5.1(b)
and 5.1(c) and the priority allocation with respect to the Preferred Units in
Section 5.1(d) below and subject to the application of Section 5.1(a)(ii), after
adjusting for all Capital Contributions and distributions made during any
Partnership Year (or portion thereof), the Partnership’s Profits and Losses for
such Partnership Year (or portion thereof) shall be allocated among the Partners
in a manner such that, after such allocations have been made, the balance of
each Partner’s Capital Account shall, to the extent possible, be equal to an
amount that would be distributed to such Partner if (A) the Partnership were to
sell its assets for their Book Values, (B) all Partnership liabilities were
satisfied (limited with respect to each nonrecourse liability to the Book Value
of the assets encumbering such liability), and (C) the Partnership were to
distribute the proceeds of sale in accordance with Section 5.6 and dissolve in
accordance with Section 2.4, minus the sum of such Partner’s shares of
Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain.

(ii) Losses. Losses shall not be allocated to a Limited Partner to the extent
that such allocation would cause a deficit in such Partner’s Capital Account
(after reduction to reflect the items described in Regulations
Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such
Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain. Any Losses in excess of that limitation shall be allocated to the
General Partner. After the occurrence of an allocation of Loss to the General
Partner in accordance with this Section 5.1(a)(ii), to the extent permitted by
Regulations Section 1.704-1(b), Profits shall first be allocated to the General
Partner in an amount necessary to offset the Losses previously allocated to the
General Partner under this Section 5.01(a)(ii).

(b) Minimum Gain Chargeback. Notwithstanding any provision to the contrary,
(i) any expense of the Partnership that is a “nonrecourse deduction” within the
meaning of Regulations Section 1.704-2(b)(1) shall be allocated in accordance
with the Partners’ respective Percentage Interests, (ii) any expense of the
Partnership that is a “partner nonrecourse deduction” within the meaning of
Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears
the “economic risk of loss” with respect to the “partner nonrecourse debt”
within the meaning of Regulations Section 1.704-2(b)(4) to which such partner
nonrecourse deduction is attributable in accordance with Regulations
Section 1.704-2(i)(1), (iii) if there is a net decrease in Partnership Minimum
Gain within the meaning of Regulations Section 1.704-2(f)(1) for any Partnership
Year

 

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(or other period), then, subject to the exceptions set forth in Regulations
Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income shall be
allocated among the Partners in accordance with Regulations Section 1.704-2(f)
and the ordering rules contained in Regulations Section 1.704-2(j), and (iv) if
there is a net decrease in Partner Nonrecourse Debt Minimum Gain within the
meaning of Regulations Section 1.704-2(i)(4) for any Partnership Year (or other
period), then, subject to the exceptions set forth in Regulations
Section 1.704-(2)(g), items of gain and income shall be allocated among the
Partners in accordance with Regulations Section 1.704-2(i)(4) and the ordering
rules contained in Regulations Section 1.704-2(j). A Partner’s “interest in
partnership profits” for purposes of determining its share of the nonrecourse
liabilities of the Partnership within the meaning of Regulations
Section 1.752-3(a)(3) shall be such Partner’s Percentage Interest.

(c) Qualified Income Offset. If a Partner unexpectedly receives in any
Partnership Year (or other period) an adjustment, allocation, or distribution
described in subparagraphs (4), (5), or (6) of Regulations
Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such
Partner’s Capital Account that exceeds the sum of such Partner’s shares of
Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such Partnership Year or other
period (and, if necessary, later Partnership Years or other periods) items of
income and gain in an amount and manner sufficient to eliminate such deficit
Capital Account balance as quickly as possible as provided in Regulations
Section 1.704-1(b)(2)(ii)(d); provided, that an allocation pursuant to this
Section 5.1(c) shall be made only if and to the extent that such Partner would
have a deficit Capital Account balance after all other allocations provided for
in Article 5 have been tentatively made as if this Section 5.1(c) were not in
this Agreement. This Section 5.1(c) is intended to constitute a “qualified
income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted consistently therewith.

(d) Priority Allocation With Respect to Preferred Units. Profits, and if
necessary, items of Partnership gross income or gain for any Partnership Year,
shall be specially allocated to Partners that own Series A Preferred Units in an
amount equal to the excess, if any, of (i) the cumulative distributions received
by such Partner for or with respect to the current Partnership Year and all
prior Partnership Years with respect to the Series A Preferred Priority Return
on such Series A Preferred Units (with a distribution made in a Partnership Year
that relates to a Partnership Record Date occurring at the end of the preceding
Partnership Year being treated as made with respect to such preceding
Partnership Year) over (ii) the cumulative allocations of Partnership Profits,
gross income and gain to such Partner under this Section 5.1(d) for all prior
Partnership Years.

(e) Allocations Between Transferor and Transferee. If a Partner transfers any
part or all of its Partnership Interest, the distributive shares of the various
items of Profit and Loss allocable among the Partners during such Partnership
Year shall be allocated between the transferor and the transferee Partner either
(i) as if the Partnership’s taxable year had ended on the date of the transfer,
or (ii) based on the number of days of such taxable year that each was a Partner
without regard to the results of Partnership activities in the respective
portions of such taxable year in which the transferor and the transferee were
Partners. The General Partner, in its sole and absolute discretion, shall
determine which method shall be used to allocate the distributive shares of the
various items of Profit and Loss between the transferor and the transferee
Partner.

(f) Definition of Profit and Loss. “Profit” and “Loss” and any items of income,
gain, expense, or loss referred to in this Agreement shall be determined in
accordance with federal income tax accounting principles, as modified by
Regulations Section 1.704-1(b)(2)(iv), except

 

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that Profit and Loss shall not include items of income, gain and expense that
are specially allocated pursuant to Sections 5.1(b), 5.1(c), or 5.1(d). All
allocations of income, Profit, gain, Loss and expense (and all items contained
therein) for federal income tax purposes shall be identical to all allocations
of such items set forth in this Section 5.1, except as otherwise required by
Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). The General
Partner shall have the sole and absolute authority to elect the method to be
used by the Partnership for allocating items of income, gain, and expense as
required by Section 704(c) of the Code including a method that may result in a
Partner receiving a disproportionately larger share of the Partnership tax
depreciation deductions, and such election shall be binding on all Partners;
provided, however, the Partnership shall allocate items of income, gain, loss
and deduction with respect to the assets contributed to the Partnership pursuant
to the Contribution and Exchange Agreement using the “traditional method” under
Regulations Section 1.704-3(b).

(g) Curative Allocations. The allocations set forth in Sections 5.1(b) and
5.1(c) of this Agreement (the “Regulatory Allocations”) are intended to comply
with certain requirements of the Regulations. The General Partner is authorized
to offset all Regulatory Allocations either with other Regulatory Allocations or
with special allocations of other items of Partnership income, gain, loss or
deduction pursuant to this Section 5.1(g). Therefore, notwithstanding any other
provision of this Section 5.1 (other than the Regulatory Allocations), the
General Partner shall make such offsetting special allocations of Partnership
income, gain, loss or deduction in whatever manner it deems appropriate so that,
after such offsetting allocations are made, each Partner’s Capital Account is,
to the extent possible, equal to the Capital Account balance such Partner would
have had if the Regulatory Allocations were not part of this Agreement and all
Partnership items were allocated pursuant to Sections 5.1(a), 5.1(d) and 5.1(e).

5.2 Distributions.

(a) Cash Available for Distribution. The Partnership shall distribute cash on a
quarterly (or, at the election of the General Partner, more or less frequently)
basis, in an amount determined by the General Partner in its sole and absolute
discretion, to the Partners who are Partners on the Partnership Record Date with
respect to such quarter (or other distribution period) in the following order of
priority:

(i) first, to the holders of Preferred Units, in such amounts as is required for
the Partnership to pay all distributions and any other amounts with respect to
such Preferred Units accumulated, due or payable in accordance with the
instruments designating such Preferred Units through the last day of such
quarter or other distribution period (such distributions shall be made to such
Partners in such order of priority and with such preferences as have been
established with respect to such Preferred Units as of the last day of such
quarter or other distribution period); and

(ii) thereafter, to the holders of the Common Units, including the General
Partner, in amounts proportionate to their respective Percentage Interests in
the Common Units on the applicable Partnership Record Date;

provided, however, that if a new or existing Partner acquires additional
Partnership Units in exchange for a Capital Contribution on any date other than
the next day after a Partnership Record Date, the cash distribution attributable
to such additional Partnership Units (other than Partnership Units acquired by
the General Partner in connection with the issuance of additional REIT Shares,

 

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or other interests in the General Partner) relating to the Partnership Record
Date next following the issuance of such additional Partnership Units (or
relating to the Partnership Record Date if such Partnership Units are acquired
on a Partnership Record Date) shall be reduced in the proportion to (i) the
number of days that such additional Partnership Units are held by such Partner
bears to (ii) the number of days between such Partnership Record Date (inclusive
of such Partnership Record Date) and the immediately preceding Partnership
Record Date (exclusive of such immediately preceding Partnership Record Date).

(b) Withholding; Partnership Loans. Notwithstanding any other provision of this
Agreement, the General Partner is authorized to take any action that it
determines to be necessary or appropriate to cause the Partnership to comply
with any withholding requirements established under the Code or any other
federal, state or local law including, without limitation, pursuant to Sections
1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to any Partner or assignee
(including by reason of Section 1446 of the Code), either (i) if the actual
amount to be distributed to the Partner equals or exceeds the amount required to
be withheld by the Partnership, the amount withheld shall be treated as a
distribution of cash in the amount of such withholding to such Partner, or
(ii) if the actual amount to be distributed to the Partner is less than the
amount required to be withheld by the Partnership, the excess of the amount
required to be withheld over the actual amount to be distributed shall be
treated as a loan (a “Partnership Loan”) from the Partnership to the Partner on
the day the Partnership pays over such amount to a taxing authority. A
Partnership Loan shall be repaid through withholding by the Partnership with
respect to subsequent distributions to the applicable Partner or assignee. In
the event that a Limited Partner (a “Defaulting Limited Partner”) fails to pay
any amount owed to the Partnership with respect to the Partnership Loan within
15 days after demand for payment thereof is made by the Partnership on the
Limited Partner, the General Partner, in its sole and absolute discretion, may
elect to make the payment to the Partnership on behalf of such Defaulting
Limited Partner. In such event, on the date of payment, the General Partner
shall be deemed to have extended a loan (a “General Partner Loan”) to the
Defaulting Limited Partner in the amount of the payment made by the General
Partner and shall succeed to all rights and remedies of the Partnership against
the Defaulting Limited Partner as to that amount. Without limitation, the
General Partner shall have the right to receive any distributions that otherwise
would be made by the Partnership to the Defaulting Limited Partner until such
time as the General Partner Loan has been paid in full, and any such
distributions so received by the General Partner shall be treated as having been
received by the Defaulting Limited Partner and immediately paid to the General
Partner.

Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to
this Section 5.2(b) shall bear interest at the lesser of (i) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, or (ii) the maximum
lawful rate of interest on such obligation, such interest to accrue from the
date the Partnership or the General Partner, as applicable, is deemed to extend
the loan until such loan is repaid in full.

(c) Limitation on Distributions. In no event may a Partner receive a
distribution of cash with respect to a Partnership Unit if such Partner is
entitled to receive a cash distribution as the holder of record of a REIT Share
for which all or part of such Partnership Unit has been or will be exchanged.

 

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5.3 REIT Distribution Requirements. The General Partner shall use its
commercially reasonable efforts to cause the Partnership to distribute amounts
sufficient to enable the General Partner to pay stockholder dividends that will
allow the General Partner to (i) meet its distribution requirement for
qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid
any federal income or excise tax liability imposed by the Code.

5.4 No Right to Distributions In Kind. No Partner shall be entitled to demand
property other than cash in connection with any distributions by the
Partnership.

5.5 Limitations of Return of Capital Contributions. Notwithstanding any of the
provisions of this Article 5, no Partner shall have the right to receive and the
General Partner shall not have the right to make, a distribution that includes a
return of all or part of a Partner’s Capital Contributions, unless after giving
effect to the return of a Capital Contribution, the sum of all Partnership
liabilities, other than the liabilities to a Partner for the return of his
Capital Contribution, does not exceed the fair market value of the Partnership’s
assets.

5.6 Distributions Upon Liquidation. Upon liquidation of the Partnership, after
payment of, or adequate provision for, debts and obligations of the Partnership,
including any Partner loans, any remaining assets of the Partnership shall be
distributed to the Partners as follows:

(a) first, to the holders of Preferred Units, in such amounts as is required for
them to receive the Liquidation Preference with respect to the Preferred Units
held by them in accordance with the instruments designating such Preferred Units
(such distributions shall be made to such Partners in such order of priority and
with such preferences as have been established with respect to such Preferred
Units);

(b) thereafter, to the holders of the Common Units, including the General
Partner, in amounts proportionate to their respective Percentage Interests in
the Common Units.

