Exhibit 10.1

AGREEMENT OF LIMITED PARTNERSHIP

OF

SPIRIT REALTY, L.P.

a Delaware limited partnership

 

 

THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE
OF SUCH REGISTRATION, UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE
PARTNERSHIP THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED
WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE
SECURITIES OR “BLUE SKY” LAWS.

dated as of September 25, 2012

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TABLE OF CONTENTS

 

         Page  

ARTICLE 1 DEFINED TERMS

     1   

ARTICLE 2 ORGANIZATIONAL MATTERS

     17   

Section 2.1

 

Formation

     17   

Section 2.2

 

Name

     17   

Section 2.3

 

Registered Office and Registered Agent; Principal Executive Office

     18   

Section 2.4

 

Power of Attorney

     18   

Section 2.5

 

Term

     19   

Section 2.6

 

Partnership Interests Are Securities

     19   

ARTICLE 3 PURPOSE

     20   

Section 3.1

 

Purpose and Business

     20   

Section 3.2

 

Powers

     20   

Section 3.3

 

Partnership Only for Purposes Specified

     20   

Section 3.4

 

Representations and Warranties by the Partners

     21   

ARTICLE 4 CAPITAL CONTRIBUTIONS

     23   

Section 4.1

 

Capital Contributions of the Partners

     23   

Section 4.2

 

Issuances of Additional Partnership Interests

     23   

Section 4.3

 

Additional Funds and Capital Contributions

     24   

Section 4.4

 

Stock Option Plans and Equity Plans

     26   

Section 4.5

 

Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock Incentive Plan or
Other Plan

     26   

Section 4.6

 

No Interest; No Return

     26   

Section 4.7

 

Conversion or Redemption of REIT Shares and Capital Shares

     27   

Section 4.8

 

Other Contribution Provisions

     27   

ARTICLE 5 DISTRIBUTIONS

     28   

Section 5.1

 

Requirement and Characterization of Distributions

     28   

Section 5.2

 

Distributions in Kind

     28   

Section 5.3

 

Amounts Withheld

     28   

Section 5.4

 

Distributions upon Liquidation

     28   

Section 5.5

 

Distributions to Reflect Additional Partnership Units

     29   

Section 5.6

 

Restricted Distributions

     29   

ARTICLE 6 ALLOCATIONS

     29   

Section 6.1

 

Timing and Amount of Allocations of Net Income and Net Loss

     29   

Section 6.2

 

General Allocations

     29   

 

iv

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Section 6.3

 

Additional Allocation Provisions

     30   

Section 6.4

 

Regulatory Allocation Provisions

     31   

Section 6.5

 

Tax Allocations

     33   

ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS

     34   

Section 7.1

 

Management

     34   

Section 7.2

 

Certificate of Limited Partnership

     38   

Section 7.3

 

Restrictions on General Partner’s Authority

     39   

Section 7.4

 

Reimbursement of the General Partner and the Special Limited Partner

     40   

Section 7.5

 

Outside Activities of the General Partner and the Special Limited Partner

     42   

Section 7.6

 

Transactions with Affiliates

     43   

Section 7.7

 

Indemnification

     43   

Section 7.8

 

Liability of the General Partner and the Special Limited Partner

     46   

Section 7.9

 

Other Matters Concerning the General Partner and the Special Limited Partner

     48   

Section 7.10

 

Title to Partnership Assets

     49   

Section 7.11

 

Reliance by Third Parties

     49   

ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     50   

Section 8.1

 

Limitation of Liability

     50   

Section 8.2

 

Management of Business

     50   

Section 8.3

 

Outside Activities of Limited Partners

     50   

Section 8.4

 

Return of Capital

     51   

Section 8.5

 

Rights of Limited Partners Relating to the Partnership

     51   

Section 8.6

 

Partnership Right to Call Limited Partner Interests

     52   

ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS

     52   

Section 9.1

 

Records and Accounting

     52   

Section 9.2

 

Partnership Year

     52   

Section 9.3

 

Reports

     53   

ARTICLE 10 TAX MATTERS

     53   

Section 10.1

 

Preparation of Tax Returns

     53   

Section 10.2

 

Tax Elections

     53   

Section 10.3

 

Tax Matters Partner

     54   

Section 10.4

 

Withholding

     55   

Section 10.5

 

Organizational Expenses

     55   

Section 10.6

 

Treatment of Partnership as Disregarded Entity

     55   

ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS

     55   

Section 11.1

 

Transfer

     55   

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Section 11.2

 

Transfer of General Partner’s Partnership Interest

     56   

Section 11.3

 

Limited Partners’ Rights to Transfer

     58   

Section 11.4

 

Admission of Substituted Limited Partners

     61   

Section 11.5

 

Assignees

     61   

Section 11.6

 

General Provisions

     62   

ARTICLE 12 ADMISSION OF PARTNERS

     64   

Section 12.1

 

Admission of Successor General Partner

     64   

Section 12.2

 

Admission of Additional Limited Partners

     64   

Section 12.3

 

Amendment of Agreement and Certificate of Limited Partnership

     65   

Section 12.4

 

Limit on Number of Partners

     65   

Section 12.5

 

Admission

     65   

ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION

     65   

Section 13.1

 

Dissolution

     65   

Section 13.2

 

Winding Up

     66   

Section 13.3

 

Deemed Contribution and Distribution

     68   

Section 13.4

 

Rights of Holders

     68   

Section 13.5

 

Notice of Dissolution

     68   

Section 13.6

 

Cancellation of Certificate of Limited Partnership

     68   

Section 13.7

 

Reasonable Time for Winding-Up

     68   

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

     69   

Section 14.1

 

Procedures for Actions and Consents of Partners

     69   

Section 14.2

 

Amendments

     69   

Section 14.3

 

Actions and Consents of the Partners

     69   

ARTICLE 15 GENERAL PROVISIONS

     70   

Section 15.1

 

Redemption Rights of Qualifying Parties

     70   

Section 15.2

 

Addresses and Notice

     74   

Section 15.3

 

Titles and Captions

     74   

Section 15.4

 

Pronouns and Plurals

     74   

Section 15.5

 

Further Action

     75   

Section 15.6

 

Binding Effect

     75   

Section 15.7

 

Waiver

     75   

Section 15.8

 

Counterparts

     75   

Section 15.9

 

Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial

     75   

Section 15.10

 

Entire Agreement

     76   

Section 15.11

 

Invalidity of Provisions

     76   

Section 15.12

 

Limitation to Preserve REIT Status

     76   

Section 15.13

 

No Partition

     77   

Section 15.14

 

No Third-Party Rights Created Hereby

     77   

Section 15.15

 

No Rights as Stockholders

     78   

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Exhibits List

 

Exhibit A

  

PARTNERS AND PARTNERSHIP UNITS

     A-1   

Exhibit B

  

EXAMPLES REGARDING ADJUSTMENT FACTOR

     B-1   

Exhibit C

  

NOTICE OF REDEMPTION

     C-1   

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AGREEMENT OF LIMITED PARTNERSHIP OF SPIRIT REALTY, L.P.

THIS AGREEMENT OF LIMITED PARTNERSHIP OF SPIRIT REALTY, L.P., dated as of
September 25, 2012, is made and entered into by and among Spirit General OP
Holdings, LLC, a Delaware limited liability company, as the General Partner,
Spirit Realty Capital, Inc., a Maryland corporation, as the Special Limited
Partner, and the Persons whose names are set forth on Exhibit A attached hereto,
as limited partners, and any Additional Limited Partner that is admitted from
time to time to the Partnership and listed on Exhibit A attached hereto. This
Agreement shall be effective at the Effective Time.

WHEREAS, the Partnership was originally formed as Spirit Finance Acquisitions,
LLC, a Delaware limited liability company (the “Original LLC”), pursuant to
(i) that certain Certificate of Formation of Spirit Finance Acquisitions, LLC,
filed with the Secretary of State of the State of Delaware (the “Secretary of
State”) on March 19, 2004 and (ii) the Operating Agreement of the LLC, dated as
of March 19, 2004 (the “Original Operating Agreement”), executed by the Special
Limited Partner (under the name Spirit Finance Corporation), as the sole member;

WHEREAS, on September 25, 2012, pursuant to a Contribution Agreement between the
Special Limited Partner and the General Partner, the Special Limited Partner
contributed a portion of its interest in the Original LLC to the General
Partner, the General Partner was admitted as a member of the Original LLC and
the Original LLC continued without dissolution;

WHEREAS, the General Partner and the Special Limited Partner, in their
capacities as members of the Original LLC desire to convert the Original LLC
into a Delaware limited partnership with the name Spirit Realty, L.P. pursuant
to (i) that certain Certificate of Conversion (the “Certificate of Conversion”),
as filed with the Secretary of State of the State of Delaware on September 25,
2012 (the “Conversion Date”), (ii) that certain Certificate of Limited
Partnership of the Partnership, as filed with the Secretary of State of the
State of Delaware on the Conversion Date, and (iii) this Agreement.

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

ARTICLE 1

DEFINED TERMS

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

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

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

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

(Agreement of Limited Partnership of Spirit Realty, L.P.)

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“Additional Limited Partner” means a Person who is admitted to the Partnership
as a limited partner pursuant to Section 12.2(A) hereof and listed on Exhibit A
hereto.

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

(i) increase such Capital Account by any amounts that such Partner is obligated
to restore pursuant to this Agreement upon liquidation of such Partner’s
Partnership Interest or that such Person is deemed to be obligated to restore
pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence
of each of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and

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

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

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

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

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

(ii) the Special Limited Partner distributes any rights, options or warrants to
all holders of its REIT Shares to subscribe for or to purchase or to otherwise
acquire REIT Shares, or other securities or rights convertible into,
exchangeable for or exercisable for REIT Shares, at a price per share less than
the Value of a REIT Share on the record date for such distribution (other than
REIT Shares issuable pursuant to a Qualified DRIP/COPP or as compensation to
employees or other service providers) (each a “Distributed Right”), then, as of
the distribution date of such Distributed Rights or, if later, the time such
Distributed Rights become exercisable, the Adjustment Factor shall

 

2

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be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction (a) the numerator of which shall be the number of REIT Shares issued
and outstanding on the record date (or, if later, the date such Distributed
Rights become exercisable) plus the maximum number of REIT Shares purchasable
under such Distributed Rights and (b) the denominator of which shall be the
number of REIT Shares issued and outstanding on the record date (or, if later,
the date such Distributed Rights become exercisable) plus a fraction (1) the
numerator of which is the maximum number of REIT Shares purchasable under such
Distributed Rights times the minimum purchase price per REIT Share under such
Distributed Rights and (2) the denominator of which is the Value of a REIT Share
as of the record date (or, if later, the date such Distributed Rights become
exercisable); provided, however, that, if any such Distributed Rights expire or
become no longer exercisable, then the Adjustment Factor shall be adjusted,
effective retroactive to the date of distribution of the Distributed Rights, to
reflect a reduced maximum number of REIT Shares or any change in the minimum
purchase price for the purposes of the above fraction; and

(iii) the Special Limited Partner shall, by dividend or otherwise, distribute to
all holders of its REIT Shares evidences of its indebtedness or assets
(including securities, but excluding any dividend or distribution referred to in
subsection (i) or (ii) above), which evidences of indebtedness or assets relate
to assets not received by the Special Limited Partner pursuant to a pro rata
distribution by the Partnership, then the Adjustment Factor shall be adjusted to
equal the amount determined by multiplying the Adjustment Factor in effect
immediately prior to the close of business as of the record date by a fraction
(a) the numerator of which shall be such Value of a REIT Share as of the record
date and (b) the denominator of which shall be the Value of a REIT Share as of
the record date less the then fair market value (as determined by the General
Partner, whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one REIT Share.

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

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

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

 

3

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“Agreement” means this Limited Partnership Agreement of Spirit Realty, L.P., as
now or hereafter amended, restated, modified, supplemented or replaced.

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

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

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

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

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

(i) To each Partner’s Capital Account, there shall be added such Partner’s
Capital Contributions, such Partner’s distributive share of Net Income and any
items in the nature of income or gain that are specially allocated pursuant to
Section 6.3 or 6.4 hereof, and the amount of any Partnership liabilities assumed
by such Partner or that are secured by any property distributed to such Partner.

(ii) From each Partner’s Capital Account, there shall be subtracted the amount
of cash and the Gross Asset Value of any Partnership property distributed to
such Partner pursuant to any provision of this Agreement, such Partner’s
distributive share of Net Losses and any items in the nature of expenses or
losses that are specially allocated pursuant to Section 6.3 or 6.4 hereof, and
the amount of any liabilities of such Partner assumed by the Partnership or that
are secured by any property contributed by such Partner to the Partnership
(except to the extent already reflected in the amount of such Partner’s Capital
Contribution).

(iii) In the event any interest in the Partnership is Transferred in accordance
with the terms of this Agreement (which Transfer does not result in the
termination of the Partnership for federal income tax purposes), the transferee
shall succeed to the Capital Account of the transferor to the extent that it
relates to the Transferred interest.

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

(v) The provisions of this Agreement relating to the maintenance of Capital
Accounts are intended to comply with Regulations promulgated under Section 704
of the

 

4

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Code, and shall be interpreted and applied in a manner consistent with such
Regulations. If the General Partner shall determine that it is necessary or
prudent to modify the manner in which the Capital Accounts are maintained in
order to comply with such Regulations, the General Partner may make such
modification, provided that such modification is not likely to have any material
effect on the amounts distributable to any Partner pursuant to Article 13 hereof
upon the dissolution of the Partnership. The General Partner may, in its sole
and absolute discretion, (a) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership’s balance
sheet, as computed for book purposes, in accordance with Regulations
Section 1.704-1(b)(2)(iv)(q) and (b) make any appropriate modifications in the
event that unanticipated events might otherwise cause this Agreement not to
comply with Regulations Section 1.704-1(b) or Section 1.704-2.

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

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

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

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

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

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

“Closing Price” has the meaning set forth in the definition of “Value.”

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

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

“Consent of the General Partner” means the Consent of the sole General Partner,
which Consent, except as otherwise specifically required by this Agreement, may
be obtained prior to or after the taking of any action for which it is required
by this Agreement and may be given or withheld by the General Partner in its
sole and absolute discretion.

 

5

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

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

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

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

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

“Delaware Courts” has the meaning set forth in Section 15.9.B hereof.

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

 

6

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“Disregarded Entity” means, with respect to any Person, (i) any “qualified REIT
subsidiary” (within the meaning of Code Section 856(i)(2)) of such Person,
(ii) any entity treated as a disregarded entity for federal income tax purposes
with respect to such Person, or (iii) any grantor trust if the sole owner of the
assets of such trust for federal income tax purposes is such Person.

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

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

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

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

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

“Flow-Through Partners” has the meaning set forth in Section 3.4.C hereof.

“Flow-Through Entity” has the meaning set forth in Section 3.4.C hereof.

“Fourteen-Month Period” means (a) as to an Original Limited Partner or any
Assignee of an Original Limited Partner that is a Qualifying Party, a
fourteen-month period ending on the day before the first fourteen-month
anniversary of the date of this Agreement and (b) as to any other Qualifying
Party, a fourteen-month period ending on the day before the first fourteen-month
anniversary of such Qualifying Party’s first becoming a Holder of Partnership
Common Units; provided, however, that the General Partner may, in its sole and
absolute discretion, by written agreement with a Qualifying Party, shorten or
lengthen the applicable Fourteen-Month Period to a period of shorter or longer
than fourteen (14) months with respect to a Qualifying Party other than an
Original Limited Partner or an Assignee of an Original Limited Partner.

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

“General Partner” means Spirit General OP Holdings, LLC and its successors and
assigns as a general partner of the Partnership, in each case, that is admitted
from time to time to the Partnership as a general partner pursuant to the Act
and this Agreement and is listed as a general partner on Exhibit A, as such
Exhibit A may be amended or updated from time to time, in such Person’s capacity
as a general partner of the Partnership.

 

7

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“General Partner Interest” means the entire Partnership Interest held by a
General Partner hereof, which Partnership Interest may be expressed as a number
of Partnership Common Units, Partnership Preferred Units or any other
Partnership Units.

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

(a) The initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset on the date of
contribution, as determined by the General Partner and agreed to by the
contributing Person.

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

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

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

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

(iv) the grant of an interest in the Partnership (other than a de minimis
interest) 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 or in anticipation of becoming a
Partner of the Partnership, if the General Partner reasonably determines that
such adjustment is necessary or appropriate to reflect the relative economic
interests of the Partners in the Partnership; and

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

(c) The Gross Asset Value of any Partnership asset distributed to a Partner
shall be the gross fair market value of such asset on the date of distribution,
as

 

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determined by the distributee and the General Partner; provided, however, that
if the distributee is the General Partner or if the distributee and the General
Partner cannot agree on such a determination, such gross fair market value shall
be determined by Appraisal.

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

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

“Hart-Scott-Rodino Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended.

“Holder” means either (a) a Partner or (b) an Assignee owning a Partnership
Interest.

“Incapacity” or “Incapacitated” means: (i) as to any Partner who is an
individual, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her person
or his or her estate; (ii) as to any Partner that is a corporation or limited
liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or the revocation of its charter; (iii) as to
any Partner that is a partnership, the dissolution and commencement of winding
up of the partnership; (iv) as to any Partner that is an estate, the
distribution by the fiduciary of the estate’s entire interest in the
Partnership; (v) as to any trustee of a trust that is a Partner, the termination
of the trust (but not the substitution of a new trustee); or (vi) as to any
Partner, the bankruptcy of such Partner. For purposes of this definition,
bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner
commences a voluntary proceeding seeking liquidation, reorganization or other
relief of or against such Partner under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and non-appealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner files an
answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks, consents to or
acquiesces in the appointment of a trustee, receiver or Liquidator for the
Partner or for all or any substantial part of the Partner’s properties, (f) any
proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the

 

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appointment without the Partner’s consent or acquiescence of a trustee, receiver
or liquidator has not been vacated or stayed within ninety (90) days of such
appointment, or (h) an appointment referred to in clause (g) above is not
vacated within ninety (90) days after the expiration of any such stay.

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

“IRS” means the United States Internal Revenue Service.

“Limited Partner” means any Person that is admitted from time to time to the
Partnership as a limited partner pursuant to the Act and this Agreement and is
listed as a limited partner on Exhibit A attached hereto, as such Exhibit A may
be amended or updated from time to time, including the Special Limited Partner,
any Substituted Limited Partner or Additional Limited Partner, in such Person’s
capacity as a limited partner of the Partnership.

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

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

“Liquidating Gains” means any net gain realized in connection with the actual or
hypothetical sale of all or substantially all of the assets of the Partnership
(including upon the occurrence of any Liquidating Event or Terminating Capital
Transaction), including but not limited to net gain realized in connection with
an adjustment to the Gross Asset Value of Partnership assets under the
definition of Gross Asset Value in Section 1 of this Agreement.

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

“Majority in Interest of the Limited Partners” means Limited Partners holding in
the aggregate Percentage Interests that are greater than fifty percent (50%) of
the aggregate Percentage Interests of all Limited Partners.

“Majority in Interest of the Partners” means Partners holding in the aggregate
Percentage Interests that are greater than fifty percent (50%) of the aggregate
Percentage Interests of all Partners entitled to Consent to or withhold Consent
from a proposed action.

