EXHIBIT 10.1

 

SECOND AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

FARMLAND PARTNERS OPERATING PARTNERSHIP, LP

 

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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.

 

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Dated as of April 16, 2014

 

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TABLE OF CONTENTS

 

 

 

Page

 

 

ARTICLE I DEFINED TERMS

2

 

 

ARTICLE II ORGANIZATIONAL MATTERS

14

 

 

Section 2.1

Organization

14

Section 2.2

Name

15

Section 2.3

Registered Office and Agent; Principal Office

15

Section 2.4

Term

15

Section 2.5

Partnership Interests as Securities

16

Section 2.6

Certificates Describing Partnership Units

16

 

 

 

ARTICLE III PURPOSE

16

 

 

Section 3.1

Purpose and Business

16

Section 3.2

Powers

16

 

 

 

ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

17

 

 

Section 4.1

Capital Contributions of the Partners

17

Section 4.2

Issuances of Partnership Interests

17

Section 4.3

No Preemptive Rights

19

Section 4.4

Other Contribution Provisions

19

Section 4.5

No Interest on Capital

19

Section 4.6

LTIP Units

19

Section 4.7

Conversion of LTIP Units

22

 

 

 

ARTICLE V DISTRIBUTIONS

25

 

 

Section 5.1

Requirement and Characterization of Distributions

25

Section 5.2

Amounts Withheld

27

Section 5.3

Distributions Upon Liquidation

28

Section 5.4

Revisions to Reflect Issuance of Partnership Interests

28

 

 

 

ARTICLE VI ALLOCATIONS

28

 

 

Section 6.1

Allocations for Capital Account Purposes

28

Section 6.2

Revisions to Allocations to Reflect Issuance of Partnership Interests or Certain
DRO Obligations

31

 

 

 

ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS

31

 

 

Section 7.1

Management

31

Section 7.2

Certificate of Limited Partnership

35

Section 7.3

Title to Partnership Assets

35

Section 7.4

Reimbursement of the General Partner and the Parent

36

Section 7.5

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

38

Section 7.6

Transactions with Affiliates

40

Section 7.7

Indemnification

41

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 7.8

Liability of the General Partner

43

Section 7.9

Other Matters Concerning the General Partner

44

Section 7.10

Reliance by Third Parties

45

Section 7.11

Restrictions on General Partner’s Authority

45

Section 7.12

Loans by Third Parties

46

 

 

 

ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

46

 

 

Section 8.1

Limitation of Liability

46

Section 8.2

Management of Business

46

Section 8.3

Outside Activities of Limited Partners

46

Section 8.4

Return of Capital

47

Section 8.5

Rights of Limited Partners Relating to the Partnership

47

Section 8.6

Redemption Right

49

 

 

 

ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS

52

 

 

Section 9.1

Records and Accounting

52

Section 9.2

Fiscal Year

52

Section 9.3

Reports

52

 

 

 

ARTICLE X TAX MATTERS

53

 

 

Section 10.1

Preparation of Tax Returns

53

Section 10.2

Tax Elections

53

Section 10.3

Tax Matters Partner

53

Section 10.4

Organizational Expenses

55

Section 10.5

Withholding

55

 

 

 

ARTICLE XI TRANSFERS AND WITHDRAWALS

56

 

 

Section 11.1

Transfer

56

Section 11.2

Transfers of Partnership Interests of General Partner

56

Section 11.3

Limited Partners’ Rights to Transfer

57

Section 11.4

Substituted Limited Partners

58

Section 11.5

Assignees

59

Section 11.6

General Provisions

59

 

 

 

ARTICLE XII ADMISSION OF PARTNERS

61

 

 

Section 12.1

Admission of a Successor General Partner

61

Section 12.2

Admission of Additional Limited Partners

62

Section 12.3

Amendment of Agreement and Certificate of Limited Partnership

62

Section 12.4

Limit on Number of Partners

62

 

 

 

ARTICLE XIII DISSOLUTION AND LIQUIDATION

63

 

 

Section 13.1

Dissolution

63

Section 13.2

Winding Up

63

Section 13.3

Compliance with Timing Requirements of Regulations; Restoration of Deficit
Capital Accounts

65

 

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TABLE OF CONTENTS

(continued)

 

 

 

Page

 

 

 

Section 13.4

Rights of Limited Partners

66

Section 13.5

Notice of Dissolution

67

Section 13.6

Cancellation of Certificate of Limited Partnership

67

Section 13.7

Reasonable Time for Winding Up

67

Section 13.8

Waiver of Partition

67

Section 13.9

Liability of Liquidator

67

 

 

 

ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

67

 

 

Section 14.1

Amendments

67

Section 14.2

Meetings of the Partners

69

 

 

 

ARTICLE XV GENERAL PROVISIONS

70

 

 

Section 15.1

Addresses and Notice

70

Section 15.2

Titles and Captions

70

Section 15.3

Pronouns and Plurals

71

Section 15.4

Further Action

71

Section 15.5

Binding Effect

71

Section 15.6

Creditors

71

Section 15.7

Waiver

71

Section 15.8

Counterparts

71

Section 15.9

Applicable Law

71

Section 15.10

Invalidity of Provisions

72

Section 15.11

Power of Attorney

72

Section 15.12

Entire Agreement

73

Section 15.13

No Rights as Stockholders

73

Section 15.14

Limitation to Preserve REIT Status

73

 

List of Exhibits:

 

Exhibit A — Partner Registry

Exhibit B — Capital Account Maintenance

Exhibit C — Special Allocation Rules

Exhibit D — Notice of Redemption

Exhibit E — Form of DRO Registry

Exhibit F — Notice of Election by Partner to Convert LTIP Units into Class A
Units

Exhibit G — Notice of Election by Partnership to Force Conversion of LTIP Units
into Class A Units

 

iii

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SECOND AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

FARMLAND PARTNERS OPERATING PARTNERSHIP, LP

 

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
April 16, 2014, (the “Agreement”) is entered into by and among Farmland Partners
OP GP, LLC, a Delaware limited liability company, as the General Partner, and
the Persons whose names are set forth on the Partner Registry (as hereinafter
defined) as Limited Partners, together with any other Persons who become
Partners in Farmland Partners Operating Partnership, LP (the “Partnership”) as
provided herein.

 

WHEREAS, on September 27, 2013, Farmland Partners Inc., a Maryland corporation
(the “Parent”), formed the Partnership as a limited partnership pursuant to
Delaware law by the filing of the Certificate of Limited Partnership with the
Delaware Secretary of State;

 

WHEREAS, the Parent and Paul A. Pittman (the “Organizational Limited Partner”)
entered into that certain Agreement of Limited Partnership of the Partnership
dated as of September 27, 2013 (the “Original Agreement”);

 

WHEREAS, on March 5, 2014, an amendment to the Certificate of Limited
Partnership was filed with the Delaware Secretary of State to reflect the
withdrawal of the Parent as the General Partner and the admission of Farmland
Partners OP GP, LLC as the General Partner;

 

WHEREAS, the General Partner and the Organizational Limited Partner entered into
that certain First Amended and Restated Agreement of Limited Partnership dated
as of March 5, 2014 (the “First Amended and Restated Agreement”); and

 

WHEREAS, the partners of the Partnership now wish to amend and restate the
partnership agreement as set forth herein, which shall amend, restate and
supersede the First Amended and Restated Agreement in its entirety.

 

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

 

1

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ARTICLE I

 

DEFINED TERMS

 

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

 

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

 

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

 

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

 

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

 

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

 

“Adjustment Event” has the meaning set forth in Section 4.6.A(i).

 

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

 

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

 

“Agreed Value” means (i) in the case of any Contributed Property, the
Section 704(c) Value of such property as of the time of its contribution to the
Partnership, reduced by any liabilities either assumed by the Partnership upon
such contribution or to which such property is

 

2

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subject when contributed as determined under Section 752 of the Code and the
Regulations thereunder; and (ii) in the case of any property distributed to a
Partner by the Partnership, the Partnership’s Carrying Value of such property at
the time such property is distributed, reduced by any indebtedness either
assumed by such Partner upon such distribution or to which such property is
subject at the time of distribution.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(c)                                  with any other adjustments as determined by
the General Partner, in its sole and absolute discretion.

 

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

 

3

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

 

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

 

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

 

“Capital Account Limitation” has the meaning set forth in Section 4.7.B.

 

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

 

“Carrying Value” means (i) with respect to a Contributed Property or Adjusted
Property, the Section 704(c) Value of such property reduced (but not below zero)
by all Depreciation with respect to such Contributed Property or Adjusted
Property, as the case may be, charged to the Partners’ Capital Accounts and
(ii) with respect to any other Partnership property, the adjusted basis of such
property for U.S. federal income tax purposes, all as of the time of
determination.  The Carrying Value of any property shall be adjusted from time
to time in accordance with Exhibit B, and to reflect changes, additions
(including capital improvements thereto) or other adjustments to the Carrying
Value for dispositions and acquisitions of Partnership properties, as deemed
appropriate by the General Partner.

 

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

 

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

 

“Charter” means the charter of the Parent, within the meaning of
Section 1-101(f) of the Maryland General Corporation Law.

 

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

 

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

 

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

 

4

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“Class A Unit Distribution” has the meaning set forth in Section 4.6.A.

 

“Class A Unit Economic Balance” has the meaning set forth in Section 6.1.E.

 

“Class A Unit Transaction” has the meaning set forth in Section 4.7.F.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Constituent Person” has the meaning set forth in Section 4.7.F.

 

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

 

“Conversion Date” has the meaning set forth in Section 4.7.B.

 

“Conversion Factor” means 1.0; provided, however, that, if the Parent
(i) declares or pays a dividend on its outstanding Shares in Shares or makes a
distribution to all holders of its outstanding Shares in Shares and does not
make a corresponding distribution on Class A Units in Class A Units,
(ii) subdivides its outstanding Shares, or (iii) combines its outstanding Shares
into a smaller number of Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has

 

5

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occurred as of such time) and the denominator of which shall be the actual
number of Shares (determined without the above assumption) issued and
outstanding on the record date for such dividend, distribution, subdivision or
combination; and provided further that in the event that an entity other than an
Affiliate of the Parent shall become General Partner pursuant to any merger,
consolidation or combination of the General Partner or the Parent with or into
another entity (the “Successor Entity”), the Conversion Factor shall be adjusted
by multiplying the Conversion Factor by the number of shares of the Successor
Entity into which one Share is converted pursuant to such merger, consolidation
or combination, determined as of the date of such merger, consolidation or
combination.  Any adjustment to the Conversion Factor shall become effective
immediately after the effective date of the event retroactive to the record
date, if any, for the event giving rise thereto, it being intended that
(x) adjustments to the Conversion Factor are to be made to avoid unintended
dilution or anti-dilution as a result of transactions in which Shares are
issued, redeemed or exchanged without a corresponding issuance, redemption or
exchange of Partnership Units and (y) if a Specified Redemption Date shall fall
between the record date and the effective date of any event of the type
described above, that the Conversion Factor applicable to such redemption shall
be adjusted to take into account such event.

 

“Conversion Notice” has the meaning set forth in Section 4.7.B.

 

“Conversion Right” has the meaning set forth in Section 4.7.A.

 

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

 

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

 

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

 

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

 

6

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

 

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

 

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

 

“Economic Capital Account Balances” has the meaning set forth in Section 6.1.E.

 

“Effective Date” means April 16, 2014, the date of the closing of the initial
public offering of the Parent’s shares of common stock, $0.01 par value per
share.

 

“Equity Incentive Plan” means any equity incentive or compensation plan
hereafter adopted by the Partnership or the Parent, including, without
limitation, the Farmland Partners Inc. 2014 Equity Incentive Plan.

 

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

 

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

 

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

 

“Forced Conversion” has the meaning set forth in Section 4.7.C.

 

“Forced Conversion Notice” has the meaning set forth in Section 4.7.C.

 

“Funding Debt” means any Debt incurred for the purpose of providing funds to the
Partnership by or on behalf of the Parent or any wholly owned subsidiary of the
Parent.

 

“General Partner” means Farmland Partners OP GP, LLC, a Delaware limited
liability company, or its successor or permitted assignee, as general partner of
the Partnership.

 

“General Partner Interest” means the Partnership Interest held by the General
Partner, which Partnership Interest is an interest as a general partner under
the Act. The General Partner will not be required to make a Capital Contribution
to the Partnership in exchange for the General Partner Interest.  A General
Partner Interest may be expressed as a number of Partnership Units.

 

7

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

 

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

 

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

 

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

 

“Indemnitee” means (i) any Person made a party to a proceeding by reason of its
status as (A) the General Partner, (B) a Limited Partner or (C) a director or
officer of the Partnership, the General Partner or the Parent and (ii) such
other Persons (including Affiliates of the General Partner, the Parent, a
Limited Partner or the Partnership) as the General Partner may designate from
time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.

 

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

 

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“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 Units.

 

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

 

“Liquidating Gains” has the meaning set forth in Section 6.1.E.

 

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

 

“LTIP Units” means a Partnership Unit which is designated as an LTIP Unit and
which has the rights, preferences and other privileges designated in Section 4.6
and elsewhere in this Agreement in respect of holders of LTIP Units.  The
allocation of LTIP Units among the Partners shall be set forth in the Partner
Registry, as it may be amended or restated from time to time.

 

“LTIP Unitholder” means a Partner that holds LTIP Units.

 

“LV Safe Harbor” “LV Safe Harbor Election” and “LV Safe Harbor Interest” each
has the meaning set forth in Section 10.2.B.

 

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

 

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

 

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

 

“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to

 

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Section 2.B of Exhibit C if such properties were disposed of in a taxable
transaction in full satisfaction of such liabilities and for no other
consideration.

 

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

 

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

 

“Notice of Redemption” means a Notice of Redemption substantially in the form of
Exhibit D.

 

“Operating Entity” has the meaning set forth in Section 7.4.F.

 

“Organizational Limited Partner” has the meaning set forth in the recitals
hereto.

 

“Original Agreement” has the meaning set forth in the recitals hereto.

 

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

 

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

 

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

 

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

 

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

 

“Partnership” has the meaning set forth in the recitals hereto.

 

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

 

“Partnership Minimum Gain” has the meaning set forth in Regulations
Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as
any net increase or decrease in

 

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Partnership Minimum Gain, for a Fiscal Year shall be determined in accordance
with the rules of Regulations Section 1.704-2(d).

 

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

 

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

 

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

 

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

 

“Publicly Traded” means listed or admitted to trading on the New York Stock
Exchange, the NYSE MKT LLC, the NASDAQ Stock Market or any successor to any of
the foregoing.

 

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

 

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

 

“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment pursuant to Section 754 of the Code) upon the
disposition of any

 

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

 

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

 

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

 

“Redemption Amount” means either the Cash Amount or the Shares Amount, as
determined by the General Partner, in its sole and absolute discretion. A
Redeeming Partner shall have no right, without the General Partner’s consent, in
its sole and absolute discretion, to receive the Redemption Amount in the form
of the Shares Amount.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Share” means a share of common stock (or other comparable equity interest) of
the Parent (or the Successor Entity, as the case may be).  Shares may be issued
in one or more classes or series in accordance with the terms of the Charter. 
Shares issued in lieu of the Cash

 

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Amount by the Partnership or the Parent may be either registered or unregistered
Shares at the option of the Parent.  If there is more than one class or series
of Shares, the term “Shares” shall, as the context requires, be deemed to refer
to the class or series of Shares that corresponds to the class or series of
Partnership Interests for which the reference to Shares is made.  When used with
reference to Class A Units, the term “Shares” refers to shares of common stock
(or other comparable equity interest) of the Parent.

 

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

 

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

 

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

 

“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.4 and who is shown as a
Limited Partner in the Partner Registry.