To the extent deemed advisable by the General Partner, appropriate arrangements
(including the use of a liquidating trust) may be made to assure that adequate
funds are available to pay any contingent debts or obligations.

5.7 Substantial Economic Effect. It is the intent of the Partners that the
allocations of Profit and Loss under this Agreement have substantial economic
effect, or be consistent with the Partners’ interests in the Partnership, within
the meaning of Section 704(b) of the Code as interpreted by the Regulations
promulgated pursuant thereto. Article 5 and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.

ARTICLE 6

RIGHTS, OBLIGATIONS AND

POWERS OF THE GENERAL PARTNER

6.1 Management of the Partnership.

(a) Except as otherwise expressly provided in this Agreement, the General
Partner shall have full, complete and exclusive discretion to manage and control
the business of the Partnership for the purposes herein stated, and shall make
all decisions affecting the business and assets of the Partnership. Subject to
the restrictions specifically contained in this Agreement, the

 

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powers of the General Partner shall include, without limitation, the authority
to take the following actions, as deemed necessary or desirable in the sole and
absolute discretion of the General Partner, on behalf of the Partnership (or any
Subsidiary or Subsidiary Partnership):

(i) to acquire, purchase, own, operate, lease and dispose of (other than in a
“prohibited transaction” within the meaning of Section 857(b)(6)(B)(iii) of the
Code) any real property and any other property or assets including, but not
limited to, notes and mortgages, that the General Partner determines are
necessary or appropriate or in the best interests of the business of the
Partnership;

(ii) to construct buildings and make other improvements on the Properties owned
or leased by the Partnership;

(iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership
Interests or any securities (including secured and unsecured debt obligations of
the Partnership, debt obligations of the Partnership convertible into any class
or series of Partnership Interests, or options, rights, warrants or appreciation
rights relating to any Partnership Interests) of the Partnership;

(iv) to borrow or lend money for the Partnership, issue or receive evidences of
indebtedness in connection therewith, refinance, increase the amount of, modify,
amend or change the terms of, or extend the time for the payment of, any such
indebtedness, and secure such indebtedness by mortgage, deed of trust, pledge or
other lien on the Partnership’s assets;

(v) to pay, either directly or by reimbursement, for all Administrative Expenses
to third parties or to the General Partner or its Affiliates as set forth in
this Agreement;

(vi) to guarantee or become a co-maker of indebtedness of the General Partner or
any Subsidiary thereof, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such guarantee
or indebtedness, and secure such guarantee or indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership’s assets;

(vii) to use assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with this Agreement, including, without
limitation, payment, either directly or by reimbursement, of all Administrative
Expenses of the General Partner, the Partnership or any Subsidiary of either, to
third parties or to the General Partner as set forth in this Agreement;

(viii) to lease all or any portion of any of the Partnership’s assets, whether
or not the terms of such leases extend beyond the termination date of the
Partnership and whether or not any portion of the Partnership’s assets so leased
are to be occupied by the lessee, or, in turn, subleased in whole or in part to
others, for such consideration and on such terms as the General Partner may
determine;

(ix) to prosecute, defend, arbitrate, or compromise any and all claims or
liabilities in favor of or against the Partnership, on such terms and in such
manner as the General Partner may reasonably determine, and similarly to
prosecute, settle or defend litigation with respect to the Partners, the
Partnership, or the Partnership’s assets;

 

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(x) to file applications, communicate, and otherwise deal with any and all
governmental agencies having jurisdiction over, or in any way affecting, the
Partnership’s assets or any other aspect of the Partnership business;

(xi) to make or revoke any election permitted or required of the Partnership by
any taxing authority;

(xii) to maintain such insurance coverage for public liability, fire and
casualty, and any and all other insurance for the protection of the Partnership,
for the conservation of Partnership assets, or for any other purpose convenient
or beneficial to the Partnership, in such amounts and such types, as it shall
determine from time to time;

(xiii) to determine whether or not to apply any insurance proceeds for any
Property to the restoration of such Property or to distribute the same;

(xiv) to establish one or more divisions of the Partnership, to hire and dismiss
employees of the Partnership or any division of the Partnership, and to retain
legal counsel, accountants, consultants, real estate brokers, and such other
persons, as the General Partner may deem necessary or appropriate in connection
with the Partnership business and to pay therefor such reasonable remuneration
as the General Partner may deem reasonable and proper;

(xv) to retain other services of any kind or nature in connection with the
Partnership business, and to pay therefor such remuneration as the General
Partner may deem reasonable and proper;

(xvi) to negotiate and conclude agreements on behalf of the Partnership with
respect to any of the rights, powers and authority conferred upon the General
Partner;

(xvii) to maintain accurate accounting records and to file promptly all federal,
state and local income tax returns on behalf of the Partnership;

(xviii) to distribute Partnership cash or other Partnership assets in accordance
with this Agreement;

(xix) to form or acquire an interest in, and contribute property to, any further
limited or general partnerships, limited liability companies, joint ventures or
other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to, Subsidiaries
of the Partnership and any other Person in which it has an equity interest from
time to time);

(xx) to establish Partnership reserves for working capital, capital
expenditures, contingent liabilities, or any other valid Partnership purpose;

 

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(xxi) to merge, consolidate or combine the Partnership with or into another
Person, subject to any limitations set forth in this Agreement, including those
set forth in Articles 7 and 12;

(xxii) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” for
purposes of Section 7704 of the Code;

(xxiii) to take any and all actions necessary to adopt or modify any
distribution reinvestment plan of the Partnership or the General Partner;

(xxiv) to take any and all actions necessary to maintain the General Partner’s
status as a REIT as set forth in Section 3.1; and

(xxv) to take such other action, execute, acknowledge, swear to or deliver such
other documents and instruments, and perform any and all other acts that the
General Partner deems necessary or appropriate for the formation, continuation
and conduct of the business and affairs of the Partnership (including, without
limitation, all actions consistent with allowing the General Partner at all
times to qualify as a REIT unless the General Partner voluntarily terminates its
REIT status) and to possess and enjoy all of the rights and powers of a general
partner as provided by the Act.

(b) Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
Partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.

6.2 Delegation of Authority. The General Partner may delegate any or all of its
powers, rights and obligations hereunder, and may appoint, employ, contract or
otherwise deal with any Person for the transaction of the business of the
Partnership, which Person may, under supervision of the General Partner, perform
any acts or services for the Partnership as the General Partner may approve.

6.3 Indemnification and Exculpation of Indemnitees.

(a) The Partnership shall indemnify to the fullest extent allowed under
applicable law, an Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal
fees and expenses), judgments, fines, settlements, and other amounts arising
from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise.

Any indemnification pursuant to this Section 6.3 shall be made only out of the
assets of the Partnership.

(b) The indemnification provided by this Section 6.3 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.

 

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

(d) For purposes of this Section 6.3, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 6.3; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.

(e) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.

(f) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 6.3 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) The provisions of this Section 6.3 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.

(h) Neither the amendment nor repeal of this Section 6.3, nor the adoption or
amendment of any other provision of the Agreement inconsistent with this
Section 6.3, shall apply to or affect in any respect the applicability with
respect to any act or failure to act which occurred prior to such amendment,
repeal or adoption.

6.4 Liability of the General Partner.

(a) Notwithstanding anything to the contrary set forth in this Agreement, the
General Partner shall not be liable for monetary damages to the Partnership or
any Partners for losses sustained or liabilities incurred as a result of errors
in judgment or of any act or omission if the General Partner acted in good
faith. The General Partner shall not be in breach of any duty that the General
Partner may owe to the Limited Partners or the Partnership or any other Persons
under this Agreement or of any duty stated or implied by law or equity provided
the General Partner, acting in good faith, abides by the terms of this
Agreement.

(b) The Limited Partners expressly acknowledge that the General Partner is
acting on behalf of the Partnership, itself and its stockholders collectively,
that the General Partner is under no obligation to consider the separate
interests of the Limited Partners (including, without limitation, the tax
consequences to Limited Partners or the tax consequences of some, but not all,

 

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of the Limited Partners) in deciding whether to cause the Partnership to take
(or decline to take) any actions. In the event of a conflict between the
interests of its stockholders on one hand and the Limited Partners on the other,
the General Partner shall endeavor in good faith to resolve the conflict in a
manner not adverse to either its stockholders or the Limited Partners; provided,
however, that for so long as the General Partner directly owns a controlling
interest in the Partnership, any such conflict that the General Partner, in its
sole and absolute discretion, determines cannot be resolved in a manner not
adverse to either its stockholders or the Limited Partner shall be resolved in
favor of the stockholders. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith.

(c) Subject to its obligations and duties as General Partner set forth in
Section 6.1 hereof, the General Partner may exercise any of the powers granted
to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.

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

(e) Any amendment, modification or repeal of this Section 6.4 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the General Partner’s liability to the Partnership and the Limited Partners
under this Section 6.4 as in effect immediately prior to such amendment,
modification or repeal with respect to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when claims
relating to such matters may arise or be asserted.

6.5 Reimbursement of General Partner.

(a) Except as provided in this Section 6.5 and elsewhere in this Agreement
(including the provisions of Articles 5 and 6 regarding distributions, payments,
and allocations to which it may be entitled), the General Partner shall not be
compensated for its services as general partner of the Partnership.

(b) REIT Expenses and Administrative Expenses shall be obligations of the
Partnership and the General Partner shall be entitled to reimbursement for all
REIT Expenses and Administrative Expenses incurred by the General Partner on
behalf of the Partnership. Reimbursement of REIT Expenses and Administrative
Expenses shall be treated as an expense of the Partnership and not as
allocations of Partnership income or gain.

(c) 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 Administrative Expenses.

 

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6.6 Outside Activities. Subject to the Articles of Incorporation and any
agreements entered into by the General Partner or its Affiliates with the
Partnership or a Subsidiary, any officer, director, employee, agent, trustee,
Affiliate or stockholder of the General Partner shall be entitled to and may
have business interests and engage in business activities in addition to those
relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any such business ventures, interest or activities. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any such
business ventures, interests or activities, and the General Partner shall have
no obligation pursuant to this Agreement to offer any interest in any such
business ventures, interests and activities to the Partnership or any Limited
Partner, even if such opportunity is of a character which, if presented to the
Partnership or any Limited Partner, could be taken by such Person.

6.7 Employment or Retention of Affiliates.

(a) Any Affiliate of the General Partner may be employed or retained by the
Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee, manager, furnisher of goods or services, broker, agent, lender
or otherwise) and may receive from the Partnership any compensation, price, or
other payment therefor which the General Partner determines to be fair and
reasonable.

(b) The Partnership may lend or contribute to its Subsidiaries or other Persons
in which it has an equity investment, and such Persons may borrow funds from the
Partnership, on terms and conditions established in the sole and absolute
discretion of the General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person.

(c) The Partnership may transfer assets to joint ventures, other partnerships,
corporations or other business entities in which it is or thereby becomes a
participant upon such terms and subject to such conditions as the General
Partner deems are consistent with this Agreement and applicable law.

(d) Except as expressly permitted by this Agreement, neither the General Partner
nor any of its Affiliates shall sell, transfer or convey any property to, or
purchase any property from, the Partnership, directly or indirectly, except
pursuant to transactions that are on terms that are fair and reasonable to the
Partnership.

6.8 General Partner Participation. The General Partner agrees that all business
activities of the General Partner, including activities pertaining to the
acquisition, development or ownership of Properties, shall be conducted through
the Partnership or one or more Subsidiaries of the Partnership (including a
taxable REIT subsidiary within the meaning of Section 856(l) of the Code);
provided, however, that the General Partner is allowed to make a direct
acquisition, but if and only if, such acquisition is made in connection with the
issuance of Additional Securities, which direct acquisition and issuance have
been approved and determined to be in the best interests of the General Partner
and the Partnership by a majority of the board of directors of the General
Partner.

6.9 Title to Partnership Assets. Title to Partnership assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion

 

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thereof. Title to any or all of the Partnership assets may be held in the name
of the Partnership, the General Partner or one or more nominees, as the General
Partner may determine, including Affiliates of the General Partner. The General
Partner hereby declares and warrants that any Partnership assets for which legal
title is held in the name of the General Partner or any nominee or Affiliate of
the General Partner shall be held by the General Partner for the use and benefit
of the Partnership in accordance with the provisions of this Agreement;
provided, however, that the General Partner shall use its best efforts to cause
beneficial and record title to such assets to be vested in the Partnership as
soon as reasonably practicable. All Partnership assets shall be recorded as the
property of the Partnership in its books and records, irrespective of the name
in which legal title to such Partnership assets is held.