“Market Price” has the meaning set forth in the definition of “Value.”

 

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

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

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

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

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

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

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

(g) Notwithstanding any other provision of this definition of “Net Income” or
“Net Loss,” any item that is specially allocated pursuant to Section 6.3 or 6.4
hereof shall not be taken into account in computing Net Income or Net Loss. The
amounts of the items of Partnership income, gain, loss or deduction available to
be specially allocated

 

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pursuant to Section 6.3 or 6.4 hereof shall be determined by applying rules
analogous to those set forth in this definition of “Net Income” or “Net Loss.”

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

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

“Nonrecourse Liability” has the meaning set forth in Regulations Sections
1.704-2(b)(3) and 1.752-1(a)(2).

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

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

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

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

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

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

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

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

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

 

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

“Partnership Equivalent Units” has the meaning set forth in Section 4.7.A
hereof.

“Partnership Interest” means an ownership interest in the Partnership held by
either a Limited Partner or a General Partner and includes any and all benefits
to which the holder of such a Partnership Interest may be entitled as provided
in this Agreement, together with all obligations of such Person to comply with
the terms and provisions of this Agreement. There may be one or more classes or
series of Partnership Interests. A Partnership Interest may be expressed as a
number of Partnership Common Units, Partnership Preferred Units or other
Partnership Units.

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

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

“Partnership Record Date” means the record date established by the General
Partner for a distribution pursuant to Section 5.1 hereof, which record date
shall generally be the same as the record date established by the Special
Limited Partner for a distribution to its stockholders of some or all of its
portion of such distribution.

“Partnership Unit” means a Partnership Common Unit, a Partnership Preferred Unit
or any other unit of the fractional, undivided share of the Partnership
Interests that the General Partner has authorized pursuant to Section 4.1,
Section 4.2 or Section 4.3 hereof; provided, however, that Partnership Units
comprising a General Partner Interest or a Limited Partner Interest shall have
the differences in rights and privileges as specified in this Agreement.

“Partnership Unit Designation” shall have the meaning set forth in Section 4.2.A
hereof.

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

“Percentage Interest” means, with respect to each Partner, the fraction,
expressed as a percentage, the numerator of which is the aggregate number of
Partnership Units of all classes and series held by such Partner and the
denominator of which is the total number of Partnership Units of all classes and
series held by all Partners; provided, however, that, to the extent applicable
in context, the term “Percentage Interest” means, with respect to a Partner, the
fraction, expressed as a percentage, the numerator of which is the aggregate
number of Partnership Units of a specified class or series (or specified group
of classes and/or series) held

 

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by such Partner and the denominator of which is the total number of Partnership
Units of such specified class or series (or specified group of classes and/or
series) held by all Partners.

“Permitted Transfer” has the meaning set forth in Section 11.3.A hereof.

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

“Plan” means the Spirit Realty Capital, Inc and Spirit Realty, LP 2012 Incentive
Award Plan.

“Pledge” has the meaning set forth in Section 11.3.A hereof.

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

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

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

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

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

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

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

“Regulatory Allocations” has the meaning set forth in
Section 6.4.A(viii) hereof.

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

 

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“REIT Partner” means (a) the Special Limited Partner or any Affiliate of the
Special Limited Partner to the extent such person has in place an election to
qualify as a REIT and, (b) any Disregarded Entity with respect to any such
Person.

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

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

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

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

“Related Party” means, with respect to any Person, any other Person to whom
ownership of shares of the Special Limited Partner’s stock by the first such
Person would be attributed under Code Section 544 (as modified by Code
Section 856(h)(1)(B)) or Code Section 318(a) (as modified by Code
Section 856(d)(5)).

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

“Safe Harbors” has the meaning set forth in Section 11.3.D hereof.

“SEC” means the Securities and Exchange Commission.

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

“Special Limited Partner” means Spirit Realty Capital, Inc., a Maryland
corporation, and its successors and assigns as the Special Limited Partner of
the Partnership, in each case, that is admitted from time to time as a Limited
Partner pursuant to the Act and this Agreement and is listed as the Special
Limited Partner on Exhibit A, as such Exhibit A may be amended or updated from
time to time, in such Person’s capacity as the Special Limited Partner of the
Partnership.

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

 

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“Specified Redemption Date” means the tenth (10th) Business Day after the
receipt by the General Partner of a Notice of Redemption; provided, however,
that no Specified Redemption Date shall occur during the first Fourteen-Month
Period (except pursuant to a Special Redemption).

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

“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; provided, however, that, with respect to the Partnership, “Subsidiary”
means solely a partnership or limited liability company (taxed, for federal
income tax purposes, as a partnership or as a Disregarded Entity and not as an
association or publicly traded partnership taxable as a corporation) of which
the Partnership is a member or any “taxable REIT subsidiary” of the Special
Limited Partner in which the Partnership owns shares of stock, unless the
ownership of shares of stock of a corporation or other entity (other than a
“taxable REIT subsidiary”) will not jeopardize the Special Limited Partner’s
status as a REIT or any Special Limited Partner Affiliate’s status as a
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), in
which event the term “Subsidiary” shall include such corporation or other
entity.

“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant (i) Section 11.4 hereof or (ii) pursuant to
any Partnership Unit Designation.

“Surviving Partnership” has the meaning set forth in Section 11.2.B(ii) hereof.

“Tax Items” has the meaning set forth in Section 6.5.A hereof.

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

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

“Terminating Capital Transaction” means any sale or other disposition of all or
substantially all of the assets of the Partnership or a related series of
transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership, in any case, not in
the ordinary course of the Partnership’s business.

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

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

 

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

“Value” means, on any Valuation Date with respect to a REIT Share, the average
of the daily Market Prices for ten (10) consecutive trading days immediately
preceding the Valuation Date (except that the Market Price for the trading day
immediately preceding the date of exercise of a stock option under any Stock
Option Plans shall be substituted for such average of daily market prices for
purposes of Section 4.4 hereof). The term “Market Price” on any date means, with
respect to any class or series of outstanding REIT Shares, the Closing Price for
such REIT Shares on such date. The “Closing Price” on any date means the last
sale price for such REIT Shares, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular way,
for such REIT Shares, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if such REIT Shares are not listed or
admitted to trading on the New York Stock Exchange, as reported on the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which such REIT Shares are listed
or admitted to trading or, if such REIT Shares are not listed or admitted to
trading on any national securities exchange, the last quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc. Automated Quotation System or, if such system is no longer in use,
the principal other automated quotation system that may then be in use or, if
such REIT Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such REIT Shares selected by the General Partner or, in the event
that no trading price is available for such REIT Shares, the fair market value
of the REIT Shares, as determined by the Special Limited Partner.

In the event that 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 Special Limited Partner on the basis of such quotations and
other information as it considers appropriate.

ARTICLE 2

ORGANIZATIONAL MATTERS

Section 2.1 Formation. The Partnership is a limited partnership heretofore
formed and continued pursuant to the provisions of the Act and upon the terms
and subject to the conditions set forth in this Agreement. The Partners hereby
approve, ratify and confirm the conversion of the Original LLC into the
Partnership on the Conversion Date, and this Agreement shall be effective upon
the effectiveness of the Certificate of Conversion (the “Effective Time”).
Except as expressly provided herein to the contrary, the rights and obligations
of the Partners and the administration and termination of the Partnership shall
be governed by the Act. The Partnership Interest of each Partner shall be
personal property for all purposes.

Section 2.2 Name. The name of the Partnership is “Spirit Realty, L.P.” The
Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of the General Partner or
any Affiliate thereof. The words “Limited

 

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Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in
the Partnership’s name where necessary for the purposes of complying with the
laws of any jurisdiction that so requires. The General Partner in its sole and
absolute discretion may change the name of the Partnership at any time and from
time to time and shall notify the Partners of such change in the next regular
communication to the Partners.

Section 2.3 Registered Office and Registered Agent; Principal Executive Office.
The address of the registered office of the Partnership in the State of Delaware
is located at c/o The Corporation Trust Company, Corporation Trust Center, 1209
Orange Street, Wilmington, DE 19801, or such other place as the General Partner
may from time to time designate, and the registered agent of the Partnership in
the State of Delaware is The Corporation Trust Company, Corporation Trust
Center, 1209 Orange Street, Wilmington, DE 19801, or such other registered agent
as the General Partner may from time to time designate. The principal office of
the Partnership is located at 14631 North Scottsdale Road, Suite 200,
Scottsdale, Arizona 85254, or such other place as the General Partner may from
time to time designate by notice to the Limited Partners. The Partnership may
maintain offices at such other place or places as the General Partner deems
advisable.

Section 2.4 Power of Attorney.

 

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

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

 

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

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

 

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

Section 2.5 Term. The term of the Partnership shall continue indefinitely unless
the Partnership is dissolved sooner pursuant to the provisions of Article 13
hereof or as otherwise provided by law.

Section 2.6 Partnership Interests Are Securities. All Partnership Interests in
the Partnership shall constitute a “security” within the meaning of, and
governed by, (i) Article 8 of the Uniform Commercial Code (including
Section 8-102(a)(15) thereof) as in effect from time to time in the State of
Delaware, and (ii) the corresponding provisions of the Uniform Commercial Code
of any other applicable jurisdiction that now or hereafter substantially
includes the 1994 revisions to Article 8 thereof as adopted by the American Law
Institute and the National Conference of Commissioners on Uniform State Laws and
approved by the American Bar Association on February 14, 1995.

Section 2.7 Admission. The General Partner is hereby admitted as the general
partner of the Partnership upon its execution of this Agreement or a counterpart
hereof. A Person shall be admitted as a limited partner of the Partnership on
the date hereof at the time that (a) this Agreement or a counterpart hereof is
executed by or on behalf of such Person and (b) such Person is listed by the
General Partner as a limited partner of the Partnership on Exhibit

 

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A attached hereto. Notwithstanding the foregoing, the Special Limited Partner is
hereby admitted as a limited partner of the Partnership. The General Partner
hereby Consents to the admission of any Person as a limited partner of the
Partnership pursuant to this Section 2.7.

ARTICLE 3

PURPOSE

Section 3.1 Purpose and Business. The purpose and nature of the Partnership is
to conduct any business, enterprise or activity permitted by or under the Act,
including, without limitation, (i) to conduct the business of ownership,
construction, reconstruction, development, redevelopment, alteration,
improvement, maintenance, operation, sale, leasing, transfer, encumbrance,
conveyance and exchange of the Properties, (ii) to acquire and invest in any
securities and/or loans relating to the Properties, (iii) to enter into any
partnership, joint venture, business or statutory trust arrangement, limited
liability company or other similar arrangement to engage in any business
permitted by or under the Act, or to own interests in any entity engaged in any
business permitted by or under the Act, (iv) to conduct the business of
providing property and asset management and brokerage services, whether directly
or through one or more partnerships, joint ventures, Subsidiaries, business
trusts, limited liability companies or similar arrangements, and (v) to do
anything necessary or incidental to the foregoing.

Section 3.2 Powers. The Partnership shall be 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, to borrow and lend money and to issue evidence of
indebtedness, whether or not secured by mortgage, deed of trust, pledge or other
lien, to acquire, own, manage, improve and develop real property and lease,
sell, transfer and dispose of real property. However, the Partnership may not,
without the General Partner’s specific consent, which it may give or withhold in
its sole and absolute discretion, take or refrain from taking, any action that,
in its judgment, in its sole and absolute discretion (i) could adversely affect
the Special Limited Partner’s ability to continue to qualify as a REIT,
(ii) could subject the Special Limited Partner to any taxes under Sections 857
or 4981 of the Code or any other related or successor provision under the Code,
or (iii) could violate any law or regulation of any governmental body or agency
having juristication over the Special Limited Partner, its securities or the
Partnership.

Section 3.3 Partnership Only for Purposes Specified. The Partnership shall be a
limited partnership formed pursuant to the Act to conduct its business in
accordance with this Agreement, and this Agreement shall not be deemed to create
a company, venture or partnership between or among the Partners or any other
Persons with respect to any activities whatsoever other than the activities
within the purposes of the Partnership as specified in Section 3.1 hereof.
Except as otherwise provided in this Agreement, no Partner shall have any
authority to act for, bind, commit or assume any obligation or responsibility on
behalf of the Partnership, its properties or any other Partner. No Partner, in
its capacity as a Partner under this Agreement, shall be responsible or liable
for any indebtedness or obligation of another Partner, nor shall the Partnership
be responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to

 

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those responsibilities, liabilities, indebtedness or obligations incurred
pursuant to and as limited by the terms of this Agreement and the Act.

Section 3.4 Representations and Warranties by the Partners.

 

A. Each Partner that is an individual (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner)
represents and warrants to, and covenants with, each other Partner that (i) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default under,
any material agreement by which such Partner or any of such Partner’s property
is bound, or any statute, regulation, order or other law to which such Partner
is subject, (ii) if five percent (5%) or more (by value) of the Partnership’s
interests are or will be owned by such Partner within the meaning of Code
Section 7704(d)(3), such Partner does not, and for so long as it is a Partner
will not, own, directly or indirectly, (a) stock of any corporation that is a
tenant of (I) the Special Limited Partner or any Disregarded Entity with respect
to the Special Limited Partner, (II) the Partnership or (III) any partnership,
venture or limited liability company of which the Special Limited Partner, any
Disregarded Entity with respect to the Special Limited Partner, or the
Partnership is a direct or indirect member or (b) an interest in the assets or
net profits of any non-corporate tenant of (I) the Special Limited Partner or
any Disregarded Entity with respect to the Special Limited Partner, (II) the
Partnership or (III) any partnership, venture, or limited liability company of
which the Special Limited Partner, any Disregarded Entity with respect to the
Special Limited Partner, or the Partnership is a direct or indirect member,
(iii) such Partner has the legal capacity to enter into this Agreement and
perform such Partner’s obligations hereunder, and (iv) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
Notwithstanding the foregoing, a Partner that is an individual shall not be
subject to the ownership restrictions set forth in clause (ii) of the
immediately preceding sentence to the extent such Partner obtains the written
Consent of the General Partner prior to violating any such restrictions. Each
Partner that is an individual shall also represent and warrant to the
Partnership that such Partner is neither a “foreign person” within the meaning
of Code Section 1445(f) nor a foreign partner within the meaning of Code
Section 1446(e).

 

B.

Each Partner that is not an individual (including, without limitation, each
Additional Limited Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner)
represents and warrants to, and covenants with, each other Partner that (i) all
transactions contemplated by this Agreement to be performed by it have been duly
authorized by all necessary action, including, without limitation, that of its
general partner(s), manager(s), committee(s), trustee(s), beneficiaries,
directors and/or stockholder(s) (as the case may be) as required, (ii) the
consummation of such transactions shall not result in a breach or violation of,
or a default under, its partnership or operating agreement, trust agreement,
charter or bylaws (as the case may be) any material agreement by which such
Partner or any of such Partner’s properties or any of its partners, members,
beneficiaries, trustees or stockholders (as the case may be) is or are bound, or
any statute, regulation, order or other law to which such Partner or any of its
partners, members, trustees, beneficiaries or stockholders (as the case may be)
is or are subject, (iii) if five percent (5%) or more (by value) of the
Partnership’s interests are or will be owned by such Partner within the meaning
of Code Section 7704(d)(3), such Partner does not, and for so long as it is a
Partner will not, own, directly or indirectly, (a) stock of any

 

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  corporation that is a tenant of (I) the Special Limited Partner or any
Disregarded Entity with respect to the Special Limited Partner, (II) the
Partnership or (III) any partnership, venture or limited liability company of
which the Special Limited Partner, any Disregarded Entity with respect to the
Special Limited Partner, or the Partnership is a direct or indirect member or
(b) an interest in the assets or net profits of any non-corporate tenant of
(I) the Special Limited Partner, or any Disregarded Entity with respect to the
Special Limited Partner, (II) the Partnership or (III) any partnership, venture
or limited liability company for which the Special Limited Partner, any
Disregarded Entity with respect to the Special Limited Partner, or the
Partnership is a direct or indirect member, and (iv) this Agreement is binding
upon, and enforceable against, such Partner in accordance with its terms.
Notwithstanding the foregoing, a Partner that is not an individual shall not be
subject to the ownership restrictions set forth in clause (iii) of the
immediately preceding sentence to the extent such Partner obtains the written
Consent of the General Partner prior to violating any such restrictions. Each
Partner that is not an individual shall also represent and warrant to the
Partnership that such Partner is neither a “foreign person” within the meaning
of Code Section 1445(f) nor a foreign partner within the meaning of Code
Section 1446(e).

 

C. Each Partner (including, without limitation, each Additional Limited Partner
or Substituted Limited Partner as a condition to becoming an Additional Limited
Partner or Substituted Limited Partner) represents, warrants and agrees that
(i) it is an “accredited investor” as defined in Rule 501 promulgated under the
Securities Act, (ii) it has acquired and continues to hold its interest in the
Partnership for its own account for investment purposes only and not for the
purpose of, or with a view toward, the resale or distribution of all or any part
thereof in violation of applicable laws, and not with a view toward selling or
otherwise distributing such interest or any part thereof at any particular time
or under any predetermined circumstances in violation of applicable laws,
(iii) it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate
investments, and that it has a sufficiently high net worth that it does not
anticipate a need for the funds that it has invested in the Partnership in what
it understands to be a highly speculative and illiquid investment, and
(iv) without the Consent of the General Partner, it shall not take any action
that would cause (a) the Partnership at any time to have more than 100 partners,
including as partners those persons (“Flow-Through Partners”) indirectly owning
an interest in the Partnership through an entity treated as a partnership,
Disregarded Entity, S corporation or grantor trust (each such entity, a
“Flow-Through Entity”), but only if substantially all of the value of such
person’s interest in the Flow-Through Entity is attributable to the Flow-Through
Entity’s interest (direct or indirect) in the Partnership; or (b) the
Partnership Interest initially issued to such Partner or its predecessors to be
held by more than two partners, including as partners any Flow-Through Partners.

 

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

 

E.

Each Partner (including, without limitation, each Additional Limited Partner or
Substituted Limited Partner as a condition to becoming an Additional Limited
Partner or Substituted Limited Partner) hereby acknowledges that no
representations as to potential profit, cash flows, funds from operations or
yield, if any, in respect of the Partnership, the Special Limited Partner or the

 

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  General Partner have been made by any Partner or any employee or
representative or Affiliate of any Partner, and that projections and any other
information, including, without limitation, financial and descriptive
information and documentation, that may have been in any manner submitted to
such Partner shall not constitute any representation or warranty of any kind or
nature, express or implied.

 

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

ARTICLE 4

CAPITAL CONTRIBUTIONS

Section 4.1 Capital Contributions of the Partners. The Partners have heretofore
made Capital Contributions to the Partnership. Each Partner owns Partnership
Units in the amount set forth for such Partner on Exhibit A, as the same may be
amended or updated from time to time by the General Partner to the extent
necessary to reflect accurately 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. Except as provided by law or in Section 4.2, 4.3, or 10.4
hereof, the Partners shall have no obligation or, except with the prior Consent
of the General Partner, right to make any additional Capital Contributions or
loans to the Partnership.

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

 

A.