 

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

 

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

 

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

 

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

 

“Unvested LTIP Units” has the meaning set forth in Section 4.6.C.

 

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

 

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

 

“Vested LTIP Units” has the meaning set forth in Section 4.6.C.

 

“Vesting Agreement” means each or any, as the context implies, agreement or
instrument entered into by a holder of LTIP Units upon acceptance of an award of
LTIP Units under an Equity Incentive Plan.

 

ARTICLE II

 

ORGANIZATIONAL MATTERS

 

Section 2.1                                   Organization

 

A.                                    Organization, Status and Rights.  The
Partnership is a limited partnership organized pursuant to the provisions of the
Act and upon the terms and conditions set forth in the Original Agreement.  The
Partners hereby confirm and agree to their status as partners of the Partnership
and to continue the business of the Partnership on the terms set forth in this
Agreement.  Upon the Effective Date, the Organizational Limited Partner shall
withdraw from the Partnership and relinquish any and all rights or interest he
may have in the Partnership, and the Partnership shall continue without
dissolution.  Except as expressly provided herein, the rights and obligations of
the Partners and the administration and termination of the Partnership shall be
governed by the Act.  The Partnership Interest of each Partner shall be personal
property for all purposes.

 

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

 

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

 

Section 2.2                                   Name

 

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

 

Section 2.3                                   Registered Office and Agent;
Principal Office

 

The address of the registered office of the Partnership in the State of Delaware
is located at 615 South Dupont Highway, City of Dover, County of Kent, Delaware
19901 and the registered agent for service of process on the Partnership in the
State of Delaware at such registered office is National Corporate
Research, Ltd.  The principal office of the Partnership is 8670 Wolff Court,
Suite 240, Westminster, CO 80031, or shall be such other place as the General
Partner may from time to time designate by notice to the Limited Partners.  The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.

 

Section 2.4                                   Term

 

The term of the Partnership commenced on September 27, 2013, and shall continue
until dissolved pursuant to the provisions of Article XIII or as otherwise
provided by law.

 

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Section 2.5                                   Partnership Interests as
Securities

 

All Partnership Interests shall be securities within the meaning of, and
governed by, (i) Article 8 of the Delaware Uniform Commercial Code and
(ii) Article 8 of the Uniform Commercial Code of any other applicable
jurisdiction.

 

Section 2.6                                   Certificates Describing
Partnership Units

 

The General Partner shall have the authority to issue certificates evidencing
the Limited Partnership Interests in accordance with Section 17-702(b) of the
Act. Any such certificate (i) shall be in form and substance as approved by the
General Partner, (ii) shall not be negotiable and (iii) shall bear a legend to
the following effect:

 

THIS CERTIFICATE IS NOT NEGOTIABLE. THE PARTNERSHIP UNITS REPRESENTED BY THIS
CERTIFICATE ARE GOVERNED BY AND TRANSFERABLE ONLY IN ACCORDANCE WITH (A) THE
PROVISIONS OF THE SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF FARMLAND PARTNERS OPERATING PARTNERSHIP, LP, AS AMENDED, SUPPLEMENTED OR
RESTATED FROM TIME TO TIME AND (B) ANY APPLICABLE FEDERAL OR STATE SECURITIES OR
BLUE SKY LAWS.

 

ARTICLE III

 

PURPOSE

 

Section 3.1                                   Purpose and Business

 

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

 

Section 3.2                                   Powers

 

The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest

 

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in other entities, to enter into, perform and carry out contracts of any kind,
borrow money and issue evidences of indebtedness, whether or not secured by
mortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and
develop real property, and lease, sell, transfer and dispose of real property;
provided, however, that the Partnership shall not take, or shall refrain from
taking, any action which, in the judgment of the General Partner, in its sole
and absolute discretion, (i) could adversely affect the ability of the Parent to
qualify or continue to qualify as a REIT (unless the Parent has decided to
terminate or revoke its election to be taxed as a REIT), (ii) could subject the
Parent to any taxes under Sections 857 or 4981 of the Code, or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over the General Partner, the Parent or their securities, unless
such action (or inaction) shall have been specifically consented to by the
General Partner in writing.

 

ARTICLE IV

 

CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

 

Section 4.1                                   Capital Contributions of the
Partners

 

A.                                    Capital Contributions.  Prior to or
concurrently with the execution of this Agreement, the Partners have made the
Capital Contributions as set forth in the Partner Registry.  On the date hereof,
the Partners own Partnership Units in the amounts set forth in the Partner
Registry and have Percentage Interests in the Partnership as set forth in the
Partner Registry.  On the Effective Date, certain Partners will make Capital
Contributions to the Partnership, and the General Partner will update the
Partner Registry to reflect the Capital Contributions made by each Partner, the
Partnership Units assigned to each Partner and the Percentage Interest in the
Partnership represented by such Partnership Units.  The number of Partnership
Units and Percentage Interest shall be adjusted in the Partner Registry from
time to time by the General Partner to the extent necessary to reflect
accurately exchanges, redemptions, Capital Contributions, the issuance of
additional Partnership Units or similar events having an effect on a Partner’s
Percentage Interest occurring after the Effective Date and in accordance with
the terms of this Agreement.

 

B.                                    General Partnership Interest.  Except for
any Partnership Units designated as Limited Partner Interests by the General
Partner, the Partnership Units held by the General Partner shall be the General
Partner Interest of the General Partner.

 

C.                                    Except as provided in Sections 7.5, 10.5,
and 13.3, the Partners shall have no obligation to make any additional Capital
Contributions or provide any additional funding to the Partnership (whether in
the form of loans, repayments of loans or otherwise).  Except as otherwise set
forth in Section 13.3, no Partner shall have any obligation to restore any
deficit that may exist in its Capital Account, either upon a liquidation of the
Partnership or otherwise.

 

Section 4.2                                   Issuances of Partnership Interests

 

A.                                    General.  The General Partner is hereby
authorized to cause the Partnership from time to time to issue to Partners
(including the General Partner, the Parent and their Affiliates) or other
Persons (including, without limitation, in connection with the contribution of
property to

 

17

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the Partnership or any of its Subsidiaries) Partnership Units or other
Partnership Interests in one or more classes, or in one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to one or more other classes of Partnership Interests, all as
shall be determined, subject to applicable Delaware law, by the General Partner
in its sole and absolute discretion, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests, (ii) the right of each such
class or series of Partnership Interests to share in Partnership distributions,
(iii) the rights of each such class or series of Partnership Interests upon
dissolution and liquidation of the Partnership, (iv) the rights, if any, of each
such class to vote on matters that require the vote or Consent of the Limited
Partners, and (v) the consideration, if any, to be received by the Partnership;
provided, however, that no such Partnership Units or other Partnership Interests
shall be issued to the General Partner or the Parent unless (a) the Partnership
Interests are issued in connection with the grant, award or issuance of Shares
or other equity interests in the Parent (including a transaction described in
Section 7.4.F) having designations, preferences and other rights such that the
economic interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner or the
Parent in accordance with this Section 4.2.A, and the General Partner or the
Parent contributes to the Partnership the proceeds (if any) from the issuance of
Shares or equity received by the General Partner or the Parent as required
pursuant to Section 7.5.D, (b) the General Partner or the Parent makes an
additional Capital Contribution to the Partnership, or (c) the additional
Partnership Interests are issued to all Partners holding Partnership Interests
in the same class in proportion to their respective Percentage Interests in such
class.  If the Partnership issues Partnership Interests pursuant to this
Section 4.2.A, the General Partner shall make such revisions to this Agreement
(including but not limited to the revisions described in Section 5.4,
Section 6.2 and Section 8.6) as it deems necessary to reflect the issuance of
such Partnership Interests.  The designation of any newly issued class or series
of Partnership Interests may provide a formula for treating such Partnership
Interests solely for purposes of voting on or consenting to any matter that
requires the vote or Consent of the Limited Partners as set forth in one or more
of Sections 7.1, 7.5.A, 7.11, 13.1(i), 13.1(vi), 14.1.A, 14.1.C, 14.2.A, and
14.2.B of this Agreement as the equivalent of a specified number (including any
fraction thereof) of Class A Units.  Nothing in this Agreement shall prohibit
the General Partner from issuing Partnership Units for less than fair market
value if the General Partner concludes in good faith that such issuance is in
the best interests of the Partnership.

 

B.                                    Classes of Partnership Units.  On the
Effective Date, the Partnership shall have three authorized classes of
Partnership Units, entitled “Class A Units,” “Class B Units” and “LTIP Units,”
and, thereafter, such additional classes of Partnership Units as may be created
by the General Partner pursuant to Section 4.2.A and this Section 4.2.B. 
Class A Units, Class B Units or a class of Partnership Interests created
pursuant to Section 4.2.A or this Section 4.2.B, at the election of the General
Partner, in its sole and absolute discretion, may be issued to newly admitted
Partners in exchange for the contribution by such Partners of cash, real estate
partnership interests, stock, notes or other assets or consideration; provided,
however, that any Partnership Unit that is not specifically designated by the
General Partner as being of a particular class shall be deemed to be a Class A
Unit.  Each Class B Unit shall be converted automatically into a Class A Unit on
the day immediately following the Partnership Record Date for the

 

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Distribution Period in which such Class B Unit was issued, without the
requirement for any action by the General Partner, the Partnership or the
Partner holding the Class B Unit.  The issuance and terms of any LTIP Units
shall be in accordance with Section 4.6.

 

Section 4.3                                   No Preemptive Rights

 

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

 

Section 4.4                                   Other Contribution Provisions

 

A.                                    General.  If any Partner is admitted to
the Partnership and is given a Capital Account in exchange for services rendered
to the Partnership, such transaction shall be treated by the Partnership and the
affected Partner (and set forth in the Partner Registry) as if the Partnership
had compensated such Partner in cash, and the Partner had made a Capital
Contribution of such cash to the capital of the Partnership.

 

B.                                    Mergers.  To the extent the Partnership
acquires any property (or an indirect interest therein) by the merger of any
other Person into the Partnership or with or into a Subsidiary of the
Partnership, Persons who receive Partnership Interests in exchange for their
interest in the Person merging into the Partnership or with or into a Subsidiary
of the Partnership shall be deemed to have been admitted as Additional Limited
Partners pursuant to Section 12.2 and shall be deemed to have made Capital
Contributions as provided in the applicable merger agreement (or if not so
provided, as determined by the General Partner in its sole and absolute
discretion) and as set forth in the Partner Registry.

 

Section 4.5                                   No Interest on Capital

 

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

 

Section 4.6                                   LTIP Units

 

A.                                    Issuance of LTIP Units.  The General
Partner may from time to time, for such consideration as the General Partner may
determine to be appropriate, issue LTIP Units to Persons who provide services to
the Partnership or the Parent and admit such Persons as Limited Partners. 
Subject to the following provisions of this Section 4.6 and the special
provisions of Sections 4.7 and 6.1.E, LTIP Units shall be treated as Class A
Units, with all of the rights, privileges and obligations attendant thereto (or,
if so designated by the General Partner in connection with the issuance thereof,
as Class B Units for the quarter in which such LTIP Units are issued).  For
purposes of computing the Partners’ Percentage Interests, holders of LTIP Units
shall be treated as Class A Unit holders and LTIP Units shall be treated as
Class A Units.  In particular, the Partnership shall maintain at all times a
one-to-one correspondence between LTIP Units and Class A Units for conversion,
distribution and other purposes, including, without limitation, complying with
the following procedures:

 

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(i)                                     If an Adjustment Event (as defined
below) occurs, then the General Partner shall make a corresponding adjustment to
the LTIP Units to maintain a one-for-one conversion and economic equivalence
ratio between Class A Units and LTIP Units.  The following shall be “Adjustment
Events”: (A) the Partnership makes a distribution on all outstanding Class A
Units in Partnership Units, (B) the Partnership subdivides the outstanding
Class A Units into a greater number of units or combines the outstanding Class A
Units into a smaller number of units, or (C) the Partnership issues any
Partnership Units in exchange for its outstanding Class A Units by way of a
reclassification or recapitalization of its Class A Units.  If more than one
Adjustment Event occurs, the adjustment to the LTIP Units need be made only once
using a single formula that takes into account each and every Adjustment Event
as if all Adjustment Events occurred simultaneously.  For the avoidance of
doubt, the following shall not be Adjustment Events: (x) the issuance of
Partnership Units in a financing, reorganization, acquisition or other similar
business Class A Unit Transaction, (y) the issuance of Partnership Units
pursuant to any employee benefit or compensation plan or distribution
reinvestment plan or (z) the issuance of any Partnership Units to the General
Partner or the Parent in respect of a capital contribution to the Partnership. 
If the Partnership takes an action affecting the Class A Units other than
actions specifically described above as “Adjustment Events” and in the opinion
of the General Partner such action would require an adjustment to the LTIP Units
to maintain the one-to-one correspondence described above, the General Partner
shall have the right to make such adjustment to the LTIP Units, to the extent
permitted by law and by any Equity Incentive Plan, in such manner and at such
time as the General Partner, in its sole discretion, may determine to be
appropriate under the circumstances.  If an adjustment is made to the LTIP
Units, as herein provided, the Partnership shall promptly file in the books and
records of the Partnership an officer’s certificate setting forth such
adjustment and a brief statement of the facts requiring such adjustment, which
certificate shall be conclusive evidence of the correctness of such adjustment
absent manifest error.  Promptly after filing of such certificate, the
Partnership shall mail a notice to each LTIP Unitholder setting forth the
adjustment to his or her LTIP Units and the effective date of such adjustment;
and

 

(ii)                                  The LTIP Unitholders shall, when, as and
if authorized and declared by the General Partner out of assets legally
available for that purpose, be entitled to receive distributions in an amount
per LTIP Unit equal to the distributions per Class A Unit (the “Class A Unit
Distribution”), paid to holders of Class A Units on such Partnership Record Date
established by the General Partner with respect to such distribution.  So long
as any LTIP Units are outstanding, no distributions (whether in cash or in kind)
shall be authorized, declared or paid on Class A Units or Class B Units, unless
equal distributions have been or contemporaneously are authorized, declared and
paid on the LTIP Units.

 

B.                                    Priority.  Subject to the provisions of
this Section 4.6 and the special provisions of Sections 4.7 and 5.1.E, the LTIP
Units shall rank pari passu with the Class A Units and Class B Units as to the
payment of regular and special periodic or other distributions and distribution
of assets upon liquidation, dissolution or winding up.  As to the payment of
distributions and as to distribution of assets upon liquidation, dissolution or
winding up, any class or series of Partnership Units which by its terms
specifies that it shall rank junior to, on a parity with, or senior to the
Class A Units shall also rank junior to, or pari passu with, or senior to, as
the case may be, the LTIP Units.  Subject to the terms of any Vesting Agreement,
an LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the
same extent, and subject to the same

 

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restrictions as holders of Class A Units are entitled to transfer their Class A
Units pursuant to Article XI.

 

C.                                    Special Provisions.  LTIP Units shall be
subject to the following special provisions:

 

(i)                                     Vesting Agreements.  LTIP Units may, in
the sole discretion of the General Partner, be issued subject to vesting,
forfeiture and additional restrictions on transfer pursuant to the terms of a
Vesting Agreement.  The terms of any Vesting Agreement may be modified by the
General Partner from time to time in its sole discretion, subject to any
restrictions on amendment imposed by the relevant Vesting Agreement or by the
Equity Incentive Plan, if applicable.  LTIP Units that have vested under the
terms of a Vesting Agreement are referred to as “Vested LTIP Units;” all other
LTIP Units shall be treated as “Unvested LTIP Units.”