6.10 Miscellaneous. In the event the General Partner redeems any REIT Shares
(other than REIT Shares redeemed in accordance with the share redemption program
of the General Partner through proceeds received from the General Partner’s
distribution reinvestment plan, which proceeds so used shall not become a
Capital Contribution of the General Partner), then the General Partner shall
cause the Partnership to purchase from the General Partner an equivalent number
of Common Units as determined based on the application of the Conversion Factor
on the same terms that the General Partner redeemed such REIT Shares. Moreover,
if the General Partner makes a cash tender offer or other offer to acquire REIT
Shares, then the General Partner shall cause the Partnership to make a
corresponding offer to the General Partner to acquire an equivalent number of
Common Units held by the General Partner as determined based on the application
of the Conversion Factor. In the event any REIT Shares are exchanged by the
General Partner pursuant to such offer, the Partnership shall redeem an
equivalent number of the General Partner’s Common Units as determined based on
the application of the Conversion Factor for an equivalent purchase price.

6.11 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 and to enter into any contracts
on behalf of the Partnership, and take any and all actions on behalf of the
Partnership and such Person shall be entitled to deal with the General Partner
as if 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 which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or 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 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.

 

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ARTICLE 7

CHANGES IN GENERAL PARTNER

7.1 Transfer of the General Partner’s Partnership Interest.

(a) The General Partner shall not transfer all or any portion of its General
Partnership Interest or withdraw as General Partner except as provided in or in
connection with a transaction contemplated by Section 7.1(b), (c) or (d).

(b) Except as otherwise provided in Section 7.1(c) or (d) hereof, the General
Partner shall not engage in any merger, consolidation or other combination with
or into another Person or sale of all or substantially all of its assets, (other
than in connection with a change in the General Partner’s state of incorporation
or organizational form) in each case which results in a change of control of the
General Partner (a “Transaction”), unless:

(i) the approval of the holders of a majority of the Common Units is obtained;

(ii) as a result of such Transaction all Limited Partners will receive for each
Common Unit an amount of cash, securities, or other property equal to the
product of the Conversion Factor and the greatest amount of cash, securities or
other property paid in the Transaction to a holder of one REIT Share in
consideration of one REIT Share, provided that if, in connection with the
Transaction, a purchase, tender or exchange offer (“Offer”) shall have been made
to and accepted by the holders of more than 50% of the outstanding REIT Shares,
each holder of Common Units shall be given the option to exchange its Common
Units for the greatest amount of cash, securities, or other property which a
Limited Partner would have received had it (A) exercised its Exchange Right and
(B) sold, tendered or exchanged pursuant to the Offer the REIT Shares received
upon exercise of the Exchange Right immediately prior to the expiration of the
Offer; or

(iii) the General Partner is the surviving entity in the Transaction and either
(A) the holders of REIT Shares do not receive cash, securities, or other
property in the Transaction or (B) all Limited Partners (other than the General
Partner or any Subsidiary of the General Partner) receive an amount of cash,
securities, or other property (expressed as an amount per REIT Share) that is no
less than the product of the Conversion Factor and the greatest amount of cash,
securities, or other property (expressed as an amount per REIT Share) received
in the Transaction by any holder of REIT Shares.

(c) Notwithstanding Section 7.1(b), the General Partner may merge with or into
or consolidate with another entity if immediately after such merger or
consolidation (i) substantially all of the assets of the successor or surviving
entity (the “Surviving General Partner”), other than Partnership Units held by
the General Partner, are contributed, directly or indirectly, to the Partnership
as a Capital Contribution in exchange for Partnership Units with a fair market
value equal to the value of the assets so contributed as determined by the
Surviving General Partner in good faith and (ii) the Surviving General Partner
expressly agrees to assume all obligations of the General Partner, as
appropriate, hereunder. Upon such contribution and assumption, the Surviving
General Partner shall have the right and duty to amend this Agreement as set
forth in this Section 7.1(c). The Surviving General Partner shall in good faith
arrive at a new method for the calculation of the Cash Amount, the REIT Shares
Amount and Conversion Factor for a Partnership Unit after any such merger or
consolidation so as to approximate the existing method for such calculation as

 

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closely as reasonably possible. Such calculation shall take into account, among
other things, the kind and amount of securities, cash and other property that
was receivable upon such merger or consolidation by a holder of REIT Shares or
options, warrants or other rights relating thereto, and which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Surviving General Partner also
shall in good faith modify the definition of REIT Shares and make such
amendments to Section 8.5 hereof so as to approximate the existing rights and
obligations set forth in Section 8.5 as closely as reasonably possible. The
above provisions of this Section 7.1(c) shall similarly apply to successive
mergers or consolidations permitted hereunder.

In respect of any transaction described in the preceding paragraph, the General
Partner is required to use its commercially reasonable efforts to structure such
transaction to avoid causing the Limited Partners to recognize a gain for
federal income tax purposes by virtue of the occurrence of or their
participation in such transaction, provided such efforts are consistent with the
exercise of the fiduciary duties of the board of directors of the General
Partner to the Stockholders under applicable law.

(d) Notwithstanding Section 7.1(b),

(i) a General Partner may transfer all or any portion of its General Partnership
Interest to (A) a wholly-owned Subsidiary of such General Partner or (B) the
owner of all of the ownership interests of such General Partner, and following a
transfer of all of its General Partnership Interest, may withdraw as General
Partner; and

(ii) the General Partner may engage in Transactions not required by law or by
the rules of any National Securities Exchange on which the REIT Shares are
listed to be submitted to the vote of the holders of the REIT Shares.

7.2 Admission of a Substitute or Additional General Partner. A Person shall be
admitted as a substitute or additional General Partner of the Partnership only
if the following terms and conditions are satisfied:

(a) the Person to be admitted as a substitute or additional General Partner
shall have accepted and agreed to be bound by all the terms and provisions of
this Agreement by executing a counterpart thereof and such other documents or
instruments as may be required or appropriate in order to effect the admission
of such Person as a General Partner, and a certificate evidencing the admission
of such Person as a General Partner shall have been filed for recordation and
all other actions required by Section 2.5 hereof in connection with such
admission shall have been performed;

(b) if the Person to be admitted as a substitute or additional General Partner
is a corporation or a partnership it shall have provided the Partnership with
evidence satisfactory to counsel for the Partnership of such Person’s authority
to become a General Partner and to be bound by the terms and provisions of this
Agreement; and

 

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(c) counsel for the Partnership shall have rendered an opinion (relying on such
opinions from other counsel and the state or any other jurisdiction as may be
necessary) that the admission of the person to be admitted as a substitute or
additional General Partner is in conformity with the Act, that none of the
actions taken in connection with the admission of such Person as a substitute or
additional General Partner will cause (i) the Partnership to be classified other
than as a partnership for federal income tax purposes, or (ii) the loss of any
Limited Partner’s limited liability.

7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.

(a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and
its removal pursuant to Section 7.4(a) hereof) or the death, withdrawal, removal
or dissolution of a General Partner (except that, if a General Partner is on the
date of such occurrence a partnership, the withdrawal, death, dissolution, Event
of Bankruptcy as to, or removal of a partner in, such partnership shall be
deemed not to be a dissolution of such General Partner if the business of such
General Partner is continued by the remaining partner or partners), the
Partnership shall be dissolved and terminated unless the Partnership is
continued pursuant to Section 7.3(b) hereof. The merger of the General Partner
with or into any entity that is admitted as a substitute or successor General
Partner pursuant to Section 7.2 hereof shall not be deemed to be the withdrawal,
dissolution or removal of the General Partner.

(b) Following the occurrence of an Event of Bankruptcy as to a General Partner
(and its removal pursuant to Section 7.4(a) hereof) or the death, withdrawal,
removal or dissolution of a General Partner (except that, if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the holders of Common Units, within 90 days after such occurrence,
may elect to continue the business of the Partnership for the balance of the
term specified in Section 2.4 hereof by selecting, subject to Section 7.2 hereof
and any other provisions of this Agreement, a substitute General Partner by
consent of a majority in interest of the Common Units. If the holders of Common
Units elect to continue the business of the Partnership and admit a substitute
General Partner, the relationship with the Partners and of any Person who has
acquired an interest of a Partner in the Partnership shall be governed by this
Agreement.

7.4 Removal of a General Partner.

(a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of,
a General Partner, such General Partner shall be deemed to be removed
automatically; provided, however, that if a General Partner is on the date of
such occurrence a partnership, the withdrawal, death, dissolution, Event of
Bankruptcy as to or removal of a partner in such partnership shall be deemed not
to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.

(b) If a General Partner has been removed pursuant to this Section 7.4 and the
Partnership is continued pursuant to Section 7.3 hereof, such General Partner
shall promptly transfer and assign its General Partnership Interest in the
Partnership to the substitute General Partner approved by a majority in interest
of the Limited Partners in accordance with Section 7.3(b) hereof and otherwise
admitted to the Partnership in accordance with Section 7.2 hereof. At the time
of assignment, the removed General Partner shall be entitled to receive from the
substitute General

 

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Partner the fair market value of the General Partnership Interest of such
removed General Partner as reduced by any damages caused to the Partnership by
such General Partner. Such fair market value shall be determined by an appraiser
mutually agreed upon by the General Partner and a majority in interest of the
Limited Partners within 10 days following the removal of the General Partner. In
the event that the parties are unable to agree upon an appraiser, the removed
General Partner and a majority in interest of the Limited Partners each shall
select an appraiser. Each such appraiser shall complete an appraisal of the fair
market value of the removed General Partner’s General Partnership Interest
within 30 days of the General Partner’s removal, and the fair market value of
the removed General Partner’s General Partnership Interest shall be the average
of the two appraisals; provided, however, that if the higher appraisal exceeds
the lower appraisal by more than 20% of the amount of the lower appraisal, the
two appraisers, no later than 40 days after the removal of the General Partner,
shall select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner’s General Partnership Interest no
later than 60 days after the removal of the General Partner. In such case, the
fair market value of the removed General Partner’s General Partnership Interest
shall be the average of the two appraisals closest in value.

(c) The General Partnership Interest of a removed General Partner, during the
time after default until transfer under Section 7.4(b), shall be converted to
that of a special Limited Partner; provided, however, such removed General
Partner shall not have any rights to participate in the management and affairs
of the Partnership, and shall not be entitled to any portion of the income,
expense, profit, gain or loss allocations or cash distributions allocable or
payable, as the case may be, to the Limited Partners. Instead, such removed
General Partner shall receive and be entitled only to retain distributions or
allocations of such items that it would have been entitled to receive in its
capacity as General Partner, until the transfer is effective pursuant to
Section 7.4(b).

(d) All Partners shall have given and hereby do give such consents, shall take
such actions and shall execute such documents as shall be legally necessary and
sufficient to effect all the foregoing provisions of this Section.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

8.1 Management of the Partnership. The Limited Partners shall not participate in
the management or control of Partnership business nor shall they transact any
business for or on behalf of the Partnership, nor shall they have the power to
sign for or bind the Partnership, such powers being vested solely and
exclusively in the General Partner.

8.2 Power of Attorney. Each Limited Partner hereby irrevocably appoints the
General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of its Partnership Interest.

8.3 Limitation on Liability of Limited Partners. No Limited Partner shall be
liable for any debts, liabilities, contracts or obligations of the Partnership.
A Limited Partner shall be liable to the Partnership only to make payments of
its Capital Contribution, if any, as and when due hereunder. After its Capital
Contribution is fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further Capital Contributions or
other payments or lend any funds to the Partnership.

 

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8.4 Ownership by Limited Partner of Corporate General Partner or Affiliate. No
Limited Partner shall at any time, either directly or indirectly, own any stock
or other interest in the General Partner or in any Affiliate thereof, if such
ownership by itself or in conjunction with other stock or other interests owned
by other Limited Partners would, in the opinion of counsel for the Partnership,
jeopardize the classification of the Partnership as a partnership for federal
tax purposes. The General Partner shall be entitled to make such reasonable
inquiry of the Limited Partners as is required to establish compliance by the
Limited Partners with the provisions of this Section.

8.5 Exchange Right.

(a) Subject to Sections 8.5(b), 8.5(c), 8.5(d), 8.5(e), and 8.5(g) and the
provisions of any agreements between the Partnership and one or more holders of
Common Units with respect to Common Units held by them, each holder of Common
Units shall have the right (the “Exchange Right”) to require the Partnership to
redeem on a Specified Exchange Date all or a portion of the Common Units held by
such Limited Partner at an exchange price equal to and in the form of the Cash
Amount to be paid by the Partnership, provided that such Common Units shall have
been outstanding for at least one year. The Exchange Right shall be exercised
pursuant to a Notice of Exchange delivered to the Partnership (with a copy to
the General Partner) by the Limited Partner who is exercising the Exchange Right
(the “Exchanging Partner”); provided, however, that the Partnership shall not be
obligated to satisfy such Exchange Right if the General Partner elects to
purchase the Common Units subject to the Notice of Exchange pursuant to
Section 8.5(b); and provided, further, that no holder of Common Units may
deliver more than two Notices of Exchange during each calendar year. A Limited
Partner may not exercise the Exchange Right for less than 1,000 Common Units or,
if such Limited Partner holds less than 1,000 Common Units, all of the Common
Units held by such Partner. The Exchanging Partner shall have no right, with
respect to any Common Units so exchanged, to receive any distribution paid with
respect to Common Units if the record date for such distribution is on or after
the Specified Exchange Date.