General. The General Partner is hereby authorized to cause the Partnership to
issue additional Partnership Interests, in the form of Partnership Units, for
any Partnership purpose, at any time or from time to time, to the Partners
(including the General Partner and the Special Limited Partner) or to other
Persons, and to admit such Persons as Additional Limited Partners, for such
consideration and on such terms and conditions as shall be established by the
General Partner in its sole and absolute discretion, all without the approval of
any Limited Partner or any other Person. Without limiting the foregoing, the
General Partner is expressly authorized to cause the Partnership to issue
Partnership Units (i) upon the conversion, redemption or exchange of any Debt,
Partnership Units, or other securities issued by the Partnership, (ii) for less
than fair market value, (iii) for no consideration and (iv) in connection with
any merger or consolidation of any other Person into the Partnership. Any
additional Partnership Interests may be issued in one or more classes, or one or
more series of any of such classes, with such designations, preferences,
conversion or other rights, voting powers or rights, restrictions, limitations
as to distributions, qualifications or terms or conditions of redemption
(including, without limitation, terms that may be senior or otherwise entitled
to preference over existing Partnership Units) as shall be determined by the
General Partner, in its sole and absolute discretion and without the approval of
any Limited Partner or any other Person, and set forth in a written document
thereafter attached

 

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  to and made an exhibit to this Agreement, which exhibit shall be an amendment
to this Agreement and shall be incorporated herein by this reference (each, a
“Partnership Unit Designation”). Without limiting the generality of the
foregoing, the General Partner shall have authority to specify, in its sole and
absolute discretion: (a) the allocations of items of Partnership income, gain,
loss, deduction and credit to each such class or series of Partnership
Interests; (b) the right of each such class or series of Partnership Interests
to share (on a pari passu, junior or preferred basis) in Partnership
distributions; (c) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership; (d) the voting
rights, if any, of each such class or series of Partnership Interests; and
(e) the conversion, redemption or exchange rights applicable to each such class
or series of Partnership Interests. Upon the issuance of any additional
Partnership Interest, the General Partner shall update Exhibit A and the books
and records of the Partnership as appropriate to reflect such issuance.

 

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

 

C. No Preemptive Rights. Except as specified in Section 4.2.B(i) hereof, no
Person, including, without limitation, any Partner or Assignee, shall have any
preemptive, preferential, participation or similar right or rights to subscribe
for or acquire any Partnership Interest.

Section 4.3 Additional Funds and Capital Contributions.

 

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

 

B.

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

 

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  and the Percentage Interests of the General Partner and the Limited Partners
shall be adjusted to reflect the issuance of such additional Partnership Units.

 

C. Loans by Third Parties. The General Partner, in its sole and absolute
discretion on behalf of the Partnership, may obtain any Additional Funds by
causing the Partnership to incur Debt to any Person (other than the General
Partner or the Special Limited Partner (but, for this purpose, disregarding any
Debt that may be deemed incurred to the General Partner or the Special Limited
Partner by virtue of clause (iii) of the definition of Debt)) upon such terms as
the General Partner determines appropriate, including making such Debt
convertible, redeemable or exchangeable for Partnership Units or REIT Shares;
provided, however, that the Partnership shall not incur any such Debt if any
Limited Partner would be personally liable for the repayment of such Debt
(unless such Limited Partner otherwise agrees).

 

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

 

E.

Issuance of Securities by the Special Limited Partner. The Special Limited
Partner shall not issue any additional REIT Shares, Capital Shares or New
Securities unless the Special Limited Partner contributes the cash proceeds or
other consideration received from the issuance of such additional REIT Shares,
Capital Shares or New Securities (as the case may be) and from the exercise of
the rights contained in any such additional Capital Shares or New Securities
directly or indirectly to the Partnership in exchange for (x) in the case of an
issuance of REIT Shares, Partnership Common Units, or (y) in the case of an
issuance of Capital Shares or New Securities, Partnership Equivalent Units;
provided, however, that notwithstanding the foregoing, the Special Limited
Partner may issue REIT Shares, Capital Shares or New Securities (a) pursuant to
Section 4.4 or Section 15.1.B hereof, (b) pursuant to a dividend or distribution
(including any stock split) of REIT Shares, Capital Shares or New Securities to
all of the holders of REIT Shares, Capital Shares or New Securities (as the case
may be), (c) upon a conversion, redemption or exchange of Capital Shares,
(d) upon a conversion, redemption, exchange or exercise of New Securities, or
(e) in connection with an acquisition of Partnership Units or a property or
other asset to be owned, directly or indirectly, by the Special Limited Partner.
In the event of any issuance of additional REIT Shares, Capital Shares or New
Securities by the Special Limited Partner, and the contribution to the
Partnership, directly or indirectly, by the Special Limited Partner, of the cash
proceeds or other consideration received from such issuance (or property
acquired with such proceeds), if any, if the cash proceeds actually received by
the Special Limited 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 Special Limited Partner shall be deemed
to have made a Capital Contribution to the Partnership in the

 

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  amount equal to the sum of the cash proceeds of such issuance plus the amount
of such underwriter’s discount and other expenses paid by the Special Limited
Partner (which discount and expense shall be treated as an expense for the
benefit of the Partnership for purposes of Section 7.4). In the event that the
Special Limited Partner issues any additional REIT Shares, Capital Shares or New
Securities and contributes, directly or indirectly, the cash proceeds or other
consideration received from the issuance thereof to the Partnership, the
Partnership is expressly authorized to issue a number of Partnership Common
Units or Partnership Equivalent Units to the Special Limited Partner equal to
the number of REIT Shares, Capital Shares or New Securities so issued, divided
by the Adjustment Factor then in effect, in accordance with this Section 4.3.E
without any further act, approval or vote of any Partner or any other Persons.

Section 4.4 Stock Option Plans and Equity Plans.

 

A. Future Stock Incentive Plans. Nothing in this Agreement shall be construed or
applied to preclude or restrain the General Partner or the Special Limited
Partner from adopting, modifying or terminating stock incentive plans for the
benefit of employees, directors or other business associates of the General
Partner, the Special Limited Partner, the Partnership or any of their
Affiliates. The General Partner may implement such plans and any actions taken
under such plans (such as the grant or exercise of options to acquire REIT
Shares, or the issuance of restricted REIT Shares), whether taken with respect
to or by an employee or other service provider of the Special Limited Partner,
the Partnership or its Subsidiaries, in a manner reasonably determined by the
General Partner, which may be set forth in plan implementation guidelines that
the General Partner may establish or amend from time to time. The Partners
acknowledge and agree that, in the event that any such plan is adopted, modified
or terminated by the General Partner or the Special Limited Partner, amendments
to this Agreement may become necessary or advisable and that any such amendments
requested by the General Partner or the Special Limited Partner shall not
require any Consent or approval by the Limited Partners.

 

B. Issuance of Partnership Common Units. The Partnership is expressly authorized
to issue Partnership Common Units as contemplated by this Section 4.4 without
any further act, approval or vote of any Partner or any other Persons.

Section 4.5 Dividend Reinvestment Plan, Cash Option Purchase Plan, Stock
Incentive Plan or Other Plan. Except as may otherwise be provided in this
Article 4, all amounts received or deemed received by the Special Limited
Partner in respect of any dividend reinvestment plan, cash option purchase plan,
stock incentive or other stock or subscription plan or agreement, either
(a) shall be utilized by the Special Limited Partner to effect open market
purchases of REIT Shares, or (b) if the Special Limited Partner elects instead
to issue new REIT Shares with respect to such amounts, shall be contributed by
the Special Limited Partner to the Partnership in exchange for additional
Partnership Common Units. Upon such contribution, the Partnership will issue to
the Special Limited Partner a number of Partnership Common Units equal to the
quotient of (i) the new REIT Shares so issued, divided by (ii) the Adjustment
Factor then in effect. The Partnership is expressly authorized to issue
Partnership Common Units as contemplated by this Section 4.5 without any further
act, approval or vote of any Partner or any other Persons.

Section 4.6 No Interest; No Return. No Partner shall be entitled to interest on
its Capital Contribution or on such Partner’s Capital Account. Except as
provided herein or by law, no

 

26

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Partner shall have any right to demand or receive the return of its Capital
Contribution from the Partnership.

Section 4.7 Conversion or Redemption of REIT Shares and Capital Shares.

 

A. Conversion of Capital Shares. If, at any time, any of the Capital Shares are
converted into REIT Shares, in whole or in part, then a number of Partnership
Units with preferences, conversion and other rights, restrictions (other than
restrictions on transfer), rights and limitations as to dividends and other
distributions and qualifications that are substantially the same as the
preferences, conversion and other rights, restrictions (other than restrictions
on transfer), rights and limitations as to distributions and qualifications of
such Capital Shares (for the avoidance of doubt, Partnership Equivalent Units
need not have voting rights, redemption rights or restrictions on transfer that
are substantially equivalent to such Capital Shares) (“Partnership Equivalent
Units”) equal to the number of Capital Shares so converted shall automatically
be converted into a number of Partnership Common Units equal to the quotient of
(i) the number of REIT Shares issued upon such conversion divided by (ii) the
Adjustment Factor then in effect, and the Percentage Interests of the General
Partner and the Limited Partners shall be adjusted to reflect such conversion.

 

B. Redemption of Capital Shares or REIT Shares. Except as otherwise provided in
Section 7.4.C., if, at any time, any Capital Shares are redeemed or otherwise
repurchased (whether by exercise of a put or call, automatically or by means of
another arrangement) by the Special Limited Partner for cash, the Partnership
shall, immediately prior to such redemption or repurchase of Capital Shares,
redeem or repurchase an equal number of the corresponding Partnership Equivalent
Units held by the Special Limited Partner upon the same terms and for the same
price per Partnership Equivalent Unit as such Capital Shares are redeemed. If,
at any time, any REIT Shares are forfeited or redeemed or otherwise repurchased
or reacquired by the Special Limited Partner, the Partnership shall, immediately
prior to such forfeiture, redemption, reacquisition or repurchase of REIT
Shares, forfeit, redeem, reacquire or repurchase a number of Partnership Common
Units held by the Special Limited Partner equal to the quotient of (i) the REIT
Shares so forfeited, redeemed, reacquired or repurchased, divided by (ii) the
Adjustment Factor then in effect, such forfeiture, redemption, reacquisition or
repurchase to be upon the same terms and for the same price per Partnership
Common Unit (after giving effect to application of the Adjustment Factor) as
such REIT Shares are forfeited, redeemed, repurchased or otherwise reacquired.

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

 

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ARTICLE 5

DISTRIBUTIONS

Section 5.1 Requirement and Characterization of Distributions. Subject to the
rights of any Holder of any Partnership Interest set forth in a Partnership Unit
Designation, the General Partner may cause the Partnership to distribute such
amounts, at such times, as the General Partner may, in its sole and absolute
discretion, determine to the Holders as of any Partnership Record Date:
(i) first, with respect to any Partnership Units that are entitled to any
preference in distribution, in accordance with the rights of Holders of such
class(es) of Partnership Units (and, within each such class, among the Holders
of each such class, pro rata in proportion to their respective Percentage
Interests of such class on such Partnership Record Date); and (ii) second, with
respect to any Partnership Units that are not entitled to any preference in
distribution, in accordance with the rights of Holders of such class(es) of
Partnership Units, as applicable (and, within each such class, among the Holders
of each such class, pro rata in proportion to their respective Percentage
Interests of such class on such Partnership Record Date). Distributions payable
with respect to any Partnership Units, other than any Partnership Units issued
to the General Partner or the Special Limited Partner in connection with the
issuance of REIT Shares by the Special Limited Partner, that were not
outstanding during the entire quarterly period in respect of which any
distribution is made shall be prorated based on the portion of the period that
such Partnership Units were outstanding. The General Partner shall make such
reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with the Special Limited Partner’s qualification as a REIT, to cause
the Partnership to distribute sufficient amounts to enable the Special Limited
Partner, for so long as the Special Limited Partner has determined to qualify as
a REIT, to pay stockholder dividends that will (a) satisfy the requirements for
qualifying as a REIT under the Code and Regulations (the “REIT Requirements”)
and (b) except to the extent otherwise determined by the Special Limited
Partner, eliminate any federal income or excise tax liability of the Special
Limited Partner.

Section 5.2 Distributions in Kind. Except as expressly provided herein, no right
is given to any Holder to demand and receive property other than cash as
provided in this Agreement. The General Partner may determine, in its sole and
absolute discretion, to make a distribution in kind of Partnership assets to the
Holders, and such assets shall be distributed in such a fashion as to ensure
that the fair market value is distributed and allocated in accordance with
Articles 5, 6 and 13 hereof; provided, however, that the General Partner shall
not make a distribution in kind to any Holder unless the Holder has been given
90 days prior written notice of such distribution.

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

Section 5.4 Distributions upon Liquidation. Notwithstanding the other provisions
of this Article 5, net proceeds from a Terminating Capital Transaction, and any
other amounts distributed after the occurrence of a Liquidating Event, shall be
distributed to the Holders in accordance with Section 13.2 hereof.

 

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Section 5.5 Distributions to Reflect Additional Partnership Units. In the event
that the Partnership issues additional Partnership Units pursuant to the
provisions of Article 4 hereof, subject to the rights of any Holder of any
Partnership Interest set forth in a Partnership Unit Designation, the General
Partner is hereby authorized to amend this Article 5 and Articles 6, 11 and 12
hereof as it determines, in its sole an absolute discretion, are necessary or
desirable to reflect the issuance of such additional Partnership Units,
including, without limitation, making preferential distributions to Holders of
certain classes of Partnership Units all without the consent of any other
Person.

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

ARTICLE 6

ALLOCATIONS

Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss. Net
Income and Net Loss of the Partnership shall be determined and allocated with
respect to each Partnership Year as of the end of each such year, provided that
the General Partner may, in its sole and absolute discretion, allocate Net
Income and Net Loss for a shorter period as of the end of such period (and, for
purposes of this Article 6, references to the term “Partnership Year” may
include such shorter periods). Except as otherwise provided in this Article 6,
and subject to Section 11.6.C hereof, an allocation to a Holder of a share of
Net Income or Net Loss shall be treated as an allocation of the same share of
each item of income, gain, loss or deduction that is taken into account in
computing Net Income or Net Loss.

Section 6.2 General Allocations. Except as otherwise provided in this Article 6
and Section 11.6.C hereof, Net Income and Net Loss for any Partnership Year
shall be allocated to each of the Holders as follows:

 

A. Net Income.

(i) First, 100% to the General Partner in an amount equal to the remainder, if
any, of the cumulative Net Losses allocated to the General Partner pursuant to
clause (iii) in Section 6.2.B for all prior Partnership Years minus the
cumulative Net Income allocated to the General Partner pursuant to this clause
(i) for all prior Partnership Years;

(ii) Second, 100% to each Holder in an amount equal to the remainder, if any, of
the cumulative Net Losses allocated to each such Holder pursuant to clause
(ii) in Section 6.2.B for all prior Partnership Years minus the cumulative Net
Income allocated to such Holder pursuant to this clause (ii) for all prior
Partnership Years; and

(iii) Third, 100% to the Holders of Partnership Common Units in accordance with
their respective Percentage Interests in the Partnership Common Units.

To the extent the allocations of Net Income set forth above in any paragraph of
this Section 6.2.A are not sufficient to entirely satisfy the allocation set
forth in such paragraph, such

 

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allocation shall be made in proportion to the total amount that would have been
allocated pursuant to such paragraph without regard to such shortfall.

 

B. Net Losses.

(i) First, 100% to the Holders of Partnership Common Units in accordance with
their respective Percentage Interests in the Partnership Common Units (to the
extent consistent with this clause (i)) until the Adjusted Capital Account
(ignoring for this purpose any amounts a Holder is obligated to contribute to
the capital of the Partnership or is deemed obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c)(2)) of all such Holders is zero;

(ii) Second, 100% to the Holders (other than the General Partner) to the extent
of, and in proportion to, the positive balance (if any) in their Adjusted
Capital Accounts; and

(iii) Third, 100% to the General Partner.

 

C. Allocations to Reflect Issuance of Additional Partnership Interests. In the
event that the Partnership issues additional Partnership Interests to the
General Partner, the Special Limited Partner or any Additional Limited Partner
pursuant to Section 4.2 or 4.3, the General Partner shall amend this Section 6.2
or Sections 12.2.C or 13.2.A as it determines, in its sole and absolute
discretion, are necessary to reflect the terms of the issuance of such
additional Partnership Interests, including making preferential allocations to
certain classes of Partnership Interests, subject to the terms of any
Partnership Unit Designation with respect to Partnership Interests then
outstanding.

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

 

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

 

B.

Offsetting Allocations. Notwithstanding the provisions of Sections 6.1, 6.2.B
and 6.2.C, but subject to Sections 6.3 and 6.4, in the event Net Income or items
thereof are being allocated to a Partner to offset prior Net Loss or items
thereof which have been allocated to such Partner, the General Partner shall
attempt to allocate such offsetting Net Income or items thereof which are

 

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  of the same or similar character (including without limitation Section 704(b)
book items versus tax items) to the original allocations with respect to such
Partner.

Section 6.4 Regulatory Allocation Provisions. Notwithstanding the foregoing
provisions of this Article 6:

 

A. Regulatory Allocations.

(i) Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any
other provision of this Article 6, if there is a net decrease in Partnership
Minimum Gain during any Partnership Year, each Holder shall be specially
allocated items of Partnership income and gain for such year (and, if necessary,
subsequent years) in an amount equal to such Holder’s share of the net decrease
in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g).
Allocations pursuant to the previous sentence shall be made in proportion to the
respective amounts required to be allocated to each Holder pursuant thereto. The
items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.4.A(i) is intended to
qualify as a “minimum gain chargeback” within the meaning of Regulations
Section 1.704-2(f) and shall be interpreted consistently therewith.

(ii) Partner Minimum Gain Chargeback. Except as otherwise provided in
Regulations Section 1.704-2(i)(4) or in Section 6.4.A(i) hereof, if there is a
net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt
during any Partnership Year, each Holder who has a share of the Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(5), shall be specially allocated items of
Partnership income and gain for such year (and, if necessary, subsequent years)
in an amount equal to such Holder’s share of the net decrease in Partner Minimum
Gain attributable to such Partner Nonrecourse Debt, determined in accordance
with Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Holder pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and
1.704-2(j)(2). This Section 6.4.A(ii) is intended to qualify as a “chargeback of
partner nonrecourse debt minimum gain” within the meaning of Regulations
Section 1.704-2(i) and shall be interpreted consistently therewith.

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

(iv) Qualified Income Offset. If any Holder unexpectedly receives an adjustment,
allocation or distribution described in Regulations Section 1.704-

 

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1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be
specially allocated, in accordance with Regulations
Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient
to eliminate, to the extent required by such Regulations, the Adjusted Capital
Account Deficit of such Holder as quickly as possible, provided that an
allocation pursuant to this Section 6.4.A(iv) shall be made if and only to the
extent that such Holder would have an Adjusted Capital Account Deficit after all
other allocations provided in this Article 6 have been tentatively made as if
this Section 6.4.A(iv) were not in the Agreement. It is intended that this
Section 6.4.A(iv) qualify and be construed as a “qualified income offset” within
the meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
consistently therewith.