 

(ii)                                  Forfeiture.  Unless otherwise specified in
the Vesting Agreement, upon the occurrence of any event specified in a Vesting
Agreement as resulting in either the right of the Partnership or the General
Partner to repurchase LTIP Units at a specified purchase price or some other
forfeiture of any LTIP Units, then if the Partnership or the General Partner
exercises such right to repurchase or forfeiture in accordance with the
applicable Vesting Agreement, the relevant LTIP Units shall immediately, and
without any further action, be treated as cancelled and no longer outstanding
for any purpose.  Unless otherwise specified in the Vesting Agreement, no
consideration or other payment shall be due with respect to any LTIP Units that
have been forfeited, other than any distributions declared with respect to a
Partnership Record Date prior to the effective date of the forfeiture.  In
connection with any repurchase or forfeiture of LTIP Units, the balance of the
portion of the Capital Account of the LTIP Unitholder that is attributable to
all of his or her LTIP Units shall be reduced by the amount, if any, by which it
exceeds the target balance contemplated by Section 6.1.E, calculated with
respect to the LTIP Unitholder’s remaining LTIP Units, if any.

 

(iii)                               Allocations.  LTIP Unitholders shall be
entitled to certain special allocations of gain under Section 6.1.E.

 

(iv)                              Redemption.  The Redemption Right provided to
the holders of Class A Units under Section 8.6 shall not apply with respect to
LTIP Units unless and until they are converted to Class A Units as provided in
clause (v) below and Section 4.7.

 

(v)                                 Conversion to Class A Units.  Vested LTIP
Units are eligible to be converted into Class A Units in accordance with
Section 4.7.

 

D.                                    Voting.  LTIP Unitholders shall (a) have
the same voting rights as the Limited Partners, with the LTIP Units voting as a
single class with the Class A Units and having one vote per LTIP Unit; and
(b) have the additional voting rights that are expressly set forth below.  So
long as any LTIP Units remain outstanding, the Partnership shall not, without
the affirmative vote of the holders of a majority of the LTIP Units outstanding
at the time, given in person or by proxy, either in writing or at a meeting
(voting separately as a class), amend, alter or repeal, whether by merger,
consolidation or otherwise, the provisions of this Agreement applicable to

 

21

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LTIP Units so as to materially and adversely affect any right, privilege or
voting power of the LTIP Units or the LTIP Unitholders as such, unless such
amendment, alteration, or repeal affects equally, ratably and proportionately
the rights, privileges and voting powers of all of Class A Units (including the
Class A Units held by the General Partner or the Parent); but subject, in any
event, to the following provisions:

 

(i)                                     With respect to any Class A Unit
Transaction (as defined in Section 4.7.F), so long as the LTIP Units are treated
in accordance with Section 4.7.F, the consummation of such Class A Unit
Transaction shall not be deemed to materially and adversely affect such rights,
preferences, privileges or voting powers of the LTIP Units or the LTIP
Unitholders as such; and

 

(ii)                                  Any creation or issuance of any
Partnership Units or of any class or series of Partnership Interest in
accordance with the terms of this Agreement, including, without limitation,
additional Class A Units or LTIP Units, whether ranking senior to, junior to, or
on a parity with the LTIP Units with respect to distributions and the
distribution of assets upon liquidation, dissolution or winding up, shall not be
deemed to materially and adversely affect such rights, preferences, privileges
or voting powers of the LTIP Units or the LTIP Unitholders as such.

 

The foregoing voting provisions will not apply if, at or prior to the time when
the act with respect to which such vote would otherwise be required will be
effected, all outstanding LTIP Units shall have been converted into Class A
Units.

 

Section 4.7                                   Conversion of LTIP Units.

 

A.                                    Conversion Right.  An LTIP Unitholder
shall have the right (the “Conversion Right”), at his or her option, at any time
to convert all or a portion of his or her Vested LTIP Units into Class A Units;
provided, however, that a holder may not exercise the Conversion Right for less
than one thousand (1,000) Vested LTIP Units or, if such holder holds less than
one thousand Vested LTIP Units, all of the Vested LTIP Units held by such
holder.  LTIP Unitholders shall not have the right to convert Unvested LTIP
Units into Class A Units until they become Vested LTIP Units; provided, however,
that when an LTIP Unitholder is notified of the expected occurrence of an event
that will cause his or her Unvested LTIP Units to become Vested LTIP Units, such
LTIP Unitholder may give the Partnership a Conversion Notice conditioned upon
and effective as of the time of vesting and such Conversion Notice, unless
subsequently revoked by the LTIP Unitholder, shall be accepted by the
Partnership subject to such condition.  The General Partner shall have the right
at any time to cause a conversion of Vested LTIP Units into Class A Units.  In
all cases, the conversion of any LTIP Units into Class A Units shall be subject
to the conditions and procedures set forth in this Section 4.7.

 

B.                                    Exercise by an LTIP Unitholder.  A holder
of Vested LTIP Units may convert such LTIP Units into an equal number of fully
paid and non-assessable Class A Units, giving effect to all adjustments (if any)
made pursuant to Section 4.6.  Notwithstanding the foregoing, in no event may a
holder of Vested LTIP Units convert a number of Vested LTIP Units that exceeds
(x) the Economic Capital Account Balance of such Limited Partner, to the extent
attributable to its ownership of LTIP Units, divided by (y) the Class A Unit
Economic Balance,

 

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in each case as determined as of the effective date of conversion (the “Capital
Account Limitation”).  In order to exercise his or her Conversion Right, an LTIP
Unitholder shall deliver a notice (a “Conversion Notice”) in the form attached
as Exhibit F to this Agreement to the Partnership (with a copy to the General
Partner) not less than ten nor more than 60 days prior to a date (the
“Conversion Date”) specified in such Conversion Notice; provided, however, that
if the General Partner has not given to the LTIP Unitholders notice of a
proposed or upcoming Class A Unit Transaction (as defined in Section 4.7.F) at
least 30 days prior to the effective date of such Class A Unit Transaction, then
LTIP Unitholders shall have the right to deliver a Conversion Notice until the
earlier of (x) the tenth day after such notice from the General Partner of a
Class A Unit Transaction or (y) the third business day immediately preceding the
effective date of such Class A Unit Transaction.  A Conversion Notice shall be
provided in the manner provided in Section 15.1.  Each LTIP Unitholder covenants
and agrees with the Partnership that all Vested LTIP Units to be converted
pursuant to this Section 4.7.B shall be free and clear of all liens and
encumbrances.  Notwithstanding anything herein to the contrary, a holder of LTIP
Units may deliver a Notice of Redemption pursuant to Section 8.6 relating to
those Class A Units that will be issued to such holder upon conversion of such
LTIP Units into Class A Units in advance of the Conversion Date; provided,
however, that the redemption of such Class A Units by the Partnership shall in
no event take place until after the Conversion Date.  For clarity, it is noted
that the objective of this paragraph is to put an LTIP Unitholder in a position
where, if he or she so wishes, the Class A Units into which his or her Vested
LTIP Units will be converted can be redeemed by the Partnership simultaneously
with such conversion, with the further consequence that, if the General Partner
elects to cause the Parent to assume and perform the Partnership’s redemption
obligation with respect to such Class A Units under Section 8.6 by delivering to
such holder Shares rather than cash, then such holder can have such Shares
issued to him or her simultaneously with the conversion of his or her Vested
LTIP Units into Class A Units.  The General Partner and LTIP Unitholder shall
reasonably cooperate with each other to coordinate the timing of the events
described in the foregoing sentence.

 

C.                                    Forced Conversion.  The Partnership, at
any time at the election of the General Partner, may cause any number of Vested
LTIP Units held by an LTIP Unitholder to be converted (a “Forced Conversion”)
into an equal number of Class A Units, giving effect to all adjustments (if any)
made pursuant to Section 4.6; provided, however, that the Partnership may not
cause Forced Conversion of any LTIP Units that would not at the time be eligible
for conversion at the option of such LTIP Unitholder pursuant to Section 4.7.B. 
In order to exercise its right of Forced Conversion, the Partnership shall
deliver a notice (a “Forced Conversion Notice”) in the form attached as
Exhibit G to this Agreement to the applicable LTIP Unitholder not less than ten
nor more than 60 days prior to the Conversion Date specified in such Forced
Conversion Notice.  A Forced Conversion Notice shall be provided in the manner
provided in Section 15.1.

 

D.                                    Completion of Conversion.  A conversion of
Vested LTIP Units for which the holder thereof has given a Conversion Notice or
the Partnership has given a Forced Conversion Notice shall occur automatically
after the close of business on the applicable Conversion Date without any action
on the part of such LTIP Unitholder, as of which time such LTIP Unitholder shall
be credited on the books and records of the Partnership with the issuance as of
the opening of business on the next day of the number of Class A Units issuable
upon such conversion.  After the conversion of LTIP Units as aforesaid, the
Partnership shall deliver to such LTIP Unitholder,

 

23

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upon his or her written request, a certificate of the General Partner certifying
the number of Class A Units and remaining LTIP Units, if any, held by such
person immediately after such conversion.  The Assignee of any Limited Partner
pursuant to Article XI may exercise the rights of such Limited Partner pursuant
to this Section 4.7 and such Limited Partner shall be bound by the exercise of
such rights by the Assignee.

 

E.                                     Impact of Conversions for Purposes of
Section 6.1.E.  For purposes of making future allocations under Section 6.1.E
and applying the Capital Account Limitation, the portion of the Economic Capital
Account Balance of the applicable LTIP Unitholder that is treated as
attributable to his or her LTIP Units shall be reduced, as of the date of
conversion, by the product of the number of LTIP Units converted and the Class A
Unit Economic Balance.

 

F.                                      Class A Unit Transactions.  If the
Partnership, the General Partner or the Parent shall be a party to any Class A
Unit Transaction, as defined below (including without limitation a merger,
consolidation, unit exchange, self tender offer for all or substantially all
Class A Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership’s assets, but excluding any Class A Unit
Transaction which constitutes an Adjustment Event) in each case as a result of
which Class A Units shall be exchanged for or converted into the right, or the
holders of such Class A Units shall otherwise be entitled, to receive cash,
securities or other property or any combination thereof (each of the foregoing
being referred to herein as a “Class A Unit Transaction”), then the General
Partner shall, immediately prior to the Class A Unit Transaction, exercise its
right to cause a Forced Conversion with respect to the maximum number of LTIP
Units then eligible for conversion, taking into account any allocations that
occur in connection with the Class A Unit Transaction or that would occur in
connection with the Class A Unit Transaction if the assets of the Partnership
were sold at the Class A Unit Transaction price or, if applicable, at a value
determined by the General Partner in good faith using the value attributed to
the Partnership Units in the context of the Class A Unit Transaction (in which
case the Conversion Date shall be the effective date of the Class A Unit
Transaction).  In anticipation of such Forced Conversion and the consummation of
the Class A Unit Transaction, the Partnership shall use commercially reasonable
efforts to cause each LTIP Unitholder to be afforded the right to receive in
connection with such Class A Unit Transaction in consideration for the Class A
Units into which his or her LTIP Units will be converted the same kind and
amount of cash, securities and other property (or any combination thereof)
receivable upon the consummation of such Class A Unit Transaction by a holder of
the same number of Class A Units, assuming such holder of Class A Units is not a
Person with which the Partnership consolidated or into which the Partnership
merged or which merged into the Partnership or to which such sale or transfer
was made, as the case may be (a “Constituent Person”), or an affiliate of a
Constituent Person.  In the event that holders of Class A Units have the
opportunity to elect the form or type of consideration to be received upon
consummation of the Class A Unit Transaction, prior to such Class A Unit
Transaction the General Partner shall give prompt written notice to each LTIP
Unitholder of such election, and shall use commercially reasonable efforts to
afford the LTIP Unitholders the right to elect, by written notice to the General
Partner, the form or type of consideration to be received upon conversion of
each LTIP Unit held by such holder into Class A Units in connection with such
Class A Unit Transaction.  If an LTIP Unitholder fails to make such an election,
such holder (and any of its transferees) shall receive upon conversion of each
LTIP Unit held him or her (or by any of his or her transferees) the same kind
and amount of consideration that a holder of a Class A Unit would

 

24

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receive if such Class A Unit holder failed to make such an election.  Subject to
the rights of the Partnership and the General Partner under any Vesting
Agreement and any Equity Incentive Plan, the Partnership shall use commercially
reasonable effort to cause the terms of any Class A Unit Transaction to be
consistent with the provisions of this Section 4.7.F and to enter into an
agreement with the successor or purchasing entity, as the case may be, for the
benefit of any LTIP Unitholders whose LTIP Units will not be converted into
Class A Units in connection with the Class A Unit Transaction that will
(i) contain provisions enabling the holders of LTIP Units that remain
outstanding after such Class A Unit Transaction to convert their LTIP Units into
securities as comparable as reasonably possible under the circumstances to the
Class A Units and (ii) preserve as far as reasonably possible under the
circumstances the distribution, special allocation, conversion, and other rights
set forth in this Agreement for the benefit of the LTIP Unitholders.

 

ARTICLE V

 

DISTRIBUTIONS

 

Section 5.1                                   Requirement and Characterization
of Distributions

 

A.                                    General.  The General Partner may cause
the Partnership to distribute at least quarterly all, or such portion as the
General Partner may in its sole and absolute discretion determine, of the
Available Cash of the Partnership with respect to such quarter or shorter period
to the Partners in accordance with the terms established for the class or
classes of Partnership Interests held by such Partners who are Partners on the
respective Partnership Record Date with respect to such quarter or shorter
period as provided in Sections 5.1.B, 5.1.C and 5.1.D and in accordance with the
respective terms established for each class of Partnership Interest. 
Notwithstanding anything to the contrary contained herein, in no event may a
Partner receive a distribution of Available Cash with respect to a Partnership
Unit for a quarter or shorter period if such Partner is entitled to receive a
distribution with respect to a Share for which such Partnership Unit has been
redeemed or exchanged.  Unless otherwise expressly provided for herein, or in
the terms established for a new class or series of Partnership Interests created
in accordance with Article IV hereof, no Partnership Interest shall be entitled
to a distribution in preference to any other Partnership Interest.  The General
Partner shall make such reasonable efforts, as determined by it in its sole and
absolute discretion and consistent with the qualification of the Parent as a
REIT, to distribute Available Cash (a) to Limited Partners so as to preclude any
such distribution or portion thereof from being treated as part of a sale of
property to the Partnership by a Limited Partner under Section 707 of the Code
or the Regulations thereunder; provided, however, that none of the General
Partner, the Parent, and the Partnership shall have liability to a Limited
Partner under any circumstances as a result of any distribution to a Limited
Partner being so treated, and (b) to the Parent in an amount sufficient to
enable the Parent to make distributions to its stockholders that will enable the
Parent to (1) satisfy the requirements for qualification as a REIT under the
Code and the Regulations (the “REIT Requirements”), and (2) avoid any U.S.
federal income or excise tax liability.

 

B.                                    Method.  (i) Each holder of Partnership
Interests that is entitled to any preference in distribution shall be entitled
to a distribution in accordance with the rights of any such class of

 

25

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Partnership Interests (and, within such class, pro rata in proportion to the
respective Percentage Interests on such Partnership Record Date); and

 

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

 

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

 

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

 

            A x Y            

(A x Y) + (B x X)

 

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

 

            B x X            

(A x Y) + (B x X)

 

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

 

The Class A Share shall be distributed pro rata among Partners holding Class A
Units on the Partnership Record Date for the Distribution Period in accordance
with the number of Class A Units held by each Partner on such Partnership Record
Date; provided, however, that in no event may a Partner receive a distribution
of Available Cash with respect to a Class A Unit if a Partner is entitled to
receive a distribution with respect to a Share for which such Class A Unit has
been redeemed or exchanged.  If Class B Units were issued on the same date, the
Class B Share shall be distributed pro rata among the Partners holding Class B
Units on the Partnership Record Date for the Distribution Period in accordance
with the number of Class B Units held by each Partner on such Partnership Record
Date.  In no event shall any Class B Units be entitled to

 

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receive any distribution of Available Cash for any Distribution Period ending
prior to the date on which such Class B Units are issued.