(b) Notwithstanding the provisions of Section 8.5(a), a Limited Partner that
exercises the Exchange Right shall be deemed to have offered to sell the Common
Units described in the Notice of Exchange to the General Partner, and the
General Partner may, in its sole and absolute discretion, elect to purchase
directly and acquire such Common Units by paying to the Exchanging Partner
either the Cash Amount or the REIT Shares Amount, as elected by the General
Partner (in its sole and absolute discretion), on the Specified Exchange Date,
whereupon the General Partner shall acquire the Common Units offered for
exchange by the Exchanging Partner and shall be treated for all purposes of this
Agreement as the owner of such Common Units. If the General Partner shall elect
to exercise its right to purchase Common Units under this Section 8.5(b) with
respect to a Notice of Exchange, it shall so notify the Exchanging Partner
within five business days after the receipt by the General Partner of such
Notice of Exchange. Unless the General Partner (in its sole and absolute
discretion) shall exercise its right to purchase Common Units from the
Exchanging Partner pursuant to this Section 8.5(b), the General Partner shall
have no obligation to the Exchanging Partner or the Partnership with respect to
the Exchanging Partner’s exercise of the Exchange Right. In the event the
General Partner shall exercise its right to purchase Common Units with respect
to the exercise of an Exchange Right in the manner described in the first
sentence of this Section 8.5(b), the Partnership shall have no obligation to pay
any amount to the Exchanging Partner with respect to such Exchanging Partner’s
exercise of such Exchange Right, and each of

 

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the Exchanging Partner, the Partnership, and the General Partner, as the case
may be, shall treat the transaction between the General Partner, as the case may
be, and the Exchanging Partner for federal income tax purposes as a sale of the
Exchanging Partner’s Common Units to the General Partner, as the case may be.
Each Exchanging Partner agrees to execute such documents as the General Partner
may reasonably require in connection with the issuance of REIT Shares upon
exercise of the Exchange Right, including an assignment of the Common Units, and
if the General Partner is relying upon the exemption from registration under the
Securities Act of 1933, as amended, provided by Regulation D promulgated under
the Securities Act of 1933, as amended, or any successor rule, a document
pursuant to which the Exchanging Partner makes a representation that it is an
accredited investor; provided, however, that if the Exchanging Partner cannot
make such representation, then the Exchanging Partner shall have no right to
exercise its Exchange Right.

(c) Notwithstanding the provisions of Section 8.5(a) and 8.5(b), a Limited
Partner shall not be entitled to exercise the Exchange Right if the delivery of
REIT Shares to such Partner on the Specified Exchange Date by the General
Partner pursuant to Section 8.5(b) (regardless of whether or not the General
Partner would in fact exercise its rights under Section 8.5(b)) would, in the
determination of the General Partner (i) result in such Partner or any other
person owning, directly or indirectly, shares of stock of the General Partner in
excess of the Aggregate Stock Ownership Limit (as defined in the Articles of
Incorporation and calculated in accordance therewith) or the Common Stock
Ownership Limit (as defined in the Articles of Incorporation and calculated in
accordance therewith), except as provided in the Articles of Incorporation,
(ii) result in REIT Shares being owned by fewer than 100 persons (determined
without reference to any rules of attribution), except as provided in the
Articles of Incorporation, (iii) result in the General Partner being “closely
held” within the meaning of Section 856(h) of the Code, (iv) cause the General
Partner to own, directly or constructively, 9.9% or more of the ownership
interests in a tenant within the meaning of Section 856(d)(2)(B) of the Code,
(v) cause a violation of the Securities Act of 1933, as amended, either for the
exchange or other securities offerings, (vi) require such REIT Shares to be
registered under the Securities Act of 1933, as amended, (vii) cause the General
Partner to no longer qualify as a REIT, or (viii) cause the Partnership to be
treated as a “publicly traded partnership” under Section 7704 of the Code. The
General Partner, in its sole and absolute discretion, may waive the restriction
on exchange set forth in this Section 8.5(c).

(d) Any Cash Amount to be paid to an Exchanging Partner pursuant to this
Section 8.5 shall be paid on the Specified Exchange Date; provided, however,
that the General Partner may elect to cause the Specified Exchange Date to be
delayed for up to an additional 180 days to the extent required for the General
Partner to cause additional REIT Shares to be issued to provide financing to be
used to make such payment of the Cash Amount. Notwithstanding the foregoing, the
General Partner agrees to use its commercially reasonable efforts to cause the
closing of the acquisition of exchanged Common Units hereunder to occur as
quickly as reasonably possible.

(e) Notwithstanding any other provision of this Agreement, the General Partner
shall place appropriate restrictions on the ability of the Limited Partners to
exercise their Exchange Rights as and if deemed necessary to ensure that the
Partnership does not constitute a “publicly traded partnership” under
Section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt
written notice thereof to each of the Limited Partners, which notice shall state
the restrictions the General Partner has instituted in order to avoid the
Partnership being treated as a “publicly traded partnership” under Section 7704
of the Code.

 

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(f) Each Limited Partner covenants and agrees with the General Partner that all
Common Units delivered for exchange shall be delivered to the Partnership or the
General Partner, as the case may be, free and clear of all liens; and,
notwithstanding anything contained herein to the contrary, neither the General
Partner nor the Partnership shall be under any obligation to acquire Common
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 Common Units to the Partnership or the General Partner,
such Limited Partner shall assume and pay such transfer tax.

(g) With respect to the Contribution Common Units, the Exchange Right provided
for in this Article 8 shall not be exercisable or exercised by any holder of
Contribution Common Units until such Contribution Common Units have been
outstanding for at least two years.

(h) The exercise of an Exchange Right by a Limited Partner will be subject to
compliance with securities laws applicable to the exchange and therefore the
Exchange Right may not be exercisable in the absence of an effective
registration statement or an available exemption from registration.

8.6 Outside Activities of Limited Partners. Subject to (i) any other agreements
entered into by a Limited Partner or any of its Affiliates with the General
Partner or any of its Affiliates, including those certain (A) Restrictive
Covenants Agreements, by and among PM Holdings, Advisor Holdings, the
Partnership and C-III Capital Partners LLC, dated as of September 8, 2020, (B)
Restrictive Covenants Agreements, by and among PM Holdings, Advisor Holdings,
the Partnership and each of Alan Feldman, Thomas Elliott and Michele Weisbaum,
dated as of September 8, 2020, and (C) Employment Agreements, by and between
Advisor Holdings and each of Alan Feldman, Thomas Elliott and Michele Weisbaum,
dated as of September 8, 2020, and (ii) any fiduciary duty owed by a Limited
Partner or any officer, director, employee, agent, representative, trustee,
Affiliate, manager, member or stockholder of any such Limited Partner or
assignee, to the General Partner by virtue of such Person’s position as a
director of the General Partner, any Limited Partner, any assignee of such
Limited Partner admitted pursuant to Section 9.3, or any officer, director,
employee, agent, representative, trustee, Affiliate, manager, member or
stockholder of any such Limited Partner or assignee, as applicable, shall be
entitled to and may have business interests and engage in business activities in
addition to those relating to the General Partner, including business interests
and activities that are in direct or indirect competition with the General
Partner or that are enhanced by the activities of the General Partner. Neither
the General Partner nor any Limited Partner shall have any rights by virtue of
this Agreement in any business ventures of any Limited Partner or assignee
admitted pursuant to Section 9.3. Subject to such agreements, none of the
General Partner, Limited Partners nor any other Person shall have any rights by
virtue of this Agreement in any business ventures of any other Person (other
than to the extent expressly provided herein), and such Person shall have no
obligation pursuant to this Agreement, subject to any other agreements entered
into by a Limited Partner or its Affiliates with the General Partner or its
Affiliates to offer any interest in any such business ventures to the General
Partner, any other Limited Partner, or any such other Person, even if such
opportunity is of a character that, if presented to the General Partner, any
other Limited Partner or such other Person, could be taken by such Person.

8.7 Rights of Limited Partners Relating to the General Partner.

(a) In addition to other rights provided by this Agreement or by the Act, and
subject to Section 8.7(c), the General Partner shall deliver to each Limited
Partner a copy of any information mailed to all of the common stockholders of
the General Partner as soon as practicable after such mailing.

 

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(b) The General Partner shall notify any Limited Partner, on request, of the
then current Conversion Factor or any change made to the Conversion Factor.

(c) Notwithstanding any other provision of this Section 8.7, the General Partner
may keep confidential from the Limited Partners (or any of them, individually),
for such period of time as the General Partner determines to be reasonable, any
information that (i) the General Partner believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in its best interests or (ii) the General Partner is
required by law or by agreement to keep confidential.

ARTICLE 9

TRANSFERS OF LIMITED PARTNERSHIP INTERESTS

9.1 Purchase for Investment.

(a) Each Limited Partner hereby represents and warrants to the General Partner
and to the Partnership that the acquisition of its Partnership Interests is made
as a principal for its account for investment purposes only and not with a view
to the resale or distribution of such Partnership Interest.

(b) Each Limited Partner agrees that it will not sell, assign or otherwise
transfer its Partnership Interest or any fraction thereof, whether voluntarily
or by operation of law or at judicial sale or otherwise, to any Person who does
not make the representations and warranties to the General Partner set forth in
Section 9.1(a) above and similarly agree not to sell, assign or transfer such
Partnership Interest or fraction thereof to any Person who does not similarly
represent, warrant and agree.

9.2 Restrictions on Transfer of Limited Partnership Interests.

(a) Subject to the provisions of Sections 9.2(b), (c) and (d), no Limited
Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all
or any portion of its Limited Partnership Interest, or any of such Limited
Partner’s economic rights as a Limited Partner, whether voluntarily or by
operation of law or at judicial sale or otherwise (collectively, a “Transfer”)
without the consent of the General Partner, which consent shall not unreasonably
be withheld. Any such purported transfer undertaken without such consent shall
be considered to be null and void ab initio and shall not be given effect. The
General Partner may require, as a condition of any Transfer to which it
consents, that the transferor assume all costs incurred by the Partnership in
connection therewith.

(b) No Limited Partner may withdraw from the Partnership other than as a result
of a permitted Transfer (i.e., a Transfer consented to as contemplated by clause
(a) above or clause (c) below or a Transfer pursuant to Section 9.5 below) of
all of its Partnership Units pursuant to this Article 9 or pursuant to an
exchange of all of its Partnership Units pursuant to Section 8.5 or any
instrument designating a Preferred Unit. Upon the permitted Transfer or
redemption of all of a Limited Partner’s Partnership Interest, such Limited
Partner shall cease to be a Limited Partner.

 

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(c) Subject to Sections 9.2(e), (f) and (g) below, a Limited Partner may
Transfer, with the consent of the General Partner, which consent shall not be
unreasonably withheld, all or a portion of its Partnership Units to (i) its
Affiliate; (ii) a parent or parent’s spouse, natural or adopted descendant or
descendants, spouse of such descendant, or brother or sister, or a trust created
by such Limited Partner for the benefit of such Limited Partner and/or any such
Person(s), of which trust such Limited Partner or any such Person(s) is a
trustee, (iii) a corporation controlled by a Person or Persons named in
(i) above, or (iv) if the Limited Partner is an entity, its beneficial owners.

(d) Subject to Sections 9.2(e), (f) and (g) below, a Limited Partner may
Transfer, with the consent of the General Partner, which consent may be granted
or withheld in its sole and absolute discretion, all or a portion of its
Partnership Units to (i) any lender or lenders, or agents acting on their
behalf, to whom any Partnership Unit Interest is transferred pursuant to (y) the
formation of any secured pledge or (z) the exercise of remedies under a pledge;
or (ii) any special purpose entities owned and used by the lenders or agents
described in Section 9.2(d)(i) for the purpose of holding any such Partnership
Unit.

(d) No Limited Partner may effect a Transfer of its Limited Partnership
Interest, in whole or in part, if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would otherwise violate any applicable
federal or state securities or blue sky law (including investment suitability
standards).

(e) No Transfer by a Limited Partner of its Partnership Units, in whole or in
part, may be made to any Person if (i) in the opinion of the General Partner
based on the advice of legal counsel for the Partnership, the transfer would
result in the Partnership’s being treated as an association taxable as a
corporation (other than a qualified REIT subsidiary within the meaning of
Section 856(i) of the Code), (ii) in the opinion of the General Partner based on
the advice of legal counsel for the Partnership, it would adversely affect the
ability of the General Partner to continue to qualify as a REIT or subject the
General Partner to any additional taxes under Section 857 or Section 4981 of the
Code, (iii) in the opinion of the General Partner, such transfer would cause any
of the Partnership Units to be deemed to be “traded” on an “established
securities market” or “readily tradable on a secondary market (or the
substantial equivalent thereof)” within the meaning of Section 7704 of the Code
and the Regulations promulgated thereunder, (iv) would cause the Partnership to
become, with respect to any employee benefit plan subject to Title I of ERISA or
to Section 4975 of the Code, a “party-in-interest” (as defined in Section 3(14)
of ERISA) or a “disqualified person” (as defined in Section 4975(e)(2) of the
Code) or (v) would, in the belief of the General Partner, cause any portion of
the assets of the Partnership to constitute assets of any employee benefit plan
pursuant to 29 CFR Section 2510.3-101.