(v) Gross Income Allocation. In the event that any Holder has a deficit Capital
Account at the end of any Partnership Year that is in excess of the sum of
(1) the amount (if any) that such Holder is obligated to restore to the
Partnership upon complete liquidation of such Holder’s Partnership Interest
(including, the Holder’s interest in outstanding Partnership Preferred Units and
other Partnership Units) and (2) the amount that such Holder is deemed to be
obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the
penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5),
each such Holder shall be specially allocated items of Partnership income and
gain in the amount of such excess to eliminate such deficit as quickly as
possible, provided that an allocation pursuant to this Section 6.4.A(v) shall be
made if and only to the extent that such Holder would have a deficit Capital
Account in excess of such sum after all other allocations provided in this
Article 6 have been tentatively made as if this Section 6.4.A(v) and
Section 6.4.A(iv) hereof were not in the Agreement.

(vi) Limitation on Allocation of Net Loss. To the extent that any allocation of
Net Loss would cause or increase an Adjusted Capital Account Deficit as to any
Holder, such allocation of Net Loss shall be reallocated (x) first, among the
other Holders of Partnership Common Units in accordance with their respective
Percentage Interests with respect to Partnership Common Units and
(y) thereafter, among the Holders of other classes of Partnership Units as
determined by the General Partner, subject to the limitations of this
Section 6.4.A(vi).

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

 

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(viii) Curative Allocations. The allocations set forth in Sections 6.4.A(i),
(ii), (iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory Allocations”) are
intended to comply with certain regulatory requirements, including the
requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Sections 6.1 and 6.2 hereof, the Regulatory Allocations shall be
taken into account in allocating other items of income, gain, loss and deduction
among the Holders so that to the extent possible without violating the
requirements giving rise to the Regulatory Allocations, the net amount of such
allocations of other items and the Regulatory Allocations to each Holder shall
be equal to the net amount that would have been allocated to each such Holder if
the Regulatory Allocations had not occurred.

 

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

Section 6.5 Tax Allocations.

 

A. In General. Except as otherwise provided in this Section 6.5, for income tax
purposes under the Code and the Regulations, each Partnership item of income,
gain, loss and deduction (collectively, “Tax Items”) shall be allocated among
the Holders in the same manner as its correlative item of “book” income, gain,
loss or deduction is allocated pursuant to Sections 6.2, 6.3 and 6.4 hereof.

 

B. Section 704(c) Allocations. Notwithstanding Section 6.5.A hereof, Tax Items
with respect to Property that is contributed to the Partnership with an initial
Gross Asset Value that varies from its basis in the hands of the contributing
Partner immediately preceding the date of contribution shall be allocated among
the Holders for income tax purposes pursuant to Regulations promulgated under
Code Section 704(c) so as to take into account such variation. The Partnership
shall account for such variation under any method approved under Code
Section 704(c) and the applicable Regulations as chosen by the General Partner.
In the event that the Gross Asset Value of any Partnership asset is adjusted
pursuant to subsection (b) of the definition of “Gross Asset Value” (provided in
Article 1 hereof), subsequent allocations of Tax Items with respect to such
asset shall take account of the variation, if any, between the adjusted basis of
such asset and its Gross Asset Value in a manner consistent with Code
Section 704(c) and the applicable Regulations and using the method chosen by the
General Partner. Allocations pursuant to this Section 6.5.B are solely for
purposes of federal, state and local income taxes and shall not affect, or in
any way be taken into account in computing, any Partner’s Capital Account or
share of Net Income, Net Loss, or any other items or distributions pursuant to
any provision of this Agreement.

 

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ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management.

 

A. Except as otherwise expressly provided in this Agreement, including any
Partnership Unit Designation, all management powers over the business and
affairs of the Partnership are and shall be exclusively vested in the General
Partner, and no Limited Partner, in its capacity as a Limited Partner, shall
have any right to participate in or exercise control or management power over
the business and affairs of the Partnership (provided, however, that the Special
Limited Partner, in its capacity as the sole member of the General Partner and
not in its capacity as a limited partner of the Partnership, may have the power
to direct the actions of the General Partner with respect to the Partnership).
No General Partner may be removed by the Partners, with or without cause, except
with the Consent of the General Partner, which it may give or withhold at its
sole and absolute discretion. In addition to the powers now or hereafter granted
a general partner of a limited partnership under applicable law or that are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to the other provisions hereof including, without
limitation, Section 3.2 and Section 7.3, and the rights of any Holder of any
Partnership Interest set forth in a Partnership Unit Designation, shall have
full and exclusive power and authority, in its sole and absolute discretion,
without the consent or approval of any Limited Partner, to do or authorize all
things deemed necessary or desirable by it to conduct the business and affairs
of the Partnership and the General Partner, to exercise or direct the exercise
of all of the powers of the Partnership under the Act and this Agreement and to
effectuate the purposes of the Partnership including, without limitation:

(1) the making of any expenditures, the lending or borrowing of money or selling
of assets (including, without limitation, making prepayments on loans and
borrowing money to permit the Partnership to make distributions to the Holders
in such amounts as will permit the Special Limited Partner (so long as the
Special Limited Partner qualifies as a REIT) (a) to prevent the imposition of
any federal income tax on the Special Limited Partner (including, for this
purpose, any excise tax pursuant to Code Section 4981), (b) to make
distributions to its stockholders and (c) payments to any taxing authority
sufficient to permit the Special Limited Partner to maintain REIT status or
otherwise to satisfy the REIT Requirements), the assumption or guarantee of, or
other contracting for, indebtedness and other liabilities, the issuance of
evidences of indebtedness (including the securing of same by deed to secure
debt, mortgage, deed of trust or other lien or encumbrance on the Partnership’s
assets) and the incurring of any obligations that the General Partner deems
necessary for the conduct of the activities of the Partnership;

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

(3) the taking of any and all acts necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” under Code
Section 7704;

(4) subject to Section 11.2 hereof, the acquisition, sale, transfer, exchange or
other disposition of any, all or substantially all of the assets (including the
goodwill) of the Partnership (including, but not limited to, the exercise or
grant of any conversion, option, privilege or

 

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subscription right or any other right available in connection with any assets at
any time held by the Partnership) or the merger, consolidation, reorganization
or other combination of the Partnership with or into another entity;

(5) the mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership, the assignment of any assets of the Partnership in trust for
creditors or on the promise of the assignee to pay the debts of the Partnership,
the use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement and on any
terms that the General Partner sees fit, including, without limitation, the
financing of the operations and activities of the General Partner, the
Partnership or any of the Partnership’s Subsidiaries, the lending of funds to
other Persons (including, without limitation, the General Partner and/or the
Partnership’s Subsidiaries) and the repayment of obligations of the Partnership,
its Subsidiaries and any other Person in which the Partnership has an equity
investment, and the making of capital contributions to and equity investments in
the Partnership’s Subsidiaries;

(6) the management, operation, leasing, landscaping, repair, alteration,
demolition, replacement or improvement of any Property;

(7) the negotiation, execution and performance of any contracts, including
leases (including ground leases), easements, management agreements, rights of
way and other property-related agreements, conveyances or other instruments that
the General Partner considers useful or necessary to the conduct of the
Partnership’s operations or the implementation of the General Partner’s powers
under this Agreement, including contracting with contractors, developers,
consultants, governmental authorities, accountants, legal counsel, other
professional advisors and other agents and the payment of their expenses and
compensation, as applicable, out of the Partnership’s assets;

(8) the distribution of Partnership cash or other Partnership assets in
accordance with this Agreement, the holding, management, investment and
reinvestment of cash and other assets of the Partnership, and the collection and
receipt of revenues, rents and income of the Partnership;

(9) the selection and dismissal of employees of the Partnership (if any) or the
General Partner (if any) (including, without limitation, employees having titles
or offices such as “president,” “vice president,” “secretary” and “treasurer”),
and agents, outside attorneys, accountants, consultants and contractors of the
Partnership or the General Partner and the determination of their compensation
and other terms of employment or hiring;

(10) the maintenance of such insurance (including, without limitation, directors
and officers insurance) for the benefit of the Partnership and the Partners
(including, without limitation, the Special Limited Partner) as the General
Partner deems necessary or appropriate;

(11) the formation of, or acquisition of an interest in, and the contribution of
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, any Subsidiary and any other Person in which the
General Partner has an equity investment from time to time); provided, however,
that, as long as the Special Limited Partner has determined to continue to
qualify as a REIT, the Partnership will not

 

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engage in any such formation, acquisition or contribution that would cause the
Special Limited Partner to fail to qualify as a REIT;

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

(13) the undertaking of any action in connection with the Partnership’s direct
or indirect investment in any Subsidiary or any other Person (including, without
limitation, the contribution or loan of funds by the Partnership to such
Persons);

(14) the determination of the fair market value of any Partnership property
distributed in kind using such reasonable method of valuation as the General
Partner may adopt; provided, however, that such methods are otherwise consistent
with the requirements of this Agreement;

(15) the enforcement of any rights against any Partner pursuant to
representations, warranties, covenants and indemnities relating to such
Partner’s contribution of property or assets to the Partnership;

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

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

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

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

(20) the issuance of additional Partnership Units in connection with Capital
Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereof;

 

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(21) an election to dissolve the Partnership pursuant to Section 13.1.B hereof;

(22) the distribution of cash to acquire Partnership Common Units held by a
Limited Partner in connection with a Redemption under Section 15.1 hereof;

(23) an election to require the Special Limited Partner to acquire Tendered
Units in exchange for REIT Shares;

(24) Any update to Exhibit A hereto to reflect accurately at all times the
Capital Contributions and Percentage Interests of the Partners as the same are
adjusted from time to time to the extent necessary to reflect redemptions,
Capital Contributions, the issuance of Partnership Units, the admission of any
Additional Limited Partner or any Substituted Limited Partner or otherwise,
which update, notwithstanding anything in this Agreement to the contrary, shall
not be deemed an amendment to this Agreement, as long as the matter or event
being reflected in Exhibit A hereto otherwise is authorized by this Agreement;
and

(25) the registration of any class of securities of the Partnership under the
Securities Act or the Exchange Act, and the listing of any debt securities of
the Partnership on any exchange.

B. Each of the Limited Partners agrees that, except as provided in Section 7.3
hereof and subject to the rights of any Holder of any Partnership Interest set
forth in a Partnership Unit Designation, the General Partner, in its sole and
absolute discretion, is authorized to execute, deliver and perform the
above-mentioned agreements and transactions on behalf of the Partnership, and
otherwise to exercise any power of the General Partner under this Agreement and
the Act, without any further act, approval or vote of the Partners or any other
Persons, notwithstanding any other provision of the Act or any applicable law,
rule or regulation, and, for so long as the Special Limited Partner is the sole
member of the General Partner and in the absence of any specific corporate
action on the part of the Special Limited Partner, or any specific limited
liability company action of the General Partner, to the contrary, the taking of
any such action or the execution of any such document or writing by an officer
of the Special Limited Partner, in the name and on behalf of the Special Limited
Partner, in the Special Limited Partner’s capacity as the sole member of the
General Partner, in the General Partner’s capacity as the general partner of the
Partnership, shall conclusively evidence (1) the approval thereof by the General
Partner, in its capacity as the general partner of the Partnership, (2) the
General Partner’s determination that such action, document or writing is
necessary or desirable to conduct the business and affairs of the Partnership,
exercise the powers of the Partnership under this Agreement and the Act or
effectuate the purposes of the Partnership, or any other determination by the
General Partner required by this Agreement in connection with the taking of such
action or execution of such document or writing, (3) the authority of such
officer with respect thereto, and (4) the authorization of such document or
writing under this Agreement. The Partnership is hereby authorized to execute,
deliver and perform, and the General Partner on behalf of the Partnership is
hereby authorized to execute and deliver, an Underwriting Agreement relating to
the issuance and sale of common stock of the Special Limited Partner and all
documents, agreements or certificates contemplated thereby or related thereto,
all without any further act, vote or approval of any other Person
notwithstanding any other provision of this Agreement. The foregoing
authorization shall not be deemed a restriction on the powers of the General
Partner to enter into other agreements on behalf of the Partnership.

 

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C. At all times from and after the date hereof, the General Partner may cause
the Partnership to obtain and maintain (i) casualty, liability and other
insurance on the Properties and (ii) liability insurance for the Indemnitees
hereunder.

 

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

 

E. In exercising its authority under this Agreement, the General Partner may,
but shall be under no obligation to (except as otherwise provided by this
Agreement with respect to the qualification of the Special Limited Partner as a
REIT), take into account the tax consequences to any Partner of any action taken
(or not taken) by it. The General Partner, the Special Limited Partner and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement.

 

F. The determination as to any of the following matters, made by or at the
direction of the General Partner consistent with the this Agreement and the Act,
shall be final and conclusive and shall be binding upon the Partnership and
every Limited Partner and shall not constitute a breach of this Agreement, of
any agreement contemplated herein or therein, or of any duty existing at law, in
equity or otherwise, including any fiduciary duty: the amount of assets at any
time available for distribution or the redemption of Partnership Common Units;
the amount and timing of any distribution; the amount, purpose, time of
creation, increase or decrease, alteration or cancellation of any reserves or
charges and the propriety thereof (whether or not any obligation or liability
for which such reserves or charges shall have been created shall have been paid
or discharged); the amount of any Partner’s Capital Account, Adjusted Capital
Account or Adjusted Capital Account Deficit; the amount of Net Income, Net Loss
or Depreciation for any period; the Gross Asset Value of any Partnership asset;
the Value of any REIT Share; any interpretation of the terms, preferences,
conversion or other rights, voting powers or rights, restrictions, limitations
as to dividends or distributions, qualifications or terms or conditions of
redemption of any class or series of Partnership Interest; the fair value, or
any sale, bid or asked price to be applied in determining the fair value, of any
asset owned or held by the Partnership or of any Partnership Interest; the
number of authorized or outstanding Units of any class or series; any matter
relating to the acquisition, holding and disposition of any assets by the
Partnership; or any other matter relating to the business and affairs of the
Partnership or required or permitted by applicable law, this Agreement or
otherwise to be determined by the General Partner.

Section 7.2 Certificate of Limited Partnership. To the extent that such action
is determined by the General Partner to be reasonable and necessary or
appropriate, the General Partner shall file amendments to and restatements of
the Certificate and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other state, the
District of Columbia or any other jurisdiction, in which the Partnership may
elect to do business or own property. Subject to the terms of Section 8.5.A
hereof, the General Partner shall not be required, before or after filing, to
deliver or mail a copy of the Certificate or any amendment thereto to any
Limited Partner. The General Partner shall use all reasonable efforts to cause
to be filed such other certificates or documents as may be reasonable and
necessary or appropriate for the formation,

 

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continuation, qualification and operation of a limited partnership (or a
partnership in which the limited partners have limited liability to the extent
provided by applicable law) in the State of Delaware and any other state, or the
District of Columbia or other jurisdiction, in which the Partnership may elect
to do business or own property.

Section 7.3 Restrictions on General Partner’s Authority.

 

A. The General Partner may not take any action in contravention of an express
prohibition or limitation of this Agreement without the Consent of the Limited
Partners, and may not, without limitation:

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

(2) perform any act that would subject a Limited Partner to liability as a
general partner in any jurisdiction or any other liability except as provided
herein or under the Act.

 

B. Except as provided in Section 7.3.C hereof, the General Partner shall not,
without the prior Consent of the Limited Partners, amend, modify or terminate
this Agreement.

 

C. Notwithstanding Section 7.3.B and 14.2 hereof but subject to the rights of
any Holder of any Partnership Interest set forth in a Partnership Unit
Designation, the General Partner shall have the power, without the Consent of
the Limited Partners, to amend this Agreement as may be required to facilitate
or implement any of the following purposes:

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

(2) to reflect the admission, substitution or withdrawal of Partners, a Transfer
or any other redemption, conversion or purchase of any Partnership Interest, the
termination of the Partnership in accordance with this Agreement and to update
Exhibit A in connection with such admission, substitution, withdrawal, Transfer,
adjustment or other event;

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

(4) to set forth or amend the designations, preferences, conversion or other
rights, voting powers, restrictions, limitations as to distributions,
qualifications or terms or conditions of redemption of the Holders of any
additional Partnership Interests issued pursuant to Article 4, including as
contemplated by Section 4.2.A and Section 5.5;

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

 

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(6) (a) to reflect such changes as are reasonably necessary for the Special
Limited Partner to maintain its status as a REIT or to satisfy the REIT
Requirements, or (b) to reflect the Transfer of all or any part of a Partnership
Interest among the Special Limited Partner and any Disregarded Entity with
respect to the Special Limited Partner;

(7) to modify either or both of the manner in which items of Net Income or Net
Loss are allocated pursuant to Article 6 or the manner in which Capital Accounts
are adjusted, computed, or maintained (but in each case only to the extent
otherwise provided in this Agreement and as may be permitted under applicable
law);

(8) to reflect the issuance of additional Partnership Interests in accordance
with Section 4.2;

(9) to reflect any modification to this Agreement permitted by Section 4.4.A or
any other provision of this Agreement that authorizes the General Partner to
make amendments without the consent of any other Person; and

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

 

D. Notwithstanding Sections 7.3.B, 7.3.C and 14.2 hereof, this Agreement shall
not be amended, and no action may be taken by the General Partner, without the
Consent of each Partner adversely affected thereby, if such amendment or action
would (i) convert a Limited Partner Interest in the Partnership into a General
Partner Interest (except as a result of the General Partner acquiring such
Partnership Interest), (ii) modify the limited liability of a Limited Partner,
(iii) alter the rights of any Partner to receive the distributions to which such
Partner is entitled pursuant to Article 5 or Section 13.2.A(4) hereof, or alter
the allocations specified in Article 6 hereof (except, in any case, as permitted
pursuant to Sections 4.2, 5.5, 7.3.C and Article 6 hereof), (iv) alter or modify
the Redemption rights, Cash Amount or REIT Shares Amount as set forth in
Section 15.1 hereof, or amend or modify any related definitions, (v) subject to
Section 7.9.D, remove, alter or amend the powers and restrictions related to
REIT Requirements or permitting the Special Limited Partner to avoid paying tax
under Code Sections 857 or 4981 contained in Sections 3.2, 7.1 and 7.3, or
(vi) amend this Section 7.3.D. Any such amendment or action consented to by any
Partner shall be effective as to that Partner, notwithstanding the absence of
such consent by any other Partner. Further, no amendment may alter the
restrictions on the General Partner’s powers expressly set forth elsewhere in
this Agreement (including, without limitation, this Section 7.3) without the
Consent specified therein.

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

 

A. Neither the General Partner nor the Special Limited Partner shall be
compensated for its services as general partner or limited partner of the
Partnership except as provided in this Agreement (including the provisions of
Articles 5 and 6 hereof regarding distributions, payments and allocations to
which the General Partner or Special Limited Partner may be entitled in its
capacity as the General Partner or the Special Limited Partner, as applicable).

 

B.