 

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

 

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

 

                       B1 x X1                       

(A x Y) + (B1 x X1) + (B2 x X2)

 

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

 

                       B2 x X2                       

(A x Y) + (B1 x X1) + (B2 x X2)

 

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

 

E.                                     Distributions With Respect to LTIP
Units.  In accordance with Section 4.6.A, LTIP Unitholders shall be entitled to
receive distributions in an amount per LTIP Unit equal to the Class A Unit
Distribution.

 

Section 5.2                                   Amounts Withheld

 

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

 

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Section 5.3                                   Distributions Upon Liquidation

 

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

 

Section 5.4                                   Revisions to Reflect Issuance of
Partnership Interests

 

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

 

ARTICLE VI

 

ALLOCATIONS

 

Section 6.1                                   Allocations for Capital Account
Purposes

 

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

 

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

 

(1)                                 first, to the General Partner until the
cumulative Net Income allocated under this clause (1) equals the cumulative Net
Losses allocated to the General Partner under Section 6.1.B(6);

 

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

 

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

 

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

 

(5)                                 fifth, to the holders of any Partnership
Interests that are entitled to any preference in distribution in accordance with
the rights of any such class of Partnership Interests until each such
Partnership Interest has been allocated, on a cumulative basis pursuant to this
clause (5), Net Income equal to the amount of distributions payable that are
attributable to the

 

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preference of such class of Partnership Interests whether or not paid (and,
within such class, pro rata in proportion to the respective Percentage Interests
as of the last day of the period for which such allocation is being made); and

 

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

 

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

 

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

 

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

 

(3)                                 third, with respect to classes of
Partnership Interests that are entitled to any preference in distribution upon
liquidation, in reverse order of the priorities of each such class (and within
each such class, pro rata in proportion to their respective Percentage Interests
as of the last day of the period for which such allocation is being made);
provided, however, that Net Losses shall not be allocated to any Partner
pursuant to this Section 6.1.B(3) to the extent that such allocation would cause
such Partner to have an Adjusted Capital Account Deficit (or increase any
existing Adjusted Capital Account Deficit) (determined in each case by not
including in the Partners’ Adjusted Capital Accounts any amount that a Partner
is obligated to contribute to the Partnership with respect to any deficit in its
Capital Account pursuant to Section 13.3) at the end of such taxable year (or
portion thereof);

 

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

 

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

 

(6)                                 thereafter, to the General Partner.

 

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

 

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

 

E.                                     Special Allocations Regarding LTIP
Units.  Notwithstanding the provisions of Section 6.1.A, Liquidating Gains shall
first be allocated to the LTIP Unitholders until their Economic Capital Account
Balances, to the extent attributable to their ownership of LTIP Units, are equal
to (i) the Class A Unit Economic Balance, multiplied by (ii) the number of their
LTIP Units.  For this purpose, “Liquidating Gains” means net gains that are or
would be realized in connection with the actual or hypothetical sale of all or
substantially all of the assets of the Partnership, including but not limited to
net capital gain realized in connection with an adjustment to the value of
Partnership assets under Section 704(b) of the Code made pursuant to Section 1.D
of Exhibit B of the Partnership Agreement.  The “Economic Capital Account
Balances” of the LTIP Unitholders will be equal to their Capital Account
balances to the extent attributable to their ownership of LTIP Units. 
Similarly, the “Class A Unit Economic Balance” shall mean (i) the Capital
Account balance of the Parent, plus the amount of the Parent’s share of any
Partner Minimum Gain or Partnership Minimum Gain, in either case to the extent
attributable to the Parent’s ownership of Class A Units and computed on a
hypothetical basis after taking into account all allocations through the date on
which any allocation is made under this Section 6.1.E, but prior to the
realization of any Liquidating Gains, divided by (ii) the number of the Parent’s
Class A Units.  Any such allocations shall be made among the LTIP Unitholders in
proportion to the amounts required to be allocated to each under this
Section 6.1.E.  The parties agree that the intent of this Section 6.1.E is to
make the Capital Account balance associated with each LTIP Unit to be
economically equivalent to the Capital Account balance associated with the
Parent’s Class A Units (on a per-Unit basis), provided that Liquidating Gains
are of a sufficient magnitude to do so upon a sale of all or substantially all
of the assets of the Partnership, or upon an adjustment to the Partners’ Capital
Accounts pursuant to Section 1.D of Exhibit B.  To the extent the LTIP
Unitholders receive a distribution in excess of their Capital Accounts, such
distribution will be a guaranteed payment under Section 707(c) of the Code.

 

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F.                                      Special Allocations in Connection with a
Liquidity Event.  The Partners intend that the allocation of Net Profits, Net
Losses and other items of income, gain, loss, deduction and credit required to
be allocated to the Capital Accounts of the Partners pursuant to this Agreement
will result in final Capital Account balances that will permit the amount each
Partner is entitled to receive upon “liquidation” of the Partnership (within the
meaning of Section 1.704-1(b)(2)(ii)(g) of the Treasury Regulations) to equal
the amount such Partner would have received if such amount was distributable
solely pursuant to the priorities set forth in Article V and Section 13.2.A(1) -
(4) (and, for the avoidance of doubt, taking into account any applicable DRO
Amounts).  Accordingly, notwithstanding the provisions of Section 6.1.A, in the
taxable year of the event precipitating a Liquidity Event and thereafter,
appropriate adjustments to allocations of Net Profits and Net Losses to the
Partners shall be made to achieve such result.

 

Section 6.2                                   Revisions to Allocations to
Reflect Issuance of Partnership Interests or Certain DRO Obligations

 

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

 

B.                                    Certain DRO Obligations.  If a DRO Partner
has agreed and is obligated to restore the deficit balance in such Partner’s
Capital Account upon the occurrence of certain events, and such obligation is
inconsistent with the allocation of Net Losses that otherwise would apply to
such Partner as a DRO Partner pursuant to this Article VI (for example, because
the DRO Partner has agreed to bear Net Losses in a manner pari passu with the
General Partner), the General Partner shall make such revisions to this
Article VI as it deems necessary to reflect the terms of such obligation,
including with respect to the order of allocation of Net Losses with respect to
such Partner.  Such revisions shall not require the consent or approval of any
other Partner.

 

ARTICLE VII

 

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1                                   Management

 

A.                                    Powers of General Partner.  Except as
otherwise expressly provided in this Agreement, all management powers over the
business and affairs of the Partnership are and shall be exclusively vested in
the General Partner, and no Limited Partner shall have any right to participate
in or exercise control or management power over the business and affairs of the
Partnership.  The General Partner may not be removed by the Limited Partners
with or without cause.  In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to Section 7.11, shall have full power and authority to
do all things deemed necessary or desirable by it to conduct the business of the

 

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Partnership, to exercise all powers set forth in Section 3.2 and to effectuate
the purposes set forth in Section 3.1, including, without limitation:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(12)                          the maintenance of such insurance for the benefit
of the Partnership and the Partners (including, without limitation, the Parent
and the General Partner) as it deems necessary or appropriate;

 

(13)                          the formation of, or acquisition of an interest
(including non-voting interests in entities controlled by Affiliates of the
Partnership or third parties) in, and the contribution of property to, any
further limited or general partnerships, joint ventures, limited liability
companies or other relationships that it deems desirable (including, without
limitation, the acquisition of interests in, and the contributions of funds or
property to, or making of loans to, its Subsidiaries and any other Person in
which it has an equity investment from time to time, or the incurrence of
indebtedness on behalf of such Persons or the guarantee of the obligations of
such Persons); provided, however, that as long as the Parent has determined to
qualify or continue to qualify as a REIT, the Partnership may not engage in any
such formation, acquisition or contribution that would cause the Parent to fail
to qualify as a REIT;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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by law or equity.  The Limited Partners acknowledge that the General Partner is
acting for the benefit of the Partnership, the Limited Partners and the
stockholders of the Parent.

 

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

 

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

 

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 of Limited Partnership and do
all the things to maintain the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) under the laws
of the State of Delaware and each other state, the District of Columbia or other
jurisdiction in which the Partnership may elect to do business or own property. 
Subject to the terms of Section 8.5.A(4), the General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
of Limited Partnership or any amendment thereto to any Limited Partner.  The
General Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and any other state, the District of
Columbia or other jurisdiction in which the Partnership may elect to do business
or own property.

 

Section 7.3                                   Title to Partnership Assets

 

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

 

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Section 7.4                                   Reimbursement of the General
Partner and the Parent

 

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

 

B.                                    Responsibility for Partnership and General
Partner and Parent Expenses.  The Partnership shall be responsible for and shall
pay all expenses relating to the Partnership’s organization, the ownership of
its assets and its operations.  The Partnership shall also be responsible for
the administrative and operating costs and expenses incurred by the General
Partner and the Parent, including, but not limited to, all expenses relating to
the General Partner’s and the Parent’s (i) continued existence and subsidiary
operations, (ii) offerings and registration of securities, (iii) preparation and
filing of any periodic or other reports and communications required under
federal, state or local laws and regulations, (iv) compliance with laws,
rules and regulations promulgated by any regulatory body, and (v) operating or
administrative costs incurred in the ordinary course of business on behalf of
the Partnership; provided, however, that such costs and expenses shall not
include any administrative or operating costs of the General Partner or the
Parent attributable to assets owned by the General Partner or the Parent
directly and not through the Partnership or its subsidiaries.  The General
Partner and the Parent, at the General Partner’s sole and absolute discretion,
shall be reimbursed on a monthly basis, or such other basis as the General
Partner may determine in its sole and absolute discretion, for all expenses the
Parent or the General Partner incurs relating to or resulting from the ownership
and operation of, or for the benefit of, the Partnership (including, without
limitation, expenses related to the operations of the General Partner and the
Parent and to the management and administration of any Subsidiaries of the
General Partner, the Parent or the Partnership or Affiliates of the Partnership,
such as auditing expenses and filing fees); provided, however, that (i) the
amount of any such reimbursement shall be reduced by (x) any interest earned by
the General Partner or the Parent with respect to bank accounts or other
instruments or accounts held by it on behalf of the Partnership as permitted in
Section 7.5.A (which interest is considered to belong to the Partnership and
shall be paid over to the Partnership to the extent not applied to reimburse the
General Partner or the Parent for expenses hereunder); and (y) any amount
derived by the General Partner from any investments permitted in Section 7.5.A;
(ii) the Partnership shall not be responsible for any taxes that the General
Partner or the Parent would not have been required to pay if the Parent
qualified as a REIT for U.S. federal income tax purposes or any taxes imposed on
the General Partner or the Parent by reason of the Parent’s failure to
distribute to its stockholders an amount equal to its taxable income; (iii) the
Partnership shall not be responsible for expenses or liabilities incurred by the
General Partner in connection with any business or assets of the General Partner
other than its ownership of Partnership Interests or operation of the business
of the Partnership or ownership of interests in Qualified Assets to the extent
permitted in Section 7.5.A; and (iv) the Partnership shall not be responsible
for any expenses or liabilities of the General Partner that are excluded from
the scope of the indemnification provisions of Section 7.7.A by reason of the
provisions of clause (i), (ii) or (iii) thereof.  The General Partner shall
determine in good faith the amount of expenses incurred by it or the Parent
related to the ownership of Partnership Interests or operation of, or for the
benefit of, the Partnership.  If certain expenses are incurred that are related
both to the ownership of Partnership Interests or operation of, or for the
benefit of, the Partnership and to the ownership of

 

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other assets (other than Qualified Assets as permitted under Section 7.5.A) or
the operation of other businesses, such expenses will be allocated to the
Partnership and such other entities (including the General Partner and the
Parent) owning such other assets or businesses in such a manner as the General
Partner in its sole and absolute discretion deems fair and reasonable.  Such
reimbursements shall be in addition to any reimbursement to the General Partner
and the Parent pursuant to Section 10.3.C and as a result of indemnification
pursuant to Section 7.7.  All payments and reimbursements hereunder shall be
characterized for U.S. federal income tax purposes as expenses of the
Partnership incurred on its behalf, and not as expenses of the General Partner
or the Parent.

 

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

 

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

 

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

 

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F.                                      Funding for Certain Capital
Transactions.  In the event that the Parent shall undertake to acquire (whether
by merger, consolidation, purchase or otherwise) the assets or equity interests
of another Person and such acquisition shall require the payment of cash by the
Parent (whether to such Person or to any other selling party or parties in such
transaction or to one or more creditors, if any, of such Person or such selling
party or parties), (i) the Partnership shall advance to the Parent the cash
required to consummate such acquisition if, and to the extent that, such cash is
not to be obtained by the Parent through an issuance of Shares described in
Section 4.2 or pursuant to a transaction described in Section 7.5.B, (ii) the
Parent shall, upon consummation of such acquisition, transfer to the Partnership
(or cause to be transferred to the Partnership), in full and complete
satisfaction of such advance and as required by Section 7.5, the assets or
equity interests of such Person acquired by the Parent in such acquisition (or
equity interests in Persons owning all of such assets or equity interests), and
(iii) pursuant to and in accordance with Section 4.2 and Section 7.5.B, the
Partnership shall issue to the Parent, Partnership Interests and/or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights that are substantially the
same as those of any additional Shares, other equity securities, New Securities
and/or Convertible Funding Debt, as the case may be, issued by the Parent in
connection with such acquisition (whether issued directly to participants in the
acquisition transaction or to third parties in order to obtain cash to complete
the acquisition).  In addition to, and without limiting, the foregoing, in the
event that the Parent engages in a transaction in which (x) the Parent (or a
wholly owned direct or indirect Subsidiary of the Parent) merges with another
entity (referred to as the “Parent Entity”) that is organized in the “UPREIT
format” (i.e., where the Parent Entity holds substantially all of its assets and
conducts substantially all of its operations through a partnership, limited
liability company or other entity (referred to as an “Operating Entity”)) and
the Parent survives such merger, (y) such Operating Entity merges with or is
otherwise acquired by the Partnership in exchange in whole or in part for
Partnership Interests, and (z) the Parent is required or elects to pay part of
the consideration in connection with such merger involving the Parent Entity in
the form of cash and part of the consideration in the form of Shares, the
Partnership shall distribute to the Parent with respect to its existing
Partnership Interest an amount of cash sufficient to complete such transaction
and the General Partner shall cause the Partnership to cancel a number of
Partnership Units (rounded to the nearest whole number) held by the Parent equal
to the product attained by multiplying the number of additional Shares of the
Parent that the Parent would have issued to the Parent Entity or the owners of
the Parent Entity in such transaction if the entire consideration therefor were
to have been paid in Shares by a fraction, the numerator of which is one and the
denominator of which is the Conversion Factor.

 

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

 

A.                                    General.  Without the Consent of the
Outside Limited Partners, the General Partner shall not, directly or indirectly,
enter into or conduct any business other than in connection with the ownership,
acquisition and disposition of Partnership Interests and the management of the
business of the Partnership and such activities as are incidental thereto. 
Without the Consent of the Outside Limited Partners, the assets of the General
Partner shall be limited to Partnership Interests and permitted debt obligations
of the Partnership (as contemplated by Section 7.5.F); provided, however, that
the General Partner shall be permitted to hold such bank accounts or similar
instruments or accounts in its name as it deems necessary

 

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to carry out its responsibilities and purposes as contemplated under this
Agreement and its organizational documents (provided that accounts held on
behalf of the Partnership to permit the General Partner to carry out its
responsibilities under this Agreement shall be considered to belong to the
Partnership and the interest earned thereon shall, subject to Section 7.4.B, be
applied for the benefit of the Partnership); and, provided further that, the
General Partner shall be permitted to acquire Qualified Assets.