(f) No transfer of any Partnership Units may be made to a lender to the
Partnership or any Person who is related (within the meaning of Regulations
Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Regulations Section 1.752-1(a)(2)),
without the consent of the General Partner, which may be withheld in its sole
and absolute discretion, provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to exchange or redeem for the Cash Amount any Partnership Units
in which a security interest is 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.

 

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(g) Any Transfer in contravention of any of the provisions of this Article 9
shall be void and ineffectual and shall not be binding upon, or recognized by,
the Partnership.

(h) Prior to the consummation of any Transfer under this Article 9, the
transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.

9.3 Admission of Substitute Limited Partner.

(a) Subject to the other provisions of this Article 9, an assignee of the
Limited Partnership Interest of a Limited Partner (which shall be understood to
include any purchaser, transferee, donee, or other recipient of any disposition
of such Limited Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner and upon
the satisfactory completion of the following:

(i) The assignee shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart or an amendment thereof,
including a revised Exhibit A, and such other documents or instruments as the
General Partner may require in order to effect the admission of such Person as a
Limited Partner.

(ii) To the extent required, an amended Certificate evidencing the admission of
such Person as a Limited Partner shall have been signed, acknowledged and filed
for record in accordance with the Act.

(iii) The assignee shall have delivered a letter containing the representation
set forth in Section 9.1(a) hereof and the agreement set forth in Section 9.1(b)
hereof.

(iv) If the assignee is a corporation, partnership or trust, the assignee shall
have provided the General Partner with evidence satisfactory to counsel for the
Partnership of the assignee’s authority to become a Limited Partner under the
terms and provisions of this Agreement.

(v) The assignee shall have executed a power of attorney containing the terms
and provisions set forth in Section 8.2 hereof.

(vi) The assignee shall have paid all legal fees and other expenses of the
Partnership and the General Partner and filing and publication costs in
connection with its substitution as a Limited Partner.

(vii) The assignee shall have obtained the prior written consent of the General
Partner to its admission as a Substitute Limited Partner, which consent may be
given or denied in the exercise of the General Partner’s sole and absolute
discretion.

(b) For the purpose of allocating Profits and Losses and distributing cash
received by the Partnership, a Substitute Limited Partner shall be treated as
having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.3(a)(ii) hereof or, if
no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.

 

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(c) The General Partner shall cooperate with the Person seeking to become a
Substitute Limited Partner by preparing the documentation required by this
Section and making all official filings and publications. The Partnership shall
take all such action as promptly as practicable after the satisfaction of the
conditions in this Article 9 to the admission of such Person as a Limited
Partner of the Partnership.

9.4 Rights of Assignees of Partnership Interests.

(a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except as required
by operation of law, the Partnership shall not be obligated for any purposes
whatsoever to recognize the assignment by any Limited Partner of its Partnership
Interest until the Partnership has received notice thereof.

(b) Any Person who is the assignee of all or any portion of a Limited Partner’s
Limited Partnership Interest, but does not become a Substitute Limited Partner
and desires to make a further assignment of such Limited Partnership Interest,
shall be subject to all the provisions of this Article 9 to the same extent and
in the same manner as any Limited Partner desiring to make an assignment of its
Limited Partnership Interest.

9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited
Partner. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.

9.6 Joint Ownership of Interests. A Partnership Interest may be acquired by two
individuals as joint tenants with right of survivorship, provided that such
individuals either are married or are related and share the same personal
residence. The written consent or vote of both owners of any such jointly held
Partnership Interest shall be required to constitute the action of the owners of
such Partnership Interest; provided, however, that the written consent of only
one joint owner will be required if the Partnership has been provided with
evidence satisfactory to the counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one owner of a Partnership
Interest held in a joint tenancy with a right of survivorship, the Partnership
Interest shall become owned solely by the survivor as a Limited Partner and not
as an assignee. The Partnership need not recognize the death of one of the
owners of a jointly-held Partnership Interest until it shall have received
notice of such death. Upon notice to the General Partner from either owner, the
General Partner shall cause the Partnership Interest to be divided into two
equal Partnership Interests, which shall thereafter be owned separately by each
of the former owners.

 

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ARTICLE 10

ADMISSION OF ADDITIONAL LIMITED PARTNERS

10.1 Admission of Additional Limited Partners. 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 8.2 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.

10.2 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
Partnership Year, then Profits, Losses, each item thereof and all other items
allocable among Partners and assignees for such Partnership Year shall be
allocated among such Additional Limited Partner and all other Partners and
assignees by taking into account their varying interests during the Partnership
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 Profits, 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 item 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 by the Partnership 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 by
the Partnership thereafter shall be made to all the Partners and assignees
including such Additional Limited Partner.

10.3 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 Exhibit A) and, if required by law,
shall prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Section 8.2 hereof.

ARTICLE 11

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS; REPORTS

11.1 Books and Records. At all times during the continuance of the Partnership,
the General Partner shall keep or cause to be kept at the Partnership’s
specified office true and complete books of account in accordance with generally
accepted accounting principles, including: (a) a current list of the full name
and last known business address of each Partner, (b) a copy of the Certificate
and all certificates of amendment thereto, (c) copies of the Partnership’s
federal, state and local income tax returns and reports, (d) copies of this
Agreement and amendments thereto and any financial statements of the Partnership
for the three most recent Partnership Years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.

 

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11.2 Custody of Partnership Funds; Bank Accounts.

(a) All funds of the Partnership not otherwise invested shall be deposited in
one or more accounts maintained in such banking or brokerage institutions as the
General Partner shall determine, and withdrawals shall be made only on such
signature or signatures as the General Partner may, from time to time,
determine.

(b) All deposits and other funds not needed in the operation of the business of
the Partnership may be invested by the General Partner in investment grade
instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers’ acceptances
and municipal notes and bonds, or other investments approved by the board of
directors of the General Partner. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 11.2(b).

11.3 Fiscal and Taxable Year. The fiscal and taxable year of the Partnership
shall be the calendar year.

11.4 Annual Tax Information and Report. Within 90 days after the end of each
Partnership Year, the General Partner shall use commercially reasonable efforts
to furnish to each person who was a Limited Partner at any time during such
Partnership Year the tax information necessary to file such Limited Partner’s
individual tax returns as shall be reasonably required by law.

11.5 Partnership Representative; Tax Elections; Special Basis Adjustments.

(a) The General Partner is hereby designated as the “partnership representative”
of the Partnership within the meaning of Section 6223(a) of the Code. If any
state or local tax law provides for a partnership representative or person
having similar rights, powers, authority or obligations, the person designated
above shall also serve in such capacity (in any such federal, state or local
capacity, the “Partnership Representative”). The General Partner may name a
replacement Partnership Representative at any time; provided, however, that the
designated Partnership Representative shall serve as the Partnership
Representative until resignation, death, incapacity, or removal. In such
capacity, the Partnership Representative shall have all of the rights, authority
and power, and shall be subject to all of the obligations, of a partnership
representative to the extent provided in the Code and the Regulations, and the
Partners hereby agree to be bound by any actions taken by the Partnership
Representative in such capacity. The Partnership Representative shall represent
the Partnership in all tax matters to the extent allowed by law. Without
limiting the foregoing, the Partnership Representative is authorized and
required to represent the Partnership (at the Partnership’s expense) in
connection with all examinations of the Partnership’s affairs by tax
authorities, including administrative and judicial proceedings, and to expend
Partnership funds for professional services and costs associated therewith. Any
decisions made by the Partnership Representative, including, without limitation,
whether or not to settle or contest any tax matter, and the choice of forum for
any such contest, and whether or not to extend the period of limitations for the
assessment or collection of any tax, shall be made in the Partnership
Representative’s sole discretion. The Partnership Representative (i) shall have
the sole authority to make any elections on behalf of the Partnership permitted
to be made pursuant to the Code or the Regulations

 

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promulgated thereunder and (ii) may, in its sole discretion, make an election on
behalf of the Partnership under Sections 6221(b) or 6226 of the Code, (iii) may
request a modification to any assessment of an imputed underpayment, including a
modification for any Partner who is a REIT or regulated investment company as
defined in Section 851, based on such Partner making a deficiency dividend
pursuant to Section 860, and a modification based on the tax-exempt status of a
reviewed year Partner, and (iv) may take all actions the Partnership
Representative deems necessary or appropriate in connection with the foregoing.
The Partnership Representative shall be reimbursed and indemnified by the
Partnership for all claims, liabilities, losses, costs, damages and expenses,
and for reasonable legal and accounting fees, incurred in connection with the
performance of its duties as Partnership Representative in accordance with the
terms hereof, unless the actions of the Partnership Representative constitute
gross negligence or intentional misconduct.

(b) Each Partner hereby covenants to cooperate with the Partnership
Representative and to do or refrain from doing any or all things reasonably
requested by the Partnership Representative with respect to examinations of the
Partnership’s affairs by tax authorities (including, without limitation,
promptly filing amended tax returns and promptly paying any related taxes,
including penalties and interest) and shall provide promptly and update as
necessary at any times requested by the Partnership Representative, all
information, documents, self-certifications, tax identification numbers, tax
forms, and verifications thereof, that the Partnership Representative deems
necessary in connection with (1) any information required for the Partnership to
determine the application of Sections 6221 through 6235 of the Code to the
Partnership; (2) an election by the Partnership under Section 6221(b) or 6226 of
the Code, and (3) an audit of the Partnership or a final adjustment of a
Partnership item by a tax authority. The Partnership and the Partners hereby
agree and acknowledge that (i) the actions of the Partnership Representative in
connection with examinations of the Partnership’s affairs by tax authorities
shall be binding on the Partnership and the Partners; and (ii) neither the
Partnership nor the Partners have any right to contact the Service with respect
to an examination of the Partnership or participate in an audit of the
Partnership or proceedings under Sections 6221 through 6235 of the Code.

(c) The Partners acknowledge that the Partnership may elect the application of
Section 6221(b) of the Code (the “Opt-Out Election”) for any Partnership Year in
which it is eligible to make such election. The Partners further acknowledge
that the Partnership may elect the application of Section 6226 of the Code (the
“Push-out Election”) for any Partnership Year in which it is not eligible to
make the Opt-Out Election. This acknowledgement applies to each Partner whether
or not the Partner owns a Partnership Interest in both the reviewed year and the
year of the tax adjustment. If the Partnership makes a Push-Out Election, the
Partners shall take into account and report to the Service (or any other
applicable tax authority) any adjustment to their tax items for the reviewed
year of which they are notified by the Partnership in a written statement, in
the manner provided in Section 6226(b) of the Code, whether or not any
applicable Partner owns a Partnership Interest at such time. Any Partner that
fails to report its share of such adjustments on its tax return, shall indemnify
and hold harmless the Partnership, the General Partner, the Partnership
Representative, and each of their Affiliates from and against any and all
liabilities related to taxes (including penalties and interest) imposed on the
Partnership as a result of the Partner’s failure. Each Partner acknowledges and
agrees that no Partner shall have any claim against the Partnership, the General
Partner, the Partnership Representative, or any of their Affiliates for any tax,
penalties or interest resulting from the Partnership making a Push-Out Election.

 

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(d) If the Partnership does not make a Push-Out Election, the amount of any
imputed underpayment assessed upon the Partnership, pursuant to Code
Section 6232, attributable to a Partner (or former Partner), as reasonably
determined by the Partnership Representative, shall be treated as a withholding
tax with respect to such Partner. To the extent any portion of such imputed
underpayment cannot be withheld from a current distribution, any such Partner
(or former Partner) shall be liable to the Partnership for the amount that
cannot be withheld and agrees to pay such amount to the Partnership. Any such
amount withheld or any such payment shall not be treated as a Capital
Contribution for purposes of any provision herein that affects distributions to
the Partners and any amount not paid by any such Partner (or former Partner) at
the time reasonably requested by the Partnership Representative shall accrue
interest at the rate set by the Service for the underpayment of federal taxes,
compounded quarterly, until paid.

(e) The provisions of this Section 11 shall survive the termination of the
Partnership, the termination of this Agreement and, with respect to any Partner,
the transfer or assignment of any portion of such Partner’s Partnership
Interest.