Subject to Sections 7.4.D and 15.12 hereof, the Partnership shall be responsible
for and shall pay all expenses relating to the Partnership’s, the Special
Limited Partner’s and the General Partner’s

 

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  organization and the ownership of each of their assets and operations. The
General Partner is hereby authorized to cause the Partnership to pay
compensation for accounting, administrative, legal, technical, management and
other services rendered to the Partnership. The Partnership shall be liable for,
and shall reimburse the General Partner or the Special Limited Partnership, as
applicable, on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all sums expended in
connection with the Partnership’s business, including, without limitation,
(i) expenses relating to the ownership of interests in and management and
operation of the Partnership, (ii) compensation of officers and employees,
including, without limitation, payments under future compensation plans, of the
Special Limited Partner, the General Partner, or the Partnership that may
provide for stock units, or phantom stock, pursuant to which employees of the
Special Limited Partner, the General Partner, or the Partnership will receive
payments based upon dividends on or the value of REIT Shares, (iii) director
fees and expenses of the Special Limited Partner or its Affiliates, (iv) any
expenses (other than the purchase price) incurred by the Special Limited Partner
in connection with the redemption or other repurchase of REIT Shares or Capital
Shares, and (v) all costs and expenses of the Special Limited Partner being a
public company, including, without limitation, costs of filings with the SEC,
reports and other distributions to its stockholders; provided, however, that the
amount of any reimbursement shall be reduced by any interest earned by the
General Partner or the Special Limited Partner with respect to bank accounts or
other instruments or accounts held by it on behalf of the Partnership as
permitted pursuant to Section 7.5 hereof. The Partners acknowledge that all such
expenses of the General Partner and the Special Limited Partner are deemed to be
for the benefit of the Partnership. Such reimbursements shall be in addition to
any reimbursement of the General Partner and the Special Limited Partner as a
result of indemnification pursuant to Section 7.7 hereof.

 

C.

If the Special Limited Partner shall elect to purchase from its stockholders
REIT Shares or Capital Shares for the purpose of delivering such REIT Shares or
Capital Shares to satisfy an obligation under any dividend reinvestment program
adopted by the Special Limited Partner, any employee stock purchase plan adopted
by the Special Limited Partner or any similar obligation or arrangement
undertaken by the Special Limited Partner in the future, in lieu of the
treatment specified in Section 4.7.B., the purchase price paid by the Special
Limited Partner for such REIT Shares or Capital Shares shall be considered
expenses of the Partnership and shall be advanced to the Special Limited Partner
or reimbursed to the Special Limited Partner, subject to the condition that:
(1) if such REIT Shares subsequently are sold by the Special Limited Partner,
the Special Limited Partner shall pay or cause to be paid to the Partnership any
proceeds received by the Special Limited Partner for such REIT Shares (which
sales proceeds shall include the amount of dividends reinvested under any
dividend reinvestment or similar program; provided, that a transfer of REIT
Shares for Partnership Common Units pursuant to Section 15.1 would not be
considered a sale for such purposes); and (2) if such REIT Shares are not
retransferred by the Special Limited Partner within 30 days after the purchase
thereof, or the Special Limited Partner otherwise determines not to retransfer
such REIT Shares, the Partnership shall redeem from the Special Limited Partner
a number of Partnership Common Units determined in accordance with
Section 4.7.B, as adjusted, to the extent the General Partner determines is
necessary or advisable in its sole and absolute discretion, (x) pursuant to
Section 7.5 (in the event the Special Limited Partner acquires material assets,
other than on behalf of the Partnership) and (y) for stock dividends and
distributions, stock splits and subdivisions, reverse stock splits and
combinations, distributions of rights, warrants or options, and distributions of
evidences of indebtedness or

 

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  assets relating to assets not received by the Special Limited Partner pursuant
to a pro rata distribution by the Partnership (in which case such advancement or
reimbursement of expenses shall be treated as having been made as a distribution
in redemption of such number of Partnership Units held by the Special Limited
Partner).

 

D. To the extent practicable, Partnership expenses shall be billed directly to
and paid by the Partnership and, subject to Section 15.12 hereof, if and to the
extent any reimbursements to the General Partner, the Special Limited Partner or
any of its Affiliates by the Partnership pursuant to this Section 7.4 constitute
gross income to such Person (as opposed to the repayment of advances made by
such Person on behalf of the Partnership), such amounts shall be treated as
“guaranteed payments” within the meaning of Code Section 707(c) and shall not be
treated as distributions for purposes of computing the Partners’ Capital
Accounts.

Section 7.5 Outside Activities of the General Partner and the Special Limited
Partner. Neither the General Partner nor the Special Limited Partner shall
directly or indirectly enter into or conduct any business, other than in
connection with, (a) the ownership, acquisition and disposition of Partnership
Interests, (b) with respect to the General Partner, the management of the
business and affairs of the Partnership, (c) with respect to the Special Limited
Partner, the operation of the Special Limited Partner as a reporting company
with a class (or classes) of securities registered under the Exchange Act,
(d) with respect to the Special Limited Partner, its operations as a REIT,
(e) with respect to the Special Limited Partner, the offering, sale,
syndication, private placement or public offering of stock, bonds, securities or
other interests, (f) financing or refinancing of any type related to the
Partnership or its assets or activities, and (g) such activities as are
incidental thereto; provided, however, that, except as otherwise provided
herein, any funds raised by the Special Limited Partner pursuant to the
preceding clauses (e) and (f) shall be made available to the Partnership,
whether as Capital Contributions, loans or otherwise, as appropriate, and,
provided, further that each of the General Partner and the Special Limited
Partner may, in its sole and absolute discretion, from time to time hold or
acquire assets in its own name or otherwise other than through the Partnership
so long as the General Partner or the Special Limited Partner, as applicable,
takes commercially reasonable measures to ensure that the economic benefits and
burdens of such Property are otherwise vested in the Partnership, through
assignment, mortgage loan or otherwise or, if it is not commercially reasonable
to vest such economic interests in the Partnership, the Partners shall negotiate
in good faith to amend this Agreement, including, without limitation, the
definition of “Adjustment Factor,” to reflect such activities and the direct
ownership of assets by the General Partner or the Special Limited Partner, as
applicable. Nothing contained herein shall be deemed to prohibit the General
Partner from executing guarantees of Partnership debt. The General Partner, the
Special Limited Partner and all Disregarded Entities with respect to the Special
Limited Partner, taken as a group, shall not own any assets or take title to
assets (other than temporarily in connection with an acquisition prior to
contributing such assets to the Partnership) other than (i) interests in
Disregarded Entities with respect to the Special Limited Partner,
(ii) Partnership Interests as the General Partner or Special Limited Partner,
(iii) a minority interest in any Subsidiary of the Partnership that the General
Partner or the Special Limited Partner holds to maintain such Subsidiary’s
status as a partnership for federal income tax purposes or otherwise, and
(iv) such cash and cash equivalents, bank accounts or similar instruments or
accounts as such group deems reasonably necessary, taking into account
Section 7.1.D hereof and the requirements necessary for the Special Limited
Partner to qualify as a REIT and for the General Partner and the Special Limited
Partner to carry

 

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out their respective responsibilities contemplated under this Agreement and the
Charter. Any Limited Partner Interests acquired by the General Partner, shall be
automatically converted into a General Partner Interest comprised of an
identical number of Partnership Units with the same terms as the class or series
so acquired. Any Affiliates of the General Partner may acquire Limited Partner
Interests and shall, except as expressly provided in this Agreement, be entitled
to exercise all rights of a Limited Partner relating to such Limited Partner
Interests.

Section 7.6 Transactions with Affiliates.

 

A. The Partnership may lend or contribute funds to, and borrow funds from,
Persons in which the Partnership has an equity investment, and such Persons may
borrow funds from, and lend or contribute funds to, 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 Person.

 

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

 

C. The General Partner, the Special Limited Partner and their respective
Affiliates may sell, transfer or convey any property to, or purchase any
property from, the Partnership, directly or indirectly, on terms and conditions
established by the General Partner in its sole and absolute discretion.

 

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

Section 7.7 Indemnification.

 

A.

To the fullest extent permitted by applicable law, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
reasonable attorney’s fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, whether
by or in the right of the Partnership or otherwise (subject to (y) below) that
relate to the operations of the Partnership (“Actions”) as set forth in this
Agreement in which such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise; provided, however, that the Partnership shall
not indemnify an Indemnitee (i) if the act or omission of the Indemnitee was
material to the matter giving rise to the Action and either was committed in bad
faith or was the result of active and deliberate dishonesty; (ii) in the case of
any criminal proceeding, if the Indemnitee had reasonable cause to believe that
the act or omission was unlawful; or (iii) for any loss resulting from any
transaction for which such Indemnitee actually received an improper

 

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  personal benefit in money, property or services or otherwiese in violation or
breach of any provision of this Agreement; and provided, further, that no
payments pursuant to this Agreement shall be made by the Partnership (x) to
indemnify or advance expenses to any Indemnitee with respect to any Action
initiated or brought voluntarily by such Indemnitee (and not by way of defense)
unless (I) approved or authorized by the General Partner or (II) incurred to
establish or enforce such Indemnitee’s right to indemnification under this
Agreement, (y) to advance expenses in connection with one or more Actions or
claims brought by or in the right of the Partnership or (z) to indemnify an
Indemnitee in connection with one or more Actions involving such Indemnitee if
such Indemnitee is found liable to the Partnership with respect to such claim or
Action. If Indemnitee is entitled to indemnification hereunder with respect to
one or more but less than all claims, issues or matters in any Action, the
Partnership shall provide indemnification hereunder in connection with each such
claim, issue or matter, allocated on a reasonable and proportionate basis.

Without limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of
the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, in its sole and absolute discretion on behalf of the
Partnership, to enter into one or more indemnity agreements consistent with the
provisions of this Section 7.7 in favor of any Indemnitee having or potentially
having liability for any such indebtedness. It is the intention of this
Section 7.7.A that the Partnership indemnify each Indemnitee to the fullest
extent permitted by law and this Agreement. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.7.A.
The termination of any proceeding by conviction of an Indemnitee or upon a plea
of nolo contendere or its equivalent by an Indemnitee, or an entry of an order
of probation against an Indemnitee prior to judgment, does not create a
presumption that such Indemnitee acted in a manner contrary to that specified in
this Section 7.7.A with respect to the subject matter of such proceeding. Any
indemnification pursuant to this Section 7.7 shall be made only out of the
assets of the Partnership, and neither the General Partner nor any other Holder
shall have any obligation to pay or otherwise satisfy such indemnification
obligation or to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.7.

 

B. To the fullest extent permitted by law, expenses incurred by an Indemnitee
who is a party to a proceeding or otherwise subject to or the focus of or is
involved in any Action shall be paid or reimbursed by the Partnership as
incurred by the Indemnitee in advance of the final disposition of the Action
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee
of the Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in Section 7.7.A has been met,
and (ii) a written undertaking by or on behalf of the Indemnitee to repay the
amount if it shall ultimately be determined that the standard of conduct has not
been met.

 

C.

The indemnification provided by this Section 7.7 shall be in addition to any
other rights to which an Indemnitee or any other Person may be entitled under
any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has

 

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  ceased to serve in such capacity and shall inure to the benefit of the heirs,
successors, assigns and administrators of the Indemnitee unless otherwise
provided in a written agreement with such Indemnitee or in the writing pursuant
to which such Indemnitee is indemnified.

 

D. The Partnership may, but shall not be obligated to, purchase and maintain
insurance, on behalf of any of the Indemnitees and such other Persons as the
General Partner shall determine, against any liability that may be asserted
against or expenses that may be incurred by such Person in connection with the
Partnership’s activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of
this Agreement.

 

E. Any liabilities which an Indemnitee incurs as a result of acting on behalf of
the Partnership, the General Partner or the Special Limited Partner (whether as
a fiduciary or otherwise) in connection with the operation, administration or
maintenance of an employee benefit plan or any related trust or funding
mechanism (whether such liabilities are in the form of excise taxes assessed by
the IRS, penalties assessed by the U.S. Department of Labor, restitutions to
such a plan or trust or other funding mechanism or to a participant or
beneficiary of such plan, trust or other funding mechanism, or otherwise) shall
be treated as liabilities or judgments or fines under this Section 7.7, unless
such liabilities arise as a result of (i) an act or omission of such Indemnitee
that was material to the matter giving rise to the Action and either was
committed in bad faith or was the result of active and deliberate dishonesty;
(ii) in the case of any criminal proceeding, an act or omission that such
Indemnitee had reasonable cause to believe was unlawful, or (iii) any
transaction in which such Indemnitee actually received an improper personal
benefit in violation or breach of any provision of this Agreement.

 

F. In no event may an Indemnitee subject any of the Holders to personal
liability by reason of the indemnification provisions set forth in this
Agreement.

 

G. An Indemnitee shall not be denied indemnification in whole or in part under
this Section 7.7 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.

 

H. The provisions of this Section 7.7 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons. Any amendment,
modification or repeal of this Section 7.7 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the
Partnership’s liability to any Indemnitee under this Section 7.7 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

 

I. It is the intent of the parties that any amounts paid by the Partnership to
the General Partner or the Special Limited Partner pursuant to this Section 7.7
shall be treated as “guaranteed payments” within the meaning of Code
Section 707(c) and shall not be treated as distributions for purposes of
computing the Partners’ Capital Accounts.

 

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

 

A. To the fullest extent permitted by law: (i) The General Partner (and the
Special Limited Partner, as the sole member of the General Partner) is acting
for the benefit of not only the Partnership and the Partners, but also the
Special Limited Partner’s stockholders collectively; (ii) in the event of a
conflict between the interests of the Partnership or any Partner, on the one
hand, and the separate interests of the Special Limited Partner or its
stockholders, on the other hand, the General Partner and the Special Limited
Partner, as the sole member of the General Partner, are under no obligation not
to give priority to the separate interests of the Special Limited Partner or the
stockholders of the Special Limited Partner and may give priority to the
separate interests of the Special Limited Partner and its stockholders in a
manner that is adverse to the Partnership and its Partners, and any action or
failure to act on the part of the Special Limited Partner or its directors that
gives priority to the separate interests of the Special Limited Partner or its
stockholders does not violate the duty of loyalty otherwise owed by the General
Partner or the Special Limited Partner, as the sole member of the General
Partner, to the Partnership and/or the Partners or any other Person bound by
this Agreement; and (iii) neither the General Partner nor the Special Limited
Partner shall be liable to the Partnership or to any Partner or any other Person
bound by this Agreement for monetary damages for losses sustained, liabilities
incurred or benefits not derived by the Partnership or any Partner in connection
with such decisions, except for liability for the General Partner’s or the
Special Limited Partner’s intentional harm or gross negligence. In furtherance
and not in limitation of the foregoing, to the fullest extent permitted by law
and notwithstanding any other provision of this Agreement or any other agreement
contemplated herein or applicable provisions of law or equity or otherwise,
whenever a conflict arises between the interests of stockholders of the Special
Limited Partner, on one hand, and any other Limited Partner, on the other hand,
the General Partner will endeavor in good faith to resolve the conflict in a
manner not adverse to either the stockholders of the Special Limited Partner or
any other Limited Partner; provided, however, that for so long as the Special
Limited Partner owns a controlling interest in the Partnership, any conflict
that cannot be resolved in a manner not adverse to either the stockholders of
the Special Limited Partner or any other Limited Partner shall be resolved in
favor of the stockholders of the Special Limited Partner, and any action taken
by the General Partner in connection with any such conflict of interests shall
not constitute a breach of this Agreement or any duty in law, at equity or
otherwise.

 

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

 

C.

Any obligation or liability whatsoever of the General Partner or the Partnership
which may arise at any time under this Agreement or any other instrument,
transaction, or undertaking contemplated hereby shall be satisfied, if at all,
out of the assets of the General Partner or the Partnership only. To the fullest
extent permitted by law, no such obligation or liability shall be personally
binding upon, nor shall resort for the enforcement thereof be had to, any of the
General Partner’s members, managers or agents, or the directors, officers,
stockholders, employees or agents of the General Partner’s members or managers,
regardless of whether such

 

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  obligation or liability is in the nature of contract, tort or otherwise.
Notwithstanding anything to the contrary set forth in this Agreement, none of
the members, managers or agents of the General Partner, and none of the
directors, officers, stockholders, employees or agents of the General Partner’s
members or managers, shall be liable or accountable in damages or otherwise to
the Partnership, any Partners, or any other Person bound by this Agreement for
losses sustained, liabilities incurred or benefits not derived as a result of
errors in judgment or mistakes of fact or law or of any act or omission, except
for liability for such Person’s intentional harm or gross negligence.

 

D. Any amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the liability of the General Partner or the members, managers or agents of
the General Partner, the Special Limited Partner, or of the directors, officers,
stockholders, employees or agents of the Special Limited Partner, or the
Indemnitiees, to the Partnership, the Partners or any other Person bound by this
Agreement under this Section 7.8 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

 

E. Notwithstanding anything herein to the contrary, except for liability for
intentional harm or gross negligence on the part of such Partner or pursuant to
any express indemnities given to the Partnership by any Partner pursuant to any
other written instrument to the fullest extent permitted by law, no Partner
shall have any personal liability whatsoever, to the Partnership or to the other
Partners or to any other Person bound by this Agreement, including any damages
arising out of the breach of any such Partner’s fiduciary duties as such duties
may have been modified by this Agreement. Without limitation of the foregoing,
no property or assets of such Partner, other than its interest in the
Partnership, shall be subject to levy, execution or other enforcement procedures
for the satisfaction of any judgment (or other judicial process) in favor of any
other Partner(s) or any other Person bound by this Agreement and arising out of,
or in connection with, this Agreement. This Agreement is executed by the
officers of the Special Limited Partner, in the name and on behalf of the
Special Limited Partner, in its capacity as managing member of the General
Partner, solely as officers of the Special Limited Partner, and not in their own
individual capacities.

 

F. To the extent that, at law or in equity, the General Partner or the Special
Limited Partner, as the managing member of the General Partner or in its
capacity as a Limited Partner, has duties (including fiduciary duties) and
liabilities relating thereto to the Partnership or the Limited Partners, neither
the General Partner nor the Special Limited Partner, as the managing member of
the General Partner or in its capacity as a Limited Partner, shall be liable to
the Partnership or to any other Partner for its good faith reliance on the
provisions of this Agreement. The provisions of this Agreement, to the extent
that they restrict or eliminate the duties and liabilities of the General
Partner, the Special Limited Partner or any other Person under the Act or
otherwise existing at law or in equity, are agreed by the Partners to replace
such other duties and liabilities of the General Partner and the Special Limited
Partner.

 

G.

To the fullest extent permitted by law and notwithstanding any other provision
of this Agreement or any other agreement contemplated herein or applicable
provisions of law or equity or otherwise, whenever in this Agreement any Person
is permitted or required to make a decision

 

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  (i) in its “sole and absolute discretion,” “sole discretion”, “discretion”,
“at its election” or under a grant of similar authority or latitude, such Person
shall be entitled to consider only such interests and factors as it desires,
including its own interests, shall have no duty or obligation to give any
consideration to any interest or factors affecting the Partnership, the
Partners, or any other Person bound by this Agreement, and shall be entitled to
act in a manner adverse to the interests of the Partnership, the Partners or any
other Person bound by this Agreement, or (ii) in its “good faith” or under
another expressed standard, such Person shall act under such express standard
and shall not be subject to any other or different standards imposed by this
Agreement or any other agreement contemplated herein or by relevant provisions
of law or in equity or otherwise. If any question should arise with respect to
the operation of the Partnership, which is not otherwise specifically provided
for in this Agreement or the Act, or with respect to the interpretation of this
Agreement, the General Partner is hereby authorized to make a final
determination with respect to any such question and to interpret this Agreement
in such a manner as it shall deem, in its sole discretion, to be fair and
equitable, and its determination and interpretations so made shall be final and
binding on all parties and shall not constitute a breach of this Agreement, of
any agreement contemplated herein or therein, or of any duty existing at law, in
equity or otherwise, including any fiduciary duty.