 

B.                                    Repurchase of Shares and Other
Securities.  If the Parent exercises its rights under the Charter to purchase
Shares or otherwise elects to purchase from the holders thereof Shares, other
equity securities of the Parent, New Securities or Convertible Funding Debt,
then the General Partner shall cause the Partnership to purchase from the Parent
(i) in the case of a purchase of Shares, that number of Partnership Units of the
appropriate class equal to the product obtained by multiplying the number of
Shares purchased by the Parent times a fraction, the numerator of which is one
and the denominator of which is the Conversion Factor, or (ii) in the case of
the purchase of any other securities on the same terms and for the same
aggregate price that the Parent purchased such securities.

 

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

 

D.                                    Issuances of Shares and Other Securities. 
The Parent shall not grant, award or issue any additional Shares (other than
Shares issued pursuant to Section 8.6 or pursuant to a dividend or distribution
(including any stock split) of Shares to all of its stockholders that results in
an adjustment to the Conversion Factor pursuant to clause (i), (ii) or (iii) of
the definition thereof), other equity securities of the Parent, New Securities
or Convertible Funding Debt unless (i) the General Partner shall cause, pursuant
to Section 4.2.A, the Partnership to issue to the Parent, Partnership Interests
or rights, options, warrants or convertible or exchangeable securities of the
Partnership having designations, preferences and other rights, all such that the
economic interests are substantially the same as those of such additional
Shares, other equity securities, New Securities or Convertible Funding Debt, as
the case may be, and (ii) in exchange therefor, the Parent transfers or
otherwise causes to be transferred to the Partnership, as an additional Capital
Contribution, the proceeds (if any) from the grant, award, or issuance of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, or from the exercise of rights contained in
such additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be (or, in the case of an acquisition described in
Section 7.4.F in which all or a portion of the cash required to consummate such
acquisition is to be obtained by the Parent through an issuance of Shares
described in Section 4.2, the Parent complies with such Section 7.4.F).  Without
limiting the foregoing, the Parent is expressly authorized to issue additional
Shares, other equity securities, New Securities or Convertible Funding Debt, as
the case may be, for less than fair market value, and the General Partner is
expressly authorized, pursuant to Section 4.2.A, to cause the Partnership to
issue to the Parent corresponding Partnership Interests, (for example, and not
by way of limitation, the issuance of Shares and corresponding Partnership Units
pursuant to a stock

 

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purchase plan providing for purchases of Shares, either by employees or
stockholders, at a discount from fair market value or pursuant to employee stock
options that have an exercise price that is less than the fair market value of
the Shares, either at the time of issuance or at the time of exercise) as long
as (a) the General Partner concludes in good faith that such issuance is in the
interests of the General Partner, the Parent and the Partnership and (b) the
Parent transfers all proceeds from any such issuance or exercise to the
Partnership as an additional Capital Contribution.

 

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

 

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

 

G.                                    Capital Contributions of the Parent.  The
Capital Contributions by the Parent pursuant to Sections 7.5.D and 7.5.E will be
deemed to equal the cash contributed by the General Partner plus (a) in the case
of cash contributions funded by an offering of any equity interests in or other
securities of the Parent, the offering costs attributable to the cash
contributed to the Partnership to the extent not reimbursed pursuant to
Section 7.4.C and (b) in the case of Partnership Units issued pursuant to
Section 7.5.E, an amount equal to the difference between the Value of the Shares
sold pursuant to any Equity Incentive Plan and the net proceeds of such sale.

 

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

 

Section 7.6                                   Transactions with Affiliates

 

A.                                    Transactions with Certain Affiliates. 
Except as expressly permitted by this Agreement, with respect to any transaction
with an Affiliate not negotiated on an arm’s-length

 

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basis, the Partnership shall not, directly or indirectly, sell, transfer or
convey any property to, or purchase any property from, or borrow funds from, or
lend funds to, any Partner or any Affiliate of the Partnership that is not also
a Subsidiary of the Partnership, except pursuant to transactions that are
determined in good faith by the General Partner to be on terms that are fair and
reasonable and no less favorable to the Partnership than would be obtained from
an unaffiliated third party.

 

B.                                    Joint Ventures.  The Partnership may
transfer assets to joint ventures, limited liability companies, partnerships,
corporations, business trusts or other business entities in which it is or
thereby becomes a participant upon such terms and subject to such conditions
consistent with this Agreement and applicable law as the General Partner, in its
sole and absolute discretion, believes to be advisable.

 

C.                                    Services Agreement.  The General Partner
is expressly authorized to enter into, in the name and on behalf of the
Partnership, any management, shared-services, development or advisory agreement
with a property and/or asset manager (including an Affiliate of the Partnership,
the Parent or the General Partner) for the provision of property management,
asset management, leasing, development and/or similar services with respect to
the Partnership properties and any agreement for the provision of services of
accountants, legal counsel, appraisers, insurers, brokers, transfer agents,
registrars, developers, financial advisors and other professional and
administrative services with an Affiliate of any of the Partnership, the Parent
or the General Partner, on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.

 

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

 

E.                                     Benefit Plans Sponsored by the
Partnership.  The General Partner in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf of
the Partnership employee benefit plans funded by the Partnership for the benefit
of employees of the General Partner, the Parent, the Partnership, Subsidiaries
of the Partnership or any Affiliate of any of them.

 

Section 7.7                                   Indemnification

 

A.                                    General.  The Partnership shall indemnify
each Indemnitee to the fullest extent provided by the Act from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including, without limitation, attorneys fees and other legal fees and
expenses), judgments, fines, settlements and other amounts, arising from or in
connection with any and all claims, demands, actions, suits or proceedings,
whether civil, criminal, administrative or investigative, incurred by the
Indemnitee and relating to the Partnership or the General Partner or the Parent
or the operation of, or the ownership of property by, the Indemnitee,
Partnership or the General Partner or the Parent as set forth in this Agreement
in which any such Indemnitee may be involved, or is threatened to be involved,
as a party or otherwise, unless it is established by a final determination of a
court of competent jurisdiction that: (i) the act or omission of the

 

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Indemnitee was material to the matter giving rise to the proceeding and either
was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the Indemnitee actually received an improper personal benefit
in money, property or services or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful.  Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligation for any indebtedness or other obligation or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into one
or more indemnity agreements consistent with the provisions of this Section 7.7
in favor of any Indemnitee having or potentially having liability for any such
indebtedness.  The termination of any proceeding by judgment, order or
settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.7.A.  The termination
of any proceeding by conviction or upon a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to judgment, does not
create a rebuttable presumption that the Indemnitee acted in a manner contrary
to that specified in this Section 7.7.A with respect to the subject matter of
such proceeding.  Any indemnification pursuant to this Section 7.7 shall be made
only out of the assets of the Partnership, and any insurance proceeds from the
liability policy covering the General Partner and any Indemnitee, and neither
the General Partner nor any Limited Partner shall have any obligation to
contribute to the capital of the Partnership or otherwise provide funds to
enable the Partnership to fund its obligations under this Section 7.7.

 

B.                                    Reimbursement of Expenses.  Reasonable
expenses expected to be incurred by an Indemnitee shall be paid or reimbursed by
the Partnership in advance of the final disposition of any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative made or threatened against an Indemnitee upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of 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.                                    No Limitation of Rights.  The
indemnification provided by this Section 7.7 shall be in addition to any other
rights to which an Indemnitee or any other Person may be entitled under any
agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity unless otherwise provided in a written agreement pursuant to which
such Indemnitee is indemnified.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.8                                   Liability of the General Partner

 

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

 

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

 

C.                                    No Obligation to Consider Separate
Interests of Limited Partners.  The Limited Partners expressly acknowledge that
the General Partner is acting on behalf of the Partnership,

 

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the Limited Partners and the Parent’s stockholders, and that, except as set
forth herein, the General Partner is under no obligation to consider the
separate interests of the Limited Partners (including, without limitation, the
tax consequences to Limited Partners or Assignees) in deciding whether to cause
the Partnership to take (or decline to take) any actions, and that the General
Partner shall not be liable for monetary or other damages for losses sustained,
liabilities incurred or benefits not derived by Limited Partners in connection
with any decisions or actions made or taken or declined to be made or taken,
provided that the General Partner has acted pursuant to its authority under this
Agreement.  Any decisions or actions not taken by the General Partner in
accordance with the terms of this Agreement shall not constitute a breach of any
duty owed to the Partnership or the Limited Partners by law or equity, fiduciary
or otherwise.  In the event of a conflict between the interests of the Limited
Partners and the stockholders of the Parent, the General Partner shall act in
the interests of the Parent’s stockholders, and neither the Parent nor the
General Partner shall be liable for monetary or other losses sustained,
liabilities incurred or benefits not derived by the Limited Partners in
connection therewith.

 

D.                                    Actions of Agents.  Subject to its
obligations and duties as General Partner set forth in Section 7.1.A, the
General Partner may exercise any of the powers granted to it by this Agreement
and perform any of the duties imposed upon it hereunder either directly or by or
through its agents.  The General Partner shall not be responsible for any
misconduct or negligence on the part of any such agent appointed by the General
Partner in good faith.

 

E.                                     Effect of Amendment.  Notwithstanding any
other provision contained herein, any amendment, modification or repeal of this
Section 7.8 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner’s liability to the
Partnership and the Limited Partners under this Section 7.8 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or relating to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

 

F.                                      Limitations of Fiduciary Duty.  Sections
7.1.B, Section 7.7.E and this Section 7.8 and any other Section of this
Agreement limiting the liability of the General Partner and/or the directors and
officers of the Parent shall constitute an express limitation of any duties,
fiduciary or otherwise, that they would owe the Partnership or the Limited
Partners if such duty would be imposed by any law, in equity or otherwise.

 

Section 7.9                                   Other Matters Concerning the
General Partner

 

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

 

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

 

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Person’s professional or expert competence shall be conclusively presumed to
have been done or omitted in good faith and in accordance with such opinion.

 

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

 

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

 

Section 7.10                            Reliance by Third Parties

 

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

 

Section 7.11                            Restrictions on General Partner’s
Authority

 

The General Partner may not take any action in contravention of an express
prohibition or limitation of this Agreement without the written Consent of
(i) all Partners adversely affected or

 

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(ii) such lower percentage of the Partnership Interests held by Limited Partners
as may be specifically provided for under a provision of this Agreement or the
Act.  The preceding sentence shall not apply to any limitation or prohibition in
this Agreement that expressly authorizes the General Partner to take action
(either in its discretion or in specified circumstances) so long as the General
Partner acts within the scope of such authority.

 

Section 7.12                            Loans by Third Parties

 

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

 

ARTICLE VIII

 

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1                                   Limitation of Liability

 

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

 

Section 8.2                                   Management of Business

 

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

 

Section 8.3                                   Outside Activities of Limited
Partners

 

Subject to Section 7.5, and subject to any agreements entered into pursuant to
Section 7.6.B and to any other agreements entered into by a Limited Partner or
its Affiliates with the General Partner, the Partnership, the Parent or a
Subsidiary, any Limited Partner (other than the Parent) and any officer,
director, employee, agent, trustee, Affiliate 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 in direct or indirect competition with the
Partnership.  Neither the Partnership nor any Partners shall have any rights by
virtue of this Agreement in any business ventures of any Limited Partner or
Assignee.  None of the Limited Partners (other than the Parent) or any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship

 

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established hereby in any business ventures of any other Person (other than the
General Partner or the Parent to the extent expressly provided herein), and no
Person (other than the General Partner and the Parent) shall have any obligation
pursuant to this Agreement to offer any interest in any such business venture to
the Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.

 

Section 8.4                                   Return of Capital

 

Except pursuant to the right of redemption set forth in Section 8.6, no Limited
Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein.  No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.2.A) or, except to the extent provided by Exhibit C or as permitted
by Sections 4.2.A, 5.1.B(i), 6.1.A and 6.1.B, or otherwise expressly provided in
this Agreement, as to profits, losses, distributions or credits.

 

Section 8.5                                   Rights of Limited Partners
Relating to the Partnership

 

A.                                    General.  In addition to other rights
provided by this Agreement or by the Act, and except as limited by
Section 8.5.D, each Limited Partner shall have the right, for a purpose
reasonably related to such Limited Partner’s interest as a limited partner in
the Partnership, upon written demand with a statement of the purpose of such
demand and at such Limited Partner’s own expense:

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

C.                                    Notice of Extraordinary Transaction of the
Parent.  The Parent shall not make any extraordinary distributions of cash or
property to its stockholders or effect a merger (including, without limitation,
a triangular merger), consolidation or other combination with or into another
Person, a sale of all or substantially all of its assets or any other similar
extraordinary transaction without providing written notice to the Limited
Partners of its intention to make such distribution or effect such merger,
consolidation, combination, sale or other extraordinary transaction at least
twenty (20) Business Days prior to the record date to determine stockholders
eligible to receive such distribution or to vote upon the approval of such
merger, sale or other extraordinary transaction (or, if no such record date is
applicable, at least twenty (20) Business Days before consummation of such
merger, sale or other extraordinary transaction), which notice shall describe in
reasonable detail the action to be taken; provided, however, that the General
Partner, in its sole and absolute discretion, may shorten the required notice
period of not less than twenty (20) Business Days prior to the record date to
determine the stockholders eligible to vote upon a merger transaction (but not
any of the other transactions covered by this Section 8.5.C.) to a period of not
less than ten (10) calendar days (thereby continuing to afford the holders of
Partnership Units the opportunity to redeem Partnership Units under Section 8.6
on or prior to the record date for the stockholder vote on the merger
transaction) so long as (i) (A) the Parent will be the surviving entity in such
merger transaction, (B) immediately following the merger transaction, Persons
who held voting securities of the Parent immediately prior to such merger
transaction will hold, solely by reason of the ownership of voting securities of
the Parent immediately prior to the merger transaction, voting securities of the
Parent representing not less than fifty-one percent (51%) of the total combined
voting power of all outstanding voting securities of the Parent after such
merger, and (C) in the event that in connection with such merger transaction the
Partnership will merge with another entity, the Partnership will be the
surviving entity in such merger, or (ii) the Parent otherwise determines that it
is in the best interests of the Parent to shorten such required notice period to
a period of not less ten (10) calendar days.  This provision for such notice
shall not be deemed (i) to permit any transaction that otherwise is prohibited
by this Agreement or requires a Consent of the Partners or (ii) to require a
Consent on the part of any one or more of the Limited Partners to a transaction
that does not otherwise require Consent under this Agreement.  Each Limited
Partner agrees, as a condition to the receipt of the notice pursuant hereto, to
keep confidential the information set forth therein until such time as the
Parent has made public disclosure thereof and to use such information during
such period of confidentiality solely for purposes of determining whether to
exercise the Redemption Right; provided, however, that a Limited Partner may
disclose such information to its attorney, accountant and/or financial advisor
for purposes of obtaining advice with respect to such exercise so long as such
attorney, accountant and/or financial advisor agrees to receive and hold such
information subject to this confidentiality requirement.

 

D.                                    Confidentiality.  Notwithstanding any
other provision of this Section 8.5, the General Partner and the Parent may keep
confidential from the Limited Partners, for such period of time as the General
Partner determines in its sole and absolute discretion, any information that
(i) the General Partner reasonably believes to be in the nature of trade secrets
or other information the disclosure of which the General Partner in good faith
believes is not in the best

 

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interests of the Partnership or could damage the Partnership or its business or
(ii) the Partnership or the Parent is required by law or by agreements with
unaffiliated third parties to keep confidential, provided, however, that this
Section 8.5.D shall not affect the notice requirements set forth in
Section 8.5.C above.