(f) The Partnership Representative shall keep the Partners reasonably informed
as to the status of any tax investigations, audits, lawsuits or other judicial
or administrative tax proceedings and shall promptly copy all other Partners on
any correspondence to or from the Service or applicable state, local or foreign
tax authority relating to such proceedings. The Partnership Representative shall
inform the Service, as promptly as possible upon the commencement of any
examination or proceeding, of the tax-exempt status of any Partners and shall
take any actions or refrain from taking any action to the extent necessary to
preserve the tax-exempt status of such Partners and shall afford such Partners
tax-free treatment, to the extent permissible under the Code. The Partnership
Representative has an obligation to perform its duties as the Partnership
Representative in good faith and in such manner as will serve the best interests
of the Partnership and all of the Partners.

(g) The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership as provided in Section 709 of the Code.

(h) Notwithstanding anything to the contrary in this Agreement, (i) each Partner
hereby agrees to release and hold harmless the Partnership Representative for
all decisions and actions made or untaken, as applicable, by the Partnership
Representative in its capacity as such, provided that no such Partner shall be
required to release and hold harmless the Partnership Representative for any
such decisions and actions made or untaken, as applicable, to the extent such
decisions or actions give rise to any right of recovery by such Partner under
any other agreements entered into by such Partner or any of its Affiliates with
the General Partner or any of its Affiliates (including the terms of the
Contribution and Exchange Agreement), and (ii) to the fullest extent permitted
by law, the Partnership shall indemnify and hold harmless the Partnership
Representative for all costs, expenses, claims, liabilities, losses, damages and
legal and accounting fees that are incurred by the Partnership Representative in
connection with this Section 11.5(h).

11.6 Reports Made Available to Limited Partners.

(a) As soon as practicable, but in no event later than ninety (90) days after
the close of each fiscal quarter (other than the last quarter of the Partnership
Year), upon written request by a Limited Partner to the General Partner, the
General Partner will make available, without cost, to each Limited Partner a
quarterly report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, for such fiscal quarter, presented in accordance with
generally accepted accounting

 

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principles. As soon as practicable, but in no event later than ninety (90) days
after the close of each Partnership Year, upon written request by a Limited
Partner to the General Partner, the General Partner will make available, without
cost, to each Limited Partner an annual report containing financial statements
of the Partnership, or of the General Partner if such statements are prepared
solely on a consolidated basis with the General Partner, for such fiscal year,
presented in accordance with generally accepted accounting principles.

(b) Any Partner shall further have the right to a private audit of the books and
records of the Partnership at the expense of such Partner, provided such audit
is made for Partnership purposes and is made during normal business hours.

(c) Notwithstanding the foregoing, the General Partner, in its sole discretion,
may restrict receipt of the information identified in Section 11.1, if the
General Partner reasonably believes that disclosure of such information is not
in the best interest of the Partnership or could damage the Partnership or the
General Partner or its business or the requesting Limited Partner’s reason for
obtaining the applicable information is, in the General Partner’s sole
discretion, related to the Limited Partner’s individual purposes and not for a
Partnership purpose.

ARTICLE 12

AMENDMENT OF AGREEMENT; MERGER

12.1 General. The General Partner’s consent shall be required for any amendment
to this Agreement. Subject to any consent rights expressly provided to holders
of Preferred Units in this Agreement, or any amendment hereto, the General
Partner, without the consent of the Limited Partners, may amend this Agreement
in any respect or merge or consolidate the Partnership with or into any other
partnership or business entity (as defined in Section 17-211 of the Act) in a
transaction pursuant to Section 7.1(b), (c) or (d) hereof; provided, however,
that the following amendments and any other merger or consolidation of the
Partnership shall require the consent of a majority in interest of the Common
Units:

(a) any amendment affecting the operation of the Exchange Right (except as
provided in Section 8.5(d) or 7.1(c) hereof) in a manner adverse to the Limited
Partners;

(b) any amendment that would adversely affect the rights of the Limited Partners
to receive the distributions payable to them hereunder, other than with respect
to the issuance of additional Partnership Interests pursuant to Section 4.2
hereof;

(c) any amendment that would alter the Partnership’s allocations of Profit and
Loss to the Limited Partners, other than with respect to the issuance of
additional Partnership Interests pursuant to Section 4.2 hereof; or

(d) any amendment that would impose on the Limited Partners any obligation to
make additional Capital Contributions to the Partnership.

12.2 Amendment Without the Consent of the Limited Partners. The ability of the
General Partner to amend this Agreement without the consent of the Limited
Partners, pursuant to Section 12.1, includes, but is not limited to, any
amendment to:

(a) add or modify a distribution reinvestment plan for the General Partner or
the Partnership;

 

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(b) modify the allocation provisions of the Agreement to comply with Code
Section 704(b) or 704(c);

(c) add to the representations, duties, services or obligations of the General
Partner or any Affiliates for the benefit of the Limited Partners;

(d) cure any ambiguity or mistake, correct or supplement any provision in the
Agreement that may be inconsistent with any other provision, or make any other
provision with respect to matters or questions arising under the Agreement that
will not be inconsistent with the provisions of the Agreement;

(e) amend the Agreement to reflect the addition or substitution of Limited
Partners or the reduction of the Capital Accounts upon the return of capital to
the Limited Partners;

(f) minimize the adverse impact of, or comply with, any “plan assets” for ERISA
purposes;

(g) execute, acknowledge and deliver any and all instruments to effectuate the
foregoing, including the execution, acknowledgment and delivery of any such
instrument by the attorney-in-fact for the General Partner under a special or
limited power of attorney and to take all such actions in connection therewith
as the General Partner deems necessary or appropriate with the signature of the
General Partner acting alone;

(h) change the name and/or principal place of business of the Partnership;

(i) decrease the rights and powers of the General Partner (so long as such
decrease does not impair the ability of the General Partner to manage the
Partnership and conduct its business affairs);

(j) sell preferred units and other securities and admit preferred limited
partners and other limited partners to the Partnership, subject to any consent
rights expressly provided to holders of Preferred Units in this Agreement, or
any amendment thereto;

(k) make any changes necessary or advisable to enable the General Partner to
qualify or maintain its status as a REIT;

(l) establish or amend exchange rights for the exchange of Units for an
equivalent number of REIT Shares;

(m) establish or amend a Unit repurchase program; or

(n) make any changes necessary or advisable to satisfy concerns of the
Commission, any state securities regulator or any stock exchange in connection
with a securities offering by the General Partner or otherwise.

No amendment will be adopted pursuant to Sections 12.2(j) or 12.2(n) without the
consent of the Limited Partners unless the adoption thereof (i) is for the
benefit of and not adverse to the interests of the Limited Partners and
(ii) does not affect the limited liability of the Limited Partners or the status
of the Partnership as a partnership for federal income tax purposes.

 

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ARTICLE 13

GENERAL PROVISIONS

13.1 Notices. All communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or upon deposit in the United States mail, registered, postage
prepaid return receipt requested, to the Partners at the addresses set forth
in Exhibit A attached hereto; provided, however, that any Partner may specify a
different address by notifying the General Partner in writing of such different
address. Notices to the Partnership shall be delivered at or mailed to its
specified office.

13.2 Survival of Rights. Subject to the provisions hereof limiting transfers,
this Agreement shall be binding upon and inure to the benefit of the Partners
and the Partnership and their respective legal representatives, successors,
transferees and assigns.

13.3 Additional Documents. Each Partner agrees to perform all further acts and
execute, swear to, acknowledge and deliver all further documents which may be
reasonable, necessary, appropriate or desirable to carry out the provisions of
this Agreement or the Act.

13.4 Severability. If any provision of this Agreement shall be declared illegal,
invalid, or unenforceable in any jurisdiction, then such provision shall be
deemed to be severable from this Agreement (to the extent permitted by law) and
in any event such illegality, invalidity or unenforceability shall not affect
the remainder hereof.

13.5 Entire Agreement. This Agreement and exhibits attached hereto constitute
the entire Agreement of the Partners and supersede all prior written agreements
and prior and contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof.

13.6 Pronouns and Plurals. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.

13.7 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.

13.8 Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original copy and all of which together shall
constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.

13.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware; provided, however, that
causes of action for violations of federal or state securities laws shall not be
governed by this Section 13.9.

13.10 Waiver of Jury Trial. EACH PARTNER HEREBY WAIVES ANY AND ALL RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT.

13.11 Electronic Signatures. Any electronic signature of a party to this
Agreement and of a party to take any action related to this Agreement or any
agreement entered into by the Partnership shall be valid as an original
signature and shall be effective and binding. Any such electronic signature
(including the signature(s) to this Agreement) shall be deemed (i) to be
“written” or “in writing,” (ii) to have been signed and (iii) to constitute a
record established and maintained in the ordinary course of business and an
original written record when printed from electronic files.

 

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13.12 Side Letter Agreements. Notwithstanding the foregoing or any provision of
this Agreement to the contrary, the Partners acknowledge and agree that the
authority granted to the General Partner hereunder provides the General Partner
with the authority to enter into agreements with any Limited Partner (a “Side
Letter”) without the consent of any other Person (including, without limitation,
any other Limited Partner), in connection with the relationship of such Limited
Partner to the Partnership which may affect the terms of this Agreement;
provided, however, that the economic terms set forth in any such Side Letter
shall not affect the economic rights or obligations of any other Limited Partner
under any provision of this Agreement and the terms of such Side Letter shall be
determined as to the relationship solely as between such Limited Partner and the
General Partner.

 

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IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures
to this Amended and Restated Limited Partnership Agreement, all as of the
8th day of September, 2020.

 

GENERAL PARTNER: RESOURCE REAL ESTATE OPPORTUNITY REIT, INC. By:  

/s/ Alan F. Feldman

  Alan F. Feldman, Chief Executive Officer LIMITED PARTNERS: By: RRE OPPORTUNITY
HOLDINGS, LLC By:  

/s/ Alan F. Feldman

  Alan F. Feldman, Chief Executive Officer C-III CAPITAL PARTNERS LLC: By:  

/s/ Marc W. Levy

  Marc W. Levy, Executive Managing Director RESOURCE REAL ESTATE, LLC: By:  

/s/ Marc W. Levy

  Marc W. Levy, Executive Vice President

 

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EXHIBIT A

 

Name of each Partner

  

Address

   # of
Common Units      % of
Common Units     # of
Preferred Units  

C-III CAPITAL PARTNERS LLC

  

Corporation Trust Center

1209 Orange Street,

Wilmington DE 19801

     1,178,546.000        1.536 %      61,229.000  

RESOURCE REAL ESTATE, LLC

  

Corporation Trust Center

1209 Orange Street,

Wilmington DE 19801

     4,980,213.000        6.491 %      258,736.000  

Resource Real Estate Opportunity REIT, Inc.

  

1845 Walnut Street, 17th Floor

Philadelphia, PA 19103

     70,565.408        0.092 %      —    

RRE Opportunity Holdings, LLC

  

1845 Walnut Street, 17th Floor

Philadelphia, PA 19103

     70,494,842.241        91.881 %      —          

 

 

    

 

 

   

 

 

 

Totals

        76,724,166.649        100.000 %      319,965.000  

 

A-1

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EXHIBIT B

NOTICE OF EXERCISE OF EXCHANGE RIGHT

In accordance with Section 8.5 of the Amended and Restated Limited Partnership
Agreement (the “Agreement”) of Resource Real Estate Opportunity OP, LP, the
undersigned hereby irrevocably (i) presents for exchange _______ Common Units in
Resource Real Estate Opportunity OP, LP in accordance with the terms of the
Agreement and the Exchange Right referred to in Section 8.5 thereof,
(ii) surrenders such Common Units and all right, title and interest therein, and
(iii) directs that the Cash Amount or REIT Shares Amount (as defined in the
Agreement) as determined by the General Partner deliverable upon exercise of the
Exchange Right be delivered to the address specified below, and if REIT Shares
(as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.

 

Dated: ________________, ___________

 

(Name of Limited Partner)

 

(Signature of Limited Partner)

 

(Mailing Address)

 

(City) (State) (Zip Code) Signature Guaranteed by:

 

If REIT Shares are to be issued, issue to: Name:

 

Social Security or Tax I.D. Number:

 

 

B-1

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EXHIBIT C

DESIGNATION OF THE RIGHTS, POWERS, PRIVILEGES, RESTRICTIONS,

QUALIFICATIONS AND LIMITATIONS OF THE

SERIES A CUMULATIVE PARTICIPATING REDEEMABLE PREFERRED UNITS

The following are the terms of the Series A Cumulative Participating Redeemable
Preferred Units (the “Series A Preferred Units”) established pursuant to this
Designation of Rights, Powers, Privileges, Restrictions, Qualifications and
Limitations of the Series A Cumulative Participating Redeemable Preferred Units
(the “Designation of Rights”). This Designation of Rights includes terms defined
in the Agreement in addition to terms defined in this Designation of Rights. The
following terms used in this Designation of Rights shall have the meanings
specified below:

Original Issuance Date means, with respect to each Series A Preferred Unit, the
date on which such Series A Preferred Unit was originally issued by the
Partnership.

Redemption Date means, the date on which the Series A Preferred Units shall be
redeemed, as set forth in Section 6 hereof.