 

H. To the fullest extent permitted by applicable law, no Indemnitee shall be
liable to the Partnership, any Partner or any other Person bound by this
Agreement for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnitee in good faith on behalf of the
Partnership and in a manner reasonably believed to be within the scope of the
authority conferred on such Indemnitee by this Agreement, except that an
Indemnitee shall be liable for any such loss, damage or claim incurred by reason
of such Indemnitee’s intentional harm or gross negligence.

Section 7.9 Other Matters Concerning the General Partner and the Special Limited
Partner.

 

A. The General Partner may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture or other paper or
document believed by it in good faith to be genuine and to have been signed or
presented by the proper party or parties.

 

B. The General Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers, architects, engineers, environmental
consultants and other consultants and advisers selected by it, and any act taken
or omitted to be taken in reliance upon the opinion of such Persons as to
matters that the General Partner reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.

 

C. The General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any duly authorized agents or a duly
appointed attorney or attorneys-in-fact (including, without limitation, the
Special Limited Partner). Each such agent or attorney shall, to the extent
authorized by the General Partner, have full power and authority to do and
perform all and every act and duty that is permitted or required to be done by
the General Partner hereunder.

 

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D. Notwithstanding any other provision of this Agreement or the Act, any action
of the General Partner on behalf of the Partnership or any decision of the
General Partner to refrain from acting on behalf of the Partnership, undertaken
in the good faith belief that such action or omission is necessary or advisable
in order (i) to protect the ability of the Special Limited Partner to continue
to qualify as a REIT, (ii) for the Special Limited Partner otherwise to satisfy
the REIT Requirements, (iii) for the Special Limited Partner to avoid incurring
any taxes under Code Section 857 or Code Section 4981, or (iv) for any Special
Limited Partner Affiliate to continue to qualify as a “qualified REIT
subsidiary” (within the meaning of Code Section 856(i)(2)), is expressly
authorized under this Agreement and is deemed approved by all of the Limited
Partners and shall not constitute a breach of this Agreement, of any agreement
contemplated herein or therein, or of any duty existing at law, in equity or
otherwise, including any fiduciary duty.

 

E. To the extent the Special Limited Partner, or its officers or directors, take
any action in the name or on behalf of the General Partner, in the General
Partner’s capacity as the sole general partner of the Partnership, the Special
Limited Partner and its officers and directors shall be entitled to the same
protection as the General Partner and its members, managers and agents.

Section 7.10 Title to Partnership Assets. Title to Partnership assets, whether
real, personal or mixed and whether tangible or intangible, shall be deemed to
be owned by the Partnership as an entity, and no Partner, individually or
collectively with other Partners or Persons, shall have any ownership interest
in such Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of the Partnership, the General
Partner, or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner or the Special Limited 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 or the Special Limited Partner shall be held by
the General Partner or such nominee or Affiliate for the use and benefit of the
Partnership in accordance with the provisions of this Agreement. All Partnership
assets shall be recorded as the property of the Partnership in its books and
records, irrespective of the name in which legal title to such Partnership
assets is held.

Section 7.11 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 the
consent or approval of any other Partner or Person, to encumber, sell or
otherwise use in any manner any and all assets of the Partnership and to enter
into any contracts on behalf of the Partnership, and take any and all actions on
behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership’s sole party in interest, both
legally and beneficially. To the fullest extent permitted by law, each Limited
Partner hereby waives any and all defenses or other remedies that may be
available against such Person to contest, negate or disaffirm any action of the
General Partner in connection with any such dealing. In no event shall any
Person dealing with the General Partner or its representatives be obligated to
ascertain that the terms of this Agreement have been complied with or to inquire
into the necessity or expediency of any act or action of the General Partner or
its representatives. Each and every certificate, document or other instrument
executed on behalf of the Partnership by the General Partner or its
representatives shall be conclusive evidence in favor of any and every Person
relying thereon or claiming thereunder that

 

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(i) at the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1 Limitation of Liability. No Limited Partner, including the Special
Limited Partner, acting in its capacity as such, shall have any liability under
this Agreement except for intentional harm or gross negligence on the part of
such Limited Partner or as expressly provided in this Agreement (including,
without limitation, Section 10.4 hereof) or under the Act.

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

Section 8.3 Outside Activities of Limited Partners. To the fullest extent
permitted by law and notwithstanding any other provision of this Agreement or
any other agreement contemplated herein or applicable provisions of law or
equity or otherwise, subject to any agreements entered into pursuant to
Section 7.6 hereof and any other agreements entered into by a Limited Partner or
any of its Affiliates with the General Partner, the Partnership or a Subsidiary
(including, without limitation, any employment agreement), any Limited Partner
(including, subject to Section 7.5 hereof, the Special Limited Partner) and any
Assignee, officer, director, employee, agent, trustee, Affiliate, member or
stockholder of any Limited Partner shall be entitled to and may have business
interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities that are in direct or
indirect competition with the Partnership or that are enhanced by the activities
of the Partnership. To the fullest extent permitted by law and notwithstanding
any other provision of this Agreement or any other agreement contemplated herein
or applicable provisions of law or equity or otherwise, neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner or the Special Limited Partner, to the extent expressly provided
herein), and such Person shall have no obligation pursuant to this Agreement,
subject to Section 7.6 hereof and any other agreements entered into by a Limited
Partner or its Affiliates with the General Partner, the Partnership or a
Subsidiary, to offer any interest in any such business ventures to the
Partnership, any Limited Partner, or any such other Person, even if such
opportunity is of a character that, if

 

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presented to the Partnership, any Limited Partner or such other Person, could be
taken by such Person. Notwithstanding any other provision of this Agreement, or
any other agreement contemplated herein or applicable provisions of law or
equity or otherwise, to the fullest extent permitted by law, including without
limitation Section 7.1.A and Section 7.5, one or more Affiliates of the Special
Limited Partner may own membership interests or similar equity interests in one
or more Subsidiaries, provided that the aggregate amount of such interests owned
by the Affiliates of the Special Limited Partner in any one Subsidiary shall not
exceed 5% of such Subsidiary’s outstanding membership or similar equity
interests.

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

Section 8.5 Rights of Limited Partners Relating to the Partnership.

 

A. Except as limited by Section 8.5.C hereof, the General Partner shall deliver
to each Limited Partner a copy of any information mailed or electronically
delivered to all of the common stockholders of the Special Limited Partner as
soon as practicable after such mailing.

 

B. The Partnership shall notify any Limited Partner that is a Qualifying Party,
on request, of the then current Adjustment Factor and any change made to the
Adjustment Factor shall be set forth in the quarterly report required by
Section 9.3.B hereof immediately following the date such change becomes
effective.

 

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

 

D.

Upon written request by any Limited Partner, the General Partner shall cause the
ownership of Partnership Units by such Limited Partner to be evidenced by a
certificate for units in such form as the General Partner may determine with
respect to any class of Partnership Units issued from time to time under this
Agreement. Any officer of the General Partner may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the Partnership alleged to have been lost, destroyed,
stolen or mutilated, upon the making of an affidavit of that fact by the person
claiming the certificate to be lost, destroyed, stolen or mutilated. Unless
otherwise determined by an officer of the General Partner, the owner of such
lost, destroyed, stolen or mutilated certificate or certificates, or his or her
legal representative, shall be required, as a condition precedent to the
issuance of a new certificate or certificates, to

 

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  give the Partnership a bond in such sums as the General Partner may direct as
indemnity against any claim that may be made against the Partnership.

Section 8.6 Partnership Right to Call Limited Partner Interests.

Notwithstanding any other provision of this Agreement, on and after the date on
which the aggregate Percentage Interests of the Limited Partners (other than the
Special Limited Partner) are less than one percent (1%), the Partnership shall
have the right, but not the obligation, from time to time and at any time to
redeem any and all outstanding Limited Partner Interests (other than the Special
Limited Partner’s Limited Partner Interests) by treating any Limited Partner as
a Tendering Party who has delivered a Notice of Redemption pursuant to
Section 15.1 hereof for the amount of Partnership Common Units to be specified
by the General Partner, in its sole and absolute discretion, by notice to such
Limited Partner that the Partnership has elected to exercise its rights under
this Section 8.6. Such notice given by the General Partner to a Limited Partner
pursuant to this Section 8.6 shall be treated as if it were a Notice of
Redemption delivered to the General Partner by such Limited Partner. For
purposes of this Section 8.6, (a) any Limited Partner (whether or not otherwise
a Qualifying Party) may, in the General Partner’s sole and absolute discretion,
be treated as a Qualifying Party that is a Tendering Party and (b) the
provisions of Sections 15.1.F(2) and 15.1.F(3) hereof shall not apply, but the
remainder of Section 15.1 hereof shall apply, mutatis mutandis.

ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1 Records and Accounting.

 

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

 

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

Section 9.2 Partnership Year. For purposes of this Agreement, “Partnership Year”
means the fiscal year of the Partnership, which shall be the same as the tax
year of the Partnership. The tax year shall be the calendar year unless
otherwise required by the Code.

 

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Section 9.3 Reports.

 

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

 

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

 

C. The General Partner shall have satisfied its obligations under Section 9.3.A
and Section 9.3.B by posting or making available the reports required by this
Section 9.3 on the website maintained from time to time by the Partnership or
the Special Limited Partner, provided that such reports are able to be printed
or downloaded from such website.

 

D. At the request of any Limited Partner, for any purpose reasonably related to
such Limited Partner’s interest in the Partnership, the General Partner shall,
subject to Section 17-305(b) of the Act, provide access to the books, records
and workpapers upon which the reports required by this Section 9.3 are based, to
the extent required by the Act.

ARTICLE 10

TAX MATTERS

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

Section 10.2 Tax Elections. Except as otherwise provided herein, the General
Partner shall, in its sole and absolute discretion, determine whether to make
any available election pursuant to the Code, including, but not limited to, the
election under Code Section 754. The General Partner shall have the right to
seek to revoke any such election (including, without limitation, any election
under Code Section 754) upon the General Partner’s determination in its sole and
absolute discretion that such revocation is in the best interests of the
Partners.

 

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Section 10.3 Tax Matters Partner.

 

A. The General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes. The tax matters partner shall receive no
compensation for its services. All third-party costs and expenses incurred by
the tax matters partner in performing its duties as such (including legal and
accounting fees and expenses) shall be borne by the Partnership in addition to
any reimbursement pursuant to Section 7.4 hereof. Nothing herein shall be
construed to restrict the Partnership from engaging an accounting firm to assist
the tax matters partner in discharging its duties hereunder.

 

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

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

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

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

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

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

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

The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification

 

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of the General Partner set forth in Section 7.7 hereof shall be fully applicable
to the tax matters partner in its capacity as such.

Section 10.4 Withholding. Each Limited Partner hereby authorizes the Partnership
to withhold from or pay on behalf of or with respect to such Limited Partner any
amount of federal, state, local or foreign taxes that the General Partner
determines, in its sole and absolute discretion, the Partnership is required to
withhold or pay with respect to any amount distributable or allocable to such
Limited Partner pursuant to this Agreement, including, without limitation, any
taxes required to be withheld or paid by the Partnership pursuant to Code
Section 1441, Code Section 1442, Code Section 1445 or Code Section 1446. Any
amount withheld with respect to a Limited Partner pursuant to this Section 10.4
shall be treated as paid or distributed, as applicable, to such Limited Partner
for all purposes under this Agreement. Any amount paid on behalf of or with
respect to a Limited Partner, in excess of any such withheld amount, shall
constitute a loan by the Partnership to such Limited Partner, which loan shall
be repaid by such Limited Partner within thirty (30) days after the affected
Limited Partner receives written notice from the General Partner that such
payment must be made, provided that the Limited Partner shall not be required to
repay such deemed loan if either (i) the Partnership withholds such payment from
a distribution that would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the funds of the Partnership that would, but for
such payment, be distributed to the Limited Partner. Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal (but not higher than the maximum lawful
rate) from the date such amount is due (i.e., thirty (30) days after the Limited
Partner receives written notice of such amount) until such amount is paid in
full.

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

Section 10.6 Treatment of Partnership as Disregarded Entity. Notwithstanding
anything to the contrary in this Agreement, if the Partnership is treated as a
Disregarded Entity with respect to the Special Limited Partner during any
period, then the other provisions of this Agreement shall be applied (or not
applied) in a manner consistent with such treatment with respect to such period,
as determined by the General Partner in its sole and absolute discretion. In the
event of any conflict between this Section 10.6 and any other provision of this
Agreement, this Section 10.6 shall control.

ARTICLE 11

PARTNER TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer.

 

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

 

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

 

C. No Transfer of any Partnership Interest may be made to a lender to the
Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose
loan constitutes a Nonrecourse Liability, without the Consent of the General
Partner; provided, however, that, as a condition to such Consent, the lender may
be required to enter into an arrangement with the Partnership and the General
Partner to redeem or exchange for the REIT Shares Amount any Partnership Units
in which a security interest is held by such lender simultaneously with the time
at which such lender would be deemed to be a partner in the Partnership for
purposes of allocating liabilities to such lender under Section 752 of the Code
(provided that, for purpose of calculating the REIT Shares Amount in this
Section 11.1.C, “Tendered Units” shall mean all such Partnership Units in which
a security interest is held by such lender).

Section 11.2 Transfer of General Partner’s Partnership Interest.

 

A. Subject to the rights of any Holder of any Partnership Interest set forth in
a Partnership Unit Designation, the General Partner may not Transfer all or any
portion of its Partnership Interest (whether by sale, disposition, statutory
merger or consolidation, liquidation or otherwise) without the Consent of the
Limited Partners (but may do so with the Consent of the Limited Partners). It is
a condition to any Transfer of a Partnership Interest of a General Partner
otherwise permitted hereunder that: (i) coincident with such Transfer, the
transferee is admitted as a General Partner pursuant to Section 12.1 hereof;
(ii) the transferee assumes, by operation of law or express agreement, all of
the obligations of the transferor General Partner under this Agreement with
respect to such Transferred Partnership Interest; and (iii) the transferee has
executed such instruments as may be necessary to effectuate such admission and
to confirm the agreement of such transferee to be bound by all the terms and
provisions of this Agreement with respect to the Partnership Interest so
acquired and the admission of such transferee as a General Partner.

 

B. Certain Transactions of the General Partner. Subject to the rights of any
Holder of any Partnership Interest set forth in a Partnership Unit Designation,
the General Partner may, without the Consent of the Limited Partners, Transfer
all of its Partnership Interest in connection with (a) a merger, consolidation
or other combination of its assets with another entity, (b) a sale of all or
substantially all of its assets not in the ordinary course of the Partnership’s
business or (c) a reclassification, recapitalization or change of any
outstanding shares of the General Partner’s stock or other outstanding equity
interests (each, a “Termination Transaction”) if:

(i) in connection with such Termination Transaction, all of the Limited Partners
will receive, or will have the right to elect to receive, for each Partnership
Common Unit an amount of cash, securities or other property equal to the product
of the Adjustment Factor and the greatest amount of cash, securities or other
property paid to a holder of one REIT Share in consideration of one REIT Share
pursuant to the terms of such Termination Transaction; provided, that if, in
connection with such Termination Transaction, a purchase, tender or exchange
offer shall have been made to and accepted

 

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by the holders of the outstanding REIT Shares, each holder of Partnership Common
Units shall receive, or shall have the right to elect to receive, the greatest
amount of cash, securities or other property which such holder of Partnership
Common Units would have received had it exercised its right to Redemption
pursuant to Article 15 hereof and received REIT Shares in exchange for its
Partnership Common Units immediately prior to the expiration of such purchase,
tender or exchange offer and had thereupon accepted such purchase, tender or
exchange offer and then such Termination Transaction shall have been
consummated; or

(ii) all of the following conditions are met: (w) substantially all of the
assets directly or indirectly owned by the surviving entity are owned directly
or indirectly by the Partnership or another limited partnership or limited
liability company which is the survivor of a merger, consolidation or
combination of assets with the Partnership (in each case, the “Surviving
Partnership”); (x) the Limited Partners that held Partnership Common Units
immediately prior to the consummation of such Termination Transaction own a
percentage interest of the Surviving Partnership based on the relative fair
market value of the net assets of the Partnership and the other net assets of
the Surviving Partnership immediately prior to the consummation of such
transaction; (y) the rights, preferences and privileges in the Surviving
Partnership of such Limited Partners are at least as favorable as those in
effect with respect to the Partnership Common Units immediately prior to the
consummation of such transaction and as those applicable to any other limited
partners or non-managing members of the Surviving Partnership; and (z) the
rights of such Limited Partners include at least one of the following: (a) the
right to redeem their interests in the Surviving Partnership for the
consideration available to such persons pursuant to Section 11.2.B(i) or (b) the
right to redeem their interests in the Surviving Partnership for cash on terms
substantially equivalent to those in effect with respect to their Partnership
Common Units immediately prior to the consummation of such transaction, or, if
the ultimate controlling person of the Surviving Partnership has publicly traded
common equity securities, such common equity securities, with an exchange ratio
based on the determination of relative fair market value of such securities and
the REIT Shares.

 

C. Notwithstanding the other provisions of this Article 11 (other than
Section 11.6.D hereof), the General Partner may Transfer all of its Partnership
Interests at any time to any Person that is, at the time of such Transfer an
Affiliate of the General Partner, including any “qualified REIT subsidiary”
(within the meaning of Code Section 856(i)(2)), without the Consent of any
Limited Partners. The provisions of Section 11.2.B, 11.3, 11.4.A and 11.5 hereof
shall not apply to any Transfer permitted by this Section 11.2.C.

 

D. Except in connection with Transfers permitted in this Article 11 and as
otherwise provided in Section 12.1 in connection with the Transfer of the
General Partner’s entire Partnership Interest, the General Partner may not
voluntarily withdraw as a general partner of the Partnership without the Consent
of the Limited Partners.

 

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Section 11.3 Limited Partners’ Rights to Transfer.