 

Section 8.6                                   Redemption Right

 

A.                                    General.  (i) Subject to Section 8.6.C and
Section 11.6.E, at any time on or after one (1) year following the date of the
initial issuance thereof (which, in the event of the transfer of a Class A Unit
or Class B Unit, shall be deemed to be the date that the Class A Unit or such
Class B Unit, as the case may be, was issued to the original recipient thereof
for purposes of this Section 8.6), the holder of a Class A Unit (if other than
the Parent or any Subsidiary of the Parent), including any LTIP Units that are
converted into Class A Units, shall have the right (the “Redemption Right”) to
require the Partnership to redeem such Class A Unit, with such redemption to
occur on the Specified Redemption Date and at a redemption price equal to and in
the form of the Cash Amount to be paid by the Partnership.  Any such Redemption
Right shall be exercised pursuant to a Notice of Redemption delivered to the
Partnership (with a copy to the General Partner) by the holder of the
Partnership Units who is exercising the Redemption Right (the “Redeeming
Partner”).  A Limited Partner may exercise the Redemption Right from time to
time, without limitation as to frequency, with respect to part or all of the
Partnership Units that it owns, as selected by the Limited Partner, provided,
however, that a Limited Partner may not exercise the Redemption Right for fewer
than one thousand (1,000) Partnership Units of a particular class unless such
Redeeming Partner then holds fewer than one thousand (1,000) Partnership Units
in that class, in which event the Redeeming Partner must exercise the Redemption
Right for all of the Partnership Units held by such Redeeming Partner in that
class, and provided further that, with respect to a Limited Partner which is an
entity, such Limited Partner may exercise the Redemption Right for fewer than
one thousand (1,000) Partnership Units without regard to whether or not such
Limited Partner is exercising the Redemption Right for all of the Partnership
Units held by such Limited Partner as long as such Limited Partner is exercising
the Redemption Right on behalf of one or more of its equity owners in respect of
one hundred percent (100%) of such equity owners’ interests in such Limited
Partner.  For purposes hereof, a Class A Unit issued upon conversion of a
Class B Unit shall be deemed to have been issued when the Class B Unit was
issued.

 

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

 

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

 

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

 

B.                                    Parent Assumption of Redemption Right. 
(i)  If a Limited Partner has delivered a Notice of Redemption, the General
Partner may, in its sole and absolute discretion (subject to the limitations on
ownership and transfer of Shares set forth in the Charter), elect to cause the
Parent to assume directly and satisfy a Redemption Right.  If such election is
made by the General Partner, the Partnership shall determine whether the Parent
shall pay the Redemption Amount in the form of the Cash Amount or the Shares
Amount.  The Partnership’s decision regarding whether such payment shall be made
in the form of the Cash Amount or the Shares Amount shall be made by the General
Partner, in its capacity as the general partner of the Partnership and in its
sole and absolute discretion.  Upon such payment by the Parent, the Parent shall
acquire the Partnership Units offered for redemption by the Redeeming Partner
and shall be treated for all purposes of this Agreement as the owner of such
Partnership Units.  Unless the General Partner, in its sole and absolute
discretion, shall exercise its right to cause the Parent to assume directly and
satisfy the Redemption Right, the Parent shall not have any obligation to the
Redeeming Partner or to the Partnership with respect to the Redeeming Partner’s
exercise of the Redemption Right.  If the General Partner shall exercise its
right to cause the Parent to assume directly and satisfy the Redemption Right in
the manner described in the first sentence of this Section 8.6.B and the Parent
shall fully perform its obligations in connection therewith, the Partnership
shall have no right or obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner’s exercise of the Redemption Right, and
each of the Redeeming Partner, the Partnership and the Parent shall, for U.S.
federal income tax purposes, treat the transaction between the Parent and the
Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to the
Parent.  Nothing contained in this Section 8.6.B shall imply any right of the
General Partner to require any Limited Partner to exercise the Redemption Right
afforded to such Limited Partner pursuant to Section 8.6.A.

 

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

 

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(iii)                               Each Redeeming Partner agrees to execute
such documents or provide such information or materials as the Parent may
reasonably require in connection with the issuance of Shares upon exercise of
the Redemption Right.

 

C.                                    Exceptions to Exercise of Redemption
Right.  Notwithstanding the provisions of Sections 8.6.A and 8.6.B, a Partner
shall not be entitled to exercise the Redemption Right pursuant to Section 8.6.A
if (but only as long as) the delivery of Shares to such Partner on the Specified
Redemption Date would (i) be prohibited under the restrictions on the ownership
or transfer of Shares in the Charter, (ii) be prohibited under applicable
federal or state securities laws or regulations (in each case regardless of
whether the Parent would in fact assume and satisfy the Redemption Right),
(iii) without limiting the foregoing, result in the Shares being owned by fewer
than 100 persons (determined without reference to rules of attribution),
(iv) without limiting the foregoing, result in the Parent being “closely held”
within the meaning of Section 856(h) of the Code or cause the Parent to own,
actually or constructively, ten percent (10%) or more of the ownership interests
in a tenant of the Parent, the Partnership or a Subsidiary of the Partnership’s
real property within the meaning of Section 856(d)(2)(B) of the Code, and
(v) without limiting the foregoing, cause the acquisition of the Shares by the
Redeeming Partner to be “integrated” with any other distribution of Shares for
purposes of complying with the registration provision of the Securities Act, as
amended.  Notwithstanding the foregoing, the Parent may, in its sole and
absolute discretion, waive such prohibition set forth in this Section 8.6.C.

 

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

 

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

 

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ARTICLE IX

 

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1                                   Records and Accounting

 

The General Partner shall keep or cause to be kept at the principal office of
the Partnership appropriate books and records with respect to the Partnership’s
business, including, without limitation, all books and records necessary to
provide to the Limited Partners any information, lists and copies of documents
required to be provided pursuant to Section 9.3.  Any records maintained by or
on behalf of the Partnership in the regular course of its business may be kept
on, or be in the form of, punch cards, magnetic tape, photographs, micrographics
or any other information storage device, provided, however, that the records so
maintained are convertible into clearly legible written form within a reasonable
period of time.  The books of the Partnership shall be maintained, for financial
and tax reporting purposes, on an accrual basis in accordance with generally
accepted accounting principles.

 

Section 9.2                                   Fiscal Year

 

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

 

Section 9.3                                   Reports

 

A.                                    Annual Reports.  As soon as practicable,
but in no event later than the date on which the Parent mails its annual report
to its stockholders, the General Partner shall cause to be mailed to each
Limited Partner an annual report, as of the close of the most recently ended
Fiscal Year, containing financial statements of the Partnership, or of the
Parent if such statements are prepared on a consolidated basis with the
Partnership, for such Fiscal Year, presented in accordance with generally
accepted accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the Parent.

 

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

 

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 Parent, provided that such reports
are able to be printed or downloaded from such website.

 

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ARTICLE X

 

TAX MATTERS

 

Section 10.1                            Preparation of Tax Returns

 

The General Partner shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for U.S. 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 U.S. federal and state income tax reporting purposes.

 

Section 10.2                            Tax Elections

 

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

 

B.                                    Without limiting the foregoing, the
Partners, intending to be legally bound, hereby authorize the General Partner,
on behalf of the Partnership, to make an election (the “LV Safe Harbor
Election”) to have the “liquidation value” safe harbor provided in Proposed
Treasury Regulation § 1.83-3(l) and the Proposed Revenue Procedure set forth in
Internal Revenue Service Notice 2005-43, as such safe harbor may be modified
when such proposed guidance is issued in final form or as amended by
subsequently issued guidance (the “LV Safe Harbor”), apply to any interest in
the Partnership transferred to a service provider while the LV Safe Harbor
Election remains effective, to the extent such interest meets the LV Safe Harbor
requirements (collectively, such interests are referred to as “LV Safe Harbor
Interests”).  The tax matters partner is authorized and directed to execute and
file the LV Safe Harbor Election on behalf of the Partnership and the Partners. 
The Partnership and the Partners (including any person to whom an interest in
the Partnership is transferred in connection with the performance of services)
hereby agree to comply with all requirements of the LV Safe Harbor (including
forfeiture allocations) with respect to all LV Safe Harbor Interests and to
prepare and file all U.S. federal income tax returns reporting the tax
consequences of the issuance and vesting of LV Safe Harbor Interests consistent
with such final LV Safe Harbor guidance.  The Partnership is also authorized to
take such actions as are necessary to achieve, under the LV Safe Harbor, the
effect that the election and compliance with all requirements of the LV Safe
Harbor referred to above would be intended to achieve under Proposed Treasury
Regulation § 1.83-3, including amending this Agreement.

 

Section 10.3                            Tax Matters Partner

 

A.                                    General.  The General Partner shall be the
“tax matters partner” of the Partnership for U.S. federal income tax purposes. 
Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice from the IRS
of the beginning of an administrative proceeding with respect to the
Partnership, the tax matters partner shall furnish the IRS with the name,
address, taxpayer

 

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identification number and profit interest of each of the Limited Partners and
any Assignees; provided, however, that such information is provided to the
Partnership by the Limited Partners.

 

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

 

(1)                                 to enter into any settlement with the IRS
with respect to any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for income tax
purposes (such administrative proceedings being referred to as a “tax audit” and
such judicial proceedings being referred to as “judicial review”), and in the
settlement agreement the tax matters partner may expressly state that such
agreement shall bind all Partners, except that such settlement agreement shall
not bind any Partner (i) who (within the time prescribed pursuant to the Code
and Regulations) files a statement with the IRS providing that the tax matters
partner shall not have the authority to enter into a settlement agreement on
behalf of such Partner or (ii) who is a “notice partner” (as defined in
Section 6231(a)(8) of the Code) or a member of a “notice group” (as defined in
Section 6223(b)(2) of the Code);

 

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

 

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

 

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

 

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

 

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

 

(7)                                 to take any other action required by the
Code and Regulations in connection with its role as tax matters partner.

 

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

 

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C.                                    Reimbursement.  The tax matters partner
shall receive no compensation for its services.  All third party costs and
expenses incurred by the tax matters partner in performing its duties as such
(including legal and accounting fees and expenses) shall be borne by the
Partnership.  Nothing herein shall be construed to restrict the Partnership from
engaging an accounting firm and/or law firm to assist the tax matters partner in
discharging its duties hereunder, so long as the compensation paid by the
Partnership for such services is reasonable.

 

Section 10.4                            Organizational Expenses

 

The Partnership shall elect to deduct expenses as provided in Section 709 of the
Code.

 

Section 10.5                            Withholding

 

Each Limited Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Limited Partner any amount of U.S. federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable, allocable or otherwise transferred to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445, 
1446 or 1471-1474, inclusive, of the Code and the Regulations thereunder.  Any
amount paid on behalf of or with respect to a Limited Partner (other than
amounts actually withheld from payments to a Limited Partner) shall constitute a
loan by the Partnership, to such Limited Partner, which loan shall be repaid by
such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited Partner
or (ii) the General Partner determines, in its sole and absolute discretion,
that such payment may be satisfied out of the available funds of the Partnership
which would, but for such payment, be distributed to the Limited Partner.  Any
amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated
as having been distributed or otherwise paid to such Limited Partner.  Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner’s Partnership Interest to secure
such Limited Partner’s obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.5.  If a Limited Partner fails to pay any
amounts owed to the Partnership pursuant to this Section 10.5 when due, the
General Partner may, in its sole and absolute discretion, elect to make the
payment to the Partnership on behalf of such defaulting Limited Partner, and in
such event shall be deemed to have loaned such amount to such defaulting Limited
Partner and shall succeed to all rights and remedies of the Partnership as
against such defaulting Limited Partner (including, without limitation, the
right to receive distributions).  Any amounts payable by a Limited Partner
hereunder shall bear interest at the base rate on corporate loans at large
United States money center commercial banks, as published from time to time in
The Wall Street Journal, plus four (4) percentage points (but not higher than
the maximum rate that may be charged under law) from the date such amount is due
(i.e., fifteen (15) days after demand) until such amount is paid in full.  Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request to perfect or enforce the security interest created
hereunder.

 

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ARTICLE XI

 

TRANSFERS AND WITHDRAWALS

 

Section 11.1                            Transfer

 

A.                                    Definition.  The term “transfer,” when
used in this Article XI with respect to a Partnership Interest or a Partnership
Unit, shall be deemed to refer to a transaction by which the General Partner
purports to assign all or any part of its General Partner Interest to another
Person or by which a Limited Partner purports to assign all or any part of its
Limited Partner Interest to another Person, and includes a sale, assignment,
gift, pledge, encumbrance, hypothecation, mortgage, exchange or any other
disposition by law or otherwise.  The term “transfer” when used in this
Article XI does not include any redemption or repurchase of Partnership Units by
the Partnership from a Partner or acquisition of Partnership Units from a
Limited Partner by the Parent pursuant to Section 8.6 or otherwise.  No part of
the interest of a Limited Partner shall be subject to the claims of any
creditor, any spouse for alimony or support, or to legal process, and may not be
voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.

 

B.                                    General.  No Partnership Interest shall be
transferred, in whole or in part, except in accordance with the terms and
conditions set forth in this Article XI.  Any transfer or purported transfer of
a Partnership Interest not made in accordance with this Article XI shall be null
and void.

 

Section 11.2                            Transfers of Partnership Interests of
General Partner

 

A.                                    General.  Other than to an Affiliate of
the Parent, the General Partner may not transfer any of its Partnership
Interests except in connection with (i) a transaction permitted under
Section 11.2.B, (ii) a Transfer to any wholly owned Subsidiary of the General
Partner or the owner of all of the ownership interests of the General Partner,
or (iii) as otherwise expressly permitted under this Agreement, nor shall the
General Partner withdraw as General Partner except in connection with a
transaction permitted under Section 11.2.B or any Transfer, merger,
consolidation, or other combination permitted under clause (ii) of this
Section 11.2.A.

 

B.                                    Termination Transactions.  Neither the
General Partner nor the Parent shall engage in any merger (including, without
limitation, a triangular merger), consolidation or other combination with or
into another Person (other than any transaction permitted by Section 11.2.A),
any sale of all or substantially all of its assets or any reclassification,
recapitalization or change of outstanding Shares (other than a change in par
value, or from par value to no par value, or as a result of a subdivision or
combination as described in the definition of “Conversion Factor”) (a
“Termination Transaction”), unless:

 

(i)                                     the Consent of the Outside Limited
Partners is obtained;

 

(ii)                                  following such Termination Transaction,
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; or

 

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(iii)                               in connection with such Termination
Transaction all Partners either will receive, or will have the right to receive,
for each Partnership Unit an amount of cash, securities, or other property equal
to the product of the Conversion Factor and the greatest amount of cash,
securities or other property paid to a holder of Shares, if any, corresponding
to such Unit in consideration of one such Share at any time during the period
from and after the date on which the Termination Transaction is consummated;
provided, however, that, if in connection with the Termination Transaction, a
purchase, tender or exchange offer shall have been made to and accepted by the
holders of the percentage required for the approval of mergers under the
organizational documents of the Parent, each holder of Partnership Units shall
receive, or shall have the right to receive without any right of Consent set
forth above in this Section 11.2.B, the greatest amount of cash, securities, or
other property which such holder would have received had it exercised the
Redemption Right and received Shares in exchange for its Partnership Units
immediately prior to the expiration of such purchase, tender or exchange offer
and had thereupon accepted such purchase, tender or exchange offer.

 

C.                                    Creation of New General Partner.  The
General Partner shall not enter into an agreement or other arrangement providing
for or facilitating the creation of a General Partner other than the General
Partner, unless the successor General Partner executes and delivers a
counterpart to this Agreement in which such General Partner agrees to be fully
bound by all of the terms and conditions contained herein that are applicable to
a General Partner.