Redemption Price means, as of any specified date with respect to a Series A
Preferred Unit, an amount of cash equal to the sum of (i) the Series A Preferred
Stated Value, (ii) the Series A Preferred Distribution Shortfall, and (iii) the
product of the Value of one REIT Share and the REIT Shares Amount as of such
date.

Reset Date means, with respect to each Series A Preferred Unit, the fifth
anniversary of the Original Issuance Date of such Series A Preferred Unit.

Series A Preferred Capital means, with respect to each Series A Preferred Unit
as of any particular date, an amount equal to the sum of (i) the Series A
Preferred Stated Value, and (ii) the Series A Preferred Distribution Shortfall.

Series A Preferred Distribution Date means the 15th day of each January, April,
July and October of each year (or, if not a business day, the next succeeding
business day).

Series A Preferred Distribution Period means, with respect to each Series A
Preferred Unit, the period commencing on and including January 1, April 1,
July 1 and October 1 of each year and ending on and including the day preceding
the first day of the next succeeding Distribution Period (other than the initial
Distribution Period which shall commence on and include the Original Issuance
Date of such Series A Preferred Unit and the Distribution Period during which
such Series A Preferred Unit is redeemed or otherwise acquired by the
Partnership which shall end on and include the date of such redemption or
acquisition).

Series A Preferred Distribution Shortfall means, with respect to each Series A
Preferred Unit as of any particular date, the excess of (i) the sum of the
Series A Preferred Priority Return and the Series A Preferred Return for such
Series A Preferred Unit as of such date over (ii) the cumulative amount
distributed in respect of such Series A Preferred Unit pursuant to
Section 5.2(a)(i) of the Agreement.

 

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Series A Preferred Priority Return means, with respect to each Series A
Preferred Unit as of any particular date, an amount equal to (i) 7.00% per annum
on the Series A Preferred Stated Value for the period commencing on the Original
Issuance Date and ending on the day prior to the Reset Date and (ii) 10.00% per
annum on the Series A Preferred Stated Value for the period commencing on the
Reset Date. For any partial period of less than a year, the amount of the Series
A Preferred Priority Return shall be prorated and computed on the basis of a
360-day year consisting of twelve 30-day months.

Series A Preferred Return means, with respect to each Series A Preferred Unit as
of any particular date, the amount of distributions to which a holder of such
Series A Preferred Unit would be entitled to receive as of such date if the
Series A Preferred Units were treated as part of a single class of units with
the Common Units and the Series A Preferred Units shared in distributions with
the Common Units pursuant to Section 5.2(a)(ii) and Section 5.6(b)
proportionately based on the total number of outstanding Series A Preferred
Units and Common Units.

Series A Preferred Stated Value means, with respect to each Series A Preferred
Unit, an amount equal to $200 as adjusted pursuant to Section 11 of this
Designation of Rights.

(1) Designation and Number. A series of Preferred Units, designated as the
Series A Cumulative Participating Redeemable Preferred Units, is hereby
established. The number of authorized Series A Preferred Units is 319,965.

(2) Maturity. The Series A Preferred Units have no stated maturity and will not
be subject to any sinking fund or mandatory redemption.

(3) Rank. The Series A Preferred Units will, with respect to distribution rights
and rights upon liquidation, dissolution or winding up of the Partnership, rank:
(a) senior to all classes and series of Common Units of the Partnership, and any
other class or series of Preferred Units expressly designated as ranking junior
to the Series A Preferred Units as to distribution rights and rights upon
liquidation, dissolution or winding up of the Partnership (the “Junior Units”);
(b) on a parity with any other class or series of Preferred Units issued by the
Partnership expressly designated as ranking on parity with the Series A
Preferred Units as to distribution rights and rights upon liquidation,
dissolution or winding up of the Partnership (the “Parity Preferred Units”); and
(c) junior to any class or series of Preferred Units issued by the Partnership
expressly designated as ranking senior to the Series A Preferred Units with
respect to distribution rights and rights upon liquidation, dissolution or
winding up of the Partnership (“Senior Preferred Units”). The term “Preferred
Units” does not include convertible or exchangeable debt securities of the
Partnership, which will rank senior to the Series A Preferred Units prior to
conversion or exchange. The Series A Preferred Units will also rank junior in
right or payment to the Partnership’s existing and future indebtedness.

(4) Distributions.

(a) Pursuant to Section 5.2(a)(i) of the Agreement, and subject to the
preferential rights of holders of any class or series of Senior Preferred Units,
each holder of Series A Preferred Units shall be entitled to receive, when, as
and if authorized by the General Partner and declared by the Partnership, out of
funds of the Partnership legally available for payment of distributions, with
respect to each Series A Preferred Unit, an amount equal to such Series A
Preferred Unit’s Series A Preferred Distribution Shortfall as of the applicable
Partnership Record Date for the respective Series A Preferred Distribution
Period.

 

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

(c) Notwithstanding anything to the contrary contained herein, the Series A
Preferred Priority Return will accrue and, to the extent not paid in cash,
compound quarterly on each Series A Preferred Distribution Date, whether or not
the restrictions referred to in Section 4(b) exist, whether or not the
Partnership has earnings, whether or not there are funds legally available for
the payment of distributions, and whether or not such distributions are
authorized or declared. No interest, or sum of money in lieu of interest, will
be payable in respect of any distribution on the Series A Preferred Units which
may be in arrears. When distributions are not paid in full upon the Series A
Preferred Units and any Parity Preferred Units (or a sum sufficient for such
full payment is not so set apart), all distributions declared upon the Series A
Preferred Units and any Parity Preferred Units shall be declared pro rata so
that the amount of distributions declared per Series A Preferred Unit and such
Parity Preferred Units shall in all cases bear to each other the same ratio that
accumulated distributions per Series A Preferred Unit and such Parity Preferred
Units (which shall not include any accrual in respect of unpaid distributions
for prior distributions periods if such Parity Preferred Units do not have a
cumulative distribution) bear to each other.

(d) Except as provided in the immediately preceding paragraph, unless the Series
A Preferred Distribution Shortfall for each Series A Preferred Unit has been or
contemporaneously is (i) declared and paid in cash or (ii) declared and a sum
sufficient for the payment thereof in cash is set apart for such payment for all
past Distribution Periods that have ended, no distributions (other than a
distribution in Junior Units or in options, warrants or rights to subscribe for
or purchase any such Junior Units) shall be declared and paid or declared and
set apart for payment nor shall any other distribution be declared and made upon
the Junior Units or any Parity Preferred Units, nor shall any Junior Units or
Parity Preferred Units be redeemed, purchased or otherwise acquired for any
consideration (or any monies be paid to or made available for a sinking fund for
the redemption of any such Units) by the Partnership (except (i) by conversion
into or exchange for Junior Units, (ii) the purchase of Junior Units or Parity
Preferred Units in connection with a redemption of stock pursuant to the
Articles of Incorporation to the extent necessary to preserve the General
Partner’s qualification as a REIT or (iii) the purchase of Parity Preferred
Units pursuant to a purchase or exchange offer made on the same terms to holders
of all outstanding Series A Preferred Units). Holders of the Series A Preferred
Units shall not be entitled to any distribution, whether payable in cash,
property or units, in excess of the Series A Preferred Distribution Shortfall
for the Series A Preferred Units as provided above.

(5) Liquidation Preference. Pursuant to Section 5.6(b) of the Agreement, upon
any voluntary or involuntary liquidation, dissolution or winding up of the
affairs of the Partnership, the holders of Series A Preferred Units are entitled
to be paid out of the assets of the Partnership legally available for
distribution to its Partners, after payment of or provision for the
Partnership’s debts and other liabilities, an amount per Series A Preferred Unit
that is equal to such Series A Preferred Unit’s Series A Preferred Capital (the
“Liquidation Preference”) before any distribution of assets is made to holders
of Junior Units. If the assets of the Partnership legally available for
distribution to Partners are insufficient to pay in full the Liquidation
Preference on the Series A Preferred Units and the liquidation preference on any
Parity Preferred Units, all

 

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assets distributed to the holders of the Series A Preferred Units and any Parity
Preferred Units shall be distributed pro rata so that the amount of assets
distributed per Series A Preferred Unit and per such Parity Preferred Unit shall
in all cases bear to each other the same ratio that the Liquidation Preference
per Series A Preferred Unit and the liquidation preference per such Parity
Preferred Unit bear to each other. Written notice of any distribution in
connection with any such liquidation, dissolution or winding up of the affairs
of the Partnership, stating the payment date or dates when, and the place or
places where, the amounts distributable in such circumstances shall be payable,
shall be given by first class mail, postage pre-paid, not less than 30 nor more
than 60 days prior to the payment date stated therein, to each record holder of
the Series A Preferred Units at the respective addresses of such holders as the
same shall appear on the records of the Partnership. After payment of the full
amount of the liquidating distributions to which they are entitled, the holders
of Series A Preferred Units will have no right or claim to any of the remaining
assets of the Partnership. The consolidation or merger of the Partnership with
or into another entity, a merger of another entity with or into the Partnership,
a statutory exchange by the Partnership or a sale, lease, transfer or conveyance
of all or substantially all of the Partnership’s property or business shall not
be deemed to constitute a liquidation, dissolution or winding up of the affairs
of the Partnership. Notwithstanding the above, for purposes of determining the
amount each holder of Series A Preferred Units is entitled to receive with
respect to a voluntary or involuntary liquidation, dissolution or winding up of
the affairs of the Partnership, no effect shall be given to amounts that would
be needed, if the Partnership were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of holders of
the Series A Preferred Units.

(6) Redemption.

(a) Except as provided for in this Section 6(a) or in Section 6(b) below, the
Series A Preferred Units shall not be redeemable by the Partnership prior to the
first anniversary of the Original Issuance Date. Following the first anniversary
of the Original Issuance Date, the Partnership shall redeem, at the option of a
holder of the Series A Preferred Units, a number of Series A Preferred Units as
follows: (i) between the first and second anniversary of the Original Issuance
Date, up to 25% of the number of Series A Preferred Units issued to the holder
thereof on the Original Issuance Date; (ii) between the second and third
anniversary of the Original Issuance Date, up to 50% of the number of Series A
Preferred Units issued to the holder thereof on the Original Issuance Date (less
the number of Series A Preferred Units previously redeemed); (iii) between the
third and fourth anniversary of the Original Issuance Date, up to 75% of the
number of Series A Preferred Units issued to the holder thereof on the Original
Issuance Date (less the number of Series A Preferred Units previously redeemed);
and (iv) following the fourth anniversary of the Original Issuance Date, up to
100% of the number of Series A Preferred Units issued to the holder thereof on
the Original Issuance Date (less the number of Series A Preferred Units
previously redeemed) (the “Redemption Right”). The Series A Preferred Units
redeemed in accordance with this Section 6 shall be redeemed for cash at a per
unit redemption amount equal to such Series A Preferred Unit’s Redemption Price
as of the Redemption Date; provided, however, that the Redemption Right provided
under this Section 6 shall be suspended at such time that the General Partner
(or any Successor Entity) applies to list REIT Shares (or the common stock of
any Successor Entity) on a National Securities Exchange, and shall be terminated
at such time as the National Securities Exchange approves such REIT Shares (or
the common stock of any Successor Entity) for listing; provided further, that
any payment pursuant to the Redemption Right shall be prohibited if the board of
directors of the General Partner (or any Successor Entity) determines, in its
reasonable discretion, that such redemption payment shall have a material
adverse effect on the General Partner, including without limitation, effects on
the General Partner’s cash available for operations or any restrictions set
forth under any credit facility or loan agreements of the General Partner or the
Partnership.

 

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(b) Upon the occurrence of a Listing or a Change of Control (as defined below),
the Partnership may at its option redeem for cash the outstanding Series A
Preferred Units, in whole or from time to time, in part, at the Redemption Price
on the Redemption Date. Any notice sent by the Partnership with respect to a
redemption upon a Listing or a Change of Control shall include (i) instructions
as to the tender of the Series A Preferred Units, (ii) the Redemption Date;
(iii) the place or places where any certificates representing such Series A
Preferred Units, if any, are to be surrendered for payment of the Redemption
Price; (iv) the amount of the Redemption Price; and (v) in the case of a Change
of Control, a description of the transaction or transactions that constitute the
Change of Control. For purposes of this Section 6(b), “Change of Control” shall
mean (x) a merger or consolidation of the General Partner with or into any other
business entity (except one in which the holders of capital stock or other
equity interests of the General Partner immediately prior to such merger or
consolidation continue to hold at least a majority of the outstanding voting
securities of the surviving entity), or (y) the acquisition by any person or any
group of persons (other than the General Partner or any of its direct or
indirect subsidiaries) acting together in any transaction or related series of
transactions, of such number of shares of the General Partner’s capital stock or
other equity interests as causes such person, or group of persons, to own
beneficially, directly or indirectly, as of the time immediately after such
transaction or series of transactions, 50% or more of the combined voting
securities of the General Partner.