 

A. General. Prior to the end of the first Fourteen-Month Period and except as
provided in Section 11.1.C hereof, no Limited Partner shall Transfer all or any
portion of its Partnership Interest to any transferee without the Consent of the
General Partner, which may be given or withheld in its sole and absolute
discretion; provided, however, that any Limited Partner may, at any time,
without the consent or approval of the General Partner, (i) Transfer all or part
of its Partnership Interest to any Family Member (including a Transfer by a
Family Member that is an inter vivos or testamentary trust (whether revocable or
irrevocable) to a Family Member that is a beneficiary of such trust), any
Charity, any Controlled Entity or any Affiliate, or (ii) pledge (a “Pledge”) all
or any portion of its Partnership Interest to a lending institution as
collateral or security for a bona fide loan or other extension of credit, and
Transfer such pledged Partnership Interest to such lending institution in
connection with the exercise of remedies under such loan or extension of credit
(any Transfer or Pledge permitted by this proviso is hereinafter referred to as
a “Permitted Transfer”). After such first Fourteen-Month Period, each Limited
Partner, and each transferee of Partnership Units or Assignee pursuant to a
Permitted Transfer, shall have the right to Transfer all or any portion of its
Partnership Interest to any Person, without the Consent of the General Partner
but subject to the provisions of Section 11.4 hereof and to satisfaction of each
of the following conditions:

(1) Special Limited Partner Right of First Refusal. The transferor Limited
Partner (or the Partner’s estate in the event of the Partner’s death) shall give
written notice of the proposed Transfer to the General Partner and the Special
Limited Partner, which notice shall state (i) the identity and address of the
proposed transferee and (ii) the amount and type of consideration proposed to be
received for the Transferred Partnership Units. The Special Limited Partner
shall have ten (10) Business Days upon which to give the transferor Limited
Partner notice of its election to acquire the Partnership Units on the terms set
forth in such notice. If it so elects, it shall purchase the Partnership Units
on such terms within ten (10) Business Days after giving notice of such
election; provided, however, that in the event that the proposed terms involve a
purchase for cash, the Special Limited Partner may at its election deliver in
lieu of all or any portion of such cash a note from the Special Limited Partner
payable to the transferor Limited Partner at a date as soon as reasonably
practicable, but in no event later than one hundred eighty (180) days after such
purchase, and bearing interest at an annual rate equal to the total dividends
declared with respect to one (1) REIT Share for the four (4) preceding fiscal
quarters of the Special Limited Partner, divided by the Value as of the closing
of such purchase; and provided, further, that such closing may be deferred to
the extent necessary to effect compliance with the Hart-Scott-Rodino Act, if
applicable, and any other applicable requirements of law. If it does not so
elect, the transferor Limited Partner may Transfer such Partnership Units to a
third party, on terms no more favorable to the transferee than the proposed
terms, subject to the other conditions of this Section 11.3.

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

 

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

(4) Minimum Transfer Restriction. Any Transferring Partner must Transfer not
less than the lesser of (i) five hundred (500) Partnership Units or (ii) all of
the remaining Partnership Units owned by such Transferring Partner, without, in
each case, the Consent of the General Partner; provided, however, that, for
purposes of determining compliance with the foregoing restriction, all
Partnership Units owned by Affiliates of a Limited Partner shall be considered
to be owned by such Limited Partner.

(5) Exception for Permitted Transfers. The conditions of
Sections 11.3.A(1) through 11.3.A(4) hereof shall not apply in the case of a
Permitted Transfer.

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

 

B. Certain Transactions of the Special Limited Partner. Notwithstanding anything
to the contrary in this Agreement, the Special Limited Partner may Transfer its
interest in the Partnership in connection with a Termination Transaction with
the Consent of the Limited Partners or without the Consent of the Limited
Partners if:

(1) In connection with such Termination Transaction, all of the Limited Partners
(other than the Special Limited Partner) will receive, or will have the right to
elect to receive, for each Partnership Common Unit an amount of cash, securities
or other property equal to the product of

 

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the Adjustment Factor and the greatest amount of cash, securities or other
property paid to a holder of one REIT Share in consideration of one REIT Share
pursuant to the terms of such Terminating Transaction; provided, that if, in
connection with such Termination Transaction, a purchase, tender or exchange
offer shall have been made to and accepted by the holders of the outstanding
REIT Shares, each holder of Partnership Common Units (other than the Special
Limited Partner) shall receive, or shall have the right to elect to receive, the
greatest amount of cash, securities or other property which such holder of
Partnership Common Units would have received had it exercised its right to
Redemption pursuant to Article 15 hereof and received REIT Shares in exchange
for its Partnership Common Units immediately prior to the expiration of such
purchase, tender or exchange offer and had thereupon accepted such purchase,
tender or exchange offer and then such Termination Transaction shall have been
consummated; or

(2) the following conditions are met: (w) substantially all of the assets
directly or indirectly owned by the surviving entity are owned directly or
indirectly by the Surviving Partnership; (x) the Limited Partners that held
Partnership Common Units immediately prior to the consummation of such
Termination Transaction own a percentage interest of the Surviving Partnership
based on the relative fair market value of the net assets of the Partnership and
the other net assets of the Surviving Partnership immediately prior to the
consummation of such transaction; (y) the rights, preferences and privileges of
such Limited Partners in the Surviving Partnership are at least as favorable as
those in effect with respect to Partnership Common Units immediately prior to
the consummation of such transaction and as those applicable to any other
limited partners or non-managing members of the Surviving Partnership; and
(z) the rights of such Limited Partners include at least one of the following:
(a) the right to redeem their Partnership Units for the consideration available
to such persons pursuant to Section 11.3.B(1) or cash on terms equivalent to
those in effect with respect to their Partnership Common Units immediately prior
to the consummation of such transaction, or, if the ultimate controlling person
of the Surviving Partnership has publicly traded common equity securities, such
common equity securities, with an exchange ratio based on the determination of
relative fair market value of such securities and the REIT Shares.

 

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

 

D.

Adverse Tax Consequences. Notwithstanding anything to the contrary in this
Agreement, the General Partner shall have the authority (but shall not be
required) to take any steps it determines are necessary or appropriate in its
sole and absolute discretion to prevent the Partnership from being taxable as a
corporation for federal income tax purposes. In furtherance of the foregoing,
except with the Consent of the General Partner, no Transfer by a Limited Partner
of its Partnership Interests (including any Redemption, any other acquisition of
Partnership Units by the Special Limited Partner or the General Partner or any
acquisition of Partnership Units by the Partnership) may be made to or by any
Person if such Transfer could (i) result in the Partnership being treated as an
association taxable as a corporation; (ii) result in a termination of the
Partnership under Code Section 708; (iii) be treated as effectuated through an
“established

 

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  securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Code Section 7704 and the Regulations
promulgated thereunder, (iv) result in the Partnership being unable to qualify
for one or more of the “safe harbors” set forth in Regulations Section 1.7704-1
(or such other guidance subsequently published by the IRS setting forth safe
harbors under which interests will not be treated as “readily tradable on a
secondary market (or the substantial equivalent thereof)” within the meaning of
Section 7704 of the Code) (the “Safe Harbors”) or (v) in the General Partner’s
judgment in its sole and absolute discretion, adversely affect the ability of
the Special Limited Partner to continue to qualify as a REIT or subject the
Special Limited Partner to any additional taxes under Code Section 857 or Code
Section 4981.

Section 11.4 Admission of Substituted Limited Partners.

 

A. No Limited Partner shall have the right to substitute a transferee (including
any transferees pursuant to Transfers permitted by Section 11.3 hereof) as a
Limited Partner in its place. A transferee of a Limited Partner Interest may be
admitted as a Substituted Limited Partner only with the Consent of the General
Partner, which may be given or withheld in its sole and absolute discretion. The
failure or refusal by the General Partner to permit a transferee of any such
interests to become a Substituted Limited Partner shall not give rise to any
cause of action against the Partnership or the General Partner. Subject to the
foregoing, an Assignee shall not be admitted as a Substituted Limited Partner
until and unless it furnishes to the General Partner (i) evidence of acceptance,
in form and substance satisfactory to the General Partner, of all the terms,
conditions and applicable obligations of this Agreement, (ii) a counterpart
signature page to this Agreement executed by such Assignee and (iii) such other
documents and instruments as may be required or advisable, in the sole and
absolute discretion of the General Partner, to effect such Assignee’s admission
as a Substituted Limited Partner.

 

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

 

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

Section 11.5 Assignees. If the General Partner does not Consent to the admission
of any permitted transferee under Section 11.3 hereof as a Substituted Limited
Partner, as described in Section 11.4 hereof, or in the event that any
Partnership Interest is deemed to have been Transferred notwithstanding the
restrictions set forth in this Article 11, such transferee shall be considered
an Assignee for purposes of this Agreement. An Assignee shall be entitled to all
the rights of an assignee of a limited partnership interest under the Act,
including the right to receive distributions from the Partnership and the share
of Net Income, Net Losses and other items of income, gain, loss, deduction and
credit of the Partnership attributable to the Partnership Interest assigned to
such transferee and the rights to Transfer the Partnership Interest provided in
this Article 11, but shall not be deemed to be a holder of a Partnership
Interest for any other purpose under this Agreement (other than as expressly
provided in Section 15.1 hereof with respect to a

 

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Qualifying Party that becomes a Tendering Party), and shall not be entitled to
effect a Consent or vote with respect to such Partnership Interest on any matter
presented to the Partners for approval (such right to Consent or vote, to the
extent provided in this Agreement or under the Act, fully remaining with the
transferor Limited Partner). In the event that any such transferee desires to
make a further Transfer of any such Partnership Interest, such transferee shall
be subject to all the provisions of this Article 11 to the same extent and in
the same manner as any Limited Partner desiring to make a Transfer of a Limited
Partner Interest.

Section 11.6 General Provisions.

 

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

 

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

 

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

 

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D. In addition to any other restrictions on Transfer herein contained, in no
event may any Transfer of a Partnership Interest by any Partner (including any
Redemption, any acquisition of Partnership Units by the Special Limited Partner
or any other acquisition of Partnership Units by the Partnership) be made:
(i) to any person or entity who lacks the legal right, power or capacity to own
a Partnership Interest; (ii) in violation of applicable law; (iii) except with
the Consent of the General Partner, which may be given or withheld in its sole
and absolute discretion, of any component portion of a Partnership Interest,
such as the Capital Account, or rights to distributions, separate and apart from
all other components of a Partnership Interest; (iv) in the event that such
Transfer could cause either the Special Limited Partner or any Special Limited
Partner Affiliate to cease to comply with the REIT Requirements or to cease to
qualify as a “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)); (v) except with the Consent of the General Partner, which
may be given or withheld in its sole and absolute discretion, if such Transfer
could, based on the advice of counsel to the Partnership or the General Partner,
cause a termination of the Partnership for federal or state income tax purposes
(except as a result of the Redemption (or acquisition by the Special Limited
Partner) of all Partnership Common Units held by all Limited Partners (other
than the Special Limited Partner)); (vi) if such Transfer could, based on the
advice of legal counsel to the Partnership or the General Partner, cause the
Partnership to cease to be classified as a partnership for federal income tax
purposes (except as a result of the Redemption (or acquisition by the Special
Limited Partner) of all Partnership Common Units held by all Limited Partners
(other than the Special Limited Partner)); (vii) if such Transfer would cause
the Partnership to become, with respect to any employee benefit plan subject to
Title I of ERISA, a “party-in-interest” (as defined in ERISA Section 3(14)) or a
“disqualified person” (as defined in Code Section 4975(c)); (viii) if such
Transfer could, based on the advice of legal counsel to the Partnership or the
General Partner, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.3-101; (ix) if such Transfer requires the registration
of such Partnership Interest pursuant to any applicable federal or state
securities laws; (x) except with the Consent of the General Partner, if such
Transfer could (1) be treated as effectuated through an “established securities
market” or a “secondary market” (or the substantial equivalent thereof) within
the meaning of Section 7704 of the Code and the Regulations promulgated
thereunder, (2) cause the Partnership to become a “publicly traded partnership,”
as such term is defined in Sections 469(k)(2) or 7704(b) of the Code, (3) could
be in violation of Section 3.4.C(iii), or (4) could cause the Partnership to
fail one or more of the Safe Harbors; (xi) if such Transfer causes the
Partnership (as opposed to the Special Limited Partner) to become a reporting
company under the Exchange Act; or (xii) if such Transfer subjects the
Partnership to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended. The General Partner
shall, in its sole and absolute discretion, be permitted to take all action
necessary to prevent the Partnership from being classified as a “publicly traded
partnership” under Code Section 7704.

 

E. Transfers pursuant to this Article 11 may only be made on the first day of a
fiscal quarter of the Partnership, unless the General Partner, in its sole and
absolute discretion, otherwise Consents.

 

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ARTICLE 12

ADMISSION OF PARTNERS

Section 12.1 Admission of Successor General Partner. A successor to all of the
General Partner’s General Partner Interest pursuant to a Transfer permitted by
Section 11.2 hereof who is proposed to be admitted as a successor General
Partner shall be admitted to the Partnership as the General Partner, effective
immediately upon such Transfer. Upon any such Transfer and the admission of any
such transferee as a successor General Partner in accordance with this
Section 12.1, the transferor General Partner shall be relieved of its
obligations under this Agreement and shall cease to be a general partner of the
Partnership without any separate Consent of the Limited Partners or the consent
or approval of any other Partners. Any such successor General Partner shall
carry on the business and affairs of the Partnership without dissolution. In
each case, the admission shall be subject to the successor General Partner
executing and delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or instruments as may
be required to effect the admission of such Person as a General Partner. Upon
any such Transfer, the transferee shall become the successor General Partner for
all purposes herein, and shall be vested with the powers and rights of the
transferor General Partner, and shall be liable for all obligations and
responsible for all duties of the General Partner. Concurrently with, and as
evidence of, the admission of a successor General Partner, the General Partner
shall update Exhibit A and the books and records of the Partnership to reflect
the name, address and number and classes and/or series of Partnership Units of
such successor General Partner.

Section 12.2 Admission of Additional Limited Partners.

 

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

 

B. Notwithstanding anything to the contrary in this Section 12.2, no Person
shall be admitted as an Additional Limited Partner without the Consent of the
General Partner, which may be given or withheld in its sole and absolute
discretion. 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
Exhibit A and the books and records of the Partnership, following the Consent of
the General Partner to such admission and the satisfaction of all the conditions
set forth in Section 12.2.A.

 

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

 

D. Any Additional Limited Partner admitted to the Partnership that is an
Affiliate of the Special Limited Partner shall be deemed to be a “Special
Limited Partner Affiliate” hereunder and shall be reflected as such on Exhibit A
and the books and records of the Partnership.

Section 12.3 Amendment of Agreement and Certificate of Limited Partnership. For
the admission to the Partnership of any Partner, the General Partner shall take
all steps necessary and appropriate under the Act to update the records of the
Partnership and, if necessary, to prepare as soon as practical an amendment of
this Agreement (and to update 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 2.4 hereof.

Section 12.4 Limit on Number of Partners. Unless otherwise permitted by the
General Partner in its sole and absolute discretion, no Person shall be admitted
to the Partnership as an Additional Limited Partner if the effect of such
admission would be to cause the Partnership to have a number of Partners that
would cause the Partnership to become a reporting company under the Exchange
Act.

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

ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION

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

 

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A. an event of withdrawal, as defined in Section 17-402 of the Act (including,
without limitation, bankruptcy), or the withdrawal in violation of this
Agreement, of the last remaining General Partner unless, within ninety (90) days
after the withdrawal, a Majority in Interest of the Partners remaining agree in
writing, in their sole and absolute discretion, to continue the business of the
Partnership and to the appointment, effective as of the date of such withdrawal,
of a successor General Partner;

 

B. an election to dissolve the Partnership made by the General Partner in its
sole and absolute discretion, with or without the Consent of the Limited
Partners;

 

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

 

D. any sale or other disposition of (other than the attachment of a lien or
security interest in) all or substantially all of the assets of the Partnership
outside the ordinary course of the Partnership’s business or a related series of
transactions that, taken together, result in the sale or other disposition of
(other than the attachment of a lien or security interest in) all or
substantially all of the assets of the Partnership outside the ordinary course
of the Partnership’s business; and

 

E. at any time that there are no limited partners of the Partnership unless the
business of the Partnership is continued in accordance with the Act.

Section 13.2 Winding Up.

 

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

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

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

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

 

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(4) Fourth, to the Partners in accordance with their positive Capital Account
balances, determined after taking into account all Capital Account adjustments
for all prior periods and the Partnership taxable year during which the
liquidation occurs (other than those made as a result of the liquidating
distribution set forth in this Section 13.2.A(4)).

The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article 13 other than reimbursement of its
expenses as set forth in Section 7.4.

 

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

 

C. If any Holder has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions and allocations for all taxable
years, including the year during which such liquidation occurs), except as
otherwise agreed to by such Holder, such Holder shall have no obligation to make
any contribution to the capital of the Partnership with respect to such deficit,
and such deficit shall not be considered a debt owed to the Partnership or to
any other Person for any purpose whatsoever.

 

D. In the sole and absolute discretion of the Liquidator, a pro rata portion of
the distributions that would otherwise be applied and distributed in the order
of priority set forth in Section 13.2A may be:

(1) distributed to a trust established for the Partnership for the purpose of
liquidating Partnership assets, collecting amounts owed to the Partnership, and
paying any contingent, conditional or unmatured liabilities or obligations of
the Partnership or of the General Partner arising out of or in connection with
the Partnership and/or Partnership activities. The assets of any such trust
shall be applied and distributed, from time to time, in the sole and absolute
discretion of the Liquidator, in the same proportions and amounts as would
otherwise have been applied and distributed as set forth in Section 13.2A; or

(2) withheld or escrowed to provide a reasonable reserve for Partnership
liabilities (contingent, conditional or unmatured) and to reflect the unrealized
portion of any installment obligations owed to the Partnership, provided that
such withheld or escrowed amounts shall be

 

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applied and distributed in the manner and order of priority set forth in
Section 13.2.A hereof as soon as practicable.

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

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

Section 13.5 Notice of Dissolution. In the event that a Liquidating Event
occurs, the General Partner shall, within thirty (30) days thereafter, provide
written notice thereof to each Holder and, in the General Partner’s sole and
absolute discretion or as required by the Act, to all other parties with whom
the Partnership regularly conducts business (as determined in the sole and
absolute discretion of the General Partner), and the General Partner may publish
notice thereof in a newspaper of general circulation in each place in which the
Partnership regularly conducts business (as determined in the sole and absolute
discretion of the General Partner).

Section 13.6 Cancellation of Certificate of Limited Partnership. Upon the
completion of the winding up of the Partnership the Certificate shall be
canceled in the manner required by the Act.

Section 13.7 Reasonable Time for Winding-Up. A reasonable time shall be allowed
for the orderly winding-up of the business and affairs of the Partnership and
the liquidation of its assets pursuant to Section 13.2 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions
of this Agreement shall remain in effect between and among the Partners during
the period of winding up; provided, however, reasonable efforts shall be made to
complete such winding-up within twenty-four (24) months after the adoption of a
plan of liquidation of the General Partner, as provided in Section 562(b)(1)(B)
of the Code, if necessary, in the sole and absolute discretion of the General
Partner.

 

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ARTICLE 14

PROCEDURES FOR ACTIONS AND CONSENTS

OF PARTNERS; AMENDMENTS; MEETINGS

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

Section 14.2 Amendments. Amendments to this Agreement may be proposed by the
General Partner or by Limited Partners holding twenty-five percent (25%) or more
of the Partnership Interests held by Limited Partners and, except as set forth
in Section 7.3.C and subject to Section 7.3.D and the rights of any Holder of
any Partnership Interest set forth in a Partnership Unit Designation. Following
such proposal, the General Partner shall submit to the Partners entitled to vote
thereon any proposed amendment that, pursuant to the terms of this Agreement,
requires the consent, approval or vote of such Partners. The General Partner
shall seek the consent, approval or vote of the Partners entitled to vote
thereon on any such proposed amendment in accordance with Section 14.3 hereof.