 

Section 11.3                            Limited Partners’ Rights to Transfer

 

A.                                    General.  Except to the extent expressly
permitted in Sections 11.3.B and 11.3.C or in connection with the exercise of a
Redemption Right pursuant to Section 8.6, a Limited Partner may not transfer all
or portion of its Partnership Interest, or any of such Limited Partner’s rights
as a Limited Partner, without the prior written consent of the General Partner,
which consent may be withheld in the General Partner’s sole and absolute
discretion.  Any transfer otherwise permitted under Sections 11.3.B and 11.3.C
shall be subject to the conditions set forth in Section 11.3.D and 11.3.E, and
all permitted transfers shall be subject to Section 11.5 and Section 11.6.

 

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

 

C.                                    Permitted Transfers.  A Limited Partner
may transfer, with or without the consent of the General Partner, all or a
portion of its Partnership Interest (i) in the case of a Limited Partner who is
an individual, to a member of his or her Immediate Family, any trust formed for
the benefit of himself or herself and/or members of his or her Immediate Family,
or any partnership, limited liability company, joint venture, corporation or
other business entity comprised only of himself or herself and/or members of his
or her Immediate Family and entities the ownership interests in which are owned
by or for the benefit of himself or herself and/or

 

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

 

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

 

E.                                     No Transfers to Holders of Nonrecourse
Liabilities.  No pledge or transfer of any Partnership Units may be made to a
lender to the Partnership or any Person who is related (within the meaning of
Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose
loan otherwise constitutes a Nonrecourse Liability unless (i) the General
Partner is provided prior written notice thereof and (ii) the lender enters into
an arrangement with the Partnership and the General Partner to exchange or
redeem for the Redemption Amount any Partnership Units in which a security
interest is held simultaneously with the time at which such lender would be
deemed to be a partner in the Partnership for purposes of allocating liabilities
to such lender under Section 752 of the Code.

 

Section 11.4                            Substituted Limited Partners

 

A.                                    Consent of General Partner.  No Limited
Partner shall have the right to substitute a transferee as a Limited Partner in
its place.  The General Partner shall, however, have the right to consent to the
admission of a transferee of the interest of a Limited Partner pursuant to this
Section 11.4 as a Substituted Limited Partner, which consent may be given or
withheld by the

 

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General Partner in its sole and absolute discretion.  The General Partner’s
failure or refusal to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership, the General Partner or any Partner.  The General Partner hereby
grants its consent to the admission as a Substituted Limited Partner to any bona
fide financial institution that loans money or otherwise extends credit to a
holder of Partnership Units and thereafter becomes the owner of such Partnership
Units pursuant to the exercise by such financial institution of its rights under
a pledge of such Partnership Units granted in connection with such loan or
extension of credit.

 

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

 

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

 

Section 11.5                            Assignees

 

If the General Partner, in its sole and absolute discretion, does not consent to
the admission of any permitted transferee under Section 11.3 as a Substituted
Limited Partner, as described in Section 11.4, such transferee shall be
considered an Assignee for purposes of this Agreement.  An Assignee shall be
entitled to all the rights of an assignee of a limited partnership interest
under the Act, including the right to receive distributions from the Partnership
and the share of Net Income, Net Losses, gain, loss and Recapture Income
attributable to the Partnership Units assigned to such transferee, and shall
have the rights granted to the Limited Partners under Section 8.6, but shall not
be deemed to be a holder of Partnership Units for any other purpose under this
Agreement, and shall not be entitled to vote such Partnership Units in any
matter presented to the Limited Partners for a vote (such Partnership Units
being deemed to have been voted on such matter in the same proportion as all
other Partnership Units held by Limited Partners are voted).  If any such
transferee desires to make a further assignment of any such Partnership Units,
such transferee shall be subject to all the provisions of this Article XI to the
same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.

 

Section 11.6                            General Provisions

 

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

 

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

 

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

 

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

 

E.                                     Additional Restrictions.  Notwithstanding
anything to the contrary herein, and in addition to any other restrictions on
transfer herein contained, including, without limitation, the provisions of
Article VII and this Article XI, in no event may any transfer or assignment of a
Partnership Interest by any Partner (including pursuant to Section 8.6) be made
without the express consent of the General Partner, in its sole and absolute
discretion, (i) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest; (ii) in violation of applicable law;
(iii) of any component portion of a Partnership Interest, such as the Capital
Account, or rights to distributions, separate and apart from all other
components of a Partnership Interest; (iv) if in the opinion of legal counsel to
the Partnership there is a significant risk that such transfer would cause a
termination of the Partnership for U.S. federal or state income tax purposes
(except as a result of the redemption or exchange for Shares of all Partnership
Units held by all Limited Partners other than the General Partner, or any
Subsidiary of either, or pursuant to a transaction expressly permitted under
Section 11.2); (v) if in the opinion of counsel to the Partnership, there is a
significant risk that such transfer would cause the Partnership to be treated as
an association taxable as a corporation for U.S. federal income tax purposes;
(vi) if such transfer requires the registration of such Partnership Interest
pursuant to any applicable federal or state securities laws; (vii) if such
transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning of
Section 7704 of the Code and the Regulations thereunder or such transfer causes
the Partnership to become a “publicly traded partnership,” as such term is
defined in Sections

 

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469(k)(2) or 7704(b) of the Code (provided, however, that, this clause
(vii) shall not be the basis for limiting or restricting in any manner the
exercise of the Redemption Right under Section 8.6 unless, and only to the
extent that, outside tax counsel provides to the General Partner an opinion to
the effect that, in the absence of such limitation or restriction, there is a
significant risk that the Partnership will be treated as a “publicly traded
partnership” and, by reason thereof, taxable as a corporation for U.S. federal
income tax purposes); (viii) if such transfer subjects the Partnership or the
activities of the Partnership to regulation under the Investment Company Act of
1940, the Investment Advisors Act of 1940 or ERISA, each as amended; or (ix) if
in the opinion of legal counsel for the Partnership, there is a risk that such
transfer would adversely affect the ability of the Parent to qualify or continue
to qualify as a REIT or subject the Parent to any additional taxes under
Sections 857 or 4981 of the Code.

 

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

 

ARTICLE XII

 

ADMISSION OF PARTNERS

 

Section 12.1                            Admission of a Successor General Partner

 

A successor to all of the General Partner’s General Partner Interest pursuant to
Section 11.2 who is proposed to be admitted as a successor General Partner shall
be admitted to the Partnership as the General Partner, effective upon such
transfer.  Any such successor shall carry on the business of the Partnership
without dissolution.  In such case, the admission shall be subject to such
successor General Partner executing and delivering to the Partnership an
acceptance of all of the terms and conditions of this Agreement and such other
documents or instruments as may be required to effect the admission.

 

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Section 12.2                            Admission of Additional Limited Partners

 

A.                                    General.  No Person shall be admitted as
an Additional Limited Partner without the consent of the General Partner, which
consent shall be given or withheld in the General Partner’s sole and absolute
discretion.  A Person who makes a Capital Contribution to the Partnership in
accordance with this Agreement or who exercises an option to receive Partnership
Units shall be admitted to the Partnership as an Additional Limited Partner only
with the consent of the General Partner and only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 15.11 and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner to effect such Person’s admission as an Additional Limited Partner.  The
admission of any Person as an Additional Limited Partner shall become effective
on the date upon which the name of such Person is recorded on the books and
records of the Partnership, following the consent of the General Partner to such
admission.

 

B.                                    Allocations to Additional Limited
Partners.  If any Additional Limited Partner is admitted to the Partnership on
any day other than the first day of a Fiscal Year, then Net Income, Net Losses,
each item thereof and all other items allocable among Partners and Assignees for
such Fiscal Year shall be allocated among such Additional Limited Partner and
all other Partners and Assignees by taking into account their varying interests
during the Fiscal Year in accordance with Section 706(d) of the Code, using the
interim closing of the books method (unless the General Partner, in its sole and
absolute discretion, elects to adopt a daily, weekly or monthly proration
method, in which event Net Income, Net Losses, and each item thereof would be
prorated based upon the applicable period selected by the General Partner). 
Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs
shall be allocated among all the Partners and Assignees including such
Additional Limited Partner.  All distributions of Available Cash with respect to
which the Partnership Record Date is before the date of such admission shall be
made solely to Partners and Assignees other than the Additional Limited Partner,
and all distributions of Available Cash thereafter shall be made to all the
Partners and Assignees including such Additional Limited Partner.

 

Section 12.3                            Amendment of Agreement and Certificate
of Limited Partnership

 

For the admission to the Partnership of any Partner, the General Partner shall
take all steps necessary and appropriate under the Act to amend the records of
the Partnership and, if necessary, to prepare as soon as practical an amendment
of this Agreement (including an amendment to the Partner Registry) and, if
required by law, shall prepare and file an amendment to the Certificate of
Limited Partnership and may for this purpose exercise the power of attorney
granted pursuant to Section 15.11.

 

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

 

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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.

 

ARTICLE XIII

 

DISSOLUTION AND LIQUIDATION

 

Section 13.1                            Dissolution

 

The Partnership shall not be dissolved by the admission of Substituted Limited
Partners or Additional Limited Partners or by the admission of a successor
General Partner in accordance with the terms of this Agreement.  Upon the
withdrawal of the General Partner, any successor General Partner shall continue
the business of the Partnership.  The Partnership shall dissolve, and its
affairs shall be wound up, upon the first to occur of any of the following
(“Liquidating Events”):

 

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

 

(ii)                                  an election to dissolve the Partnership
made by the General Partner, in its sole and absolute discretion;

 

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

 

(iv)                              ninety (90) days after the sale of all or
substantially all of the assets and properties of the Partnership for cash or
for marketable securities;

 

(v)                                 the redemption of all Partnership Units
other than those held by the General Partner; or

 

(vi)                              a final and non-appealable judgment is entered
by a court of competent jurisdiction ruling that the General Partner is bankrupt
or insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the General Partner, in each case
under any federal or state bankruptcy or insolvency laws as now or hereafter in
effect, unless prior to or at the time of the entry of such order or judgment,
the written Consent of the Outside Limited Partners is obtained to continue the
business of the Partnership and to the appointment, effective as of a date prior
to the date of such order or judgment, of a substitute General Partner.

 

Section 13.2                            Winding Up

 

A.                                    General.  Upon the occurrence of a
Liquidating Event, the Partnership shall continue solely for the purposes of
winding up its affairs in an orderly manner, liquidating its assets, and
satisfying the claims of its creditors and Partners.  No Partner shall take any
action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the

 

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Partnership’s business and affairs.  The General Partner (or, if there is no
remaining General Partner, any Person elected by a majority in interest of the
Limited Partners (the “Liquidator”)) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the
Partnership’s liabilities and property and the Partnership property shall be
liquidated as promptly as is consistent with obtaining the fair value thereof,
and the proceeds therefrom (which may, to the extent determined by the General
Partner, include equity or other securities of the General Partner or any other
entity) shall be applied and distributed in the following order:

 

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

 

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

 

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

 

(4)                                 Fourth, to the holders of Partnership
Interests that are entitled to any preference in distribution upon liquidation
in accordance with the rights of any such class or series of Partnership
Interests (and, within each such class or series, to each holder thereof pro
rata based on its Percentage Interest in such class); and

 

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

 

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

 

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

 

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

 

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

 

B.                                    Restoration of Deficit Capital Accounts
upon Liquidation of the Partnership.  If any Partner has a deficit balance in
its Capital Account (after giving effect to all contributions, distributions and
allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever, except as otherwise set forth in this
Section 13.3.B, or as otherwise expressly agreed in writing by the affected
Partner and the Partnership after the date hereof.  Notwithstanding the
foregoing, (i) if the General Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions, and
allocations for all Partnership years or portions thereof, including the year
during which such liquidation occurs), the General Partner shall contribute to
the capital of the Partnership the amount necessary to restore such deficit
balance to zero in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3);
(ii) if a DRO Partner has a deficit balance in its Capital Account (after giving
effect to all contributions, distributions, and allocations for all Partnership
Years or portions thereof, including the year during which such liquidation
occurs), such DRO Partner shall be obligated to make a contribution to the
Partnership with respect to any such deficit balance in such DRO Partner’s
Capital Account upon a liquidation of the Partnership in an amount equal to the
lesser of such deficit balance or such DRO Partner’s DRO Amount; and (iii) the
first sentence of this Section 13.3.B shall not apply with respect to any other
Partner to the extent, but only to such extent, that such Partner previously has
agreed in writing, with the consent of the General Partner, to undertake an
express obligation to restore all or any portion of a deficit that may exist in
its Capital Account upon a liquidation of the Partnership.  No Limited Partner
shall have any right to become a DRO Partner, to increase its DRO Amount, or
otherwise agree to restore any portion of any deficit that may exist in its
Capital Account without the express written consent of the General Partner, in
its sole and absolute discretion.  Any contribution required of a Partner under
this Section 13.3.B

 

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shall be made on or before the later of (i) the end of the Partnership Year in
which the interest is liquidated or (ii) the ninetieth (90th) day following the
date of such liquidation.  The proceeds of any contribution to the Partnership
made by a DRO Partner with respect to a deficit in such DRO Partner’s Capital
Account balance shall be treated as a Capital Contribution by such DRO Partner
and the proceeds thereof shall be treated as assets of the Partnership to be
applied as set forth in Section 13.2.A.

 

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

 

D.                                    Effect of the Death of a DRO Partner. 
After the death of a DRO Partner who is an individual, the executor of the
estate of such DRO Partner may elect to reduce (or eliminate) the DRO Amount of
such DRO Partner.  Such elections may be made by such executor by delivering to
the General Partner within two hundred and seventy (270) days of the death of
such Limited Partner, a written notice setting forth the maximum deficit balance
in its Capital Account that such executor agrees to restore under this
Section 13.3, if any.  If such executor does not make a timely election pursuant
to this Section 13.3 (whether or not the balance in the applicable Capital
Account is negative at such time), then the DRO Partner’s estate (and the
beneficiaries thereof who receive distributions of Partnership Interests
therefrom) shall be deemed a DRO Partner with a DRO Amount in the same amount as
the deceased DRO Partner.  Any DRO Partner which itself is a partnership for
U.S. federal income tax purposes may likewise elect, after the date of its
partner’s death to reduce (or eliminate) its DRO Amount by delivering a similar
notice to the General Partner within the time period specified above, and in the
absence of any such notice the DRO Amount of such DRO Partner shall not be
reduced to reflect the death of any of its partners.

 

Section 13.4                            Rights of Limited Partners

 

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

 

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expressly provided in this Agreement, no Limited Partner shall have priority
over any other Limited Partner as to the return of its Capital Contributions,
distributions, or allocations.

 

Section 13.5         Notice of Dissolution

 

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

 

Section 13.6         Cancellation of Certificate of Limited Partnership

 

Upon the completion of the liquidation of the Partnership cash and property as
provided in Section 13.2, the Partnership shall be terminated and the
Certificate of Limited Partnership and all qualifications of the Partnership as
a foreign limited partnership in jurisdictions other than the State of Delaware
shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.

 

Section 13.7         Reasonable Time for Winding Up

 

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

 

Section 13.8         Waiver of Partition

 

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

 

Section 13.9         Liability of Liquidator

 

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

 

ARTICLE XIV

 

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

 

Section 14.1         Amendments

 

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

 

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obtaining a written Consent, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, any failure to
respond in such time period shall constitute a vote in favor of the
recommendation of the General Partner.  A proposed amendment shall be adopted
and be effective as an amendment hereto if it is approved by the General Partner
and, except as provided in Section 14.1.B, 14.1.C or 14.1.D, it receives the
Consent of the Partners holding Partnership Interests representing more than
fifty percent (50%) of the Percentage Interest of the Class A Units (including
Class A Units held by the Parent).