(c) Following the second anniversary of the Original Issuance Date, the
Partnership may, at its option, redeem the outstanding Series A Preferred Units,
in whole or from time to time, in part, at the Redemption Price on the
Redemption Date. The Redemption Date shall be selected by the Partnership and
shall be no less than 30 days and no more than 60 days after the date on which
the Partnership sends the notice of redemption to the holder or holders of the
Series A Preferred Units to be redeemed.

(d) A holder of Series A Preferred Units desiring to exercise its Redemption
Right under Section 6(a) hereof must deliver a written redemption notice (the
“Redemption Exercise Notice”) in the form approved by the Partnership, duly
completed, to the Partnership by certified or express delivery mail postage
prepaid to the Partnership’s principal office c/o the General Partner. The
Redemption Exercise Notice must state: (i) the number of Series A Preferred
Units to be redeemed by the Partnership; and (ii) that the Series A Preferred
Units are to be redeemed pursuant to Section 6(a) hereof. The Redemption Date
for the Series A Preferred Units properly tendered to the Partnership pursuant a
Redemption Exercise Notice shall be the 90th day after receipt of the Redemption
Exercise Notice (or, if not a business day, the next succeeding business day).
Upon receipt of a Redemption Exercise Notice, the Partnership shall provide the
holder of the Series A Preferred Units subject to the Redemption Exercise Notice
with the following information: (i) instructions as to the tender of the Series
A Preferred Units; (ii) the Redemption Date; (iii) the place or places where any
certificates representing such Series A Preferred Units, if any, are to be
surrendered for payment of the Redemption Price; and (iv) the amount of the
Redemption Price. The Partnership may elect to cause the Redemption Date to be
delayed for up to an additional 90 days to the extent required for the General
Partner to cause additional REIT Shares to be issued to provide financing to be
used to make such payment of the Redemption Price. Notwithstanding the
foregoing, the Partnership agrees to use its best efforts to redeem the Series A
Preferred Units properly tendered to the Partnership as quickly as reasonably
possible.

 

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(e) On or after a Redemption Date, each holder of Series A Preferred Units to be
redeemed must present and surrender the certificates (or an affidavit of loss
and indemnity satisfactory to the Partnership), if such units are certificated,
representing the Series A Preferred Units to the Partnership to be redeemed at
the place designated in the notice from the Partnership referenced in Sections
6(b) or 6(c) above, or the instructions from the Partnership referenced in
Section 6(d) above, as the case may be, and thereupon the Redemption Price for
such Series A Preferred Units, determined as of the Redemption Date, will be
paid to or on the order of such holder by wire transfer pursuant to wire
instructions provided by such holder and each surrendered certificate, if any,
will be canceled. If the Series A Preferred Units to be redeemed are
certificated, then in the event that fewer than all the Series A Preferred Units
are to be redeemed, a new certificate will be issued representing the unredeemed
Series A Preferred Units.

(e) From and after a Redemption Date, all distributions on the Series A
Preferred Units subject to such redemption will cease to accumulate and all
rights of the holders thereof, except the right to receive the Redemption Price
thereof (and all accumulated and unpaid distributions to but excluding the
Redemption Date), will cease and terminate and such Series A Preferred Units
shall not be deemed to be outstanding for any purpose whatsoever, other than as
provided in clause (f) below.

(f) In the event that the Partnership defaults in the payment of the Redemption
Price for any Series A Preferred Units surrendered for redemption pursuant to
Section 6(a), such Series A Preferred Units shall continue to be deemed to be
outstanding for all purposes and to be owned by the respective holders, and the
Partnership shall promptly return any surrendered certificates representing such
Series A Preferred Units to such holders (although the failure of the
Partnership to return any such certificates to such holders shall in no way
affect the ownership of such Series A Preferred Units by such holders or their
rights thereunder). Following such default, the Partnership shall remain
obligated to deliver payment of the Redemption Price pursuant to clause
(d) above as soon as reasonably practicable as determined by the board of
directors of the General Partner.

(g) At its election, the Partnership, prior to a Redemption Date, may
irrevocably deposit the Redemption Price of the Series A Preferred Units to be
redeemed pursuant to this Section 6 in trust for the holders of the Series A
Preferred Units with a bank or trust company, in which case the Partnership
shall send a notice to the holders of Series A Preferred Units to be redeemed
which shall (i) state the date of such deposit, (ii) specify the office of such
bank or trust company as the place of payment of the Redemption Price and
(iii) require the holder of Series A Preferred Units to be redeemed to surrender
the certificates, if any, representing such Series A Preferred Units (or an
affidavit of loss and indemnity satisfactory to the Partnership) at such place
on or about the date fixed in the redemption notice (which may not be later than
the Redemption Date) against payment of the Redemption Price. Any monies so
deposited which remain unclaimed at the end of two years after the Redemption
Date shall be returned by such bank or trust company to the Partnership.

(h) In the event any Series A Preferred Units have been redeemed by the
Partnership pursuant to this Section 6, the Series A Preferred Units so redeemed
shall become authorized but unissued Preferred Units without further designation
as to class or series, available for future classification or reclassification
by the General Partner and issuance by the Partnership.

 

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(7) Listing Exchange Right.

(a) In the event that the Redemption Right is terminated in accordance with
Section 6(a), beginning 180 days after the date that the REIT Shares (or the
common stock of any Successor Entity) are listed on a National Exchange (the
“Listed Shares”), each holder of the Series A Preferred Units shall have the
right to require the General Partner to purchase all or a portion of such
holder’s Series A Preferred Units (the “Listing Exchange Units”) in exchange for
a number of Listed Shares determined by dividing (i) the number of Listing
Exchange Units tendered for purchase multiplied by the Redemption Price as of
the Listing Exchange Date (as defined below) by (ii) the volume-weighted average
price of the Listed Shares over the 30 day period prior to the Exchange Date
(the “Listing Exchange Right”). In connection with the issuance of Listed Shares
pursuant to this Listing Exchange Right, the General Partner shall issue a
corresponding number of additional Partnership Units, to be held by the General
Partner, as set forth in Section 4.2(a)(i). A holder of Series A Preferred Units
desiring to exercise its Listing Exchange Right must deliver a written notice
(the “Listing Exchange Notice”) in the form approved by the Partnership, duly
completed, to the Partnership by certified or express delivery mail postage
prepaid to the Partnership’s principal office c/o the General Partner. The
Listing Exchange Notice must state: (i) the number of Listing Exchange Units
tendered for purchase by the General Partner; and (ii) that the Listing Exchange
Units are to be purchased pursuant to this Section 7(a). The General Partner
shall purchase the Listing Exchange Units properly tendered to the General
Partner within 30 days after receipt of the Listing Exchange Notice (or, if not
a business day, the next succeeding business day) (the “Listing Exchange Date”).
Upon receipt of a Listing Exchange Notice, the General Partner shall provide the
holder of the Listing Exchange Units subject to the Listing Exchange Notice with
(i) instructions as to the tender of the Listing Exchange Units, (ii) the
Listing Exchange Date; (iii) the place or places where any certificates
representing such Listing Exchange Units are to be surrendered against payment
of the Listed Shares; and (iv) the Redemption Price on the Listing Exchange
Date. The Series A Preferred Units are not convertible or exchangeable for any
other property or securities of the Partnership except as provided in this
Section 7(a).

(b) The Partnership, the General Partner and each holder of Series A Preferred
Units that exercises its Listing Exchange Right, as the case may be, shall treat
the transaction between the General Partner and such holder of Series A
Preferred Units for federal income tax purposes as a sale of such holder’s
Series A Preferred Units to the General Partner. Each holder of Series A
Preferred Units that exercises its Listing Exchange Right agrees to execute such
documents as the General Partner may reasonably require in connection with the
issuance of REIT Shares upon exercise of the Listing Exchange Right.

(c) Notwithstanding the provisions of Section 7(a), a holder of Series A
Preferred Units shall not be entitled to exercise the Listing Exchange Right if
the delivery of REIT Shares to such Partner on the Listing Exchange Date by the
General Partner pursuant to Section 7(a) would (i) result in such Partner or any
other person owning, directly or indirectly, REIT Shares in excess of the
Aggregate Stock Ownership Limit (as defined in the Articles of Incorporation and
calculated in accordance therewith) or the Common Stock Ownership Limit (as
defined in the Articles of Incorporation and calculated in accordance
therewith), except as provided in the Articles of Incorporation, (ii) result in
REIT Shares being owned by fewer than 100 persons (determined without reference
to any rules of attribution), except as provided in the Articles of
Incorporation, (iii) result in the General Partner being “closely held” within
the meaning of Section 856(h) of the Code, or (iv) cause the General Partner to
own, directly or constructively, 9.9% or more of the ownership interests in a
tenant within the meaning of Section 856(d)(2)(B) of the Code. The General
Partner, in its sole and absolute discretion, may waive the restriction on
exchange set forth in this Section 7(c).

 

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(d) Notwithstanding any other provision of this Designation of Rights, the
General Partner shall place appropriate restrictions on the ability of the
holders of Series A Preferred Units to exercise their Listing Exchange Rights as
and if deemed necessary to ensure that the Partnership does not constitute a
“publicly traded partnership” under Section 7704 of the Code. If and when the
General Partner determines that imposing such restrictions is necessary, the
General Partner shall give prompt written notice thereof to each holder of
Series A Preferred Units, which notice shall be accompanied by a copy of an
opinion of counsel to the Partnership which states that, in the opinion of such
counsel, restrictions are necessary in order to avoid the Partnership being
treated as a “publicly traded partnership” under Section 7704 of the Code.

(e) Each holder of Series A Preferred Units covenants and agrees with the
Partnership and the General Partner that all Series A Preferred Units delivered
for redemption or exchange pursuant to Sections 6 and 7 hereof shall be
delivered to the Partnership or the General Partner, as the case may be, free
and clear of all liens; and, notwithstanding anything contained herein to the
contrary, neither the General Partner nor the Partnership shall be under any
obligation to acquire Series A Preferred Units which are or may be subject to
any liens. Each holder of Series A Preferred Units further agrees that, if any
state or local property transfer tax is payable as a result of the transfer of
its Series A Preferred Units to the Partnership or the General Partner, such
Limited Partner shall assume and pay such transfer tax.

(8) Voting Rights. Except as set forth in Article 12 of the Agreement and as
provided in Section 9 of this Designation of Rights, holders of the Series A
Preferred Units will not have any voting rights.

(9) Restrictions on New Issuances. Unless (i) fewer than 39,995.625 Series A
Preferred Units (as may be adjusted pursuant to Section 12 below) remain issued
and outstanding, (ii) the holders of a majority of the then outstanding Series A
Preferred Units consent, or (iii) an additional class or series of Preferred
Units is being issued in connection with a full redemption of the Series A
Preferred Units in accordance with Section 6, the Partnership shall not issue
any Senior Preferred Units. The holders of the Series A Preferred Units may
deliver a consent in writing or by electronic transmission to the Partnership,
and if the holders of the Series A Preferred Units entitled to cast not less
than the minimum number of votes that would be necessary to authorize the
issuance of the Senior Preferred Units deliver such consent to the Partnership,
the Partnership shall not be required to seek the consent of the remaining
holders of Series A Preferred Units, if any. The Partnership must give notice of
any consent granted pursuant to this Section 8 to each holder of Series A
Preferred Units not later than 10 days after the effective time of such action.

(10) Record Holders. The Partnership and the transfer agent for the Series A
Preferred Units may deem and treat the record holder of any Series A Preferred
Units as the true and lawful owner thereof for all purposes, and neither the
Partnership nor the transfer agent shall be affected by any notice to the
contrary.

(11) No Preemptive Rights. No holder of the Series A Preferred Units will, as a
holder of Series A Preferred Units, have any preemptive rights to purchase or
subscribe for Common Units or any other security of the Partnership (whether now
or hereafter authorized).

 

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(12) Adjustment. If the number of Common Units is adjusted pursuant to
Section 4.2(a)(ii) of the Agreement, then a corresponding adjustment to the
number of Series A Preferred Units shall automatically be made. The number of
issued and outstanding Series A Preferred Units immediately after such
adjustment shall be equal to the number of issued and outstanding Series A
Preferred Units immediately prior thereto multiplied by a fraction (the
“Adjustment Factor”) the numerator of which is equal to the number of issued and
outstanding Common Units as adjusted pursuant to Section 4.2(a)(ii) of the
Agreement immediately after the corresponding Adjustment Event and the
denominator of which is the number of issued and outstanding Common Units prior
to adjustment pursuant to Section 4.2(a)(ii) in connection with such Adjustment
Event. In connection with such adjustment to the number of Series A Preferred
Units, the Series A Preferred Stated Value per Series A Preferred Unit shall
also be adjusted by multiplying the applicable Series A Preferred Stated Value
immediately prior to such adjustment by the Adjustment Factor.

 

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