Section 14.3 Actions and Consents of the Partners.

 

A. Meetings of the Partners may be called only by the General Partner to
transact any business that the General Partner determines. The call shall state
the nature of the business to be transacted. Notice of any such meeting shall be
given to all Partners entitled to act at the meeting not less than seven
(7) days nor more than sixty (60) days prior to the date of such meeting.
Partners may vote in person or by proxy at such meeting. Unless approval by a
different number or proportion of the Partners is required by this Agreement,
the Consent of the General Partner and the Consent of the Limited Partners shall
be required to approve such proposal at a meeting of the Partners. Whenever the
Consent of Partners is permitted or required under this Agreement, such Consent
may be given at a meeting of Partners or in accordance with the procedure
prescribed in Section 14.3.B hereof.

 

B. Any action requiring the Consent of any Partner or group of Partners pursuant
to this Agreement or that is required or permitted to be taken at a meeting of
the Partners may be taken without a meeting if a Consent in writing or by
electronic transmission (as defined in Section 17-405(d) of the Act) setting
forth the action so taken or consented to is given by Partners whose Consent
would be sufficient to approve such action at a meeting of the Partners. Such
Consent may be in one instrument or in several instruments, and shall have the
same force and effect as the affirmative vote of such Partners at a meeting of
the Partners. Such Consent shall be filed with the General Partner. An action so
taken shall be deemed to have been taken at a meeting held on the effective date
so certified. For purposes of obtaining a Consent in writing or by electronic
transmission, the General Partner may require a response within a reasonable
specified time, but not less than fifteen (15) days, and failure to respond in
such time period shall constitute a Consent that is consistent with the General
Partner’s recommendation with respect to the proposal; provided, however, that
an action shall become effective at such time as requisite Consents are received
even if prior to such specified time.

 

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

 

D. The General Partner may set, in advance, a record date for the purpose of
determining the Partners (i) entitled to Consent to any action, (ii) entitled to
receive notice of any meeting of the Partners or (iii) in order to make a
determination of Partners for any other proper purpose. Such date, in any case,
shall not be prior to the close of business on the day the record date is fixed
and shall be not more than ninety (90) days and, in the case of a meeting of the
Partners, not less than five (5) days, before the date on which the meeting is
to be held. If no record date is fixed, the record date for the determination of
Partners entitled to notice of a meeting of the Partners shall be at the close
of business on the day on which the notice of the meeting is sent, and the
record date for any other determination of Partners shall be the effective date
of such Partner action, distribution or other event. When a determination of the
Partners entitled to Consent at any meeting of the Partners has been made as
provided in this section, such determination shall apply to any adjournment
thereof.

 

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

ARTICLE 15

GENERAL PROVISIONS

Section 15.1 Redemption Rights of Qualifying Parties.

 

A.

After the applicable Fourteen-Month Period, a Qualifying Party shall have the
right (subject to the terms and conditions set forth herein) to require the
Partnership to redeem all or a portion of the Partnership Common Units held by
such Tendering Party (Partnership Common Units that have in fact been tendered
for redemption being hereafter referred to as “Tendered Units”) in exchange (a
“Redemption”) for the Cash Amount payable on the Specified Redemption Date. The
Partnership may, in the General Partner’s sole and absolute discretion, redeem
Tendered Units at the request of the Holder thereof prior to the end of the
applicable Fourteen-Month Period (subject to the terms and conditions set forth
herein) (a “Special Redemption”); provided, however, that the General Partner
first receives a legal opinion to the same effect as the legal opinion described
in Section 15.1.G(4) of this Agreement. Any Redemption shall be exercised
pursuant to a Notice of Redemption delivered to the General Partner and the
Special Limited Partner by the Qualifying Party when exercising the Redemption
right (the “Tendering Party”).

 

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  The Partnership’s obligation to effect a Redemption, however, shall not arise
or be binding against the Partnership until the earlier of (i) the date the
General Partner, on behalf of the Partnership, notifies the Tendering Party that
the Partnership has declined to elect to require the Special Limited Partner to
acquire some or all of the Tendered Units under Section 15.1.B hereof following
receipt of a Notice of Redemption and (ii) the Business Day following the
Cut-Off Date. In the event of a Redemption, the Cash Amount shall be delivered
as a certified or bank check payable to the Tendering Party or, in the General
Partner’s sole and absolute discretion, in immediately available funds, in each
case, on or before the tenth (10th) Business Day following the date on which the
General Partner receives a Notice of Redemption from the Tendering Party.

 

B.

Notwithstanding the provisions of Section 15.1.A hereof, on or before the close
of business on the Cut-Off Date, the Partnership may, in the General Partner’s
sole and absolute discretion, elect to require the Special Limited Partner to
acquire some or all (such percentage being referred to as the “Applicable
Percentage”) of the Tendered Units from the Tendering Party in exchange for REIT
Shares. If the Partnership elects to require the Special Limited Partner to
acquire some or all of the Tendered Units pursuant to this Section 15.1.B, the
Partnership shall give written notice thereof to the Tendering Party on or
before the close of business on the Cut-Off Date. If the Partnership elects to
require the Special Limited Partner to acquire any of the Tendered Units for
REIT Shares, the Special Limited Partner shall issue and deliver such REIT
Shares to the Tendering Party pursuant to the terms of this Section 15.1.B, in
which case (1) the Special Limited Partner shall assume directly the obligation
with respect thereto and shall satisfy the Tendering Party’s exercise of its
Redemption right with respect to such Tendered Units and (2) such transaction
shall be treated, for federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the Special Limited Partner in
exchange for the REIT Shares Amount. If the Partnership so elects, on the
Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Special Limited Partner in exchange for a number of REIT
Shares equal to the product of the REIT Shares Amount and the Applicable
Percentage. The Tendering Party shall submit (i) such information, certification
or affidavit as the Special Limited Partner may reasonably require in connection
with the application of the Ownership Limit to any such acquisition and
(ii) such written representations, investment letters, legal opinions or other
instruments necessary, in the Special Limited Partner’s view, to effect
compliance with the Securities Act. In the event of an election by the
Partnership to require the Special Limited Partner to purchase the Tendered
Units pursuant to this Section 15.1.B, the Tendering Party shall no longer have
the right to cause the Partnership to effect a Redemption of such Tendered Units
and, upon notice to the Tendering Party by the Partnership given on or before
the close of business on the Cut-Off Date that the Partnership has elected to
require the Special Limited Partner to acquire some or all of the Tendered Units
pursuant to this Section 15.1.B, the obligation of the Partnership to effect a
Redemption of the Tendered Units as to which the General Partner’s notice
relates shall not accrue or arise. A number of REIT Shares equal to the product
of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be
delivered by the Special Limited Partner as duly authorized, validly issued,
fully paid and non-assessable REIT Shares and, if applicable, Rights, free of
any pledge, lien, encumbrance or restriction, other than the Ownership Limit,
the Securities Act and relevant state securities or “blue sky” laws. Neither any
Tendering Party whose Tendered Units are acquired by the Special Limited Partner
pursuant to this Section 15.1.B, any Partner, any Assignee nor any other
interested Person shall have any right to require or cause the Special Limited
Partner to register, qualify or list any REIT Shares owned or held by such
Person, whether or not such REIT Shares

 

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  are issued pursuant to this Section 15.1.B, with the SEC, with any state
securities commissioner, department or agency, under the Securities Act or the
Exchange Act or with any stock exchange; provided, however, that this limitation
shall not be in derogation of any registration or similar rights granted
pursuant to any other written agreement between the Special Limited Partner and
any such Person. Notwithstanding any delay in such delivery, the Tendering Party
shall be deemed the owner of such REIT Shares and Rights for all purposes,
including, without limitation, rights to vote or consent, receive dividends, and
exercise rights, as of the Specified Redemption Date. REIT Shares issued upon an
acquisition of the Tendered Units by the Special Limited Partner pursuant to
this Section 15.1.B may contain such legends regarding restrictions under the
Securities Act and applicable state securities laws as the Special Limited
Partner in good faith determines to be necessary or advisable in order to ensure
compliance with such laws.

 

C. Notwithstanding the provisions of Section 15.1.A and 15.1.B hereof, the
Tendering Parties shall have no rights under this Agreement that would otherwise
be prohibited by the Charter and shall have no rights to require the Partnership
to redeem Tendered Units or require the Special Limited Partner to acquire
Tendered Units if such a redemption or the acquisition of such Tendered Units by
the Special Limited Partner pursuant to Section 15.1.B hereof would cause any
Person to violate the Ownership Limit. To the extent that any attempted
Redemption or acquisition of the Tendered Units by the Special Limited Partner
pursuant to Section 15.1.B hereof would be in violation of this Section 15.1.C,
to the fullest extent permitted by law, it shall be null and void ab initio, and
the Tendering Party shall not acquire any rights or economic interests in REIT
Shares otherwise issuable by the Special Limited Partner under Section 15.1.B
hereof or cash otherwise payable under Section 15.1.A hereof.

 

D. If the Partnership does not elect to require the Special Limited Partner to
acquire the Tendered Units pursuant to Section 15.1.B hereof:

(1) The Partnership may elect to raise funds for the payment of the Cash Amount
either (a) by requiring that the Special Limited Partner contribute to the
Partnership funds from the proceeds of a registered public offering by the
Special Limited Partner of REIT Shares sufficient to purchase the Tendered Units
or (b) from any other sources (including, but not limited to, the sale of any
Property and the incurrence of additional Debt) available to the Partnership.
The Special Limited Partner shall make a Capital Contribution of any such
amounts to the Partnership in exchange for additional Partnership Units, and the
Partnership is hereby authorized from time to time to issue such additional
Partnership Units in consideration therefor without any further act, approval or
vote of any Partner or other Persons. Any such contribution shall entitle the
Special Limited Partner to an equitable Percentage Interest adjustment.

(2) If the Cash Amount is not paid on or before the Specified Redemption Date,
interest shall accrue with respect to the Cash Amount from the day after the
Specified Redemption Date to and including the date on which the Cash Amount is
paid at a rate equal to the base rate on corporate loans at large United States
money center commercial banks, as published from time to time in the Wall Street
Journal (but not higher than the maximum lawful rate).

 

E. Notwithstanding the provisions of Section 15.1.B hereof, the Special Limited
Partner shall not acquire any Tendered Units in exchange for REIT Shares if such
exchange would be prohibited under the Charter.

 

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

(1) All Partnership Common Units acquired by the Special Limited Partner
pursuant to Section 15.1.B hereof shall automatically, and without further
action required, be converted into and deemed to be a Special Limited Partner’s
Partnership Interest comprised of the same number of Partnership Common Units.

(2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption
for less than one thousand (1,000) Partnership Common Units or, if such
Tendering Party holds (as a Limited Partner or, economically, as an Assignee)
less than one thousand (1,000) Partnership Common Units, all of the Partnership
Common Units held by such Tendering Party, without, in each case, the Consent of
the General Partner, which may be given or withheld in its sole and absolute
discretion.

(3) If (i) a Tendering Party surrenders its Tendered Units during the period
after the Partnership Record Date with respect to a distribution and before the
record date established by the Special Limited Partner for a distribution to its
stockholders of some or all of its portion of such Partnership distribution, and
(ii) the Partnership elects to require the Special Limited Partner to acquire
any of such Tendered Units in exchange for REIT Shares pursuant to
Section 15.1.B, such Tendering Party shall pay to the Special Limited Partner on
the Specified Redemption Date an amount in cash equal to the portion of the
Partnership distribution in respect of the Tendered Units exchanged for REIT
Shares, insofar as such distribution relates to the same period for which such
Tendering Party would receive a distribution in respect of such REIT Shares.

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

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

 

G. In connection with an exercise of Redemption rights pursuant to this
Section 15.1, except as otherwise Consented to by the General Partner, in its
sole and absolute discretion, the Tendering Party shall submit the following to
the General Partner, in addition to the Notice of Redemption:

 

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

(2) A written representation that neither the Tendering Party nor to the best of
their knowledge any Related Party has any intention to acquire any additional
REIT Shares prior to the closing of the Redemption or an acquisition of the
Tendered Units by the Special Limited Partner pursuant to Section 15.1.B hereof
on the Specified Redemption Date;

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

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

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

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

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

 

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

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

Section 15.7 Waiver.

 

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

 

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

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

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

 

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

 

B.

Each Partner hereby (i) submits to the non-exclusive jurisdiction of any state
or federal court sitting in the State of Delaware (collectively, the “Delaware
Courts”), with respect to any dispute arising out of this Agreement or any
transaction contemplated hereby to the extent such courts would have subject
matter jurisdiction with respect to such dispute, (ii) to the fullest extent

 

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  permitted by law, irrevocably waives, and agrees not to assert by way of
motion, defense, or otherwise, in any such action, any claim that it is not
subject personally to the jurisdiction of any of the Delaware Courts, that its
property is exempt or immune from attachment or execution, that the action is
brought in an inconvenient forum, or that the venue of the action is improper,
(iii) to the fullest extent permitted by law, agrees that notice or the service
of process in any action, suit or proceeding arising out of or relating to this
Agreement or the transactions contemplated hereby shall be properly served or
delivered if delivered to such Partner at such Partner’s last known address as
set forth in the Partnership’s books and records, and (iv) to the fullest extent
permitted by law, irrevocably waives any and all right to trial by jury in any
legal proceeding arising out of or related to this Agreement or the transactions
contemplated hereby.

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

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

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

(i) an amount equal to the excess, if any, of (a) four and nine-tenths percent
(4.9%) of the REIT Partner’s total gross income (but excluding the amount of any
REIT Payments and amounts excluded from gross income pursuant to
Section 856(c)(5)(G) of the Code) for the Partnership Year that is described in
subsections (A) through (I) of Code Section 856(c)(2) over (b) the amount of
gross income (within the meaning of Code Section 856(c)(2)) derived by the REIT
Partner from sources other than those described in subsections (A) through
(I) of Code Section 856(c)(2) (but not including the amount of

 

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any REIT Payments and amounts excluded from gross income pursuant to
Section 856(c)(5)(G) of the Code); or

(ii) an amount equal to the excess, if any, of (a) twenty-four percent (24%) of
the REIT Partner’s total gross income (but excluding the amount of any REIT
Payments and amounts excluded from gross income pursuant to Section 856(c)(5)(G)
of the Code) for the Partnership Year that is described in subsections
(A) through (I) of Code Section 856(c)(3) over (b) the amount of gross income
(within the meaning of Code Section 856(c)(3)) derived by the REIT Partner from
sources other than those described in subsections (A) through (I) of Code
Section 856(c)(3) (but not including the amount of any REIT Payments and amounts
excluded from gross income pursuant to Section 856(c)(5)(G) of the Code);

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

Section 15.13 No Partition. No Partner nor any successor-in-interest to a
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, or to file a complaint or institute any
proceeding at law or in equity to have such property of the Partnership
partitioned, and each Partner, on behalf of itself and its successors and
assigns hereby waives any such right. It is the intention of the Partners that
the rights of the parties hereto and their successors-in-interest to Partnership
property, as among themselves, shall be governed by the terms of this Agreement,
and that the rights of the Partners and their respective successors-in-interest
shall be subject to the limitations and restrictions as set forth in this
Agreement.

Section 15.14 No Third-Party Rights Created Hereby. The provisions of this
Agreement are solely for the purpose of defining the interests of the Holders,
inter se; and no other person, firm or entity (i.e., a party who is not a
signatory hereto or a permitted successor to such signatory hereto) shall have
any right, power, title or interest by way of subrogation or otherwise, in and
to the rights, powers, title and provisions of this Agreement. 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 to the Partnership or to pursue any other right or remedy hereunder or at
law or in equity. None of the rights or obligations of the Partners herein set
forth to make Capital Contributions or loans to the Partnership shall be deemed
an asset of the Partnership for any purpose by any creditor or other third
party, nor may any such rights or

 

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obligations be sold, transferred or assigned by the Partnership or pledged or
encumbered by the Partnership to secure any debt or other obligation of the
Partnership or any of the Partners.

Section 15.15 No Rights as Stockholders. Nothing contained in this Agreement
shall be construed as conferring upon the Holders of Partnership Units any
rights whatsoever as stockholders of the Special Limited Partner, including
without limitation any right to receive dividends or other distributions made to
stockholders of the Special Limited Partner or to vote or to consent or receive
notice as stockholders in respect of any meeting of stockholders for the
election of directors of the Special Limited Partner or any other matter.

[Remainder of Page Left Blank Intentionally]

 

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

 

GENERAL PARTNER: SPIRIT GENERAL OP HOLDINGS, LLC, a Delaware limited liability
company, By:  

/s/ Joni G. Barrett

  Name: Joni G. Barrett   Its: Vice President – Operations and Secretary SPECIAL
LIMITED PARTNER: SPIRIT REALTY CAPITAL, INC. a Maryland corporation, By:  

/s/ Joni G. Barrett

  Name: Joni G. Barrett   Its: Vice President – Operations and Secretary

(Agreement of Limited Partnership of Spirit Realty, L.P.)

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

LIMITED PARTNER:

 

Name:

 

2

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As of             , 201    

EXHIBIT A

PARTNERS AND PARTNERSHIP UNITS

 

Name and Address of Partners    Partnership Units (Type and Amount)

 

General Partner:

 

Spirit General OP Holdings, LLC

   Partnership Common Units        

 

Special Limited Partner:

 

Spirit Realty Capital, Inc.

   Partnership Common Units        

 

 

Limited Partners:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL:    Partnership Common Units

 

A-1

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EXHIBIT B

EXAMPLES REGARDING ADJUSTMENT FACTOR

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

Example 1

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

1.0 * 200/100 = 2.0

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

Example 2

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

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

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

Example 3

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

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

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

 

B-1

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EXHIBIT C

NOTICE OF REDEMPTION

 

To:

   [                    ]    [                    ]    [                    ]

The undersigned Limited Partner or Assignee hereby irrevocably tenders for
Redemption Partnership Common Units in Spirit Realty, L.P. in accordance with
the terms of the Agreement of Limited Partnership of Spirit Realty, L.P., dated
as of [                    ] as amended (the “Agreement”), and the Redemption
rights referred to therein. The undersigned Limited Partner or Assignee:

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

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

(c) represents, warrants, certifies and agrees that:

(i) the undersigned Limited Partner or Assignee is a Qualifying Party,

(ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such
Partnership Common Units, free and clear of the rights or interests of any other
person or entity,

(iii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and
surrender such Partnership Common Units as provided herein, and

(iv) the undersigned Limited Partner or Assignee has obtained the consent or
approval of all persons and entities, if any, having the right to consent to or
approve such tender and surrender; and

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

All capitalized terms used herein and not otherwise defined shall have the same
meaning ascribed to them respectively in the Agreement.

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Dated:  

 

    Name of Limited Partner or Assignee:      

 

     

 

      (Signature of Limited Partner or Assignee)      

 

      (Street Address)      

 

      (City)          (State)              (Zip Code)      

Signature Medallion Guaranteed by:

   

 

Issue Check Payable to:        

 

Please insert social security or identifying number:        

 

 

C-2