 

B.            Amendments Not Requiring Limited Partner Approval. 
Notwithstanding Section 14.1.A but subject to Section 14.1.C, the General
Partner shall have the power, without the Consent of the Limited Partners, to
amend this Agreement as may be required to facilitate or implement any of the
following purposes:

 

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

 

(2)           to reflect the admission, substitution, termination, or withdrawal
of Partners in accordance with this Agreement (which may be effected through the
replacement of the Partner Registry with an amended Partner Registry);

 

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

 

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

 

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

 

(6)           to modify the method by which Partners’ Capital Accounts, or any
debits or credits thereto, are computed, in each case in accordance with
Section 1.E of Exhibit B to this Agreement; and

 

(7)           to include provisions in the Agreement that may be referenced in
any rulings, regulations, notices, announcements, or other guidance regarding
the U.S. federal income tax treatment of compensatory partnership interests
issued and made effective after the date hereof or in connection with any
elections that the General Partner determines to be necessary or advisable in
respect of any such guidance.  Any such amendment may include, without
limitation, (a) a provision authorizing or directing the General Partner to make
any election under such guidance, (b) a covenant by the Partnership that all of
the Partners must (I) comply with the such guidance and (II) take all actions
(or, as the case may be, not take any action) necessary, including providing the
Partnership with any required information, to permit the Partnership to comply
with the requirements set forth or referred to in the Regulations for

 

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such election or other related guidance from the IRS, and (c) an amendment to
the capital account maintenance provisions and the allocation provisions
contained in Exhibit B or Exhibit C of this Agreement so that such provisions
comply with (I) the provisions of the Code and the Regulations as they apply to
the issuance of compensatory partnership interests and (II) the requirements of
such guidance and any election made by the General Partner with respect thereto,
including, a provision requiring “forfeiture allocations” as appropriate.

 

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

 

C.            Amendments Requiring Limited Partner Approval (Excluding the
Parent).  Notwithstanding Sections 14.1.A and 14.1.B, without the Consent of the
Outside Limited Partners, the General Partner shall not amend Section 4.2.A,
Section 7.1.A (second sentence only), Section 7.5, Section 7.6, Section 7.8,
Section 7.11, Section 11.2, Section 13.1, the last sentence of Section 11.4.A
(provided, however, that no such amendment shall in any event adversely affect
the rights of any lender who made a loan or who extended credit and received in
connection therewith a pledge of Partnership Units prior to the date such
amendment is adopted unless, and only to the extent such lender consents
thereto), this Section 14.1.C or Section 14.2.

 

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

 

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

 

Section 14.2         Meetings of the Partners

 

A.            General.  Meetings of the Partners may be called by the General
Partner and shall be called upon the receipt by the General Partner of a written
request by Limited Partners holding Partnership Interests representing
twenty-five percent (25%) or more of the Percentage Interest of the Class A
Units (including Class A Units held by the Parent).  The call shall state the
nature of the business to be transacted.  Notice of any such meeting shall be
given to all

 

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Partners not less than seven (7) days nor more than thirty (30) days prior to
the date of such meeting.  Partners entitled to vote may vote in person or by
proxy at such meeting.  Whenever the vote or Consent of Partners is permitted or
required under this Agreement, such vote or Consent may be given at a meeting of
Partners or may be given in accordance with the procedure prescribed in
Section 14.1.A.  Except as otherwise expressly provided in this Agreement, the
Consent of holders of Partnership Interests representing a majority of the
Percentage Interests of the Class A Units shall control (including Class A Units
held by the Parent).

 

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

 

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

 

D.            Conduct of Meeting.  Each meeting of Partners shall be conducted
by the General Partner or such other Person as the General Partner may appoint
pursuant to such rules for the conduct of the meeting as the General Partner or
such other Person deems appropriate.

 

ARTICLE XV

 

GENERAL PROVISIONS

 

Section 15.1         Addresses and Notice

 

Any notice, demand, request or report required or permitted to be given or made
to a Partner or Assignee under this Agreement shall be in writing and shall be
deemed given or made when delivered in person, when sent by first class United
States mail or by other means of written communication (including, but not
limited to, via e-mail) to the Partner or Assignee at the address set forth in
the Partner Registry or such other address as the Partners shall notify the
General Partner in writing.

 

Section 15.2         Titles and Captions

 

All article or section titles or captions in this Agreement are for convenience
only.  They shall not be deemed part of this Agreement and in no way define,
limit, extend or describe the

 

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scope or intent of any provisions hereof.  Except as specifically provided
otherwise, references to “Articles” “Sections” and “Exhibits” are to Articles,
Sections and Exhibits of this Agreement.

 

Section 15.3         Pronouns and Plurals

 

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

 

Section 15.4         Further Action

 

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

 

Section 15.5         Binding Effect

 

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

 

Section 15.6         Creditors

 

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

 

Section 15.7         Waiver

 

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

 

Section 15.8         Counterparts

 

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

 

Section 15.9         Applicable Law

 

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

 

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Section 15.10       Invalidity of Provisions

 

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

 

Section 15.11       Power of Attorney

 

A.            General.  Each Limited Partner and each Assignee who accepts
Partnership Units (or any rights, benefits or privileges associated therewith)
is deemed to irrevocably constitute and appoint the General Partner, any
Liquidator and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true
and lawful agent and attorney-in-fact, with full power and authority in its
name, place and stead to:

 

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

 

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

 

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

 

B.            Irrevocable Nature.  The foregoing power of attorney is hereby
declared to be irrevocable and a power coupled with an interest, in recognition
of the fact that each of the Partners will be relying upon the power of the
General Partner or any Liquidator to act as contemplated by this Agreement in
any filing or other action by it on behalf of the Partnership,

 

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and it shall survive and not be affected by the subsequent Incapacity of any
Limited Partner or Assignee and the transfer of all or any portion of such
Limited Partner’s or Assignee’s Partnership Units and shall extend to such
Limited Partner’s or Assignee’s heirs, successors, assigns and personal
representatives.  Each such Limited Partner or Assignee hereby agrees to be
bound by any representation made by the General Partner or any Liquidator,
acting in good faith pursuant to such power of attorney; and each such Limited
Partner or Assignee hereby waives any and all defenses which may be available to
contest, negate or disaffirm the action of the General Partner or any
Liquidator, taken in good faith under such power of attorney.  Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner’s or
Liquidator’s request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.

 

Section 15.12       Entire Agreement

 

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

 

Section 15.13       No Rights as Stockholders

 

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

 

Section 15.14       Limitation to Preserve REIT Status

 

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

 

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

 

(ii)           an amount equal to the excess, if any of (a) 24% of the Parent’s
total gross income (but not including the amount of any General Partner
Payments) for the Fiscal Year which is described in subsections (A) through
(I) of Section 856(c)(3) of the Code over (b) the amount of gross income (within
the meaning of Section 856(c)(3) of the Code but not including

 

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the amount of any General Partner Payments) derived by the Parent from sources
other than those described in subsections (A) through (I) of
Section 856(c)(3) of the Code;

 

provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the Parent, as a
condition precedent, obtains an opinion of tax counsel that the receipt of such
excess amounts would not adversely affect the Parent’s ability to qualify as a
REIT.  To the extent General Partner Payments may not be made in a given Fiscal
Year due to the foregoing limitations, such General Partner Payments shall carry
over and be treated as arising in the following year; provided, however, that
such amounts shall not carry over for more than five (5) Fiscal Years, and if
not paid within such five (5) Fiscal Year period, shall expire; and provided
further that (i) as General Partner Payments are made, such payments shall be
applied first to carry over amounts outstanding, if any, and (ii) with respect
to carry over amounts for more than one Fiscal Year, such payments shall be
applied to the earliest Fiscal Year first.

 

[Remainder of page intentionally left blank, signature page follows]

 

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

 

 

GENERAL PARTNER:

 

 

 

Farmland Partners OP GP, LLC

 

 

 

By:

Farmland Partners Inc., its sole member

 

 

 

 

 

 

 

 

By:

/s/ Luca Fabbri

 

 

 

 

 

Name: Luca Fabbri

 

 

Title: Chief Financial Officer, Secretary and Treasurer

 

 

 

 

LIMITED PARTNERS:

 

 

 

 

Pittman Hough Farms LLC, a Colorado limited liability company

 

 

 

 

 

 

 

 

By:

/s/ Paul A. Pittman

 

 

 

 

 

Name: Paul A. Pittman

 

 

Title: Manager

 

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EXHIBIT A

 

FORM OF PARTNER REGISTRY

 

 

 

CLASS A UNITS

 

Name And Address Of Partner

 

Partnership
Units

 

Initial Capital
Account

 

Percentage
Interest

 

 

 

 

 

 

 

 

 

GENERAL PARTNER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farmland Partners OP GP, LLC

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMITED PARTNERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Farmland Partners Inc.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL CLASS A UNITS

 

 

 

 

 

100.00000

%

 

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EXHIBIT B

 

CAPITAL ACCOUNT MAINTENANCE

 

1.                                      Capital Accounts of the Partners

 

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

 

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

 

(1)                                 Except as otherwise provided in Regulations
Section 1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss
and deduction shall be made without regard to any adjustments to the adjusted
bases of the assets of the Partnership pursuant to Sections 734(b) and 743(b) of
the Code, provided, however, that the amounts of any adjustments to the adjusted
bases of the assets of the Partnership made pursuant to Section 734 of the Code
as a result of the distribution of property by the Partnership to a Partner (to
the extent that such adjustments have not previously been reflected in the
Partners’ Capital Accounts) shall be reflected in the Capital Accounts of the
Partners in the manner and subject to the limitations prescribed in Regulations
Section l.704-1(b)(2)(iv)(m)(4).

 

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

 

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

 

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

 

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

 

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

 

C.                                    A transferee (including any Assignee) of a
Partnership Unit shall succeed to a pro rata portion of the Capital Account of
the transferor in accordance with Regulations Section 1.704-1(b)(2)(iv)(l).

 

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

 

(2)                                 Such adjustments shall be made as of the
following times: (a) immediately prior to the acquisition of an additional
interest in the Partnership by any new or existing Partner in exchange for more
than a de minimis Capital Contribution; (b) immediately prior to the
distribution by the Partnership to a Partner of more than a de minimis amount of
property as consideration for an interest in the Partnership; (c) immediately
prior to the liquidation of the Partnership within the meaning of Regulations
Section 1.704-l(b)(2)(ii)(g); (d) immediately prior to 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; (e) immediately
prior to the issuance by the Partnership of a noncompensatory option to acquire
an interest in the Partnership (other than an option for a de minimis interest);
and (f) at such other times as are permitted by applicable Regulations and as
determined in the discretion of the General Partner; provided, however, that
adjustments pursuant to clauses (a), (b), (d), (e) and (f) above shall be made
only if the General Partner determines that such adjustments are necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership or to comply with applicable Regulations; provided further, however,
that the issuance of any LTIP Unit shall be deemed to require a revaluation
pursuant to this Section 1.D.

 

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

 

(4)                                 In determining Unrealized Gain or Unrealized
Loss for purposes of this Exhibit B, the aggregate cash amount and fair market
value of all Partnership assets (including cash or cash equivalents) shall be
determined by the General Partner using such reasonable

 

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method of valuation as it may adopt, or in the case of a liquidating
distribution pursuant to Article XIII of the Agreement, shall be determined and
allocated by the Liquidator using such reasonable methods of valuation as it may
adopt.  The General Partner, or the Liquidator, as the case may be, shall
allocate such aggregate fair market value among the assets of the Partnership in
such manner as it determines in its sole and absolute discretion to arrive at a
fair market value for individual properties.

 

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

 

2.                                      No Interest

 

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

 

3.                                      No Withdrawal

 

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

 

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EXHIBIT C

 

SPECIAL ALLOCATION RULES

 

1.                                      Special Allocation Rules.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

F.                                      Partner Nonrecourse Deductions.  Any
Partner Nonrecourse Deductions for any Fiscal Year shall be specially allocated
to the Partner who bears the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).

 

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

 

2.                                      Allocations for Tax Purposes

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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EXHIBIT D

 

NOTICE OF REDEMPTION

 

The undersigned hereby irrevocably (i) redeems                    Partnership
Units in Farmland Partners Operating Partnership, LP (the “Partnership”) in
accordance with the terms of the Second Amended and Restated Agreement of
Limited Partnership of the Partnership, as amended, and the Redemption Right
referred to therein, (ii) surrenders such Partnership Units and all right, title
and interest therein and (iii) directs that the Cash Amount or Shares Amount (as
determined by the General Partner) deliverable upon exercise of the Redemption
Right be delivered to the address specified below, and if Shares are to be
delivered, such Shares be registered or placed in the name(s) and at the
address(es) specified below.  The undersigned hereby represents, warrants, and
certifies that the undersigned (a) has marketable and unencumbered title to such
Partnership Units, free and clear of the rights of or interests of any other
person or entity, (b) has the full right, power and authority to redeem and
surrender such Partnership Units as provided herein and (c) has obtained the
consent or approval of all persons or entities, if any, having the right to
consult or approve such redemption and surrender. Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Second Amended
and Restated Agreement of Limited Partnership of the Partnership.

 

Dated:

 

 

Name of Limited Partner:

 

 

 

 

 

 

 

 

 

 

 

 

(Signature of Limited Partner)

 

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

 

(City)           (State)             (Zip Code)

 

 

 

 

 

Signature Guaranteed by:

 

 

 

 

 

 

 

 

 

 

 

 

IF SHARES ARE TO BE ISSUED, ISSUE TO:

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Social Security or tax identifying number:

 

 

 

 

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EXHIBIT E

 

FORM OF DRO REGISTRY

 

 

DRO AMOUNT

 

PART I DRO PARTNERS

 

 

 

 

 

PART II DRO PARTNERS

 

 

 

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EXHIBIT F

 

NOTICE OF ELECTION BY PARTNER TO CONVERT
LTIP UNITS INTO CLASS A UNITS

 

The undersigned holder of LTIP Units hereby irrevocably (i) elects to
convert                   LTIP Units in Farmland Partners Operating Partnership,
LP (the “Partnership”) into Class A Units in accordance with the terms of the
Second Amended and Restated Agreement of Limited Partnership of the Partnership,
as amended; and (ii) directs that any cash in lieu of Class A Units that may be
deliverable upon such conversion be delivered to the address specified below. 
The undersigned hereby represents, warrants, and certifies that the undersigned
(a) has title to such LTIP Units, free and clear of the rights or interests of
any other person or entity other than the Partnership; (b) has the full right,
power, and authority to cause the conversion of such LTIP Units as provided
herein; and (c) has obtained the consent to or approval of all persons or
entities, if any, having the right to consent or approve such conversion.
Capitalized terms used but not defined herein shall have the meanings assigned
to them in the Second Amended and Restated Agreement of Limited Partnership of
the Partnership.

 

Dated:

 

 

Name of Limited Partner:

 

 

 

 

 

 

 

 

 

 

 

 

(Signature of Limited Partner)

 

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

 

(City)           (State)             (Zip Code)

 

 

 

 

 

Signature Guaranteed by:

 

 

 

 

 

 

 

 

 

 

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EXHIBIT G

 

NOTICE OF ELECTION BY PARTNERSHIP TO FORCE CONVERSION OF
LTIP UNITS INTO CLASS A UNITS

 

Farmland Partners Operating Partnership, LP (the “Partnership”) hereby
irrevocably elects to cause the number of LTIP Units held by the holder of LTIP
Units set forth below to be converted into Class A Units in accordance with the
terms of the Second Amended and Restated Agreement of Limited Partnership of the
Partnership, as amended (the “Agreement”). Capitalized terms used but not
defined herein shall have the meanings assigned to them in the Agreement.

 

Name of Holder:

 

Date of this Notice:

 

Number of LTIP Units to be Converted:

 

Please Print: Exact Name as Registered with Partnership

 

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